AQUINAS UNIVERSITY FOUNDATION

A Feasibility Study on

Milling Facilities on

Sugarcane Processing

and Muscovado

Production At Barangays Cepres & Maysua,

Polangui, Albay

LGU-PYD-AQFI-PO/SHG PARTNERSHIP

12/27/2010

under the AQFI-CONVENIO-AECID 07-CO1-034 PROGRAM ON “Strengthening the Productive Sectors in the Rural Areas and Improving Sexual and Reproductive Health in the Regions of Bicol (V) & Caraga (XIII).

BACKGROUND AND RATIONALE

Extreme poverty is a daily scene in the lives of millions of Filipinos. This remains

prevalent in rural areas because of few economic opportunities on agricultural-based

income sources. Lack of access to productive resources further aggravates the problem.

This unfavourable socio-economic environment leaves the poor marginalized. It affects

not only the ability of rural communities to meet their daily needs but their capacity to

respond to harsh environment.

The call to reduce poverty necessitates development interventions that address

the root causes of the problem of extreme poverty in communities. Enhancing the

capacity of the poor and providing economic opportunities are critical interventions

along this line. However, they have to be sustainable, responsive, demand-driven and

participatory as envisioned by the CONVENIO AECID 07-C01-034 FILIPINAS PROGRAM of

PAZ Y DESARROLLO (PYD) and AQUINAS UNIVERSITY FOUNDATION INC. (AQFI) on

“Strengthening the Productive Sectors in the Rural Areas and Improving Sexual and

Reproductive Health in the Regions of Bicol (V) & Caraga (XIII)”. This program has been

actively promoting participatory community development towards reducing poverty

nationwide.

Geared towards the abovementioned program’s objectives, the program board

identified specific productive sectors and specific rural areas to start with. Participatory

Resource Appraisals (PRA) was conducted in the identified rural areas to effect the

development possibilities in each area. The Participatory Resource Appraisal (PRA)

conducted in Barangays Cepres and Maysua from the Municipality of Polangui in the

Province of Albay on April 10 and 21, 2008 was participated by barangay officials and

farmers of the communities. Common highlights of the appraisals in the two barangays

included mostly agricultural land use classification; diversified and intercropped

agricultural land areas dominated by corn, coconut and sugarcane farming; farm

products as the major sources of income; food as biggest allocation in household

expenditures; and 100% of the barangay households live below the poverty threshold.

The development possibilities identified for intervention by the program included the

formation of cooperatives for common service facilities, cooperative services, marketing

and capability building; provide value-added to current produce particularly sugarcane;

development of other alternative sources of income especially for women with

continuing capability building, financing and marketing support; alternative transport

facilities; support for sustainable farm technologies and other farm production related

assistance; support for basic social services such as health care system improvement,

waste management system development, educational assistance, water system

development, continuation of road improvement and electrification.

Validating the results of the Participatory Resource Appraisal (PRA) in the

identified barangays, Aquinas University Foundation, Inc. (AQFI) conducted barangay

surveys producing the Barangay Profiles that provide a brief analysis of the socio-

economic and political situation of the barangays posing a picture of a farming upland

communities that are living below the poverty threshold as characterized by the

interlinked process/cycle of poor income and productivity due to poor health, low

education, poor technology, unemployment, and giving rise to higher poverty

incidence. Faced with these pressing problems, the greatest challenge recommended

based from the activities conducted is in building human capacities and in providing

opportunities for productive and viable livelihood activities while ensuring the sustainable

use and management of the area’s elemental resources.

Given this perspective, the focus of this study is directed and concentrated on

strengthening one of the major productive sectors of the two identified barangays, that

is, the Sugarcane. Basically, this entails the development and improvement of the

present cultural, social and economic activities of the area that could provide them with

the maximum value-added opportunities vis-a-vis their current potentials and resources.

The sugarcane production of Barangay Cepres is characterized by sugarcane

plantations dominating 46% of the total agricultural land use and sugarcane produce

obtaining 63% of the total production of major crops. Whilst 20% of the total agricultural

land use (2nd to corn) and 30% of the total production of major crops (2nd to coconuts)

depicts the sugarcane production of Barangay Maysua. The sugarcane farming system

adapted by Polangui communities that could be worked on as their competitive

advantage over other sugarcane producers in the Philippines includes 100% organic

farming system and year-round production.

Sugarcane in both barangays are primarily processed into “panocha” or

“sangkaka” products (molded raw sugar). This product is being promoted by the local

government unit as the One-town One-product (OTOP) of Polangui, Albay based on the

considerable number of the household earning a living through “sangkaka” production

producing more than 1600 tons of “sangkaka” per year with their current capacity1. The

process involves the extraction of sugarcane juice at small-scale sugarcane mills paying

15 - 25% of their total “panocha” output to privately owned millers.

Such common practice of this specific productive sector in these communities

aggravate poverty, being primarily associated with lack of income opportunities and

poor agricultural productivity experienced by farmers due to such factors as low price for

agricultural products, limited markets or low demand for “sangkaka” products due to

lack of access to market information and awareness of market requirements, financial

indebtedness to available credit institutions, farm land not owned, lack of capital to

implement proper farm maintenance and good quality inputs, lack of education, lack of

technology and facilities on proper land preparation technique and method for good

agronomic practices and high transaction costs as a result of very low productivity and

diseconomies of scale. Thus, development possibilities that could be intervened towards

this end will be providing value-added to current produce particularly sugarcane

through technology support for product development, post harvest facilities for

sugarcane milling and processing, product promotion and marketing and financing

support.

Hence, this prompted the proponents of this project to propose the establishment

of milling facilities on sugarcane processing and muscovado production in the

Barangays of Cepres and Maysua, Polangui, Albay as the potential and viable solution in

addressing the problem on extreme poverty in these communities, that is, if proven

feasible through the conduct of this study.

This feasibility study shall likewise take into consideration the underlying principle

and purpose as basis and justifications in implementing such project given the above

communities’ situational analyses, putting emphasis on the capability of the target

product in working towards the program’s and the project’s objectives and the key

players of the industry which is affected by or affecting the project.

1 SDCAsia. July 2009. Value Chain Analysis: Muscovado Sugar, Bicol Region.

From the various community projects identified, the muscovado sugar production

showed great potentials. It has been providing the key players in the industry with high

economic returns and increasing local and international market demand.

