Clusters and networks as enablers of product and process innovation

One of the strategies adopted in the Philippines to facilitate a more consistent supply of good quality vegetables from smallholder farmers is the clustering approach, whereby a small group or cluster of smallholder farmers is organized to deliver a pre-determined amount of produce to a focal customer (CRS-Philippines, 2007). Developed from the CIAT Territorial Approach, the CRS Eight Step Clustering Approach for Agro-enterprise Development employs a participatory action learning process, where the cluster members proactively plan their production to meet the specifc quality and delivery requirements of their focal customer. The clustering approach is a strategy which allows smallholder farmers to access higher value chains. Evidence is provided to demonstrate how several of the clusters facilitated have utilised the skills and knowledge acquired in servicing their focal customer to develop new products for new markets, to adopt alternative low cost systems of production to reduce their reliance on external inputs, to reduce postharvest losses and product deterioration through improved packaging, to improve access to low cost community-based loans and to take advantage of local and national government grants that provide production inputs and support the development of community-based infrastructure projects

Relationships with market intermediaries: the case of vegetable cluster marketing in Southern Philippines

Effective relationship among partners is a key in strengthening collaborative marketing efforts. One of the collaborative marketing efforts is through clustering of farmer to link into market. This study examined the level of relationship of vegetable cluster farmers with their market intermediaries - cluster and the downstream buyers. A total of 81 vegetables farmers in Southern Philippines were surveyed to determine their relationship level on trust, power-dependence, relationship-specific investments and satisfaction. Comparison between clusters and downstream buyers were made using ANOVA and Welch Test. The study found that farmers have high level of trust to their clusters compared to their downstream buyers. The high level of trust is attributed to assurance of the market, leadership of the clusters, and openness in sharing and information. Results showed that there benefits offered by clustering which were not found in other buyers. This include provision of training and high prices Empirical findings showed farmers in Davao had high trust level with their cluster than Bukidnon and South Cotabato