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SMC, Kuok Group tie up for food security project

01/06/2009

Food giant San Miguel Corp. (SMC) and property conglomerate Kuok Group will soon launch a food security program in Davao del Norte, where 18,494 hectares of logged-over areas have been identified for upland agro-forestry development, as the initial phase of a billion-dollar venture dubbed “Feeding the Future.”

The launching in Davao del Norte of the first phase of this project, which will cover four of its municipalities, is part of the commitment of SMC and Kuok to invest up to $1 billion in one million hectares of land for agricultural production in support of President Arroyo’s food security agenda, according to Philippine Agricultural Development and Commercial Corp. (PADCC) president Marriz Agbon.

Agbon, who also heads the Convergence Initiative Technical Secretariat of the “Feeding the Future” program, said the initiative will initially cover the municipalities of Kapalong with 3,246 hectares; San Isidro , 5,860 hectares; Talaingod, 7,860 hectares; and New Corella, 1,552 hectares, of a total project area of 18,494 hectares.

These areas covered by the joint project experience high rainfall throughout the year, with clay loam to sandy loam soil, thus making these combined areas an ideal site for plantation development, Agbon said.

“The subject areas are logged-over areas. These are classified as open or barren land,” Agbon said in his report to DA Secretary Arthur Yap. “The area is a potential site for upland Agro-forestry development.”

To raise farm productivity, especially at this time of a global food crunch, the President has called on the DA to promote corporate farming so private and state-run companies can provide for the food needs of their respective employees, and to support private sector-led agribusiness ventures such as this SMC-Kuok project.

In support of President Arroyo’s food security and sufficiency agenda, SMC and the Kuok group have committed to jointly develop one million hectares of lands to be pinpointed by the government as suitable for food production.

Agbon said that initially, the government has identified about 100,000 hectares as “Priority 1” areas in Luzon and Mindanao , and another 480,000 hectares of “Priority 2” areas for recommendation to San Miguel and Kuok.

Agbon said these initial areas for proposed farm investments by SMC and the Kuok Group include the Mountain Province, Zamboanga del Norte, Zamboanga Sibugay and Saranggani.

The government will use the country’s existing community-based forestry management (CBFM) areas and the untenured areas identified by the Department of Agrarian Reform for the “Feeding our Future” project.

Some one million hectares classified as Priority 2 areas for development have been identified in the provinces of Isabela, Mindoro Oriental, Mindoro Occidental, Negros Oriental, Bukidnon, Davao Oriental, Sultan Kudarat and Surigao del Sur, among others, Agbon said.

Another 220,000 hectares are classified as Priority 3 areas, he said, and can be found in Davao del Sur, Davao del Norte, South Cotabato, North Cotabato and Agusan del Norte.

Agbon said food production under the “Feeding our Future” venture will cover grains and vegetables as well as meat and dairy products.

A Memorandum of Understanding (MoU) on this project was signed during the Global City event last year by SMC president and chief operating officer Ramon Ang and Kuok Group chairman Roberto Kuok, and witnessed by Mrs. Arroyo, Yap and other government officials.

Under this MoU, SMC and the Kuok Group, which are identified as “cooperators” of the project, will provide the “financing, technical support and management for agricultural crop production” determined to be suitable for areas covered by the project, which will include, but will not be limited to, “irrigation, access roads and post-harvest investments.”

SMC and the Kuok Group will also purchase the farm produce in the covered areas at “guaranteed production off-take” terms through separate Procurement Agreements with the various agricultural producers that will be involved in the project.