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PROVINCIAL COMMODITY INVESTMENT PLAN (PCIP)

Province of Ifugao

I. DEVELOPMENT CONTEXT

Ifugao is one of the 6 provinces comprising the Cordillera Administrative Region which was

created in 1987 through Executive Order 220. It has 11 municipalities, 175 barangays and 10

Special Economic Zones occupying 256,636 hectares of land area that makes up 14.03% of the

total land area (1,829,368 has) of CAR. From only 10.71 percent of the province land area

classified as alienable and disposable (A & D) lands in 2003 based on NAMRIA land

classification, it increased to 21.84% in 2010.The Province is a landlocked mountainous

province located in the Northern portion of Luzon Island and lies between 120°40’ to 121°31’

longitude and 16°35’ to 17°5’ latitude. It is bounded on the east by Isabela, Benguet on the

west, Mountain Province on the north and Nueva Vizcaya on the south. The province of Ifugao

is predominantly rural. Only 5 out of 11 municipalities have urban barangays.

Ifugao has a total population of 191,078 with 39,479 HHs. From 2000 to 2010, growth rate is at

1.69%. The province’s 2010 population of 191,078 persons translated to a gross density of 74

persons per sq. kilometer which is lower than the regional average of 82 persons per square

kilometer and the national average of 308 persons per square kilometer. Males outnumbered

females. The sex ratio for the years 2000 and 2010 are 104 and 106 respectively. This means

that in 2010 there are 106 males in every 100 female.

Based on the 2012 CBMS conducted province-wide, a total of 75, 637 are in the labor force of

the province of which 60.44% are male and 39.56% are female. Economic dependency ratio is

64 for the whole province meaning for every 100 independents, there are 64 dependents.

Literacy rate in 2012 is 92.10%.

Ifugao with its rugged, mountainous, flat, lowland characteristic and fertile lands is conducive

for the development of Agriculture. There are several agricultural crops grown in the Province

which are classified as seasonal and permanent crops. Seasonal crops are dominated by two

staple food; rice and corn. Yellow corn is pre-dominantly used for commercial purposes

compared to the white corn.

Other seasonal crops include vegetables, rootcrops and legumes. Permanent crops which are

planted independently or are intercropped with other plants includes the following: robusta

and arabica coffee that are planted mostly in the upper portion of Ifugao. Others are mango,

pomelo and different variety of oranges.Other emerging fruit crops are rambutan, durian,

lanzones and rattan. A seasonal number of these fruits are already in the bearing stage.

Sugarcane also has great potentials.

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Coffee (67.94%) however has the highest production under the permanent crops followed by

banana (21.97%). Coffee which is classified as arabica and robusta produced a total production

of 3,198.51 metric tons for the past three years or an average production of 1,066.17 metric

tons annually.

II. DEVELOPMENT VISION AND FRAMEWORK OF IFUGAO

UNESCO recognizes Ifugao as a world heritage site with the inscription “a living cultural

landscape”. As such the province stands to gain in terms of attention and assistance of national

government and international organizations in the preservation of and enhancement of its rice

terraces and unique culture. Likewise, the province is recognized as the only province in the

country as a globally important agriculture heritage system site along with 7 others in the

world by FAO.

Anchored on this potential, the Province vision is to become an “Eco-Cultural Tourism Center

with God-Loving and Empowered PeopleLiving in Life-sustaining communities and a Life-

Enhancing Environment where Principled Governance Prevails”.

Local economic development is the main goal in Ifugao provincial development and the

province believes that poverty reduction and the aspiration for better quality of life for every

Ifugao are hinged on the ability of the local population to generate income. While the province

have improved a lot in social and economic development, its potentials in eco-cultural tourism

and agro-industry when harnessed can serve as the springboard for a sustainable economic

development that can have rippling effects to the whole region.

The province’s economy is propelled by the agriculture activities wherein the municipal

products of Ifugao are agricultural in nature, reflective of the main economic activity in the

area.

Agricultural data has shown that the province is the top producer of “tilapia” in the region with

a harvest of 1, 461.51 metric tons in 2012. In terms of corn production, its 2 lowland

municipalities of Lamut, Alfonso Lista and parts of Aguinaldo have produced at least 261,643

metric tons from 2009-2011 making Ifugao the top producer of corn in CAR and 19th

in the

country.

As of 2012, 62,465 metric tons of palay were harvested from about 17,193 hectares of irrigated

and rain-fed production areas. Of this volume, 1,868 metric tons are “tinawon”, a native rice

variety. The potential of this rice variety lies in it being organic and harvested from the 2,000

year old rice terraces and thus highly priced at about P100.00 per kilo. “Tinawon” has been

started to be exported in 2006.

