Wednesday, February 21Food Security Matters

Feed Milling Business: From Sugar Slavery to Success

When we hear about the feed milling business, we always think of those large structures with large silos and tanks that needs hundreds of millions, if not billions of pesos to set up. This is not the case with the man who was enslaved by sugar barons for most of his life.

Oscar “Oca” Latorgo is a third-generation sugarcane worker who spends most of his teenage and adult life working in the sugarcane fields in his native town, Binalbagan, Negros Occidental, Philippines.

Feed pelletizer machine produced by CPU (Central Philippine University) similar to what Oscar owned.

As a former Sakada, he’d been doing back-breaking jobs all over Negros cutting and loading sugarcane on trucks. His life turned 360 degrees though when he received his 2.8 hectares of land through Comprehensive Agrarian Reform (CARP) in 2013, followed by the return of his oldest son during the pandemic in early 2020.

Oca is a 48-year-old widower with 3 sons and a daughter who is still in college. The oldest son Roy had worked in Batangas as a Sakada himself since the age of 19 after graduating high school back when there was no K12. After 3 years in sugarcane fields, he worked for 7 years in a feed milling company here in San Jose, Batangas. His job was ended when COVID-19 hit the country and was forced to return to Binalbagan. Now at 31, he helps his father manage their small farm.

Sugarcane Cannot Support a Family

“When I received my CLOA (Certificate of Land Ownership), I was very happy and I thought I could finally get my family out of poverty. But after four years of planting sugarcane, I discovered that the 3-hectare cane plantation can barely feed us. My second son (Rene) who just started working as a security guard in Bacolod, told me to raise chickens and ducks. I owned a 3-hectare plantation but I’m still working not only for my own plantation but also for other small sugarcane planters. My life became more stressful both physically and mentally”, Oca recalled.

Animal Farming is Better than Sugarcane Farming

He added that In 2016, he started raising native chickens and pigs and after a year, he started to enjoy what he was doing. By 2018, he had around 200 native chickens, 100 Mallard ducks which produce fertilized eggs for balut, and 10 fattening pigs. he stopped planting sugarcane by 2019 and focused on livestock and poultry.

“The pandemic derailed my dream though as the cost of feeds skyrocketed so I had to find ways in order to continue my small animal farming business. This is when my oldest son came into the picture,” he added

Feed Milling Business is Born

“Why don’t we produce our own feeds?”, “Roy, my oldest son asked me which got me thinking. We had enough corn and rice bran is widely available but I only feed my chickens with corn and coconut. I had no trust in giving my animals locally-grown feeds.” he continued.

With a small amount of savings, Roy bought a second-hand pellet machine through Facebook. The machine was built by Central Philippine University (CPU) in Iloilo, and he got it for P25,00 from another farmer in Victorias City.

Equipped with seven years of working experience in a large feed mill in Batangas, Roy started mixing whatever available materials they have and Oca was very excited when the machine started producing pellet feeds. After a month of trial and error and conditioning the machine, they developed 3 types of feeds in 3 different sizes. This is when things started to change dramatically in their favor.

By the time the cost of animal feeds in the province was extremely high, they were producing around 10 sacks per day (500 kgs). That was August 2020 during the height of the lockdown when commercial feeds were scarce. They started selling their excess feeds at P1,000/sack and they got overwhelmed by the high demand. The old machine can only produce a maximum of 600kgs for 10 hours of full operation and manual mixing was very tiring and challenging so they decided to sell all of their slaughter-size pigs, 10 goats, and a carabao to raise P120,000 for a shredder, mixer, and a brand new pellet machine that can produce at least a ton of pellets per day.

“By May 2021, we were producing 1,500kgs of feeds and employed 6 full-time workers. Three workers were operating their machines while another three workers were planting, harvesting, and collecting raw materials. Our feeds, which cost only P1,050, were still P300-500 cheaper than the commercial feeds and our customers had dramatically increased,” Oca said.

By July 2022, they have 12 permanent workers who are enjoying the minimum salary mandated by DOLE (P410/day for the agriculture sector).

Feed Milling Business Save Families from Century-old Sugar Slavery

Their feed milling business is becoming stronger and as of today, 15 families are being supported, not including their neighbors who are farming papaya to be sold to them.

“Our major feed ingredients include corn bran, rice bran, green papaya, banana stalks, Ipil-ipil leaves, cassava, coconuts, Azolla, and molasses, with a small percentage of lemongrass, galangal (langkawas), and cooked taro roots being added in one of our feed types. We include zero commercial feed in our ingredients and all are sourced locally,” Roy said.

“My 3 sons are working with me now including my nephews and some of my neighbors. Although the feed milling business is the number one source of income, I still maintain around 2,000 broilers, 300 native chickens, 20 fattening pigs, 1000 Mallard ducks (for balut production), and 150 goats,” Oscar continued.