Generally, muscovado sugar production poses high income opportunities

because of its high value product image/market positioning, high demand and high end

target markets, thereby alleviating the standard living of sugarcane producers and

“sangkaka” processors. Moreso, availability of a common service facility for muscovado

sugar production shall effect the consolidation of production/cluster operations to

overcome very low productivity and diseconomies of scale; and shall lead to the

accessibility of the producers to market information and awareness of market

requirements by selling directly to sugar end-users (household & industrial). Membership in

community organizations managing the project operations shall imply share of

earnings/profitability of the project in the long run providing the members with additional

source of income, thereby eliminating the need for financial assistance. With the

additional source of income, capitalization on farm lands, proper farm maintenance and

good quality inputs, and household basic needs satisfaction will be realizable. Most

importantly, the project shall implement good manufacturing practices obliging the

farmers to participate in technology transfers and follow standard procedures on proper

land preparation technique/method and good agronomic practices to attain maximum

productivity beneficial to both the farmers and the project.

On one hand, the key players that will be positively affected by the project shall

include the sugarcane backyard growers, “left out” Pensumil sugarcane farmers,

“sangkaka” backyard microprocessors, commodity goods retailers and end users

(household and industrial). Sugarcane backyard growers shall benefit on the project’s

advocacy on good agronomic practices and its productivity implications. Pensumil

sugarcane farmers might be given the option to add value on their sugarcanes not

accommodated by Pensumil if there will be an excess in processing capacity of the

proposed plant. “Sangkaka” backyard microprocessors shall be provided with value-

added opportunities and higher income potentials from processing their sugarcanes into

muscovado. Commodity goods retailer will be given that same income potential on

sugar but with a healthy option. End users will definitely be provided of a healthy option

satisfying their needs for sweeteners and for value for their money. On the other hand,

the key players that may probably affect the project negatively are the Polangui’s

village level common service milling facility, nearby muscovado processing plants, and

village traders and consolidators. This project will be the direct competitor of village level

common service milling facilities and small-scale muscovado processing plants in the

nearby communities. As such, it will inevitably pose several negative implications on the

project, thereby alienating the possibility of complementing the activities of these milling

and processing plants with that of the project. These milling facilities and muscovado

processing plants situated in the same municipality as the project does not observe good

manufacturing practices effecting nonetheless inferior quality of products.

Complementing and making use of the current capabilities of these milling and

processing plants may eventually affect adversely the marketing and manufacturing

strategies of this project specifically on the product image and superior quality of the

product. Nevertheless, the possible existence of village traders and consolidators may

push high market prices and eventually take advantage profusely of the high income

potential of the product.

In addressing these product image, quality and market price positioning issues,

the project will be geared towards having its own niche in the market. That is, the

muscovado sugar that will be processed and marketed shall gain its competitive

advantage on its export quality compliance and unusual market positioning strategies.

The project shall obtain good manufacturing and agronomic practices to be

able to effect a product that is in compliant with the existing Bureau of Food and Drugs

(BFAD) standards and export quality standards. This commitment shall be the project’s

social responsibility of providing the market with value for their money through good

quality and real healthy product.

Moreover, the muscovado sugar that will be processed and marketed from this

project will be positioned in the market as substitution to relatively high priced brown

sugar in the market, which majority of Philippine sugar consumers presently use based on

the Philippine Sugar Withdrawals2 from 2009-2010 of 162,296MT Raw Sugar and 125,338MT

Refined Sugar. It will not initially compete with the prevailing high-priced muscovado

sugars available in the market but rather position itself in the market as “THE ONLY

HEALTHY SUGAR FOR THE LESS FORTUNATE”. The project shall generally aim to insinuate

that muscovado sugar is not only for the rich/fortunate ones but for the poor/less

fortunate as well. Everybody, irregardless of its social classifications, deserves to reap the

numerous health benefits of the Muscovado Sugar.

2 SRA CY2009-2010 Sugar Supply and Demand Situation. Highlights of SRA Sugar Production Bulletin.

www.sra.gov.ph

INDUSTRY PROFILE

To complement with the rationale of this study, four interlinked industries was

evaluated in terms of its historical background, its current trends and developments and

its pertinent technologies which have been instituted. These four interlinked industries

include the sugarcane industry, the “sangkaka” industry, the “muscovado” sugar industry

and the “brown” sugar industry.

The Sugarcane Industry

An assessment of the sugarcane industry shall bring forth an evaluation of raw

materials (sugarcane) concerns of this project from its availability to its yield

characteristics.

Area planted to sugarcane worldwide approximately covers 13M ha from

tropical and subtropical countries 3 . In the Philippines, according to the Bureau of

Agricultural Statistics 4 , the top 3 producing provinces (production/yield) are Negros

Occidental, Bukidnon, and Negros Oriental contributing to 45.2%, 11.5% and 11.5% to

total Philippine production, respectively, in the year 2007. The Bicol region contributed

only 1.1% to the total Philippine production. Among the sugarcane producing provinces

in the Philippines, Camarines Sur ranked 14th (185, 747 MT) and Albay 17th. Within the

Region, the province of Camarines Sur is the major producer contributing 75% of the total

production. The project’s sugarcane production area of concern will be the 237

hectares of Barangay Cepres land area devoted to agriculture and 276 hectares of

Barangay Maysua land area devoted to agriculture, both involved in diversified and

intercropping farming practices. Agricultural land use devoted to sugarcane production

constitutes 121 hectares at Barangay Cepres and 56 hectares at Barangay Maysua, to

date5.

As per data from the Agricultural Statistics (DA Region V), production from Albay,

Catanduanes, and Sorsogon are processed into sangkaka, while sugarcane harvested

from Camarines Sur are milled/processed into white sugar. From the total area planted to

sugarcane, 84.34% is devoted to sugar mills production and only 15.66% (approximately

1040 hectares) are for sangkaka processing. Out of the total sugarcane production of

the Region in 2008, approximately 79.77% is processed into white sugar via centrifugal

production of PENSUMIL (a commercial sugar milling company) and only 20.23% is

processed into sangkaka utilizing traditional and semi mechanized milling processes.

PENSUMIL sugarcane farmers usually supply sugarcane sticks to the plant during milling

season. Production is done employing standard practices by the plant including

mechanized harvesting using a tractor. Farmers that were “left out” or not able to send

to the milling plant prefer to leave their sugarcanes to mature since these are not

anymore fit for sugar production.

