JC 1st NU6 paper Leon's Mangoes-

New product improvement (process improvement)

Leon Mangoes

I came from a town in Iloilo called Leon.  We are 28 kilometers from the City.  Our area is mostly mountainous or hilly.  Our town grows a variety of agricultural crops and we are popular in Iloilo as the town the produces the best and sweetest mango.

Department of Agriculture and the Western Visayas Integrated Agricultural Research Center (DA-WESVIARC) research show that our mango has a higher sucrose content than that of Guimaras, meaning- sweeter.  The quality of our mangoes is superior and are proven to be very marketable abroad.  Despite the known quality, our mango farmers subsist on minimal margin on their produce compared to to the mangoes farmers of Guimaras.  Why are Guimaras mangoes more popular?  Magnolia even launched a new limited edition "Guimaras Mango" flavored ice cream recently.  That opportunity should have been ours. My aim in this NU6 is to present a new idea on how we can generate more income from the quality mangoes that we have in our town. 

My idea is to form a cartel of Leon Mango growers.  I used the word "Cartel" because the rules within the organization I'm visualizing will be stricter that the ordinary farming cooperative.  To illustrate my idea, here are the basic steps i'm thinking:

1)  Get hold of a government or private grant that will support the research and development of creating the best quality mango possible.

2) Form a cartel / cooperative.  Recruit Mango farmers in the town. Highlight the yield they will get using your new mango growing technique and the price protection the cartel will offer.

3) Apply for a loan in Landbank,  Use the money to finance the first roll-out of the new technique

4)  Share the new technique to the cartel members and ensure that they follow the procedures.

5)  When harvest time comes,  the farmers will sell their produce to the cartel at a predetermined price.  This is where the price protection comes in.

6)  Cartel will obtain contracts from big companies (Nestle, Robinsons Supermarket, SM Supermarket, San Miguel Corporation etc.) by capitalizing on their ability to deliver the agreed quantity and the quality of the mangoes.

6)  Once they receive payments from these clients, they will use the revenues to pay up the loan in step 3,  pay the succeeding cost of produce of farmers in step 5, and pay for further research and development in step 1.  The remainder (net income) of the cartel will be distributed among the cartel members as dividends.

Graphical representation of these steps are shown in the attached file.

The general idea of this NU6 paper is to find a way of creating synergy among the mango farmers to allow them to get higher returns for their produce.  By creating a cartel, I am trying to create a structure that will market the product, acquire the needed knowledge and support from both private and public sectors, protect that knowledge, maintain quality of the produce and at the same time create unity and cooperation among the farmers.

To protect the cartel, if a farmer decides to sell his produce outside the cartel, he will automatically be kicked out of the organization thus denying him of the dividends, price protection and the further knowledge and developments on mango farming.