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PHILIPPINES: Local rubber farmers sign processing deal with manufacturing company
A deal between farmers and a manufacturing firm, which will pave the way for the local processing of rubber, has been signed, a top agriculture official said. In a statement, Agriculture Secretary Emmanuel Piñol said the country’s rubber farmers will start producing and marketing motorcycle and small tractor tires by February next year, a major leap from their status of being just raw materials producers.
Officials of the Philippine Rubber Farmers’ Cooperative have signed a processing and marketing agreement with Valenzuela City-based Leo Tire Manufacturing Corp. (LTM). Under the agreement, the rubber farmers’ cooperative will buy the raw rubber produce of its members at a price higher than the prevailing local buying price using an initial capitalization of PHP 10 million provided by the Department of Agriculture (DA) through the Agricultural Credit Policy Council (ACPC). The raw rubber called “cuplumps” will then be processed into a product called SPR20 which will be delivered to LTM.
Piñol said that using a brand name “Pilipinas Agila Tires,” LTM will manufacture motorcycle tires commonly used by tricycles and rural motorcycles and small tractor tires for power tillers. Farmer leader Armando Pedregoza said, as cited by Piñol, that the support given by the DA to the project will “start the liberation of farmers from the control of traders and middlemen.”
The country’s rubber farmers have complained that from a high of almost PHP 100 per kilogram of cuplumps several years ago, prices have gone down to as low as PHP 20 per kilogram. Pedregoza noted that while cuplump prices have gone down, the cost of tires has gone up. By buying its members’ produce and processing it into high value products, the farmers are expected to earn more, he told Piñol. “The tolling agreement with Leo Tires is the first step in the dream of the country’s rubber farmers to establish their own tire manufacturing facility,” Piñol said.