The average yield of sugarcane per hectare decreased by 13% from 2003 to

2008, however, there was a notable increase of 25% from 2007 to 2008. Compared to the

national average yield in 2007 of 58.06 ton canes/hectare, Bicol’s average was 26%

3 PDAPI. 2007. Prospects of the Muscovado Sugar Industry in the Philippines - World Sugar Production.

4 SDCAsia. July 2009. Value Chain Analysis: Muscovado Sugar, Bicol Region.

5 AQFI. December 2009. PRA & Barangay Profile.

lower than that of the national figure, 42.96 ton canes/hectare. The province of Albay

has the highest yield per hectare and is at par with the national average. However,

based on the validation of the PRA done in the two upland barangays, their average

yield is only 13.6 ton canes/hectare only based on the “Didong 226” variety of

sugarcane. In the Philippines, the highest yield recorded is in the province of Sultan

Kudarat (96.01 ton/hectare) followed by Laguna and Cebu at 78.6 ton/hectare.

The “Sangkaka” Industry

According to the growers in Polangui, production of sangkaka has been in

existence even before WW2. The product has been used mostly for home consumption

and in the preparation of native delicacies. Common Practice of sugarcane backyard

growers is the process of their own “sangkaka” either in their household or in a village

common service facility. They employ natural production methods without addition of

any form of fertilizers and does harvesting manually.

Based on the interviews with micro processors in Polangui, they are able to

produce as much as 3 to 5 tons of sangkaka per cropping season. These are sold to

nearby public markets. On the average, Card members can collectively produce

approximately 1600 tons (28kg per day x 8days per month x 12 months x 600 members) of

“sangkaka” per year with their current capacity and with a potential to increase by 50%

with the introduction of productivity and efficiency improvement. Based on the interview

with PDCI, they have a total area of 543 hectares planted to organic sugarcane which

can produce approximately 27000 tons of “muscovado” per cropping. While Israel MP

Cooperative in Pili has projected 400 – 500 hectares of sugarcane production to be

devoted to “muscovado” processing which translates to an annual production of 52.8MT

of “muscovado” annually.6

The industry consists of the “sangkaka” backyard microprocessors mostly

belonging to the 628 CARD (financing institution) members engaged in “sangkaka”

processing in the Municipality of Polangui, Albay that employ traditional processing

technology utilizing manual extraction of sugarcane juice powered by a carabao and

utilizes open pan cooking (2 vats) fired by bagasse. The sugarcane is grown in their

backyard such that the grower is also the processor of his/her own produce. There are

also the village level common service facilities operating a mechanized extraction and

common processing area in the barangays where the growers can bring their harvested

sugarcane sticks to be processed and pays via product sharing.

Village Traders and consolidators for “sangkaka” plays a major role in bringing the

produce from the production area to the public market wholesalers. Every week the

trader travels via tricycle to Naga City and Legaspi City selling at most 10 sacks or 500

pcs of Sangkaka.

The “Muscovado” Sugar Industry

Muscovado Production has always been an integral part of the Philippine sugar-

agro industry. So widespread and dispersed are the production locales in the

6 SDCAsia. July 2009. Value Chain Analysis: Muscovado Sugar, Bicol Region.

countryside, such that muscovado or equivalent local forms, teemed in every market

outlets during, or even after production peaks usually from December to May.

Dating back from Spanish times, this backyard industry has survived years of sugar

industry turmoil. Positively, the industry requires relatively low capital to operate and

maintain. It promotes closer interaction within the family as it is a household centered

and is rural-based. It uses indigenous materials for inputs. It presupposes instant cash for

the produces as the muscovado crop could be readily disposed of upon manufacture in

direct contrast to occasional delay in sugar quedan liquidation for cane planters with

canes delivered to the mills. These, among others have contributed to the industry

survival.

Muscovado has been identified with various industry users locally, predominantly

confectioneries. Among its major uses are for making “bucayo” (sweetened grate

coconut), peanut brittle with sesame seeds, sweetened babana chips, sweetened pili

nut candies, bar breadfruit candies and coco honey. As coffee sweetener, powder

muscovado has penetrated first class diners and posh hotels and is preferred by some

health conscious groups. The export market, sone option the industry must strongly

consider, promises vast potential, granting that local producers would meet export

quality specifications and required volumes.

From juice extraction using carabao-driven wooden mills, to employment of

motorized or engine driven cast-iron three-roller mills, the processing aspect likewise has

transformed by leaps and bounds from the conventional to the semi-

mechanized/upgraded operations.

The product forms of Muscovado in Bicol Region consist of the muscovado sugar

crystals and the solidified form commonly known as sangkaka. In the Philippines, there

are around 3000 farmers dependent on the muscovado industry. Antique has the most

number of muscovado farmers, followed by Negros Occidental, Tarlac, Pangasinan and

Sultan Kudarat. In Bicol region, the sugarcane growers are concentrated in the area of

Camarines Sur near the Sugar Milling of PENSUMIL and some backyard growers

processing sangkaka in Albay and Camarines Norte. There are two dominant value

chains in Bicol namely a.) the organic muscovado channel with Pecuaria and UMFI as

anchors; and b.) the local market/public market chain which consist of backyard/micro

growers and processors and village traders. Sugarcane planters contracted by Pensumil

are now attempting to produce muscovado from sugarcanes that were “left out” by

Pensumil during the harvest.

There are 2 types of muscovado milling that are currently operating in the Bicol

Region to date. The difference basically lies on the type of extraction equipment utilized:

the manual carabao drawn and the motorized extraction equipment with the number of

open pans for boiling. Also, there are two muscovado processing plants currently

operating in the Bicol Region - The Banaba Arc Multipurpose Cooperative in Polangui,

Albay and The Israel MP Cooperative in Pili Camarines Sur. They purchase the sugarcane

sticks from its members and cooks/processes muscovado utilizing a mechanized

extractor and open pan cooking. These processing plants are dependent on their

marketing arms in selling their produce. The Banaba Arc Multipurpose Cooperative

entrust entirely to CARD (financing institution) the marketing activities of their products

reaching mall supermarkets and native delicacies producers.

7According to SRA, common to muscovado processing plants in the Philippines is

described by the following muscovado technology.

1. Plant housing. Under GI sheets, nipa or cogon leaves roofing, and a floor area of

at least 200sqm, the plant house is seldom provided with external walling. Usually

a bodega lies adjunct to the plant-house, or in the absence, the crops are stored

in the owner’s house.

