From Farm to Hospital: Market Integration in the Philippines
When it’s dinner time at Bukidnon Provincial Medical Center in the southern Philippines, the food on patients’ plates includes vegetables grown by local farmers trained by East-West Seed Knowledge Transfer Philippines.
A new model for market integration brings EWS-KT farmers’ produce to institutional buyers, providing safe, nutritious vegetables to local communities in Bukidnon province while helping farmers realize the economic benefits of following Good Agricultural Practices (GAP).
The First Step: Adopting Good Agricultural Practices
Philippine Good Agricultural Practices focus on food safety, product quality, environmental protection, and workers’ health, safety, and welfare. Training farmers in GAP is central to EWS-KT’s Developing Vegetable Value Chains to Meet Evolving Market Expectations in the Philippines project, co-funded by Australian Centre for International Agricultural Research, and was also a key component of the 2021 Integrated Coffee-Vegetable Farming Systems project in Bukidnon, supported by GIZ and Nestlé.
Farmers trained through these projects and certified in GAP have the knowledge and capacity to produce high-quality, safe-to-eat produce—a competitive advantage in an area where many farmers routinely apply excessive amounts of pesticide to their crops. However, even when their vegetables are of the highest quality, farmers still need to connect with a buyer.
In the past, market integration efforts by the EWS-KT Philippines team consisted largely of providing farmers with the contact information for trusted buyers. With the Developing Vegetable Value Chains project, EWS-KT has now taken on a facilitation role with the institutional market and is providing pathways for groups of farmers to sell their produce in a sustainable and profitable way.
COVID-19: The Turning Point
Before the COVID-19 pandemic began, vegetables produced by EWS-KT farmers in Bukidnon were generally purchased by traders and transported to Manila, Cebu, or other areas of the Philippines. When pandemic restrictions made that impossible, EWS-KT looked for opportunities closer to home.
Not surprisingly, one market with high demand for fresh produce during the pandemic was hospitals—and farmers following GAP are a good match for hospitals because of their emphasis on food safety. “We saw this as an opportunity to link GAP farmers to a market that requires the same food safety principles that they’re implementing,” explained Aila Irizsa Ibanez, Knowledge Transfer Specialist with EWS-KT Philippines.
However, when the EWS-KT team explored connecting farmers with government hospitals like Bukidnon Provincial Medical Center, they discovered how complex the process was, with competitive contracts for fruits and vegetables going out to bid every 6 months. This was not something they could do alone.
Working with Centro Supersales, Inc.
To build market integration for GAP farmers, EWS-KT connected with Centro Supersales, Inc., a fruit and vegetable consolidator with almost a decade of experience working within the system. Centro Supersales has won contracts to provide produce to seven smaller provincial hospitals as well as Bukidnon Provincial Medical Center.
Consolidators and other intermediaries play a central role in the vegetable value chain in the Philippines, including in the institutional market. Every 6 months, Centro Supersales joins the bidding for contracts from the provincial government. Once the bid price is set, all vegetable products supplied to the consolidator by EWS-KT farmers have a fixed price range for that 6-month period, no matter what the prevailing price is in the market. This benefits farmers because they can adjust their vegetable production accordingly and they know in advance how much income they will be getting.
In order to meet the contract needs, EWS-KT has grouped the GAP farmers into four geographically based clusters, with five to ten farmers in each cluster. One of the clusters provides vegetables for Bukidnon Provincial Medical Center; another serves seven municipalities in Bukidnon.
Spotlight: Leah L. Salvaleon
A key farmer in the Developing Vegetable Value Chains project, Leah works alongside the farmer cooperative that supplies vegetables and fruits for Bukidnon Provincial Medical Center. A dynamic, resourceful, and highly motivated woman, she plays many roles: farmer, accountant, delivery person, and more.
Leah became certified in GAP last year, and she is planning to train other female farmers in her municipality in GAP and to work with them to plant the crops that area hospitals are requiring.
After the vegetables are delivered by the farmer clusters to Centro Supersales, the consolidator inspects them to ensure high quality, and then the vegetables are picked up by ambulance or a provincial delivery truck and transported to the hospital.
Centro Supersales also bids to supply food to provincial detention centers, feeding programs, and other government entities. This diversification came in handy during one 6-month period when the consolidator did not get the hospital contract; EWS-KT farmers were able to supply these other end users instead.
Building on the Model
EWS-KT currently plays an intermediary role between farmers and the consolidator: Centro Supersales sends purchase orders to EWS-KT with the items required and the date of delivery, and EWS-KT passes this information on to the farmers. In addition to the farmer clusters, EWS-KT is working with the municipal-level Lantapan Vegetable Farmers Marketing Cooperative, and EWS-KT key farmers from other clusters have begun working with the Lantapan coop in the vegetable supply chain for area hospitals.
Spotlight: Pangantucan Farmer Cluster
The Pangantucan farmer cluster, alongside LnM Farm and the Lantapan coop, works with Centro Supersales to supply vegetables and fruits to nearby provincial hospitals. This farmer group is led by Elvira Baño (second from right), one of the farmer beneficiaries of EWS-KT’s Integrated Coffee-Vegetable Farming Systems crop diversification project in Bukidnon.
As EWS-KT prepares to transfer more responsibility to the farmer clusters, the team is exploring the possibility of federating the farmer clusters so they can work as a group to access a broader scope of modern markets. Since each government contract lasts only 6 months, EWS-KT is also looking into linking farmer groups to private hospitals for more steady purchasing arrangements.
While this market connection model involves a relatively small number of farmers, it shows the potential of pairing a stable supply of vegetables from smallholder farmers with a stable demand from market actors. The benefits of increased market connectivity also make the economic advantages of adopting GAP much clearer to the farmers.
“We hope to continue this market integration, because market linkages for our farmers have been a major problem,” said Aila. “Market integration makes vegetable farming sustainable.”