Value Chain Issues and Opportunities in Selected Horticulture Crops in Southern Mindanao, Philippines

Roxanne T. Aguinaldo, Larry N. Digal, Glory Dee A. Romo, Nikko L. Laorden, Jon Marx P. Sarmiento and Carol Q. Balgos

No 290420, 2011 ASAE 7th International Conference, October 13-15, Hanoi, Vietnam from Asian Society of Agricultural Economists (ASAE)

Abstract: The agri-food system is undergoing changes that create opportunities and challenges for small-scale producers. In the Philippines, food retail and processing sectors modernize and concentrate to respond to increasing market requirements. On the other hand, production sector is fragmenting and many small farmers struggle to access opportunities particularly in high value horticulture markets. This paper focuses on understanding the challenges and opportunities in selected fruit and vegetable value chains. Price spread, net margins and price transmission analyses were used to examine cost structure, distribution of benefits and efficiency of these horticulture markets. Results show that the share of the farm to retail price is declining due to declining real farm price relative to wholesale and retail prices. While nominal output prices and productivity have increased over time, cost of inputs has increased faster thereby decreasing profitability of the farm sector. With increasing cost of fuel, fertilizers and transport costs have increased significantly and compounded further by poor infrastructure facilities. Results also indicate that farm prices are not fully transmitted particularly between farm and wholesale markets compared to between wholesale and retail markets. This indicates poor infrastructure conditions in the rural areas. Price signals are also not fully transmitted from one market to another which implies inefficiencies in the markets which can be caused by poor infrastructure facilities and price distortions created by market power. There are, however, opportunities to enhance profitability through quality grading and clustering. Clearly, interventions to help farmers improve quality, productivity and access to high value markets are needed to increase their income. A value chain approach is important not only to understand issues but also to develop an integrated package of interventions that make use of the resources of the private sector and augment the limited public funds to help the small producers in the chain.

Keywords: Crop Production/Industries; Industrial Organization (search for similar items in EconPapers)
Pages: 21
Date: 2011-10-13
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Persistent link: https://EconPapers.repec.org/RePEc:ags:asae11:290420

DOI: 10.22004/ag.econ.290420

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