The impact of Family Farms Inc. in the Philippines
Since 2018, the Dutch Good Growth Fund (DGGF) – Financing local SMEs has been supporting the Capital 4 Development Asia Fund (C4D Asia Fund). The C4D Asia Fund invests in various sectors, prioritizing climate action, livelihood enhancement for underserved communities, and gender equity. Among its notable investments is Family Farms Inc., a small and medium-sized enterprise (SME) dedicated to bolstering the position of Philippine rice farmers.
Rice Farming in the Philippines
The Philippines, with a population exceeding 100 million and an annual growth rate of 2%, sees rice as a staple and highly demanded commodity. Despite its critical role in the diet, rice farmers in the Philippines often struggle with poverty due to inadequate earnings from rice production. They face challenges such as long droughts without government support or subsidies, inability to influence pricing, and a weak position in the market chain.
Family Farms Inc. aims to enhance the status of Philippine rice farmers by involving them in organic rice farming. Established as a private corporation in February 2015 on Negros Island, Family Farms Inc. began by producing small test batches of various rice varieties, strictly adhering to organic farming and processing standards. In 2016, Family Farms Inc. entered into an agreement with the National Irrigation Administration (NIA) to operate an unused rice milling facility in Bago City, Negros Occidental. This facility is situated in an irrigated rice-producing area supported by approximately 200 small farm families.
With C4D’s investment, the company acquired its first organic rice milling facility and a color sorter for rice processing, in addition to marketing its products as envisioned by its founders.
The Impact of Family Farms Inc.
Through its collaboration with the farmers’ association, Family Farms Inc. has upgraded and operated the facility for organic rice milling, marking it as the first of its kind on Negros Island. The facility is now equipped with modern rice milling and color sorting machines, capable of supporting over 500 organic rice farmers and enhancing their income by producing high-value organic rice crops.
The business model of Family Farms Inc. centers on marketing organic rice. To distinguish itself from other rice millers and traders, the company exclusively mills rice that is organically grown and certified, or in-conversion (farms adhering to organic principles for at least 12 to 24 months). By focusing on organic rice and its certification, Family Farms Inc. aims to increase the value of its products and offer premium prices to its small farmer suppliers. In 2023, Family Farms Inc. supported 178 smallholder farmers through this business model.
Most of the organic rice is sold to metropolitan areas within the Philippines and for export. Family Farms Inc. also ensures that local consumers benefit from healthier rice, thus improving food security and safety. The in-conversion rice competes in the local market with conventional rice, and Family Farms Inc. supplying farmers can buy back organic rice for their household consumption at milling cost. In 2023, the total value of transactions exceeded 550,000 USD.
With the funds raised through C4D Partners, supported by DGGF, Family Farms Inc. is currently expanding its operations further across the region.