ComVal corn co-op inks market deal with Vitarich
The Laak Multipurpose Cooperative (LAMCO) has forged a marketing agreement with Vitarich Corporation, a pioneering poultry and feeds producer in the country.
In a simple signing ceremony held Monday at Department of Agriculture (DA) regional office in Davao City, the two parties agreed to embark on corn marketing agreement where LAMCO acts as consolidator of yellow corn grains and sell it to Vitarich.
LAMCO is a co-op based in Laak, Compostela Valley Province with 6,000 members who are mostly corn farmers.
The Vitarich commits to provide direct market to corn growers and agrees to buy the consolidated corn grains based on prescribe quality standards, prices, and volume requirements. Quality standards include: moisture content of not more than 14%, and total damage grains lower than 5%.
In December 2016, Vitarich has opened its four-hectare processing plant in Panacan, Davao City to cater to the growing demands for aqua feeds products.
“The plant has a capacity of 93,000 bags per month and by July we expect to produce 200,000 bags per month. That is why we also want corn production to expand especially the ones locally produced,” said Ricardo Manuel Sarmiento, President and Chief Executive Officer of Vitarich Corporation.
In its initial operations, Vitarich used to import corn from other parts of the country, which is more costly as it required shipment fees. Having sealed market deal with LAMCO, it would be easier to transport its raw materials at the same time help improve the income of local corn farmers.
Mario Tipan, LAMCO’s chairman said the agreement offers a guaranteed floor price of P14 per kilo of quality corn grains for every 200 metric tons that will be sold to Vitarich. An excess delivery will be based on prevailing market price. Current market price for quality corn grains is pegged at P12 per kilo.
“In our experience, the floor price is already a good offer considering that prices of corn usually fluctuates lower than P14 per kilo,” Tipan said.
“Corn is very important to us being the main ingredient for our feeds – the main feed for our livestock (and poultry),” he said while expressing his confidence on the capacity of local farmers to keep up with their required quality and volume.
“We are hoping that this [marketing agreement] would be a catalyst to help the expansion of corn production in the entire country,” Sarmiento added.
The local government of Laak for its part has allocated P4-million pesos to fund corn production expansion in the area. Mayor Antonio Libuanga saidthe funding assistance covered provision of seeds, fertilizers, and other needed inputs.
DA Regional Director Ricardo M. Oñate, Jr. said the recently signed marketing agreement serves as model for direct market linkage where farmers are offered better price by the processors.