I. Brief Profile of ARFIAI. Brief Profile of ARFIA

The Aganan-River Federation of The Aganan-River Federation of Irrigators’ Associations (ARFIA), Inc. Irrigators’ Associations (ARFIA), Inc. was registered with the Securities and was registered with the Securities and Exchange Commission (SEC) as a non-Exchange Commission (SEC) as a non-stock non-profit organization on stock non-profit organization on December 19, 1995 and assisted by December 19, 1995 and assisted by the National Irrigation Administration the National Irrigation Administration under the Aganan-Sta. Barbara River under the Aganan-Sta. Barbara River Irrigation System (NIA-ASBRIS).Irrigation System (NIA-ASBRIS).

Irrigators Associations, Areas and MembershipIrrigators Associations, Areas and Membership

Name of Name of Irrigators’ Irrigators’

AssociationAssociation

Service Area Service Area (has.)(has.)

IA AreaIA Area

(has)(has)

No. of No. of Farmers Farmers ServedServed

No. of IA No. of IA MembersMembers

SAN JOSE-SAN JOSE-STO.NIÑOSTO.NIÑO

821821 715715 608608 389389

SAMICASASAMICASA 356356 250250 239239 150150SALAMBITUSALAMBITU 991991 383383 351351 228228

CAPPACAPPA 888888 450450 360360 324324MACABITUMACABITU 351351 348348 122122 110110MACATUANMACATUAN 545545 545545 280280 185185

TOTALTOTAL 39523952 26912691 19601960 13861386

ARFIA is governed by 18 Board of Directors coming ARFIA is governed by 18 Board of Directors coming from 6 IAs, where each IA has 3 representatives from 6 IAs, where each IA has 3 representatives (President, Vice-Pres & Secretary).(President, Vice-Pres & Secretary).

Presently, ARFIA manages the state-of-the-art Presently, ARFIA manages the state-of-the-art Postharvest Facilities worth P117 Million, granted by Postharvest Facilities worth P117 Million, granted by the Government of Japan thru JICA to the National the Government of Japan thru JICA to the National Irrigation Administration (NIA) in 1996. In effect, it Irrigation Administration (NIA) in 1996. In effect, it stirred the local economy and generated employment stirred the local economy and generated employment opportunities in the irrigation community.opportunities in the irrigation community.

Our Programs and Services include:Our Programs and Services include: -- PlowingPlowing– Drying and WarehousingDrying and Warehousing– Palay/Rice MarketingPalay/Rice Marketing– Micro-financingMicro-financing– Socio-economic and Policy AdvocacySocio-economic and Policy Advocacy– Maintenance of Machineries & EquipmentMaintenance of Machineries & Equipment– Strengthening of Member IAsStrengthening of Member IAs– Training and Educational TourTraining and Educational Tour

Overview of Postharvest Overview of Postharvest FacilitiesFacilities

Canters

Solar Dryer

Mechanical Dryer

Forkclift

Glass House

Warehouse

II. How ARFIA became a PACAP II. How ARFIA became a PACAP PartnerPartner

When the Postharvest facilities was When the Postharvest facilities was operationalized in 1996, NIA also started its operationalized in 1996, NIA also started its linkages with various funding donors, both linkages with various funding donors, both with government and non-government with government and non-government organizations (ex. Peace & Equity Foundation) organizations (ex. Peace & Equity Foundation) to maximize the usage of PHF and help to maximize the usage of PHF and help alleviate the socio-economic condition of the alleviate the socio-economic condition of the irrigation community.irrigation community.

In 1999, we became aware on how to access In 1999, we became aware on how to access financial assistance with the Philippines-financial assistance with the Philippines-Australia Community Assistance Program Australia Community Assistance Program (AusAID-PACAP)(AusAID-PACAP)

How ARFIA became a Partner of PACAPHow ARFIA became a Partner of PACAP

In 2000, a project proposal was drafted In 2000, a project proposal was drafted and submitted. It was evaluated and and submitted. It was evaluated and reviewed and by 2001, our first project reviewed and by 2001, our first project was approved by PACAP. Since then, was approved by PACAP. Since then, our partnership with PACAP began, and our partnership with PACAP began, and grew stronger through the years. grew stronger through the years.

This partnership was strengthened due This partnership was strengthened due also to our proven good track records also to our proven good track records and financial reputation in handling and financial reputation in handling the grant funds.the grant funds.

