REPUBLIC OF THE PHILIPPINES

PROVINCE OF MISAMIS ORIENTAL

OFFICE OF THE PROVINCIAL GOVERNOR

December 18, 2014RAYMUNDO G. AGRAVANTE

Regional Director

Department of Labor and Employment

Region X

Dear Director Agravante,

The Provincial Government of Misamis Oriental is pleased to present this livelihood project proposal for your review. We look forward to partner with you through the DOLE Integrated Livelihood Program as this would essentially be a measurable success in improving the socio-economic well-being of our farmers in the Province of Misamis Oriental.It is our vision to empower the farmers of Misamis Oriental to succeed in the global economy. One of the directions toward this goal is to make Misamis Oriental as one of the Philippines chocolate capital. Misamis Oriental has more than one thousand five hundred (1,500) potential farmers for cacao production with more than two thousand hectares suitable for cacao plantation. Moreover, the VIRTUES of producing cocoa in the Philippines includes : 1. Cocoa is SMALLHOLDER friendly, 2. It is great in diversified farming systems, 3. It has a proven record successes in the Province of Davao and the Province of Palawan, 4. It is agro-forestry compatible, and 5. It offers good income from domestic and export markets. Given such feasibility, we have engaged ties with an international producer -Kennemer Foods International (KFI) of cacao beans to put up hectares of cacao plantation in Misamis Oriental . KFI signified to provide the farmers with an efficient technology in producing cacao, while the Provincial Government shall purchase for the farmers the necessary seedlings for plantation. What is needed is the assistance for the farmers to procure the agricultural inputs for cacao production, hence, this proposal.May this initial application be considered and we would appreciate guidance on how to comply with the essential requirements for the approval of our proposed livelihood project through your Intergrated Livelihood Program.Thank you very much for your continued support for the advancement of the Province of Misamis Oriental and hoping for a positive response.

Sincerely yours,YEVGENY VINCENTE B. EMANOGOVERNOR

A Project Proposal on

Cacao Production in Misamis Oriental

I. Basic Information1. Title

: Cacao Production in Misamis Oriental

2. Proponent

: PLGU-Misamis Oriental

Provincial Capitol Building, Velez St.

9000 Cagayan de Oro City

1. Contact Person: Ms. Jonafe G. Tapulgo - Rodas

PESO Manager

Contact Nos.: Telefax 745-719

Email-pesomisamisoriental@gmail.com2. Contact Person: Ms. Conception C. Salcedo

Acting Provincial Agriculturist

Contact Nos.: Telefax-(08822) 727293 / 727234

Email-mor_r10@yahoo.com3. Project Duration: 12 Months (CY 2015)

4. Project Location: Province-wide

5. Total Project Cost

: PHP 3,292,125.00

Budget Requested

: PHP1,000,000.00

Proponent Counterpart

PLGU

: PHP1,000,000.00

Farmer-clients

: PHP 371,250.00

DOLE

: PHP1,920,875.00

II. Project Description1. Rationale

Cacao, commonly called cocoa, is economically significant to the Philippine agriculture sector; with the rising demand for cocoa and cocoa-based products in both domestic and global markets. There are cacao products worldwide and the market for the demand sets its eyes on the Philippines. Cacao beans are used in manufacturing chocolate and could be intercropped with other agricultural plants like coconut trees. A cacao tree can bear beans all-year-round one and a half years after planting but it becomes more productive after three years. Accordingly, a hectare of cacao plants could generate as much as PHP 200,000 annually compared to PHP 40,000 estimated annual income derived from coconuts. More cacao trees are now being planted in line with the 2020 goal of the industry to supply 100,000 metric tons of dried cacao beans per year for the world market.

Misamis Oriental is beginning the first few steps to becoming the Philippines chocolate capital as an international producer of cacao beans has tapped the province to put up hectares of cacao plantation. Governor Yevgeny Vincente B. Emano, in his State of the Province Address (SOPA), revealed that Kennemer Foods International (KFI) has entered into an agreement with Misamis Oriental where 1,000 hectares of land have already been made ready for the planting of cacao trees. Although the target is to have at least 30,000 hectares of cacao plantation to be able to have a chocolate plant, the provinces chief executive is optimistic to realize the vision to make Misamis Oriental the chocolate capital of the country.

2. Objectivesa. To integrate and scale-up cacao production in Misamis Orientals 23 municipal towns and two component cities of El Salvador in the west district and Gingoog City in the east district;

b. To help increase and sustain agricultural productivity and income thru the development of the cacao industry being one of the top concerns of the current administration and enable to alleviate the poverty of farmers in the province;

c. To provide an avenue for coordination and assistance among the different implementers and stakeholders (i.e. PLGU, Kennemer Foods Inc., Funding institutions [Department of Labor and Employment Region X], farmers association, etc.) in the development of the cacao industry;

d. To harness and maximize the utilization of available, yet, limited local resources especially agricultural lands for the realization of priority projects in the agriculture and fisheries sector; and

e. To improve or sustain agricultural productivity by providing the appropriate agricultural support services.

3. Expected Outputa. 50 hectares of cacao intercropped under coconut or banana;b. Interested coconut and banana farming families undertake technology training on cacao and cacao-related activities; and

c. Income of PHP 200,000 annually for bearing cacao compared to PHP 40,000 estimated annual income derived from coconuts

4. Activitiesa. On-site inspection/evaluation by PLGU-Mis. Or./KFI

b. Technology training on cacao production and other cacao-related activities

c. Actual planting and maintenance

d. Monitoring and evaluation

5. Beneficiaries/Partners50 coconut/banana farmers in Misamis Oriental (assumption: 1 farmer = 1 hectare)

6. Timetable of Activities

ActivityImplementation schedules (Months)

123456789101112

On-site inspection/ evaluation

Technology training

Planting and maintenance

Monitoring and Evaluation

7. Economic Benefits/Impactsa. Coconut farming families increased income from PHP 40,000 to PHP 200,000 annually (bearing cacao) as compared to coconut

b. Job generation

c. Establish strong/active/viable cooperatives/organizations

8. Sustainability Plan

a. Continued capability building of cooperatives/organizations in linking with institutions to develop market opportunities.

b. Strengthen cooperatives/ organization especially on project implementation/policies on technical, financial and marketing aspects.

c. A Memorandum of Agreement should be executed between PLGU/KFI/Farmer-client/Farmer Organization/DOLE stipulating roles of each party, how to develop fund for maintenance and how to sustain the project.

d. Periodic monitoring and evaluation.

9. Work and Financial Plan

ActivityDescriptionTotal Amount PLGU Counter-partDOLE Counter-partFarmer Counter-partRemarks

On-site inspection/ evaluation55 hectaresPLGU/ MLGU/ KFI

Technology training55 farmersKFI

Planting and maintenance55 hectares3,292,1251,000,0001,920,875371,250PLGU/ MLGU/ KFI/ Farmer

Monitoring and Evaluation55 hectares/ farmersPLGU/ MLGU/ KFI

Total3,292,1251,000,0001,920,875371,250

Note: Please see attached Production Cost per Hectare.