Kauyagan Multipurpose Cooperative: Brewing Prosperity and Empowering Communities through Coffee

Cultivating Prosperity and Community in the Heart of Impasug-ong 

In the scenic province of Bukidnon in Northern Mindanao, Kauyagan Multi-Purpose Cooperative was established in April 2004 by 27 members representing various sectors, including agriculture, indigenous peoples (IP), the church, transportation, academia, the local government unit (LGU), the business sector, and non-governmental organizations (NGOs). 

Their story is one of joy, determination, and unwavering commitment to provide responsive financial products and services to uplift the socio-economic conditions of their members and their community.  

Reflecting on those early days, Manager Imelda Hernandez-Esteban or “Mel” shares, “Masaya ang pag-start ng Kauyagan MPC, we are in an IP community.” [The beginnings of Kauyagan MPC were a joyful moment for us because we were in a community of indigenous peoples (IP).] Impasug-ong, where the cooperative is based, is home to the Higaonon tribe. “Higaonon” is derived from the native words “higa” (living), “goan” (mountains), and “onon” (people), which translates to “people of the living mountains” or “people of the wilderness.” The Higaonon are a resilient and culturally rich indigenous group known for their sustainable farming practices and profound connection to the environment. 

She proudly remembers being among the first members of the cooperative, realizing the profound need for a formal institution where people in the community, particularly farmers, could seek financial services for their agricultural projects.  

Back then in 2004, Engr. Sylvia “Ibing” O. Paraguya, an Impasugonganon herself, was the CEO of MASS-SPECC Cooperative Development Center (MASS-SPECC). She was involved in the brainstorming and in the formation of the coop. When they realized that farmers in the area didn’t have a reliable place to access financial support, Mel and the founders of Kauyagan MPC thought of starting a cooperative to fill this gap. MASS-SPECC, a cooperative federation, is also a member of the Foundation for a Sustainable Society, Inc. (FSSI)

The cooperative fortunately had the support of their local government. At the start, Kauyagan MPC found a temporary home in the legislative building of the Impasug-ong LGU.  

They also secured a start-up grant of one million pesos from a corporate foundation through MASS-SPECC, in addition to share capital contributed by their members.  

In August of the same year, Kauyagan MPC officially registered as a cooperative. 

Expanding Services and Transforming the Coffee Value Chain 

Initially, Kauyagan MPC’s primary focus was on savings and credit. It wasn’t until 2017 that the cooperative expanded its scope. This marked the inclusion of coffee, and abaca into the cooperative’s operations, reflecting the community’s deep-rooted connection to agriculture. 

Kauyagan MPC’s transformative impact extended further through its agricultural program. “Malaking tulong sa mga coffee and abaca farmers. [It has proven to be a lifeline for coffee and abaca farmers],” Mel explains, describing a project that has provided these farmers with opportunities to market their products and secure fair prices. 

Currently, the cooperative has been more thoroughly engaged in the production, processing, and marketing of coffee. 

First, the cooperative takes a proactive approach by providing training to coffee farmers on new farming technologies. However, this began with a significant challenge: aging coffee trees. “Our coffee when we started, yung mga kape na nasa field are 40 to 50 years old already, imagine how tall the coffee trees are. Hindi nag-re-rejuvenate ang mga coffee.” [When we first started, the coffee trees in the fields were already 40 to 50 years old, and you can imagine how tall they were. The coffee trees were not rejuvenating.] 

However, the introduction of new technologies was met with resistance, particularly in IP communities. “Sabi ng mga IP farmer, “Dili me mag putol kay basin magabaan me kay gimana pa namo sa among mga ninuno.”  [IP farmers expressed concerns, fearing that cutting the trees might offend their ancestors.]  

The cooperative responded with a compelling argument, demonstrating the potential benefits of rejuvenation. Mel recalls, “Nag-compute kami at pinakita sa IP farmers” [We calculated and showed it to the IP farmers]. The cooperative proposed a gradual approach, suggesting the cutting of sections of the fields at different times. The IP farmers were advised about the potential income if the coffee trees were rejuvenated after two years compared to having stagnant income. Calculations were made and shown to them. It was emphasized that they didn’t need to cut the entire 1-hectare plot at once because there would be nothing to sell if they did so. Instead, the suggestion was to cut them into sections. For instance, they could cut a quarter of a hectare now and then another quarter later. As the first quarter they cut began to grow, they would cut another quarter, and so on. By the time they had rejuvenated the entire hectare, the first quarter hectare they cut first would already be producing fruits. This approach ensured that their coffee income wouldn’t be interrupted, with the first section already bearing fruit when the final section was rejuvenated. 

