Incentives and Disincentives to Produce Agricultural Products to Preserve Agro-biodiversity: Evidence from Ifugao and Lake Sebu, Philippines

Philippines is one of the megadiverse countries in the world and considered to be a biodiversity hotspot as it is home to diverse species of plants, animals, and microorganisms. It is also home to myriad of globally important agricultural biodiversity, such as rice and rootcrops. An opportunity exists for the farming community to derive sufficient economic benefits from agro-biodiversity conservation as consumers recognize the importance of preserving traditional crop varieties. An electronic survey of 230 consumers in Luzon, Visayas, and Mindanao was done to examine this opportunity, particularly the demand and willingness to pay for ecolabeled products from these traditional varieties. Factors that affect the level of price premium were also analyzed using interval regression analysis. Data on production and marketing of farmers of traditional rice varieties and some rootcrops were also collected through household surveys in Ifugao and Lake Sebu. Most consumers are willing to pay for ecolabeled products, but the willingness to pay varies depending on the level of price premium. The willingness to pay decreases as price premium increases, which follows the normal demand curve. However, for most ecolabeled products except rice without organic certification, there is a kinked demand, which implies that there is a minimum price premium that most consumers are willing to pay. Certification fetches higher price and majority of the respondents are willing to pay price premiums ranging from 10% to 20% for ecolabeled products. Results show that gender, age, income, and being an organic product consumer significantly affect the level of price premium

Linking Smallholder Rural Producers to High Value Markets: The Role of Technical Assistance and Credit

Smallholder rural producers face many challenges in supplying their products to high-value markets. While these markets usually offer higher prices compared to the traditional market, they also set stricter requirements in terms of quality, volume, delivery, and packaging. For farmers to meet these standards and to achieve a higher income, they need to improve production practices and achieve a higher level of efficiency, not only in production but also in marketing. However, these changes require significant capital investments. This paper examines the role of technical assistance and credit in developing high-value chains that involve smallholder producers. Two cases are presented to illustrate the importance of both credit and technical assistance in linking smallholder producers to modern value chains. Technical assistance and credit are important but need not be directed to the production node of the chain to be effective. Marketing intermediaries can also be financed to develop linkages and to facilitate market access. It is clear, however, that credit and technical assistance will be most effective when directed towards meeting the requirements of the market. It is therefore critical that any assistance in credit, production, or marketing is treated as an investment to meet market demand

Analysis of the Employment Generation Potential of the Cavendish Banana Value Chain in Mindanao, Southern Philippines

The labor generation potential in value chain analysis has not been well studied in the value chain literature. This paper aims to examine labor generation potential of the Cavendish value chain. A value chain framework was used and covered the municipality of Sto. Tomas, Davao del Norte, as the study area. Total jobs generated were estimated based on full-time jobs (i.e., 8 hours per day, 26 days a month or 312 days a year). With the use of case approach, key informants interviews and focus group discussions were conducted covering 30 informants coming from different types of growers, laborers, and other stakeholders. Data from a survey conducted in Sto. Tomas in 2014 was also used to supplement primary data. The chain contributes significantly in terms of job generation particularly in the production node. Corporate and multinational growers contribute about 71% of the jobs generated in Sto. Tomas while the corporate grower with leaseback arrangement, cooperatives, independent growers, and individual contract growers contribute about 7%, 7%, 4%, and 11%, respectively. Using the estimate of 2.3 workers per hectare from the jobs value chain analysis, total full-time jobs estimated for the province of Davao del Norte reached more than 77,000 and about 183,000 for the entire island of Mindanao. However, there are issues that limit opportunities for job creation along the chain. If the key issues in the chain are addressed and strategies are implemented, employment in Mindanao is estimated to increase by 28%

