Coco Billions. 0 trader & exporter, 100 coops & 1 lesson from Shakespeare

MANILA: IMOD is what to do with those billions in coco funds in the Philippines. IMOD is a 100 billion-peso lesson from India courtesy of ICRISAT. I'll tell you more about it after I harvest other proposals and leave them to dry under the tropical sun. They're all wet!

So, there are 100-150 billion pesos of the coco levy fund that belongs to the coco farmers. So, many people have proposals on how to spend those billions in the short term (such as distribute the cash), in the medium term (spend on infrastructure in 2014), and in the long term (put it in a trust fund; apply industry clustering using the value chain approach; create a council to oversee the fund). I prefer the long term, but not their long term.

Eminent economist Bernardo Villegas quotes his colleague Rolando Dy, another economist and Dean of the Center for Food & Agribusiness of the University of Asia & the Pacific, as recommending "a council for the levy fund that is guided by a board composed of farmers, processors, and exporters following Southeast Asian models" (06 September 2013, mb.com.ph). I just know that the council will work - against the poor farmers. Yes Sir, it's economics. The Big Fish is a master (monster) of the Red Ocean Strategy (bloody sea), as opposed to the Blue Ocean Strategy (clear waters). For himself, Dy says in his "Coconut Roadmap / Master Plan" paper that "the key is farmer income" (September 2012, in pdf). No Sir, it's not income. Department of Trade & Industry (DTI) Undersecretary Merly Cruz says, "Let the private sector lead" (March 2012, in pdf). Yes Madam DTI, we've already done that - look what we've got!

I have no problem with those who have honestly and earnestly proposed what to do with the billions of pesos of coco levy fund, but I have a problem with how they look at the problem:
They have it all in the reverse order - they begin with the solution before they have analyzed the problem.

Hate the sin, not the sinner. No, the problem is not low income. If it were, then it's correct to aim for higher income for coco farmers. Sorry. Low income is the symptom and not the cause of the disease.
And no, it's not laziness on the part of the coco farmer. If it were, then it's correct to kick the asses of those lazybones. Sorry. The problem is they lack the entrepreneurial spirit. We Filipinos do. Still, that's not the basic problem.

And it's not monoculture either. Sorry again. If it were, then it's correct to prescribe intercropping or even simply relay cropping. Intercropping and relay cropping or even crop-livestock farming systems have only one goal: higher income. And you already know that low income is not the problem.
Last night, at 8 on 08 September 2013, someone asked me by email, "Frank, what is then your proposal?" I simply said, "I'm writing to blog about it. The Vision must come first before the Mission before the Strategy." So I wrote; here it is, this essay.
Vision <= Mission <= Goal (Strategy)

In the beginning of those series of emails about the coco fund, I already pointed out the need for a Vision for the coconut industry. And it's not that those people's Vision is limited - they have no Vision at all! Where there is no Vision, Billions will perish.

And no, I'm not going to prescribe any solution until I'm finished conjuring the Vision, Mission, and Goal. There must be a Corporate Plan first. The Vision is the desired future for the poor coco farmers. The Mission is what needs to be accomplished to bring about the fulfilment of the Vision. And the Goal or Strategy is what needs to be done or achieved in order for the Mission to move to its logical conclusion.

I want a Blue Ocean Strategy that's equivalent to an (A) in management class. So now, putting my money where my mouth is, I submit the following:

Vision:
Rich villages of coco farmers
When you dream, you might as well dream big. I don't want coco farmers to just earn higher incomes - I want the poor coco farmers to become rich. And I don't want only the coco farmers to become rich - I want their villages to become affluent. It is the village that counts. The farmers are nobody without their villages; they cannot live alone. In any case, if the farmers become rich, the multiplier effect is that their villages become rich.

Mission:
Build a Coco Partnership for Progress (CP4P). Learning from the experience in the past 13 years of the extraordinarily successful International Crops Research Institute for the Semi-Arid Tropics (ICRISAT), which is based in India and has been led all those years up to now by an Ilocano from Santa Maria, Ilocos Sur, William Dar, we have 6 partners (my list):
Public - the State
Private - business sector
Philanthropists - donors
Partisans - civil society
Preachers - religious groups
Peasants - the poor farmers themselves.