The cooperative’s support also extended to training in good agricultural practices and pest and disease management, equipping farmers with essential skills for sustainable coffee farming. 

The cooperative also trained them on selective harvesting, Mel notes that due to the towering coffee trees, farmers often engaged in what was known as “laras” [to include all], where green and ripe cherries were mixed. The cooperative introduced changes, teaching farmers to pick only the ripe red coffee cherries.  

Kauyagan MPC maintains detailed records of all harvests and coffee deliveries, ensuring transparency and fair compensation for their suppliers. Currently, the cooperative buys coffee from the farmers at prices higher than the prevailing market rates. 

“At KMPC, we firmly believe that profit should not solely benefit the cooperative. Kasi hindi naman kailangan na ang cooperative lang ang kikita eh. Dapat ang kikita mismo ay ang mga farmer dahil sila ‘yong may-ari ng produkto.” [Farmers themselves should reap the rewards as owners of their products.]  

Kung hindi tutulong ang cooperative sa mga farmer, paano na si farmer? Sa trader lang sila nagbebenta.”  KMPC’s approach is to consolidate the products of farmers, while ensuring that they retain ownership from production to market. “This is Kauyagan coffee, cultivated by farmers, with Kauyagan MPC handling processing. Yet, ownership of the product rightfully belongs to the farmers,” she says. 

The cooperative’s role in supporting coffee and abaca farmers from upland communities across the Tagoloan River became even more important. “We have established a satellite office in one of the farthest barangays of Impasug-ong, up in the mountains, on the other side of the mountain range connecting to Agusan del Sur.”  

The satellite office plays a crucial role in catering to the needs of IP communities, particularly those engaged in farming. Kauyagan MPC’s dedication to these farmers not only helped them access financial support for their agricultural projects but also in marketing their products. 

As Mel points out, “These communities are about 25 kilometers from the town center, and they really need help finding places to sell their products.” 

Further, in 2017, the cooperative established its own consumer store, an idea that originated from its members who work as laborers in the plantation crops. 

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The cooperative transformed a warehouse into a consumer store that provides a better shopping experience. Instead of simply having an attendant handing out products to buyers, community members are able to navigate the store themselves, with baskets, exploring shelves filled with an array of products. 

Isa ‘yon sa mga proud ako na naitayo namin. Sa awa ng Diyos, napakinabangan siya ng community,” Mel shares.  [This is one of the accomplishments I hold dear, and, with gratitude to God, the community has reaped the benefits.] 

A women social enterprise 

As Kauyagan MPC continued to grow, the need for improved infrastructure arose. Mel, who is serving as a governing board member of the Federation of People’s Sustainable Development Cooperatives (FPSDC), saw an opportunity to address this need. “I inquired if FPSDC could assist us because we were planning to construct a two-storey building for our store and office,” she recalls. FPSDC agreed to support the endeavor and recommended that Kauyagan MPC be included under the Investing in Women program of FSSI, marking the beginning of a multi-stakeholder partnership. FSSI is a local impact investor of the Investing in Women (IW), an initiative of the Australian Government that seeks to support women-owned and -led social enterprises (WSEs). Kauyagan MPC became one of the eight (8) WSEs supported by FSSI and its member organization FPSDC through a co-investment arrangement. 

Under this partnership, Kauyagan MPC was able to successfully move to a new home. On August 8, 2023, the cooperative formally launch its Center for Progress, Peace and Resilience to house its new office and consumer store. 

Ang consumer store, nagbibigay ng income sa Kauyagan MPC. Nagagamit ng cooperative ‘yong income para sa kaniyang mga program, para sa mga member.” [The consumer store is more than just a shop; it fuels the cooperative’s programs that benefit our members.] 

KMPC’s consumer store stands out with a “suki card” [loyalty card] program. Mel explains, “Our suki card rewards our valued buyers with points. For every 200 pesos spent, you earn 1 point.” However, it’s important to note that the conversion rate isn’t one-to-one. “Kunwari, one (1) million [ang total income] tapos ‘yung total accumulated points is “this number,” [Let’s say there’s one (1) million pesos in income, and the total accumulated points reach a certain amount,] the cooperative divides this income and total points to determine the conversion rate. 

