I.

Name of Project : Abaca Fiber Processing and Trading

Project Location : Namut, Tudela, Misamis Occidental
Proponent : Magengat Sag Dal Nag Balan Saan, Inc.
Accreditation : Fiber Industry Development Authority (on-process)
Address of Proponent: Sitio Tonggo, Namut, Tudela, Misamis Occ.
Project Cost : PhP 500,000.00
No. of Beneficiaries : 151
Source of Funds : National Greening Program-DENR

II. Background

Introduction

Abaca (Musa textiles Nee) a plant belonging to the musaceae family or Manila hemp as
it is known commercially in international trade is endemic to the Philippines that grows
in the wild and in most rural areas. It is cultivated in some upland marginal areas or
grown commercially for its fibers which are used as raw materials for pulp, cordage and
handicraft industries. Abaca is considered as one of the strongest among natural fibers.
The crop has been proven profitable and has continuously provided income to many
Filipinos, especially those to the uplands for their subsistence.

Rationale

Abaca when intercropped with fruit trees or timber trees could not only be a good
source of income to the upland dwellers but also prevent soil erosion. Therefore
integrating abaca into existing reforestation project not only provides additional income
to farmers but also maintains an ecological balance of nature as farmers can help to
protect and maintain target areas as well through ecologically sound abaca fiber
production. And as abaca fiber’s demand in both the local and international markets
rapidly surge and as more areas are available for planting, opportunities and
developments in the uplands awaits like those living within the peripherals of Mt.
Malindang Range Natural Park.
 In Namut, Tudela, Misamis Occidental, abaca has been cultivated ever since and farmers
sold their fibers to local traders at minimal price. The people’s organization felt the
plight of the local farmers and find out for an opportunity to engage in the business of
abaca fiber processing and trading to free themselves from unscrupulous businessmen.
The large tract of land planted with abaca in the area is targeted by the organization.
Owners of the abaca plantation will be encourage to enter into supply contract with the
organization. The lack of capital outlay for its operation is a problem that should be met
thus this proposal.

III. Objectives:

1. To maximize land potentials and productivity.

2. To acquire capital outlay for abaca fiber processing and trading.
3. To augment the income of marginal farmers.
4. To provide and generate jobs of upland dwellers.

IV. Project Description

The people’s organization will engaged in the buy and sell or trading of abaca fibers
since most of its members are already engaged in abaca plantation. Fibers will be
bought according to classification or grade in a reasonable price. Farmer-members are
also encourage to plant more abaca for additional income of their family. The
organization will hire laborers for hauling and storage of abaca fibers and staff to
handle the day to day activities.
V. Mechanics and Implementation
1. Construction of 1 unit abaca fiber processing center building.
The abaca fiber processing center will be constructed in a strategic location that is
most accessible to farmers which will serves also as warehouse of the people’s
organization traded abaca fibers. The maintenance of the building will be the
responsibility of the people’s organization.
2. Procurement of abaca decorticating machine and scheme for the payment of its
use. The decorticating machine will become one of the peoples’ organization’s
fixed asset. The officers will set guidelines for the use of the machine including the
payments or shares for the use thereof.
3. Procurement of weighing scale.
When all the facilities are completed and equipment are available the Peoples’
Organization will start buying abaca fiber at the prevailing market price on site. The
 POs may expand its trading coverage to neighboring barangays or municipalities
depending on the availability of capital.

4. Management Scheme.
The Protected Area Management Office will be primary responsible in the
implementation through technical assistance that will be extended to the
beneficiary organization. The People’s Organization will appoint from among its
officers who will serve as its project officer that will focused on the
implementation of the project. The president may assume the position as project
officer who will execute the activities stipulated in the project implementation
plan. The treasurer of the organization will act as the cashier and disbursing officer
of the project and shall maintain the daily transaction and all financial records of
the project based on the work and financial plan. On the trading activities of the
project, the organization may hire employees to engage in the buying of abaca
fibers such as laborers and those involves in the weighing and grading of abaca
fibers. They may receive compensation based on the accepted labor standard in
the locality. The buildings and equipment shall be properly keep safe and should
be in working condition with the help of a property custodian that will be
entrusted to a committee that will be formed by the organization.
On the management and operational scheme for payment or rental on the use of
the decorticating machine, the PO will implement a sharing scheme of 40% and
60% for the PO and the abaca plantation owners respectively in the gross receipt
sales or proceeds of the abaca fibers. The owner of abaca plantation will provide
for the payment of labor or wages of the decorticating machine operator and
expenses for the fuel or gasoline.

VI. Expected Output

A memorandum of agreement will be signed between the people’s organization and
members involved in the abaca fiber production and trading project. The income
generated from the use of abaca fiber decorticating machine and trading shall be
deposited in the People’s Organization account and shall form part as their income in
whole or in part which shall be distributed equally to its members every year-end as
dividends after certain amount is retained for additional capital, maintenance and
other operating expense.
The sharing schemes for the income derived from the business shall be the following:
For the use of decorticating machine 40% is intended for additional capital, 20% for
the maintenance, 30% for the dividends and 10% will be set aside for the
establishment of additional abaca plantation.
 For the profit derived from trading abaca fiber 50% is intended for additional capital,
30% as dividends, 30% as supervision cost and 10% for abaca plantation
establishment.

VII. Work and Financial Plan (see attached)

VIII. Monitoring and Evaluation
Monitoring and evaluation will be done periodically to determine the progress, impact
and any change stories that the project may bring and may contribute to the
community. The proponent will be required to submit their monthly financial
statement based on the standard existing accounting and auditing procedures.