2. Machinery Equipment

- Juice extractor. These are usually small two to three-roller cast-iron mills

(12”x24”) provided with accessories as cogs, gears and belts and is driven

(rotated) by a motorized or diesel engines 6-12hp. A juice hose or PVC pipe

usually leads the milled juice from the base of the mill to the cooking vats. Or

the milled juice is temporary stored in a tanks and then manually transferred

to the vats using pails.

- Cooking Vats. Locally called “kawas” are made of mild steel measuring 30”

deep and about 60” top diameter. For maximum juice output and to

preventing overflow while cooking, the kawas are provided with extenders

(welded of cemented atop the rim). The vats are arranged in series by three’s

or four’s in larger muscovado mills.

- Curing tubs. Usually made of hardwood, the rectangular wooden tub serves

for crystallizing, solidifying, the concentrated syrup through vigorous mixing

using spades and paddles.

3. Furnace

Directly below the cooking vats is a furnace usually with cement or brick lining.

Furnace are designed (usually with iron grate) for maximum heat output using

bagasse (a milling by-product) as fuel. A smokestack outside the plant house

serves as an exit for combustion products. As cooking is a critical phase in the

process, the furnace design should provide heat control via timely fuel loading

and withdrawal as the need arises.

4. Miscellaneous/Consumable

Other materials for muscovado hardening, curing and bagging such as: lime,

molds and coconut shells, jute bags/sacks.

Of the operational muscovado mills in the country today about 95% still employ

the traditional or conventional method of producing muscovado. The technology, by

present standard is now outmoded and need be upgraded to produce better quality

crop.

Basically, the methods consists of:

1. Cane harvesting. A cartload (1tonne cane) or a truckload (5 tonnes) of freshly

cut canes is delivered to the mill for immediate crushing. Or this may be

stockpiled for some hours while waiting for the cane owners regular turn to mill, in

case he is co-milling with other cane growers.

2. Cane crushing. For squeezing the juice out of the canes, majority of the mills,

about 96%, employs mechanized crushing using cast-iron three-roller mills driven

by a motorized or diesel engines, as the case maybe. Some producers in Ilocos,

however, still use their carabao to drive the mills at rather slow pace. For

mechanized milling, about two hours of crushing could yield enough juice for a

single cooking batch, usually three kawas (cast iron vats).

7 SRA CY2009-2010 Sugar Supply and Demand Situation. Highlights of SRA Sugar Production Bulletin.

www.sra.gov.ph

3. Juice transfer. To transfer milled juice directly to the cooking vats a hose or a PVC

pipe traverses from the mill outlet to the vats. For temporary juice storage, a tank

serves the purpose and then the juice is manually transferred to the cooking vats.

4. Juice cooking. The furnace is slowly fired to heat the juice in all the kawas. Cane

juice boils at 100 – 105 degrees centigrade. Cooking time is usually three to four

hours. In a series of vats, all the kawas are initially filled to the rim. Evaporation

ensues leaving only about 30% volume of concentrated juice. The thickened

juice is gradually “forwarder” (manually scooped to the succeeding vats) from

the last to the first kawa where the final cooking takes place. Scum removal

during ebullience (juice boiling) is done through skimming.

5. Juice Hardening. Others resort to slaked lime addition (only minimal amount) for

purposes of “hardening” the concentrated juice (technically termed as

massecuite) further. The practice, at the same time favors impurity coagulation,

which afterwards could be removed by scooping. It has been noted to enhance

cooking rate, at the same time reduce the muscovado color. The “maestro” or

master cook normally decides when to drop the massecuite to the curing tubs.

6. Curing. Depending on the muscovado type or form desired – lump, powder, or

simply inuyat or taga-pulot, curing of muscovado entails varied operations. For

powder form, the massecuite is immediately transferred to the tubs, and vigorous

stirring using spades/paddles ensues. Air cooling renders this operation easier. The

lumps are powdered to the desired consistency and texture. Color changes from

brown to yellow, which is the more desired color for marketability. For molded

product type, the massecuite is just transferred to the mold, usually coco shells or

wood while for the liquid form (inuyat and taga-pulot), the massecuite is just

transferred to a storage tank and sealed.

7. Storage. Sacks or bags are used for powder muscovado storage. Others used

wooden crate where the molded muscovado are piled. For liquid output,

cylindrical containers are used and then sealed or covered.

8. Marketing. Some producers have regular market outlets. Others output are

directly picked-up on site after manufacture. Still, others store their crop for better

sale period, usually during peak demands in November and holiday seasons. Few

have Manila sale contract.

For the conventional or traditional muscovado technology, the following drawbacks

have been associated with: (Muscovado Production and Technology by Sugar

Regulatory Administration)

1. Low Juice Extraction. As surveyed, the juice extraction employing the outmoded

mills of fifty years or more, is anywhere between 45-50% on cane. Using improved

mills, the figure could be increased to 60%. When cane is not fully matured, it will

not solidify.

Considering the bagasse to be about 30% of cane weight, a considerable

amount, about 20% of the extracted juice in cane remains unrecovered and thus

burned with the bagasse. Juice spillage during crushing comopounds the

problem of low juice recovery.

2. High Juice Impurity

The juice is not screened off from dirt and other impurities, as soil, bagacillo, etc.

The impurities are cooked with the juice resulting to a product crop of high color

and high sediment.

3. Juice Transfer Losses

The practice of manual juice scooping from vat to vat accounts for juice losses

which could have been minimized under semi-mechanized scheme (piping

system).

4. Cooking Losses

Scum removal during cooking likewise reduces juice volume. With proper juice

settling or clarification method, scooping is no longer necessary as juice impurities

are outrightly screened off prior to cooking.

5. Inversion Losses

The traditional method leaves sanitation practices much to be desired. The mills

are seldom sanitized, thus providing a harbor for microorganisms enhancing

sucrose inversion. Inversion, heat or organism-catalyzed, is the conversion of

sucrose to invert sugar. This minimizes yield and renders cooking more difficult.

6. Low Product Yield

Contributed by all the above drawbacks, the net effect of minimal muscovado

yield, 10% on cane is attainable. That is for every one tonne cane, the producer

gets about 100kilos of muscovado utmost.

7. Poor Product Quality

Because of antiquated technology, the output crop fares below local (if any),

much more below export standards. High sediment, high microbial count, high

moisture, high color and uneven texture characterize the present produce. While

presently still, product quality is seldom eyed by the local market, it is the primary

consideration in the export markets.

