Sustainable Agribusiness in the Philippines: Three Transformative Examples of Environmental Impact 

Introduction

Agricultural and agribusiness activities are not usually considered supportive of sustainable development targets. However, the use of intensification technologies, the expansion of agri-food markets internationally, and the financialization of production and consumption have all significantly impacted agriculture. Consequently, agricultural activities have become beset with social and economic problems, with small producers, who are often the most affected, playing a significant role. This has been identified as a major cause of environmental degradation.  

The transition of selected agribusiness initiatives to sustainability-conscious ones is thus a welcome development, albeit an unexpected one.  Agribusiness companies have addressed sustainability issues more aggressively since 2007. A number of initiatives launched by the corporate sector have recently been prompted by the need for CSR integration in the agribusiness sector, and this helped promote sustainable agricultural practices.    These initiatives, by achieving the triple bottom line and significantly reducing environmental degradation, have not only given rise to economic and social impacts but also provided a strong reassurance about the sustainability of agribusiness. 

Economic impacts are the effects on the level of economic activity in a given area. They may be viewed in terms of (1) business output (or sales volume), (2) value added (or gross regional product), (3) wealth (including property values), (4) personal income (including wages), or (5) jobs. These measures can be indicators of improvements in the economic well-being of area residents. 

On the other hand, social impacts include the effects of a mitigation project on 1) People’s way of life – that is, how they live, work, play, and interact with one another on a day-to-day basis; 2) culture – their shared beliefs, customs, values and language or dialect; 3) community – cohesion, stability, character, services, and facilities; 4) political systems – the extent to which people can participate in decisions that affect their lives, the level of democratization that is taking place, and the resources provided for this purpose; and 5) health and well-being – health is a state of complete physical, mental, social and spiritual well-being and not merely the absence of disease or infirmity. 

Meanwhile, environmental impacts are the effects of agribusiness activities on air quality, water (e.g., seas, rivers, and groundwater) quality, soil quality, waste production, sound pollution, and effects on ecosystems and biodiversity. 

An example of a sustainable agribusiness project and its impacts is Batian Nuts in Kenya, established in 2017.  It is an agro-processing enterprise that gathers and processes edible aflatoxin-free nuts, i.e., macadamia nuts, groundnuts, and cashew nuts produced by smallholder farmers and exported to the United States of America, Europe, and Asia.  The enterprise distinguishes itself from other nut buyers and fosters sustainable means through 1) sourcing directly from smallholder farmers, which allows the company to consistently pay a higher farm-gate price per unit weight of nuts, bringing the volume sourced per farmer up over time;  2) giving cash upon collecting nuts from farmers, as this is a practice among familiar buyers in the area; and 3) facilitating best practices among its partner- farmers by giving them training on good agricultural practices. The impacts identified by the project were: 1) improved dietary diversity and nutrition intake among low-income households; 2) reduced health risks in the community; 3) enhanced resilience of small-scale farmers; 4) improved livelihoods of farmers engaged in the groundnut value chain, and 5) improved soil health and biomass.  

In the Philippines, a growing number of agribusiness enterprises are using sustainability as a strategy. Companies that involve sustainability in their strategy have been noted to create business opportunities, achieve a better quality of life for communities, and save natural resources.  The following section discusses the sustainability initiatives and impacts of three agribusiness entities in the Philippines.

Three Philippine Sustainable Agribusiness Initiatives

The information about the three initiatives has been gathered from the particular special problems of different scholars, such as Mutia (2022), Abadiez (2022), and Gamala (2023), and the thesis of Suaze (2019). One is a social enterprise, the next is a family business, and the third is a processors’ association.