An Analysis of the Structure of the Philippine Retail Food Industry

The enactment of Retail Trade Liberalization Act of 2000 (RA 8762), which liberalizes the Philippine retail trade business, was not based solely on the overall thrust of the government to pursue market-oriented policies. It also stemmed from the observation that the sector lacked competition. Large retailers, particularly supermarkets, continue to displace sari-sari stores and are alleged to exercise market power, such as that enjoyed by the food manufacturers. This paper examines the structure of the retail food industry and analyzes the demand and supply factors and government policies affecting the industry. It argues that while there is some evidence supporting allegations of market power in the retailing and manufacturing sectors, it appears insufficient. Thus there is a need to empirically test these allegations.food sector

The Changing Landscape of the Philippine Retail Food Industry

The retail industry, growing at a significant rate, has contributed much to the economy of the country as highlighted in its increasing share in the personal consumption expenditure (PCE), gross domestic product (GDP), and employment. This study examines the importance of the retail industry, discussing its pattern of spread, the supply and demand conditions that affect the industry, the change in the procurement system of the retail formats, as well as the actions taken by some stakeholders to address the negative impact of such changes. The major players in the industry that are based locally have resorted to importation, modernization, and expansion to other areas to maintain their position. These activities gave the retailers a competitive edge over the others, even over the foreign retailers. Moreover, initial findings suggest that the changes in the food retail structure influenced the way the supermarkets source their fresh produce from their suppliers. This procurement system determines which actors are included in the structure. Only those suppliers who can respond to the stringent standards set by the supermarkets can continuously serve them

Analyzing Marketing Margins and Their Implications in Improving Performance of Small-Scale Producers in the Calamansi Chain in Region XI, Southern Philippines

Due to its wide range of uses and profitability, calamansi or calamondin (Citrofortunella microcarpa) is considered a high-value crop of the Philippines. But while there are many studies on the various uses of calamansi parts and technologies developed to help farmers, there is a dearth of studies on the structure and operation of the calamansi marketing chain and analysis of marketing margins of producers and other intermediaries. The present study aimed to examine marketing margins to understand the marketing system of the calamansi industry in Region XI, Southern Philippines, and identify opportunities, challenges, and solutions to improve the chain. A price transmission model was estimated using secondary data and supplemented by calculation of net margins for farmers, wholesalers, processors, and retailers using primary data collected from key informants. Results show that farm, wholesale, and fuel prices significantly explained changes in selling or retail prices. Price transmission elasticity is higher from farm to wholesale than from farm to retail, which implies that changes in farm prices are reflected more in wholesale than retail prices. Farmers received better margins even though calamansi is always subjected to seasonality of prices. Processors and wholesalers also earned positive net margins, but some retailers incurred negative net margins because of incidence of shrinkage/wastage. Given that this occurs very rarely, and with better management, retailers can still expect to gain positive net margins. Major actors in the chain may benefit by effectively managing costs, particularly post-production and wastage costs. A package of assistance that includes technology improvement, access to market, and credit is necessary to help farmers, as well as intermediaries, enhance productivity and manage costs to improve their performance in the chain

Potential for Jobs Generation of the Rice Value Chain in Mindanao, Southern Philippines

Rice is an important crop not only because it is a staple in the Philippines but also because it plays an important role in Mindanao by providing employment, with value of annual wages of more than PhP 42 billion, and food security for landless and poor farmers, particularly in regions and provinces where poverty incidences and prevalence of conflict are high. This study aims to examine the jobs generation potential of rice value chain in Mindanao. A value chain framework was used to analyze the issues and the job creation potential of the chain using the case of M’lang, North Cotabato. Key informant interviews, focus group discussions, and rice farmer surveys were done in Mindanao. Total jobs generated in the rice value chain for North Cotabato is estimated at 23,011 jobs from a total area of 125,731 ha, and 221,796 jobs for Mindanao from a total area of 1,189,266 ha in 2014. Access to better seeds, sufficiency of irrigation, access to credit, and high labor cost are issues that affect the performance of the rice value chain from production to marketing. By addressing the issues and implementing these strategies, it is estimated that additional jobs of 36,672 will be generated