These technology drawbacks will be carefully addressed by this project so as to

produce high quality muscovado and maximize the project’s market, financial,

economic and technical competencies.

The Brown Sugar Industry

The brown sugar being referred to in this study are the commonly known

“segunda” sugar, “99” sugar, and sometimes as washed sugar available in the Philippine

market. This brown sugar can be processed further to produce refine sugar or packed as

is for local and export markets.

Raw sugar is usually processed in sugar refinery plants. After harvesting of

sugarcane, the canes are crushed in a series of large roller mills. The juice extracted are

cleaned with slaked lime which settles out a lot of the dirt so that it can be sent back to

the fields as fertilizer. Once this is done, the juice is thickened up into a syrup by boiling off

the water using steam in a process called evaporation. The syrup is placed into a very

large pan for boiling, the last stage. In the pan even more water is boiled off until

conditions are right for sugar crystals to grow. In the factory the workers usually have to

throw in some sugar dust to initiate crystal formation. Once the crystals have grown the

resulting mixture of crystals and mother liquor is spun in centrifuges to separate the two,

rather like washing is spin dried. The crystals are then given a final dry with hot air before

being stored.8

The resulting sugar in the above mentioned procedures are being sold as raw

sugar or further processed to partially refined sugar (segunda) or fully refined sugar (white

sugar). Full refined sugar is the result of sulphur dioxide being introduced to the cane

juice before evaporation. It effectively bleaches the mixture. In the production of refined

white sugar, which is the most common product in the Western world9, the raw sugar

syrup is mixed with a heavy syrup and run through a centrifuge again to take away the

8 www.foodrecap.net

9 www.greenlivingtips.com

outer coating of the raw sugar crystals. Phosphoric acid and calcium hydroxide are then

added to the juice which then combine and absorb or trap impurities. Alternatively,

carbon dioxide is used to achieve the same effect. The resulting syrup is then filtered

through a bed of activated carbon to remove molasses and then crystallized a number

of times under vacuum. It is then dried to produce white refined sugar like we buy in the

store. Sometimes manufacturers add back the molasses (by product of sugar

production) to white sugar and then dried again to produce partially refined sugar

(segunda) or the brown sugar being referred to in this project.

THE PROJECT

“The demand for organic products is rapidly increasing locally as consumers are

buying organic products for its health benefits and in support of environmentally-sound

farming”, according to the Department of Agriculture.

Given this motivation, the proponents of this project directed their program

objectives and activities in the development and improvement of the present cultural,

social and economic activities of the communities that could provide them with the

maximum value-added opportunities, thereby alleviating the standard of living of the

communities. Being in the sugarcane industry, muscovado sugar production was

identified to provide the maximum advantage/growth potential to farmers in the two

barangays considering that their current sangkaka production income generating

activities could potentially be further developed and upgraded to high value

muscovado production to serve its purpose of uplifting the way of life of communities in

such rural areas.

The project will be focused on “The Establishment of Milling Facilities on

Sugarcane Processing and Muscovado Production”.

As such, the economic activities of the project will be concentrated on two

operational aspects – as sugarcane processing service facility and as muscovado sugar

manufacturer/distributor. Although sugar plants are commonly associated with capital

intensive projects, this particular project will initially aimed at small scale capacity project

to take into consideration its capital requirement versus the proponents and beneficiaries

financing capacities. Thus, the proposed plant shall initially process one tonne of fresh

sugarcane tubers per day. Based on the industry’s muscovado sugar yield per tonne of

fresh sugarcane tubers from 8 – 12% recovery rates, this project will justifiably obtain the

maximum recovery rate of 12% under strict adherence to good agronomics practices

and good manufacturing practices in sugarcane processing. Therefore, the proposed

plant output capacity in terms of muscovado sugar would be 120 kgs of muscovado

sugar per day (10 working hours).

As a sugarcane processing service facility, the target beneficiaries of this project

will be given 50% of the project’s input capacity to process their sugarcanes into

muscovado sugar paying 25% of the total yield of their inputs as payment for processing.

This operational aspect will be geared on providing the beneficiaries the technological

assistance they need to be able to earn more from their sugarcane processing activities.

Since most of the beneficiaries are both sugarcane growers and “sangkaka” processors,

the service facility aspect of the project shall provide them with high income potential

not comparable to their current income (75% share from total yield) from making use of

privately owned milling facilities and home-based processing of “sangkaka”. They are

currently producing 13.6 tons of sugarcane per hectare yielding only approximately 500

kgs of “sangkaka” (200 pairs x 2.5kilos per pair) equivalent to approximately 3.68%

recovery rate. Under the same input of 13.6 tons of sugarcane per hectare, through this

project, beneficiaries could get as much as 12% recovery rates or approximately 1,632

kgs of muscovado sugar from their sugarcanes based on muscovado sugar production

technology being proposed. The marketing strategies of the project shall make the

product easy to sell, giving the beneficiaries the options to sell their shares directly to their

target markets or to the plant, who shall have the capability to establish direct end-

users/buyers selling relationships. With the higher pricing potentials of muscovado sugar

as compared to “sangkaka”, poverty issues in rural communities specifically of the

beneficiaries can be eradicated evidently and unquestionably.

As muscovado sugar manufacturer/distributor, 50% of the project’s capacity will

be allocated for the project’s purchased sugarcanes to be process into muscovado

sugar and directly distribute at target markets. This operational aspect will be geared on

sustaining the operations of the project until such time that sustainability becomes

profitability not only for the project but to the beneficiaries as well. Nevertheless, the

substantial profit gains from this aspect shall justly cover up for the cost deficits from the

other aspect of the operations.

To achieve these objectives of the project, vital major project components are

identified to ensure the project’s implementation and success such as sugarcane

production/farming techniques, site development, manpower recruitment, processing

technology, machinery procurement and installation, systems and procedure

development, and market positioning.

Sugarcane production/farming techniques shall include continuity of the

beneficiaries competitive advantage of sugarcane farming system of 100% organic

farming system and year-round production; introduction of good variety of sugarcanes;

and skills training on harvesting techniques and good agronomics practices.

Site development shall include the construction requirements of the plant site

such as the power source, water source, proper waste disposal development, areas

available for expansion, public road accessibility and actual plant building construction

requirements.