The Social Enterprise

SIERREZA is a social enterprise that sources its products and ingredients from Dumagat/Remontado indigenous farmers in Tanay, Rizal. The enterprise’s name comes from the Sierra Madre Mountain range and was founded by Cherrys Abrigo, a 34-year-old chemical engineering graduate of the University of the Philippines Los Baños (UPLB) and an environmentalist with a Master’s in Environmental Science degree from The University of Auckland. Cherrys’s involvement with the indigenous farmers started in 2016 with a United Nations Development Programme (UNDP) grant to educate and promote sustainable agriculture among 12 Dumagat/Remontado families. The farmers were trained and taught about organic farming to reduce the environmental impact of their activities, such as kaingin (i.e., swidden farming) and illegal logging. After the project, Cherrys decided to use her savings to establish the start-up SIERREZA.  Its mission is to empower marginalized farming communities and help improve their livelihood through community-supported agriculture and fair trade practices.  She aims to ensure a consistent market for the Dumagats’ products and a sustainable livelihood for the indigenous community.

The enterprise employed two full-time workers. They handled sales, managed finance, and attended to production operations. The operations staff took the farmers’ produce from Daraitan, Tanay, Rizal, and other areas and delivered it directly to institutional buyers like Healthy Options and Good Food Corporation and household buyers. 

So as not to pressure the indigenous farmers to use chemicals to increase their production and improve the quality of their produce, SIERREZA allows each farmer to decide on what kind of fruits and vegetables they will plant. The farmers usually plant varieties of banana, ube (i.e., purple yam), guyabano (i.e., soursop), taro, ginger, pineapple, and blue ternates. The owner buys what is available for harvest every week. In relation to the economic benefits derived by the indigenous farmers, they were able to get good prices for their crops as they, in consultation with the founder, set the price for their products.  They based their prices on the prevailing public market prices, the effort they exerted, and the seasonality of the products.  Further, Cherrys introduced new livelihood projects like swine production and beekeeping, with the help of UPLB experts, to the indigenous farmers for them to diversify and increase their income.  Recently, the farmers organized themselves into a cooperative upon the encouragement of the founder (Photo 1.)

In summary, the economic impact of social enterprise is the sustainable livelihood of the community. The project’s target beneficiary, being an indigenous group, embodies the social impact of SIERREZA.  Further, their customers can buy safe and clean organic produce, and the farmers are not pressured to produce what the market demands. Moreover, the farmers have also been empowered to assume an active role in the pricing of their products and to form themselves into a cooperative. On the other hand, the environmental impact is that of the farmers’ utilization of organic farming practices, which could improve fertility, soil structure, and biodiversity, among others, and the farmers’ not being tempted to apply chemicals as there is no production quota and product and quality specification ser by SIERREZA.  There is also the prevention of kaingin and illegal logging among the farmers as a result of their earning a decent income.  

The Family Business

Gubat Agritech Industries Company (GAICO) was established in 2005 as an agribusiness partnership of the Escoto siblings. It is registered with the Securities and Exchange Commission (SEC) a family business mainly created to provide additional livelihood and income to farmers in Gubat, Sorsogon. At present, the company’s general manager is Karylle Glipo Escoto, the daughter of one of the business’s partners. GAICO is a medium-sized company involved in the different processes of coco coir processing. Its geotextile net is its main product, accounting for more than half of the company’s sales. These coco nets play a massive role in government projects and are mainly used for irrigation slope protection of slopes on roads or national highways. The demand for GAICO’s products was boosted by a memorandum circular which stated that all national and local government agencies, bureaus, and other instrumentalities, including agricultural institutions and councils, are directed to utilize cocopeat and fiber material for soil conditioning and erosion control in government projects nationwide.  Thus, in 2013, the company experienced an increased market for anti-erosion nets and coco logs with installation services (Photo 2.). 

In the second quarter of 2020, amid the COVID-19 pandemic, the geotextile net sales of GAICO dipped. Fortunately, the company developed a new market – those engaged in home and vertical gardening – and the sales of coco peat, coco logs, and other consumer products increased. 