The Politics and Materiality of Coordination: Philippine Village Leaders Responding to the Spread of a Global Plant Disease in Banana

Leadership is the process of directing and influencing, and it involves taking actions and producing change, in both informal and formal settings. In the Philippines, there are village leaders elected in a political position. Barangays (villages) are the smallest political administrative unit in the country and are led by a barangay captain. This paper investigates leadership, not only as an exclusive result of politics and social structures, but relates it to the problem-solving practices and managing interdependencies modified by a global plant disease in banana. The Philippine banana industry caters to both domestic and export markets, making it an important economic commodity. A virulent global plant disease in banana, Fusarium oxysporum f.sp. cubense Tropical Race 4 (Foc TR4), is threatening the producers in Philippine villages. Case studies of village leaders examine their actions in relation to nonconstituents, particularly with the Foc threat. Settings were four villages where export-oriented banana companies were present, mingling with local players. The common denominators in all these villages were the presence of export-oriented banana plantation and recorded incidence of Foc. The village leaders’ handling of the gravity and importance of problem still leaned largely on how their political influencers perceived the problem. The multinational companies, on the other hand, were not able to fully articulate the importance of the problem to the village leaders. These companies kept much of their researches and studies to themselves and shared only what was necessary. As a result, the village did not have complete information on how to treat or understand the problem

Coordination and Risk in the Philippine Banana Industry: Conditions for Responding to Panama Disease

Fusarium oxysporum f.sp. cubense Tropical Race 4 is a disease that traverses political, economic, geographical, and social boundaries and confronts the fragmented and highly polarized banana industry. Furthermore, the nature of TR4 has many uncertainties and unknowns. This paper investigated conditions for coordination in responding to TR4 risk. A qualitative case study of two villages in Davao del Norte, a major producing area in the Philippines with TR4 occurrence, was done to provide a contextual and in-depth analysis. Results showed that there was coordination between actors with longer working or personal relationships. They shared a common language for identifying problems and defining risks and communicate beyond the boundaries of their own organizations. There were visible signs of alliances between private and public domains in their handling of TR4 uncertainties. Actors have an urgency to react to TR4 impacts by accommodating multiple solutions. The enabling conditions for coordination identified were long-term relations forged outside the organizations/industry alliances and examination and the recognition of unknown TR4 characteristics, thus forging emerging research and information sharing. The constraints included polarization rooted from unequal access to land, blaming, and the isolated experiments and advocacy for single solutions. In conclusion, there was low coordination in responding to disease risk because of the blaming and diversities in solutions. However, there was an emerging coordination that built on social relations and deliberate efforts to bring parties together from the public and private sectors. The industry has to adapt, settle, and manage its differences to collectively address the banana disease risk

Lettuce Supply Chains and Marketing Margins in Benguet, Philippines

Understanding value chains requires knowledge of the needs of customers and how these needs are met by different suppliers of marketing or value-adding services. The need for these marketing services and costs of supplying these are reflected in marketing margins or the difference in the prices of the various marketing levels in the chain. This study analyzed lettuce supply chains in Benguet and mapped 3 chains, including the value-adding activities and the governance mechanisms such as contracts and payment terms that exist in the chain. Some new roles have emerged due to recent developments in the market. Some wholesalers became “commissioners” and “disposers,” and some individuals played dual roles along the chain. A few farmers became “disposers,” and a few “disposers” eventually became farmers. Marketing margins were also computed for a sample chain including the cost of value-adding activities to show a more accurate distribution of benefits across key actors in the chain. Higher gross margins were due to higher costs of providing marketing services, which indicates a competitive market. There are opportunities in the lettuce chains to respond to increasing demand for salad vegetables. While lettuce producers and other actors in the chain respond to these market requirements such as producing new lettuce varieties, there are issues that need to be addressed to improve efficiency and performance of the chain