Mel continues, “If 1 point is equivalent to 7 pesos, you simply multiply your points by 7 pesos, and that’s what you get.” This ingenious system ensures that every member is rewarded fairly for their patronage and support. “Mag i-issue din ang Kauyagan MPC sa’yo ng gift certificate and that gift certificate mo ang magiging “patronage refund” sa pagbili ng mga product sa consumer store. [We issue gift certificates, which serve as ‘patronage refunds’ for purchasing products at the consumer store],” Mel says. These certificates provide an extra layer of flexibility for members to choose how they benefit from their loyalty. These additional benefits are also valuable to the members. 

“Last year, the highest point value na nabigay namin was Php 55,000 sa isang mamimili. Yung mga iba na may “sari-sari” store, ang nakukuha nila ay Php 20,000.” [Last year, the highest point value we awarded to a shopper was Php 55,000. Others, particularly those with sari-sari stores, received around 20,000.]  

This project has also helped their community in many ways. “We employ 25 staff at Kauyagan, with 10 working in the consumer store. “These staff members are the heart and soul of the cooperative. Mel elaborates, “Since nung binigyan kami ng FSSI ng opportunity to build the consumer store, dahil dito, nakakabigay kami ng employment even to those elementary graduates and sa mga IPs galing dito sa aming community.” [Since FSSI gave us the opportunity to build the consumer store, we’ve been able to provide employment even to those with elementary education and from our Indigenous People’s (IP) community.] “We pay them a minimum wage with complete benefits, including SSS, PhilHealth, PAG-IBIG, 13th-month pay, and insurance.” 

Furthermore, KMPC fosters an environment of personal growth. “May isa kaming staff, isa siyang cashier. Hindi pa siya graduate ng college [One staff member, who works as a cashier, hadn’t graduated from college],” Mel recounts. “We gave her an opportunity na mag-aral ulit at nakapag-tapos siya ng Business Administration. Sariling sikap niya pero ina-arrange namin yung schedule niya.” [We gave her the opportunity to pursue her studies in business administration by arranging her work schedule in such a way that she was able to pursue her studies.] 

Mel, who has been manager of the cooperative for six years now, hesitates to take credit and describes the cooperative’s accomplishments as a result of a collective effort of the cooperative’s leadership, staff, and members. Despite her role in the cooperative’s success, what brings her the greatest satisfaction is the opportunity to engage with farmers and grassroots communities and make meaningful impact — a cause that hits close to home. As a daughter of a farmer herself, she intimately understands their struggles, hopes, and dreams. 

As a woman social entrepreneur, Mel also takes pride of the high level of consciousness about the importance of gender equality in its operations. They have also taken affirmative steps to engage women in their coffee value chain. 

Crafting a Sustainable Vision 

Yung vision namin na sana all our members enjoy a better quality of life. [Our vision is that all our members will enjoy a better quality of life.] She envisions a future where members proudly declare, “Salamat, Kauyagan, dahil sa cooperative, napagtapos namin ang mga anak ng college, dahil sa cooperative, nagkaroon kami ng bahay, dahil sa cooperative, nagkaroon kami ng sasakyan na nagagamit namin sa aming negosyo.” [Thanks to Kauyagan, we were able to send our children to college, own a house, and have a vehicle for our business.]  

To make this possible for more members of their community, Mel reveals an even grander ambition, “Ni-lo-look forward din namin na magkaroon kami ng processing center ng coffee, kung saan nando’n na ang bodega, magkaroon kami ng truck, isang value chain ng coffee na mahawakan namin.” [We hope to establish a coffee processing center where we have a warehouse, trucks, and a complete coffee value chain under our control.]  

“We aim to be recognized as a supplier and a source of quality coffee in Region X,” Mel declares with pride.  

Currently, Kauyagan MPC’s area of operation spans the entire province of Bukidnon, with majority of their members from Impasug-ong and Sumilao, where the cooperative has carved its niche. The cooperative also boasts members from Manolo Fortich, Malaybalay City, and even a few from Valencia City. 

From a limited membership and share capital in 2004 to Kauyagan MPC now has more than 3,000 members and assets of more than 85 million pesos. Mel, despite all of these achievements, describes the cooperative a work in progress, but by the way it looks, Kauyagan MPC is already a success in progress. 

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