As for the direct economic impacts of the enterprise on coconut farmers, the company collects coconut husks around 3,000 husks on a daily basis from the barangays of the municipality of Gubat and from its adjacent towns, particularly Casiguran, Juban, and Bacon.  GAICO has 15 to 20 regular coconut husk suppliers from these areas.  These coconut husks are either bought per piece, amounting to Php 0.20, or by truckload for Php 300.00. The company directly pays the suppliers upon collection.  GAICO’s economic benefits also included its being able to employ more than 200 employees with an additional number of home-based workers in the community who were involved in additional twining processes.  In terms of environmental impact, the company invested in solar panels as a source of power to counter the damage to electric posts wrought by the frequent occurrence of typhoons. GAICO also has semi-mechanized solar-powered twining machines with sensors which make its twining operations more efficient.

Concerning the sustainability impacts of the enterprise, the economic impacts are the provision of economic value to an underappreciated waste material, the higher income derived by coconut farmers from GAICO, and the generation of local employment in the municipality of Gubat, Sorsogon.  Meanwhile, the social impact is the promotion among government agencies, LGUs, and tourists of products made up of local materials. On the other hand, the company’s environmental impact is the minimization of the pollution caused by coco husks, a waste in copra making.  Further, it must also be noted that GAICO produces environmentally friendly products, such as geotextile nets, which prevent soil erosion and also utilize solar power.

Processors’ Association

The Baje Weavers Association was established in 2017 by the pandan weavers in the barangay of Baje in the municipality of Leon in Iloilo. Ms. Susana Gadian was appointed as president of the association when it was founded.  Pandan, also known as screw pine, is a tropical plant prized mostly for its long, blade-like leaves. One of the reasons why the residents engage in weaving in Baje is due to the abundance of pandan leaves. In addition, the people of Baje already possess the skills to weave, which they learned from other experienced weavers or were passed down to them by the elderly members of the community. Using pandan leaves for bags is beneficial for the environment because they are biodegradable, and using them for shopping can lessen the use of single-use plastic bags among supermarket-goers.

The Baje Weavers’ Association started with 50 women weavers, but as of 2023, there were only 16 active members.  Some of the younger weavers became inactive because they prioritized starting and raising their own families. On the other hand, the older weavers were made to stop weaving by their children due to their age. To assure the continuity of the association, a weaving and management skill development workshop among the youth in Baje is being considered.  

The local government units provided the funding necessary for the procurement of weaving and sewing supplies and also funded the weavers’ facility. The reseller is a recognized partner of the association, who ordered in bulk and resold the products under a different brand name in the city. However, the reseller promotes the products as having been woven by Baje weavers.  

Local artists in Leon are paid a fixed amount to paint any design. The association’s customer segments are local and foreign tourists looking to purchase some native souvenirs in Leon, fashion enthusiasts who purchase woven products, especially bags, for their aesthetic value, and young professionals who have disposable income to spend on woven crafts.

The economic impacts of the association’s activities are the extra income earned by the pandan farmers and weavers and the small percentage of the profit earned by the association.  For the social impacts, these are: 1) the continuation of the weaving tradition in the community passed down by its elderly members; 2) the opportunity for local artists to have their works featured in the bags; 3) the social empowerment of the women weavers; 4) the opportunity given to elderly weavers to be able to afford to buy medicine and avail of treatments; and 5) the association’s being able to promote local products.  Lastly, the environmental impact is the utilization of abundant pandan leaves and the use of bags made out of natural and biodegradable materials (Photo 3.).

Conclusion

Based on the examples of sustainable agribusiness, the common economic impacts of the enterprises are local employment/ sustainable livelihood and extra income for farmers/ members. The common environmental impacts of the three enterprises are the utilization of abundant, naturally available materials that could contribute to waste pollution and the production of environmentally friendly products.   

It is encouraging to note that agribusiness enterprises, which are not known for being sustainability-sensitive, are now making deliberate efforts to alleviate the negative impacts created by those in their sector. This suggests that the balance between profitable agribusiness and achieving sustainability is very much possible and that there need not be a trade-off between the two.