Summary of Projects funded by PACAP

Project TitleTotal

Project Cost

PACAP Grant Funds

Microfinance Capital

MF Repayment

Rate

Interest Income

Collected

# of MF Beneficiaries

Samicasa Agri. 1.132M 750,000.00 450,000.00 98% 52,685.00 68Dev't Project

Samicasa Agri. 1.927M 1.216M 400,000.00 60% 15,581.00 90Prod'n & Palay

Mktg.

Agricultural Dev't 2.821M 1.817M 800,000.00 96% 390,968.00 150Project for

Aganan RIS Area

Expansion of Agri. Dev't 3.656M 1.8M 600,000.00 98% 15,772.00 37Project for Aganan RIS

Mission

“To work together in partnership with NIA in developing a productive irrigation community towards the upliftment of the socio-economic condition of active and participative farmer beneficiaries by giving unselfish and untiring services.”

III. Role of Microfinance in III. Role of Microfinance in Organizational MissionOrganizational Mission

The Irrigators’ Associations (IA) were organized The Irrigators’ Associations (IA) were organized and strengthened by NIA to be its partner in the and strengthened by NIA to be its partner in the operation and maintenance of the irrigation operation and maintenance of the irrigation facilities for effective and efficient distribution of facilities for effective and efficient distribution of irrigation water.irrigation water.

However, most farmers are not paying their However, most farmers are not paying their Irrigation Service Fee (ISF) dues to NIA, or Irrigation Service Fee (ISF) dues to NIA, or making it their least priority, because of their low making it their least priority, because of their low income due to poor production, high cost of farm income due to poor production, high cost of farm inputs & inaccessibility to institutional credits.inputs & inaccessibility to institutional credits.

With the IA-NIA partnership and a common With the IA-NIA partnership and a common mission to uplift the socio-economic condition of mission to uplift the socio-economic condition of the farmers and the irrigation community, the the farmers and the irrigation community, the provision of various agricultural support services provision of various agricultural support services was conceptualized.was conceptualized.

One of these is the availability of microfinance One of these is the availability of microfinance assistance to farmer-members of the Federation.assistance to farmer-members of the Federation.

With Micro-finance project, it has been able to:With Micro-finance project, it has been able to:

Provide production credit to 345 farmers with low Provide production credit to 345 farmers with low interest rate (only 3%/month) coupled with low interest rate (only 3%/month) coupled with low priced inputs, thus lessened the production priced inputs, thus lessened the production capital by 15% per cropping;capital by 15% per cropping;

Increased productivity due to timely and Increased productivity due to timely and substantial application of inputs;substantial application of inputs;

Popularize the use of organic fertilizer;Popularize the use of organic fertilizer;

Increase in production led to increase of farmers’ Increase in production led to increase of farmers’ incomeincome

With Micro-finance project, it has been able to:With Micro-finance project, it has been able to:

Provide 0.20 cents to P1 price difference compared to Provide 0.20 cents to P1 price difference compared to local/prevailing market price to those who paid in-kind as local/prevailing market price to those who paid in-kind as part of the marketing program of the Federation;part of the marketing program of the Federation;

Strengthen the Capital Build-up (CBU) program of the Strengthen the Capital Build-up (CBU) program of the Federation, which is now amounting to P428,649.00 Federation, which is now amounting to P428,649.00 ending January 15, 2009;ending January 15, 2009;

Enhance the leadership and management capability of Enhance the leadership and management capability of the IA officers;the IA officers;

Increase IA membership;Increase IA membership;

Increase in farm income led to increase in the capability Increase in farm income led to increase in the capability of farmers to pay their ISF dues to NIA.of farmers to pay their ISF dues to NIA.

