Incubating Farmer Business Via Incubating Coops

MANILA: Reading William Dar's column in the Manila Times issue of 06 January 2017 with the title "The Agribusiness Incubation Approach" (The Sunday Times, manilatimes.net), I was inspired to think of a new concept:

Incubating coops as incubators of businesses run by farmer entrepreneurs.

The image above shows the Board Members of the Nagkaisa Multi-Purpose Cooperative meeting (I am the photographer) in a room in Danggay House, where you also find the Danggay Foundation, the brainchild of Senator Leticia Ramos-Shahani, now with me as President. I am now thinking of a Danggay project where a cooperative is assisted in incubating businesses for poor farmers. Something that has never been done because you can’t teach the poor to be business-minded, can you? To which I say: "All the more reason to teach!"

Up until this time, business incubation is a subject that I have refused to know and understand more of because I'm not business-inclined, ever since I first met that term and wrote about it in 2009 (see my essay, "India & ICRISAT. Thinking Outside The Box Of Science," 16 March 2009, Common Cause, blogspot.com). William Dar was then on his 10th year as Director General of the International Crops Research Institute for the Semi-Arid Tropics, or ICRISAT; he would go on and serve 15 years as DG until he retired on 31 December 2014. And I would go on and write about the aims and achievements of ICRISAT under him until then, publishing 7 books about ICRISAT. But I did not write much about business incubation as it was Greek to me.

We have to learn what we have to learn. Like I said, we have to think outside the box of science – and thereby push science.

What is business incubation? We have this definition from Entrepreneur (entrepreneur.com):

(A business incubator is) an organization designed to accelerate the growth and success of entrepreneurial companies through an array of business support resources and services that could include physical space, capital, coaching, common services, and networking connections.

In other words, business incubation is handholding a baby company until it grows up and can stand on its own and mind its own business, literally.

Learning from ICRISAT and William Dar, this New Year, as new President of Danggay Foundation, I am interested in supporting Coop Business Incubation, or CoopBus, pronounced coop buzz – where buzz means talk with an air of excitement or urgency (Collins English Dictionary). I am excited and I want people excited now that I have come to think that cooperatives, especially multi-purpose 

cooperatives like our own Nagkaisa MPC in my hometown of Asingan, can be run as business concerns and not simply or mainly as loan associations. It's time that coops think outside the box!

According to Chair Orlando R Ravanera of the Cooperative Development Authority, or CDA, there are now 25,600 cooperatives in the Philippines (cda.gov.ph). Since they have members and are located in villages, they have the captive markets – all they have to do is come out with products other than loans. If each coop made business to the tune of P500,000 a year, they would be sharing directly P12.8 billion of business locally. Think of the multiplier effect of that!

I began writing about cooperatives at least 10 years ago, arguing that "a good scheme for this is the farming cooperative" ("The University of the Philippines A Hundred Years Hence," 16 October 2007, UP Beloved, upbeloved.wordpress.com). I was referring to the equitable distribution of the benefits of labor – we can look at any company as the aggregation of labor: mental, managerial, manual and mechanical, including market-related matters.

The cooperative can serve more people and earn more from services if it is run like a business – and that is where we need CoopBus as a business incubator to create more coops as business incubators. Danggay Foundation will from now on pursue this as a project with public and private partners, such partnership inspired, again, by ICRISAT. Anyone interested, email me at frankahilario@gmail.

William Dar also says in that column:

Business incubation programs are often sponsored by private companies or municipal entities and public institutions, such as colleges and universities. Their goal is to help create and grow young businesses by providing them with necessary support and financial and technical services.

It would be wonderful if the Philippine government could set aside billions of pesos as budget for agribusiness incubation among cooperatives, especially those coops that have a majority of farmers as members.

A business incubator is good for anyone who is not business-minded but wants to improve his financial life, and farmers are like that. A business incubation committee will need to be appointed and then to train as business incubators.

By way of agribusiness incubation, or ABI, there is much to learn from India, specifically through ICRISAT. I quote from William Dar:

Looking at the case of India..., ABI’s application in creating agripreneurs can be called a success. Through the joint efforts of ICRISAT, which was then under my leadership, and India’s Department of Science and Technology.... starting in 2002, the success rate for participants for the groundbreaking ABI program was 80 percent, which was achieved in about six to seven years. Previous ABI programs in India without ICRISAT’s support was a measly 10 percent. Also, India today can boast of having the biggest number of agribusiness incubators in the world.

And so I go back to my proposal for the CoopBus, to create business-minded cooperatives in the countryside. Yes, to make a coop work as a business incubator for farmers who are not business-minded, that is an exciting challenge.

According to William Dar, for successful business incubation, these 5 components should be in place:

(1)     technology consulting

(2)     capacity building and training

(3)     access to funding

(4)     business facilitation

(5)     infrastructure and facilities.

I will note only here that "infrastructure and facilities" must include, this component also inspired by ICRISAT, a complete direct-consumer marketing system.

Now then, copying from India via ICRISAT, CoopBus must provide model coops assistance in the forms of loans, mentoring, office space, up to and including marketing.

What did India learn from its ABI programs? William Dar says:

The lessons that can be learned from India’s ABI program are plenty, but I can identify at least four: partnerships or linkages with national development programs are essential; there is a need to bridge the gap between research/researchers and farmers; there is a need to also incubate incubators; and participating firms should eventually become models for capital gain (and not just revenue generation).

Thinking of CoopBus, I note particularly the lesson, "there is a need to also incubate incubators." Therefore, I hope we can persuade the Department of Agriculture, or DA, to fund Coop Business Incubation. From poverty, the farmers we save will be our own. @1140

05February 2017. Essay word count, excluding this line. 1140