Manpower recruitment will be derived from the beneficiaries in order to obtain

100% commitment on the project. This may be decided upon by the project

management board to be assisted by beneficiaries.

Processing technology shall include skills training on good manufacturing

practices and on the specific processing technology through technology transfer

activities.

Machinery procurement and installation shall include the selection of the most

cost effective processing machines available in the market and selection of a

dependable processing machine supplier that could provide cost effective processing

machines, technology transfer and good post sale services.

Systems and procedure development shall consists of skills training on building

management capabilities in every aspect of the project and establishing internal systems

and procedures with its underlying requirement for standard operating procedures to

systematize the operations.

Most importantly, the market positioning will be supported upon by market

awareness programs, market segmentation strategies and direct marketing operations.

THE PROJECT AREA10

Barangay Cepres, Municipality of Polangui, Province of Albay

GEOGRAPHICAL

Location / Topography Upland rural barangay (generally rolling to hilly with

slight gentle and moderately steep slopes) about

7.8 km from the town proper and can be reached

by almost any kind of land transport being

strategically located along the main road network.

Climate Similar to other parts of the municipality

characterized by wet and dry seasons.

LAND

Land Area 263.35 hectares (about 1.8% of the total land area

of Polangui).

Land Use 237.12 hectares (90%) mainly planted to coconut,

sugarcane and corn. 12.88 hectares (5%) built-up

area utilized for residential and basic social &

economic facilities. Remaining 5% of the land area

are the roads/trail, river/creek and forest.

Agricultural land make up of 24% Coconut, 46%

Sugarcane, 13% Corn, 12% Banana, 3% Vegetables,

2% Pili, 0% Rootcrops.

Land Classification Its soil type is classified as Macolod-Pili complex.

MACRO-ECONOMIC

Labor & Employment Majority or 63% of the households obtain their

income primarily from farming through sales of

produce such as coconuts and copra (coconut),

panocha or kalamay (sugarcane), banana,

vegetables and rootcrops.

Farm Labor 17% in land preparation, maintenance,

and harvest of produce with daily wage of 100 – 200

pesos. The rest are employment (7%), in public and

private institutions (5%), operating sari-sari store and

other small business such as buy & sell (2%),

dressmaking (2%), driving (2%), working as cashier

(2%), and community service (2%).

Family Income & Expenditure The estimated average total monthly income of the

household is P6,700.00 including the contribution of

the wife and the children in case and in monetized

labor.

The months when income inadequacy is most felt

by the families are July, August and September.

These are the months when budget including

savings, if any, of the family is almost spend. The

rainy weather prevailing during these months affects

10

Barangay Profile, Brgy. Cepres, Municipality of Polangui, Province of Albay. Aquinas University

Foundation, Inc. December 2009

the efficiency of farm work, level of production and

quality of produce.

Average Household Expenditures are 27% food, 15%

occasions, 12% farming input, 10% education, 9%

non-food consumables, 5% transportation, 5%

clothing, 4% health, 3% tax, 3% cooking fuel, 3%

lighting, 2% recreation and 2% repairs &

maintenance.

DEMOGRAPHICS

Population Total Population of 1,575 (2008 barangay survey)

Household Statisctics Gender 46% female and 54% male.

AQFI June 2009 household survey covering 48

families, shows that majority of the family members

fall within the ages 1-24 (55.36%) and ages 25-44

(20.08%).

Total of 372 households with an estimated average

family size of 4.13 mainly composed of husband,

wife and their children.

It is common that a household have other members

such as grandparents, in-laws, nephew/niece,

goddaughter/son, uncles or cousins. These other

members of the extended family, more often than

not, become additional dependents of the primary

family.

Housing Majority or 94% of the families own their houses. The

rest are renting (2%), occupying with permission from

owner (2%), or squatting (2%). Majority of the houses

have floor area of 80 – 20 square meters and less.

28% of the households owned the homelot. 66% with

permission from owner and 4% are renting and 2%

are squatting. Homelot size ranges from 51 – 300sqm

(50%), 50 sqm and less (36%), 500 sqm and above

(10%), and 301 – 500 sqm (5%).

AGRICULTURE / COMMERCE &

INDUSTRY

Crops & Livestock Barangay Cepres is basically a coconut area. 24%

of the agricultural land is devoted to pure coconut

stands while the remaining portion is also coconut

land but intercropped with corn, sugarcane,

banana, rootcrops, vegetables and pili trees.

Most families raise livestocks and poultry such as

swine, goat, chicken, and ducks to augment

income and to prepare for special occations. Some

families own a carabao or a cow which is used

primarily as working animals and service for hauling

farm produce.

Production Area 54% of the families are tenants and only 8% are

owner-cultivators who have full control over the

resource and the produce.

Technology There is a number of small-scale sugarcane milling

facilities within the barangay, all of which are

privately owned and have the same technology

level as in the other barangays.

Production Volume 2002 – 927.11mt (63%) Sugarcane, 46.49mt (3%)

Corn, 7.87mt (0%) Rootcrops, 75.71mt (5%) Banana,

42.03mt (3%) Vegetables, 68.54mt (5%) Copra and

298mt (20%) Coconut.

Productivity Monocropping and slash-and-burn/kaingin are the

prevailing farm practices by families in the

community. Only 13% of the farming households are

adopting multi-cropping.

Majority of the families are using iorganic fertilizer,

pesticide and herbicide/weedicide/fungicide in

their farms. The use of organic farm inputs is not yet

acceptable in the community as indicated by the

very low rate of utilization.

Market Sold to traders in the barangay and in the town

proper. 61% of the household sell their produce to

local buyers/wholesalers, 21% to consumers in the

town proper, and the rest to residents of the

barangay.

Kalamay are sold in the town proper and in the

other towns of Albay province during market days

and fiestas.

INFRASTRUCTURE

ECONOMIC

Roads & Bridges The road network is generally paved and in good

condition except for an estimated 360 meters

pathway which is of earth surface.

SOCIAL

Service Facilities Elementary School, Barangay Pavilion, Barangay

Chapel, Barangay Hall, Barangay Health Center,

Barangay Outpost, Waiting Shed, Cemented

Basketball Court, Volleyball court on earth surface,

local water system and electricity.

Communication and leisure facilities include cell

phones, local radio and television.

10 sari-sari stores also serve as neighborhood centers

where people come together and talk about

matters of interest and update themselves of current

events in and outside the community.