IV. ARFIA & Its Microfinance Project:IV. ARFIA & Its Microfinance Project: Strategies ImplementedStrategies Implemented

1. Each TSAG Chairman recommends qualified 1. Each TSAG Chairman recommends qualified borrowers in his/her area to the IA President;borrowers in his/her area to the IA President;2. The IA President signs in the application form 2. The IA President signs in the application form as recommending officer and submit it to the as recommending officer and submit it to the Federation;Federation;3. Application forms were not processed if the IA 3. Application forms were not processed if the IA President was not able to sign as recommending President was not able to sign as recommending officer;officer;4. The applicant must pay all the dues required 4. The applicant must pay all the dues required and contribute for his/her CBU;and contribute for his/her CBU;

Strategies Implemented…Strategies Implemented…

5. The IA Officers assist in the 5. The IA Officers assist in the monitoring/collection of loans covered by his monitoring/collection of loans covered by his area to ensure high repayment rate;area to ensure high repayment rate;

6. The Project Team conducted field visitation and 6. The Project Team conducted field visitation and house-to-house information campaign and house-to-house information campaign and collection;collection;

7. Presentation of Monthly accomplishments 7. Presentation of Monthly accomplishments during BOD meetings for feedbacking;during BOD meetings for feedbacking;

8. Conduct of Credit Orientation8. Conduct of Credit Orientation9. Inclusion of ISF during loan payment;9. Inclusion of ISF during loan payment;10. Close coordination with NIA Institutional 10. Close coordination with NIA Institutional

workers for technical assistance and supervisionworkers for technical assistance and supervision

Farm Farm InputInput

ss Qty.Qty.

Loan Amount /HectareLoan Amount /Hectare

1st Time 1st Time BorrowerBorrower

2nd Time 2nd Time BorroweBorrowe

rr3rd time 3rd time BorrowerBorrower

SeedsSeeds 3 bags3 bags

3,600.00 3,600.00

3,600.03,600.00 0

as as needeneede

dd

Inorganic Inorganic FertilizerFertilizer 6 bags6 bags

10,000.00 10,000.00

10,000.10,000.00 00

as as needeneede

dd

PesticidePesticide 3 Liters3 Liters

2,500.00 2,500.00

3,500.03,500.00 0

as as needeneede

dd

Organic Organic FertilizerFertilizer 5 bags5 bags

825.00 825.00

825.00 825.00

as as needeneede

dd

16,925.016,925.00 0

17,925.17,925.00 00

EXAMPLE OF LOAN COMPUTATION PER HECTARE:

Due to these strategies, we had achieved Due to these strategies, we had achieved an overall repayment rate of 93% with 345 an overall repayment rate of 93% with 345 farmer-beneficiaries since the farmer-beneficiaries since the Microfinance project started in 2001.Microfinance project started in 2001.

Problems EncounteredProblems Encountered

At first, we had difficulties in At first, we had difficulties in screening the potential beneficiaries screening the potential beneficiaries for the project.for the project.

Crop failure due to natural calamities Crop failure due to natural calamities and infestations.and infestations.

Some farmers deliver palay to the Some farmers deliver palay to the Federation which is only good Federation which is only good enough to cover for their loan enough to cover for their loan payment.payment.

Abrupt increase in the prices of Abrupt increase in the prices of fertilizers and chemicals.fertilizers and chemicals.

Some farmers do not follow the Some farmers do not follow the prescribed cropping calendar for prescribed cropping calendar for proper water distribution that proper water distribution that affected the release of loans and affected the release of loans and repayments.repayments.

Farmers still practice the “wait and Farmers still practice the “wait and see” attitude.see” attitude.

Problems EncounteredProblems Encountered

LESSONS LEARNEDLESSONS LEARNED Aside from NIA, there must be close Aside from NIA, there must be close

coordination with other non-government and coordination with other non-government and government agencies for provision of various government agencies for provision of various technical support;technical support;

Regular conduct of meeting ensures Regular conduct of meeting ensures sustainability of project implementation;sustainability of project implementation;

Strengthening the CBU program and Strengthening the CBU program and counterparting scheme in every project counterparting scheme in every project endeavored promotes sense of ownership endeavored promotes sense of ownership towards the project;towards the project;

LESSONS LEARNEDLESSONS LEARNED

The role of each IA Officers and members of the The role of each IA Officers and members of the Federation is very important in project Federation is very important in project transparency and sustainability.transparency and sustainability.

Training/educating the farmers on the latest Training/educating the farmers on the latest sustainable agricultural technologies makes sustainable agricultural technologies makes them equip to apply what they have learned and them equip to apply what they have learned and improve their farm practices.improve their farm practices.

Microfinance and marketing projects must be Microfinance and marketing projects must be tied-up as part of the collection strategy to tied-up as part of the collection strategy to ensure high repayment rate.ensure high repayment rate.