The cacao queen and her legacy
The Philippine cacao queen is Charita Puentespina. She provided a legacy for us to follow. Sadly, she passed away last Aug. 16 at 86. In 2024, Puentespina was recognized as one of the Inquirer “Women of Power” awardees for her contribution to Philippine agriculture and the cacao/chocolate industry.
She was a farmer, agripreneur and founder of the Puentespina Farms and Malagos Chocolate. Her first farm was established in Davao in 1963. She started with orchid cultivation and propagation and helped save the Philippine waling-waling orchid from extinction.
In 2003, Puentespina ventured into cacao production. In 2017, her cacao beans were feted among the world’s 50 best in the Cocoa Excellence (COEX) competition in Paris, France. This is where more than 400 entries from at least 30 cacao-producing countries compete.
In 2021, Puentespina won the coveted Gold Award for “Best Drinking Chocolate in the World“ from the International Chocolate Meals in Hanover, Germany.
Learnings
Puentespina traveled all over Mindanao to share her learnings so that others would benefit. Her objective was “not only to make better products, but also to employ more farmers.” She was the founder and first president of the Cacao Industry and Development Association of Mindanao. This formed the core of the current Philippine Cacao Industry Association, now headed by Armi Lopez-Garcia.
In partnership with Mars Inc., Puentespina put up the Mars Cocoa Development Center, teaching good agricultural practices. She was so successful that, since she won the international COEX award in 2017, a Philippine representative using her learnings has consistently won the same award in every single year.
When we asked Dante Muyco Jr., a 2021 COEX awardee, what impressed him most about Puentespina, he said: “She was very generous sharing all she knew about the cacao value chain, including giving us her export contacts in the United States and Asean. She truly inspired us, specially when we had difficulties. She said we should unite and help each other, so that people would know the Philippines has the best cacao and chocolate in the world.”
Cacao credit model
Puentespina’s legacy is a model for agriculture credit. Today, many small farmers have productive capacity, but are not bankable because of insufficient collateral. Puentespina emphasized that loan decisions should instead be made mainly on a cash flow-based value chain with consolidated farmers, supported by an anchor agribusiness, cooperative or processor.
The farmer retains land ownership. Consolidation is in production, technical services, financing and market. The model combines an anchor agriculture enterprise, farmer training and technology, organized smallholder suppliers, quality control, processing/value addition and access to markets. The commercial relationship between an anchor enterprise and small farmers is the main basis for the credit decision, not collateral.
How to do this? An anchor must first be identified. Individual farmers would then be organized into a production cluster or cooperative, with the unifying anchor.
The farmer should then submit a production plan with the following components: crop, area, inputs, yield, production cost, selling price and cash flow. Insurance should be provided, where our extremely limited crop insurance today is recommended to be leveraged with the massive resources of our Government Service Insurance System.
Anchor agribusiness
This anchor is critical. It can help in technology, inputs, training, aggregation, quality control, market and records for credit assessment. The bank will now lend to an agriculture production system, not to an isolated farmer. This approach is similar to Thailand’s Bank of Agriculture and Agricultural Cooperatives (BAAC). Of BAAC’s lending, 88-90 percent goes to agriculture, compared to the Land Bank of the Philippines’ 15-20 percent. However, BAAC’s 8-percent return on equity (ROE) and 5.6-percent non-performing loans (NPL) are inferior to Landbank’s 16-percent ROE and 2-percent NPL.
It is acknowledged that Landbank is also a universal bank with commercial lending responsibilities. Though agriculture credit access should be improved, the main problem today is that there are not enough qualified agriculture borrowers with financially feasible loan proposals. The Government should now devote much more attention and resources to reach out to farmers and fisherfolk. It should implement this Puentespina model for credit to grow and the agriculture sector to significantly develop. Puentespina will then become not just the queen of cacao, but also a queen for our current ailing agriculture.