That means we have 6 Ps for CP4P. I don't want Stakeholders, because when people think Stakeholders, they think in terms of their own hidden agenda. The concept of Stakeholders is turf; they never talk of Partnership where the ultimate beneficiary is the poor - mostly the poor.

The State will provide the support policies and initial funds - this is where the billions of pesos of coco funds will come in. The policy will be in the form of a law; that's why we need sympathetic ears like those of Senator Cynthia Villar. What I have been proposing is the reverse of the legislative process: Let us agree on the implementing rules & regulations (IRR) first before we propose the law; the Corporate Plan I mentioned earlier serves as the IRR. This essay is my contribution to that end. The funds will be good for start-up programs and projects. The Private sector will help commercialize or spread any and all innovations. The Philanthropists will donate more funds for the common purpose. The People will lead the citizens in taking active part in the implementation of any project, such as the putting up of a processing plant for coco milk and the distribution and selling of it. The Peasants are there to learn to help themselves.

Goal / Strategy: Inclusive Market-Oriented Development (IMOD)

Someone asked me, "What's wrong with a council composed of farmers, processors and exporters all of whom are stakeholders in the value chain of the coconut industry, all inter-dependent?" Good question! Here's the answer, from ICRISAT Director General William Dar: "Conventional value chains don’t have this focus on the poor. Without this focus, larger-scale farmers and wealthy middlemen tend to capture most of the market opportunities." That's saying it kindly. He said that when he accepted the MS Swaminathan Award for Leadership in Agriculture for 2013 in India given by the Trust for Advancement of Agricultural Sciences (TAAS) also based in India (see also my "TAAS or SALA? William Dar is Global Science Leader of the Year 2013," 28 June 2013, blogspot.com). Dar refers to himself as a servant-leader; in this regard, Dar is my servant-shepherd; I shall not want of ideas.

IMOD calls for the inclusion of the poor peasants in all links of the value chain. NEDA's inclusive development is not inclusive enough. To go straight to the point, under IMOD, a peasant association is itself the source of credit, inputs, equipment, inventory credit (warrantage) etc; the association is itself the input supplier, producer, processor, handler, trader and exporter, none other - there is no middleman who eats and becomes fat from eating the profits.

And I submit that the best form of that peasant association, bar none, is the cooperative.
Now then, I'm proposing that those billions of pesos of coco funds be made the seed money for 100 coco cooperatives, because I know that coops today cannot be controlled by wealthy moneymakers like William Shakespeare's moneylender Shylock who would extract his pound of flesh literally from Antonio, the one-and-only merciful merchant - may his tribe increase!

The Cooperative Development Authority (CDA) tightly controls the coops. I know it does because we have gone through a year-long process (our fault) of establishing the Nagkaisa Multi-Purpose Cooperative in my hometown of Asingan in Pangasinan and as the resident editor and ideas man, I have had to read the Articles of Cooperation and the By-Laws to imbibe and perhaps improve on them. You can ask Roger Daranciang, Chair and Lito Sales, Vice Chair. Right now, 2 CDA rules come to mind. One, your share capital cannot exceed 10% of the total. Two, you cannot be a member of 2 committees at the same time.

Specifically, I propose this simple budget plan, all for the setting up of new coco coops:
PhP 05 billion - for 01 Coco Coop Federation headquartered in Manila
PhP 40 billion - for 40 coops in major coco-based municipalities all over the country
PhP 55 billion - for 59 coops in other municipalities in the Philippines where the coconut is a secondary presence

Each Coco Coop, including the Federation, shall be governed by a Board of Directors composed of representatives of the 6 Ps: Public (a local government representative), Private (local businessman, but not a trader or exporter), Philanthropist (one who practices lovingkindness), Partisan (advocate of the poor), Preacher (guardian of morality, preferably Roman Catholic), and Peasants (5 of them, local, enough to represent the broad interests of the poor farmers), to make 10 Directors. Not a council but a cooperative, so that it will be governed by strict CDA rules and regulations, and there will be transparency.

That's my Coconut Coop (CoCo) Plan. How did I come out with my CoCo Plan? You might say a little cuckoo told me. In creative thinking, you don't have to be crazy, but it works!
I'm not done. By all means, let the women lead the pack! After all, in the matter of sex, the female is better. In the matter of matrimony, she is the better half in the matter of money.