Education Majority of 57% of heads of households reached

elementary level of education, 30% secondary, 5%

did not attend school and only 1% attended post

graduate studies. There were more female heads

having elementary education level while there is

almost the same percentage of female and male

having secondary education. Those who did not

have any formal education were all male while the

one with post graduate education is a female.

Health Health services are accessed from the Barangay

Health Station located in Barangay Pintor about

2km from the centro of Barangay Cepres. The BHS

has the basic health equipment and supplies.

Water/Sanitation 73% of the household obtain drinking water from

protected well, 25% from spring, and 2% from

stream. A common piped water system connected

to the main water system in the town proper was

installed along the main road where households

within the vicinity gather or fetch drinking water.

There are no functional pipe connections yet to

individual households.

Power/Energy/Communication 62% of the households have access to electricity

which serves as the source of energy for household

lighting and operating available household

appliances. 38% of the household still use kerosene

lamp as primary lighting source.

85% of the household are using firewood as fuel for

cooking while 13% and 2% are using charcoal and

liquefied petroleum gas or LPG, respectively.

Administrative Infrastructure The main governing body of the barangay is the

Barangay Council composed of barangay officials

with its committees.

There are 14 appointed Barangay Tanod, headed

by the Chief Tanod, and 6 Lupon ng

Tagapamayapa who are in the frontline of

delivering the protective services to ensure the

safety of the residents and maintain peace and

order in the community.

Existing community-based organizations (TSPI, Social

Action, ASA, CARD, UPCP, CFCA, BHW, Guardian

Brotherhood, Barangay Council, Barangay Tanod,

Pastoral Council, Lupon ng Kapayapaan, Mr & Mrs,

People’s Organization) are mechanisms through

which people can ventilate their stand on critical

issues in the community and influence decisions.

Membership in community based organization is

only 17% of the families.

Barangay Maysua, Municipality of Polangui, Province of Albay

GEOGRAPHICAL

Location / Topography Upland area 14.5 kms away from the town proper of

Polangui. Maysua is bounded by 2 barangays of

Polangui – barangay Anapol in the west, Barangay

Cotmon in the south, as well as by barangay Danao

of the municipality of Malinao in the east, and by

the town of Buhi, Camarines Sur in the north. Land

transportation is provided by public jeepneys,

tricycles and single motorcycles along winding

concrete roads.

Climate Similar to other parts of the municipality

characterized by wet and dry seasons.

LAND

Land Area 430.1545 hectares (about 6% of the total land area

of Polangui). Its terrain is generally mountainous with

upward and downward slopes of varying degrees.

Land Use 276.89 hectares (64%) upland agriculture, 136.27

hectares (32%) forestry. The forest areas are mostly

second growth forest with bamboo clumps. The

remaining 16.99 hectares (4%) constitute the built-up

areas for residential, institutional and economic

purposes.

Agricultural land make up of 2% Coconut, 20%

Sugarcane, 33% Corn, 20% Banana, 1% Vegetables,

7% Pili, 17% Abaca.

Land Classification Its soil type is the Tigaon Clay type.

MACRO-ECONOMIC

Labor & Employment Farming Income constitute 10%

Panocha/Sugarcane, 20% Banana, 25% Abaca, 20%

Coconut and 25% Corn.

86% Farming, 3% Domestic Helper, 10% Hired Labor,

and 1% Employee.

Family Income & Expenditure The population are relatively poor with a monthly

average income of P1,250.00.

Average Household Expenditures are 42% food, 17%

education, 12% electricity, 8% planting and 21%

recreation.

DEMOGRAPHICS

Population Total Population of P1,057 (2009 barangay survey)

Household Statisctics Gender 50% female and 50% male.

Total of 192 households.

Housing 85% of the families own their houses. The rest are

allowed to use the houses they do not own.

74% of the household owned the homelots, 24% are

permitted to stay in homelots that others own, and

the rest are renting.

AGRICULTURE / COMMERCE &

INDUSTRY

Crops & Livestock Livestock and poultry raising as well as backyard

gardening are additional economic activities

engaged in by the partner household. Poultry

provides extra family income or food for family

consumption (60%)

Production Area Barangay Maysua is also the biggest Agrarian

Reform Communities. 32.9% of the total land area

are CARP areas with a total of 74 farmer

beneficiaries. There are vast tracks of lands

uncultivated.

Technology There are four sugar milling facilities in the area

which are owned by private individuals. Two are

carabao driven and two motorized.

Production Volume 30% Sugarcane, 9% Corn, 9% Banana, 1%

Vegetables, 10% Copra and 41% Coconut/Copra.

Productivity 24% engage in slash-and-burn/kaingin, 61% practice

mono-cropping, and only 15% implement more

environment-friendly methods of SALT and multi-

cropping.

Agricultural inputs employed in terms of fertilizer and

pesticides are mainly inorganic and chemical-

based (75%)

Market Sold to traders in the barangay and in the town

proper.

Kalamay are sold in the town proper and in the

other towns of Albay province during market days

and fiestas.

INFRASTRUCTURE

ECONOMIC

Roads & Bridges The road network is generally paved and in good

condition but slopy/hilly.

SOCIAL

Service Facilities Elementary School, Barangay Pavilion, Barangay

Chapel, Barangay Hall, Barangay Health Center,

Barangay Outpost, Waiting Shed, Cemented

Basketball Court, Volleyball court on earth surface,

local water system and electricity.

Communication and leisure facilities include cell

phones, local radio and television.

Sari-sari stores also serve as neighborhood centers

where people come together and talk about

matters of interest and update themselves of current

events in and outside the community.

Power/Energy/Communication 40% of the household have availed of ALECO

service and the remaining 60% use kerosene gas as

source of their primary lighting.

Administrative Infrastructure Existing community-based organizations (BPC,

Barangay Council, Pastoral Council, CARD,

Cocofed, Mr & Mrs, Maysua Water Association,

Oyangui Farmers Association, Womens Org.,

Barangay Tanod, Aquinas Cooperative (abaca),

People’s Organization).

Pertaining to the project, the proposed project areas of Barangays Cepres and

Maysua are ideal for the milling facilities for sugarcane processing and muscovado

production considering its proximity to the sugarcane plantations. The land areas

cultivated with sugarcane poses substantial source of raw materials such that Barangay

Cepres has a total of 121 hectares of agricultural land area cultivated with sugarcane

while Barangay Maysua has 56 hectares.