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Organic vegetable and root crops farming is also seen as the comparative advantage that the

province has over main vegetable producers in nearby provinces. Leafy vegetables and fruit

vegetables production has been increasing. About 7, 329.18 metric tons organic “camote”

was harvested in 2012. Of all fruit bearing trees in the province, banana occupies the most at

813 hectares, yielding about 6,510 metric tons in 2012. Demand for banana is insatiable not

only for domestic consumption but also in the export market.

Ifugao is also the second top producer of coffee in CAR producing 1,061.35 metric tons in 2012

from about 2,513 hectares of plantations found in higher terrains in the province. Two

homegrown coffee products, the Terraces Brew and Lagawe Arabica Blend have already made

it into the local and international markets. Coffee production and development is among

those seen in agri-industry that has great potentials of complementing eco-cultural tourism.

Among the important strategies for agri-industry and eco-cultural tourism development

includes developing organic farming making the province as the region’s major source of

organic rice, vegetables, fruits and coffee; promotion of high value crops and processing

technologies; investment promotion for more contract growing project; promoting the use of

integrated farming systems in the rice terraces and agricultural diversification to increase

stability of income; intensifying the promotion of priority industries such as agri-business, high

value products and tourism-related industries; establishing marketing outlets outside the

province, encouraging private investments including the setting-up of travel and tour agencies

in the province, purposive promotions and marketing of our tourist destinations; enhancing

tourism related community-based livelihood activities and implementing critical support

infrastructure that are focused on impact projects.

III. PRIORITY COMMODITY CHAINS DEVELOPMENT

A. COMMODITY PROFILE

Coffee is the regional commodity in the Cordillera Region as adopted by the Regional

Development Council. Coffee is also the regional one-town, one-product of the region. Its

potentials include being the identified commodity for agro-forestry programs in CAR.

Aside from its forestry function, coffee products come in the following: as dried beans, as

roasted coffee (grounded and whole beans) and in other product forms like coffee wine,

coffee extracts and soap.

Coffee in the province of Ifugao is harvested in about 2,513 hectares of plantations found

in higher terrains in the province. It involves at least 2,826 households as coffee

growers.Its harvest of 1,061.35 metric tons in CY 2012 accounts to 18.71% of the total

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coffee production in CAR. The beans are of 2 types: Arabica and Robusta with Robusta

having 98.41% of the total coffee production in the province.

Coffee areas are mostly found in the municipalities of Asipulo, Kiangan and Lagawe and

scattered in upland parts of Aguinaldo, Mayoyao, Banaue, Lamut, Hungduan and Hingyon.

Stakeholders in the coffee production and development industry would include the coffee

growers, coffee buyers and traders of raw coffee beans, coffee processors and the sellers

or market outlets for processed coffee. Planting, care and management of coffee trees,

harvesting, dyring, depulping, sorting, packing and transporting are all the responsibilities

of the coffee growers.

Support facilities for input provision include 3 PLGU nurseries, 4 MLGU nurseries, 2 private

nurseries and 16 agricultural farm supply stores in the province. On trading of raw beans,

there are at least 7 individual local traders. On product development, there are 3

Associated Processors, 2 individual processors and 1 multi-purpose cooperated engaged in

coffee processing. This includes sorting and grading of coffee beans, roasting and grinding

and packaging and labeling.

At present, only 10% of the raw coffee bean products are processed, 20% are processed

blended coffee and 70% are sold in their raw robusta green and dried bean form. The

PLGU intends to invest in coffee production and development targeting increase in coffee

production and increase in the percentage of processed beans and blended coffee.

B. INVESTMENT PLAN

Investment in coffee production and development is seen as among the strategies for

increasing income of farming households complementing income from other agricultural

crops and off-farm activities. The primary objective is to increase the area of coffee

plantation and the volume of production of coffee both by 40% in CY 2019 (from 1,061.35

to 1,485.89 in 2019). Another objective is for processed organic coffee and blended coffee

will increase to 50% and 30% respectively so that green beans and dried berries that are

unprocessed are being sold directly to traders shall be only 20% of total coffee production.

This is an indicator that coffee growers are also into coffee processing for value adding.

Coffee production and development shall be able to create at least 700 job opportunities

for empowered coffee farmers infusing at least P 21, 600,000 investments (at P 30,000.00

per hectare) and increasing income of farmer households by 50%.

