ONB unveils comprehensive agri growth program

San Miguel Foods Inc. and the Corporative Systems Foundation Inc. (CFSI) has entered into a supply agreement for 2,000 metric tons of peeled cassava granules designed to benefit thousands of small farmers in Mindanao.

The CFSI is the non-stock, non-profit technical arm of One Network Bank (ONB) and the assembler of the cassava produce.

The agreement actually highlights the involvement of the rural bank not only in extending agricultural credit. It also acts as a business center for producers, manufacturers, buyers, and allied businesses in the countryside.

CFSI president Alex V. Buenaventura explained that the rural bank is taking a pro-active role in empowering small farmers not only to sell their produce, but also "to invest in processing infrastructure thus putting them in control of their destiny."

The initial stage of the accord with San Miguel Foods is basically to tap the small cassava farmers to supply the raw materials. CFSI will then tap manufacturers to transform these into granules for San Miguel Foods.

ONB will extend credit to the small farmers as well as technical assistance to ensure profitability and sustainability.

Initially, ONB was prepared to extend P18,000 per hectare.

It will acquire the fresh tubers at P1.20 per kilo, while San Miguel Foods will buy the processed peeled cassava granules at P7.20 per kilo.

Further down the line, CFSI would like to get small farmers directly involved in the production process. One way is to organize them into a cooperative and run the post-harvest production stage like transforming the fresh tubers into granules.

Buenaventura, who is also ONB president and chief executive officer, explained further that the cassava undertaking is actually the third attempt to empower small farmers.

ONB is also involved with small rice and banana farmers extending technical, credit, production and post production work. Known as the One Rice Program and the One Banana Program, the exercise forms part of an integrated agri-finance strategy to ensure sustainability and profitability for small farmers.

In the process, the bank maintains a constant flow of agri loans. And as the program flourishes, it opens various opportunities for the bank.

In fact, the two agri program has been so successful that various international development agencies such as the United Nations Conference on Trade and Development (UNCTAD) has invited ONB to present its programs for possible application to other developing nations.

By reducing the layer of middlemen or traders as well as getting involved in post-production activities, the small farmers has greater control of their income and profitability.

In the same light, the rural bank will slowly reduce its participation in the entire process as the small farmers gain greater control of their future.

"We will hold their hands only as far as they need us," Buenaventura said. "Rural banks thus fulfill their role as community banks and business centers."