Using the baseline of one cropping season per year and the prevailing sugarcane

production of 13.6 tons per hectare at a single cropping season per year, Barangay

Cepres can produce as much as 1,645.6 tons sugarcane per year while Barangay

Maysua can produce as much as 761.6 tons sugarcane per year. At the initial input

capacity of the proposed plant of one ton sugarcane fresh tubers per day (10 working

hours), the number of tons of sugarcane fresh tubers required by the daily operation for

one year (26 days per month) will be 312 tons of sugarcane fresh tubers for each area.

Thus, in terms of raw materials availability, Barangay Cepres and Barangay Maysua have

as much as 5.2 times and 2.4 times the required sugarcane fresh tubers capacity of the

project, respectively.

THE PROJECT SITE AND BENEFICIARIES

The ideal project sites for every project are usually evaluated based on critical

project site criterions such as its proximity to raw materials (plantations), proximity to

public roads/infrastructures, proximity to the market, availability of basic utilities for

power/electricity and waste disposal, and sufficient water supply. For this particular

project, the minimum processing plant land area needed is 50 square meters.

The project site for Barangay Cepres is a privately owned land voluntarily offered

for solely for use of the project. The site has a midpoint proximity to the existing

sugarcane plantations in the area. It is located along public road, near the barangay

hall and accessible to basic utilities such as to the electricity posts, water supply pipeline,

and waste disposal pipelines could be developed in the area.

The project site for Barangay Maysua is a publicly owned land of 400 sq.meter

which is a portion of 6000 sq.meter LGU owned land. The said site have been voluntarily

offered solely for use of the project supported with 25 years deed of assignment.

Although the only drawback for the said site is its slopy characteristics that may make

the hauling of raw materials difficult to farmers with their existing manual hauling

practices, the site has likewise a midpoint proximity to the existing sugarcane plantations

in the area. It is also located along public road, near the barangay hall and accessible

to basic utilities such as to the electricity posts, water supply pipeline, and waste disposal

pipelines could likewise be developed in the area. The hauling concerns in this project

site could be addressed by looking at the possibility of the use of motor driven hauling

means.

The beneficiaries of this project are the two People’s Organization of the

Barangays Cepres and Maysua. These organizations are the result of the identified

interventions specifically the formation of strong cooperatives such as the People’s

Organization for common service facilities, cooperative services, marketing and

continuing capability building interventions undertaken by this specific program to

mitigate the problem of extreme poverty in rural area communities. The organization

bears the names of Cepres Farmers Organization (CFA) and Maysua Farmers

Organization (MFA). Said organizations are organized last 2009 as Associations that

benefit from grants of several financial sources. The developmental focus of the

organizations are on its barangay level specifically for its farmer members being initiated

with various income-generating projects such as this project.

11The People’s Organization are working closely with other stakeholders in the

barangay and municipal level to pursue its development objectives. It has forged a

Memorandum of Agreement (MOA) with the Local Government Unit of Polangui,

11

People’s Organization Profile. Aquinas University Foundation Inc.

Barangay Council, Paz y Desarollo and Aquinas University Foundation , Inc. last February

12, 2009 creating a Project Management Board, consisting of a representative from

Municipal Planning Development Office, Municipal Agricultural Office, Aquinas University

Foundation Inc., Sanggunian, Barangay Council and People’s Organization, that will

oversee the implementation of the agricultural productivity improvement project. The

focus of its engagement is particularly focused on the establishment of post-harvest

facility for muscovado processing and improvement of sugarcane production.

Through the Project Management Board, institutionalization of the project at the

municipal and barangay level is ensured specially the continuity of its projects that will

not only bring additional income to its members but to the development of the

barangay as a whole.

The objectives of the association are to promote the moral, social and economic

well being of the members; to protect and uphold the individual and collective rights of

all the members; to foster an association that is harmonious and progressive through

effective and efficient management of its programs or projects; to advocate and strive

for the adoption of legislation, policies and programs that will promote the economic,

social and general well-being of all the members, in particular, and the working class in

general; to promote, mainstream and actualize gender concerns and perspectives in all

the activities of the Association; to engage in economic and livelihood projects for the

benefit of the association; to provide social aid benefits to members, to uplift their plight

to secure their human dignity; and to contribute to the society its modest share in nation

building through self-help programs as an NGO representing the farmers and agricultural

workers.

The policy making body of the association is the General Assembly which has an

annual meeting to discuss policies and directions. The executive Board has a regular

monthly meeting which is set on every first Sunday of each month wherein the activities

of the month are discussed and planned. The executive board oversees the day to day

implementation of the activities. The agricultural component of the project is mostly

participated by its para-agriculturists. Ideally, this para-agriculturists who are distributed in

each purok will provide tutorial and re-echo activities of the trainings on agriculture

practices particularly on Bio-intensive gardening and sugarcane production.

Small group meetings are also done at the self-help group level to discuss

policies. It serves as arm of the association to ensure that all members are involve or

participates in the organizational and agricultural activities specially in enhancing

bayanihan spirit at the purok level. The meetings of the association are participatory. It

encourages the participation of all members men and women in all activities. Policies

are consulted to all the members before it is finalized and implemented. For instance,

the People’s Organization of Maysua approved policies such as Livestock Policy and

Policy for Tools. The livestock policy includes the creation of the Project Management

Team, the sharing of the stocks between the Association and the caretaker, the care of

the livestock and schemes for dispersal of the stocks and sustainability of the stocks.

These organizations operate based from the grants provided by AECID through

Paz y Desarollo and Aquinas University Foundation Inc. PyD and AQFI provided technical,

material and logistical support for the agricultural productivity improvement specially the

BIG technology, sugarcane production and establishment of post harvest facilities. The

Local government unit of Polangui also allocated an amount of P 350,000.00 for the

building of the milling facility for the two project sites. An additional or supplemental

budget is also being lobbied at the Provincial Government of Albay for the same

purpose. Similarly, it has close links with the Municipal Agrarian Office for farm inputs and

technical support not only in agricultural aspect but also for the livestock component of

the project. Moreso, land and other facilities like the organization’s office are being

provided by the Barangay/Village Council of the two barangays. It has also pledge

additional material support for the fulfillment of the project.

Without this project, the day to day operations of the association is supported by

its members through the provision either in cash (from the collection of membership

fees), in kind or through free labor individually and collectively. The general membership

is the decision making body of the association. It has a governing body as stipulated in its

constitution and by-laws.