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Investments shall come in the improvement of farm to market roads as strategy for

improving access to existing and potential coffee production areas, establishment of

appropriate irrigation facilities, establishment of coffee-based agro-forestry demonstration

projects at the communities and conduct of various trainings on Farm Management, Coffee

Rejuvenation, Organic Coffee Production and others. For provision of inputs, improvement

of PLGU nurseries and establishment of MLGU and BLGU nurseries are seen as critical if we

are to assure the production of quality coffee seedlings.

For processing, there is a need to provide post-harvest facilities and equipments and to

organize and strengthen coffee growers association not only for them to be able to better

manage their coffee development projects but also for easier linkage with government

programs. Establishment of a provincial coffee center comes to the fore for processing and

marketing needs including trainings and demonstration needs. Existing small processing

centers have to be upgraded for them to comply with FDA requirements. Product

development, packaging and labeling shall also be done.

A mechanism for quality control shall also be in place including strategies for making coffee

market opportunities available to coffee growers.

The PCIP Success Indicators, Strategic Objectives and Strategies are summarized as follows:

PCIP Goals • Contribute to increase income of coffee farmer households

by 20% in CY 2017

Outcomes • Creation of 350 job opportunities for coffee farmers

• Increased investments in coffee production and

development to P 21,600,00.00

Growth Objectives • Increased coffee production by 20% in 2017

• Processed organic blended coffee will be 40% of total coffee

production, organic processed robusta coffee will be 40%

and only 20% will be sold in its raw form as organic robusta

green and dried coffee beans

Key Strategies Innovation:

- Production of quality seedlings,

- Coffee Rejuvenation,

- Coffee Farm Management Trainings,

- Strengthen Coffee Growers and Producers Associations,

- Establishment of a Provincial Coffee Center and

- Enactment and implementation of an Ordinance for the

development of provincial agriculture commodity

champions.

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Cost Reduction:

- Organic inputs and

- Provision of processing equipment and post harvest

facilities like MPPs, driers and coffee hullers.

Investment Strategy:

- Expansion and development of new farms,

- Improving quality through organic farming and

- Investments in farm to market roads and irrigation

system.

Redistribution:

- Organize and make functional coffee growers and

producers’ associations.

Market Penetration:

- Attendance to trade fairs and expository tours, product

matching and promotion and

- Linkage to national and international markets.

IV. INSTITUTIONAL ARRANGEMENTS

The Provincial Program Management and Implementing Team (PPMIT) organized in the PLGU

for the Philippine Rural Development Program (PRDP) shall have general supervision in the

implementation of the projects identified in the PCIP. The PPMIT is chaired by the Provincial

Planning and Development Coordinator. I-Plan Component shall be the prime responsibility of

the Provincial Planning and Development Office (PPDO).

Based on the PCIP, projects to be funded under the I-BUILD and I-REAP components shall be

subjected to the selection process as specified in the PRDP operations manual. As needed, the

proposed projects shall be reviewed if they comply with the PRDP’s Social and Environmental

Safeguards (SES) requirements.

Feasibility studies shall be prepared for major projects especially for the I-BUILD and I-REAP

components. The Regional Program Management and Implementing Unit (RPMIU) chaired by

DA-CAR shall review and endorse projects to the National Program Management and

Implementing Unit (NPMIU) of the Department of Agriculture. When approved, I-BUILD

projects will be handled by the Provincial Engineering Office (PEO) including infrastructure

projects like irrigation systems and multi-purpose pavements identified in the I-REAP

component.

Projects for rural enterprise development and agriculture productivity shall be handled by the

Provincial Agriculture, Environment and Natural Resources Office (PAENRO) including agro-

forestry development. A system for Monitoring and Evaluation including feedback mechanism

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from intended beneficiaries shall be prepared by the PPDO and a monitoring and evaluation

team shall likewise be formed that shall be responsible not only for progress monitoring but as

well as for the preparation of project status reports and evaluation reports.

Coffee Growers’ Association, Coffee Processors’ Association including private individuals

benefitting from rural enterprise sub-projects shall have to submit action plans and periodic

financial statements. Secretariat services shall also be provided by PPDO to provide support

services to the PPMIT.

V. EXPANDED VULNERABILITY AND SUITABILITY ASSESSMENT

VULNERABILITY AND SUITABILITY ASSESSMENT FRAMEWORK

BSWM has a standard format for assessing vulnerability and suitability for crop production.