“My neighbors who also receive land through CARP are now starting to plant high-value crops like corn and papaya because they know that planting sugar cane is a big waste of land. The market for corn and papaya is not a problem anymore since we are producing more than 2 tons of feed now so there is always a need for raw materials and my neighbors can provide more than enough supply even if we upgrade our production,” he added.

The Sugar Industry is Dying

When asked if he could make a lot of money with the current price of sugar if he were to plant sugarcane again, Oca has this to say.

“Negros Hacienderos have been enslaving sugar workers for more than a century. They refuse to pay the minimum even though they can. Their greed is the reason why this province still has one of the biggest populations of the poorest Filipinos. Sugarcane farming is a massive waste of land and I don’t care whether the government will import sugar 100%. It’s not the poor who will suffer but the greedy landowners and traders who hoard sugar. Whether a kilo of sugar costs P100 or P500, sugar workers will remain underpaid so it doesn’t matter to us anymore. People who grow up working in sugarcane fields starting to realize now that there is no future in sugarcane if you are just a mere worker. And even if you own 2 to 5 hectares of land, if you refuse to abandon sugar farming, your life will never get better”, he said.

According to the latest Negros Occidental Statistics, younger generations prefer to work in malls, services, and even in construction in cities than in sugarcane fields and one of the major reasons is the below-minimum wage. Some Hacienderos who can afford machinery are starting to modernize but for those who can’t afford it, modernization is not sustainable.

“I don’t care about the sugar industry anymore as working there again is a nightmare. I am happy with what I am doing. Look, I only have almost 3 hectares of land but I am providing a stable income for my family, and also providing jobs to at least 15 individuals. A Haciendero who owns 100 hectares of sugarcane can’t even pay a minimum wage, let alone give a steady income to 15 people. They let you work like a slave and pay you less. This is how Negros become known to be the province of rich Hacienderos. But this sugar fiasco will end in the future and more and more people are now abandoning sugar slavery”, Oscar said.

Although he is now a successful farmer, Oscar despises those landowners who are still paying their workers less than the minimum wage and not providing benefits like SSS and Pag-big.

“The government should start supporting CARP beneficiaries and tell them to start planting other high-value crops instead of sugar. Sugar is what makes landowners rich but also created massive poverty and slavery for more than 100 years here. Once we get our Organic Farm Accreditation from the DA, we plan to provide free seminars to our fellow CLOA holders so they know what to do with their lands”, he said.

Although not many people are doing integrated farming as Oscar did, he said that the sky is the limit when talking about profitability if the farm is properly managed.

“My daughter is in her last year of college and she is taking a BS in Agricultural Engineering at a State University in the South so I am very excited about what she can bring here on our farm. I just have a little regret though that my late wife is not experiencing these things anymore, “ Oscar said adding that his wife had died of tuberculosis more than 18 years ago.

Questions Related to Feed Mill and Feed Distribution Business

Is selling animal feed profitable?

There are many reasons why the animal feed milling business and selling animal feed is a profitable business. One of these major reasons is that business caters to animals ensuring they eat good nutritious foods.

What is the Feedmill Industry?

It is an intermediary industry supplying the livestock and poultry sector and lately in aquaculture operations, like prawns, “bangus” and “tilapia,” with the major production input, the mixed feeds ration.

How much does it cost to start a feed mill?

In the Philippines, a backyard small feed mill must need at least P100,000 to start. This includes a feed pellet machine, shredder/crusher, and feed mixer. This does not include the cost of raw materials as some materials might be available in your backyard.

How do you market animal feed?

In rural areas where commercial feeds are scarce and expensive, word of mouth is the best way to market your animal feeds. Talk to neighbors and other people who raise poultry and livestock.

How big is the animal feed market?

The global compound feed market size was USD 490.13 billion in 2020. The market is projected to grow from USD 510.42 billion in 2021 to USD 709.62 billion in 2028 at a CAGR of 4.82% during the 2021-2028 period.

In the Philippines, since the country is agro-industrial, the feed industry is massive and there is always a massive demand for animal feeds anywhere in the Philippines.

What is a compound feed?

Compound cattle feed is a mixture of various concentrate feed ingredients in suitable proportions. Commonly used ingredients in compound cattle feed include grains, brans, protein meals/cakes, chunnies, agro-industrial by-products, minerals, and vitamins.

What ingredients are in organic animal feed?

To be fully organic, you need to make or buy organic feed. Organic feed ingredients include local crops like corn, rice bran, papaya, fruits, root crops, soybeans, molasses, fishmeal, and other local crops. Whether it is raw or pelletized, it will remain organic unless processed supplements and chemicals are added.

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