Vulnerability is assessed through area exposure to extreme weather events of frequency of

typhoon and drought. Suitability is assessed through land limitations and land suitability. For land

limitations, factors considered are the slope and the risk of the production area to flooding. For

land suitability, commodities were grouped and respective soil analysis was done as to what type of

soil is best suited for a certain commodity. The framework for VSA is as follows:

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The software for EVSA has apportioned 50% of the total parameters for the original VSA as studied

and presented by the BSWM. Based on such criteria, the following is the corresponding scores and

rank of the municipalities in the province.

ADDITIONAL PARAMETERS FOR EVSA

Considering coffee as prime commodity and considering socio-economic factor for the Expanded

Vulnerability and Suitability Assessment (EVSA), the following are included as additional parameters

to measure suitability:

• Area of Coffee Production,

• Potential Expansion Area for Coffee Production,

• Production,

• Number of Households Engaged in Coffee Farming, and

• Households with Income below Poverty Threshold.

EVSA RESULTS

Using the additional parameters and combining with the VSA done by the BSWM (land suitability,

land limitations, exposure to extreme weather events and drought), a final ranking for vulnerability

and suitability assessment for municipalities is determined based on coffee as the commodity.

The table below presents the data along the 5 additional parameters and the corresponding

percentage allotments based on ability to influence coffee production and number of potential

beneficiaries.

Municipality

Composite

Index based on

BSWM Criteria Old Rank

LAMUT 0.53375 1

ALFONSO LISTA 0.5009 2

LAGAWE 0.4526 3

AGUINALDO 0.4351 4

MAYOYAO 0.4216 5

HINGYON 0.40385 6

KIANGAN 0.40045 7

ASIPULO 0.36805 8

BANAUE 0.3677 9

HUNGDUAN 0.3493 10

TINOC 0.3475 11

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For area of production, the table and the following map would indicate that Asipulo has the highest

occupying more than half of the total coffee production area in the province at 55.47%. Lamut and

Mayoyao occupies 22.20% and 8.83% respectively.

MUNICIPALITY

AREA_OF_COFFEE_P

RODUCTION_ACTUA

L_DATA (.15)

POTENTIAL_EXP

ANSION_AREA_

FOR_COFFEE_P

RODUCTION_AC

TUAL_DATA

(.05)

PRODUCTION_

ACTUAL_DATA

(.10)

NUMBER_OF_

HHS_ENGAGE

D_IN_COFFEE_

FARMING_ACT

UAL_DATA

(.10)

HHS_WITH_INCO

ME_BELOW_POVE

RTY_TRESHOLD_AC

TUAL_DATA (.10)

OLD_COMPO

SITE_INDEX OLD_RANK

NEW_COMP

OSITE_INDEX

NEW_RAN

K

ASIPULO 1,394.00 400.00 588.81 814 67 0.36805 8 0.65824 1

LAMUT 558.00 200.00 236.02 264 44 0.53375 1 0.48865 2

LAGAWE 59.00 200.00 24.84 1,037 40 0.4526 3 0.42734 3

MAYOYAO 222.00 300.00 93.91 180 69 0.4216 5 0.41657 4

AGUINALDO 39.00 10.00 16.4 45 70 0.4351 4 0.33055 5

ALFONSO LISTA 0.00 0.00 0 0 54 0.5009 2 0.32759 6

HINGYON 10.00 90.00 3.98 126 58 0.40385 6 0.3137 7

KIANGAN 65.00 150.00 27.33 52 47 0.40045 7 0.30901 8

BANAUE 45.00 25.00 18.88 173 66 0.3677 9 0.30704 9

HUNGDUAN 28.00 85.00 11.93 35 65 0.3493 10 0.2901 10

TINOC 93.00 35.00 39.25 100 52 0.3475 11 0.28019 11

TOTAL 2,513.00 1,495.00 1061.35 2,826

Data Source: MAOs, PAENRO Computation, BSWM, BAS (CY 2012)

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As to potential area for coffee production, Asipulo, Mayoyao, Lamut and Lagawe have large areas

that can be developed for coffee production.

55.47% of total coffee production is produced by Asipulo followed by Lamut with 22.23%.

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For number of HHs engaged in coffee production, Lagawe has the most number followed by Asipulo

and Lamut with 1,037, 814 and 264 HHs respectively.

Summarizing all parameters including the proportion of HHs with income below poverty threshold,

Asipulo ranks 1st

in suitability and vulnerability assessment on coffee production among all

municipalities.Lamut and Lagawecomes in 2nd

and 3rd

.

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VI. THE PCIP MATRIX

The PCIP matrix enumerates the constraints and opportunities for coffee production and

development in the province under each value chain segment. It identifies potential

interventions, target outcomes and output indicators, lead players and estimated project cost.

From the PCIP, projects for I-BUILD and I-REAP shall be identified.

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