Analysis of the Production and Marketing Practices of Selected High-Value Vegetables in Tanay, Rizal
Date
7-2020
Degree
Bachelor of Science in Agribusiness Management
College
College of Economics and Management (CEM)
Adviser/Committee Chair
Glenn N. Baticados
Committee Member
Glenn N. Baticados, Mar B. Cruz, Dia Noelle F. Velasco
Abstract
Farmers in the Philippines are now being encouraged to shift to high-value vegetable planting. This will bring opportunities to farmers because of the increasing demand for vegetables. To further integrate this, the Department of Agriculture (DA) is now offering different training programs and interventions to help small farmers and fisherfolks engaged in high-value crop planting.
Different vegetables are being sourced from Eastern Rizal to be able to aid the expensive crops being sold in Manila. In this province, Tanay has the largest area accounting for 59,000 ha, the majority of which is dedicated to agriculture. Despite this, there is still an unstable supply of vegetables due to the current production, marketing, and distribution systems present in the country. Specifically, this study intends to present an overview of the key players, map out the flow and volume of high-value vegetables, analyze the cost and margins of the players, and analyze the constraints and problems affecting the distribution system that will be used to determine areas where improvements and/or assistance are necessary.
A Key Informant Interview (KII) was first done with Mr. Romeo B. Cruz, the Municipal Agriculturist of Tanay, to obtain the volume and area of production of the high-value vegetables in the municipality. Through this, the top five high-value vegetables will be determined. Afterward, vegetable farmers, viajeros, and other key players of the distribution system were interviewed to come up with information regarding the volume of production, cost incurred, prices, and modes of transportation of the vegetables from source to destination. This information will then be analyzed to come up with the necessary conclusions and recommendations.
The high-value vegetables focused in the study are string beans, snap beans, eggplant, pechay, and bottle gourd. It was determined that in the distribution chain of these high-value vegetables, vegetable farmers and viajeros are among the key players involved in the transport and marketing from source to destination.
The vegetable farmers interviewed are from Barangay Laiban, Daraitan, Mamuyao, and Santo Niño. Since many of the respondents are engaged in multi- x cropping, the total number of observations totaled to 30 observations. Based on the data gathered, the majority of the farmers are male and belonging to Generation X. In terms of educational attainment, a large portion of the observation was not able to attend any form of education.
The viajeros interviewed buy their products solely from the farms. It was observed that the majority of the viajeros belong to Generation Y and were able to attend up to secondary education. Among them, only one of the viajero was female. In terms of means of livelihood, seventy percent are involved in food and beverage retailing, and working as Local Government Units (LGUs). It was also observed that they have been in the trading business for around 7-12 years already.
Vegetable farmers are not employing proper handling and postharvest activities. To avoid losses, they sell their products upon harvest. On the other hand, viajeros do not have storage facilities that force them to bring their products directly to the market upon acquisition. Both of them perform grading and sorting to be able to discard vegetables that are not up to consumer standards.
The majority of the farmers are still bringing their products personally to the market. Since the pathways utilized by these players are unfinished cement roads, and rivers and creeks, distribution becomes more tedious. Farmers said that they choose their method of delivery primarily because they get to sell at a higher price and it has been a custom for them. A large portion of the observation said that markets are not accessible. This can be attributed to the distance of Tanay Public Market from the far-flung barangays in the province since the farmers said that they have to travel 0.40-1.50 hours to reach the market. Road accessibility is also a problem because of the lack of bridges and roads.
More than half of the vegetable farmers are hiring public utility vehicles to transport their vegetables. Since most of the farmers are renting the vehicles together, their transportation expenses are reduced. Because of this behavior, it can be observed that half of the farmers choose their mode of transportation based on the price since transportation expenses are among the high costs they are incurring. Viajeros are utilizing trucks because they are transporting large volumes of vegetables from source to Tanay Public Market, Taytay, Cogeo, Marikina City, Quezon City, and Pasig City.
It was seen that 47.88 percent of the vegetables focused in the study are from Daraitan, followed by Mamuyao with 40.38 percent, Laiban with 8.66 percent, and Santo Niño with 3.08 percent. From them, viajeros distribute these high-value vegetables to different municipalities and provinces. The string beans and pechay account for the top distributed vegetables (2000kg), followed by eggplant (1500kg), snap beans (1000kg), and bottle gourd (500kg).
The main components identified in the distribution system are as follows: (1) movement from growers to viajeros within the supply area, to different municipality markets; and (2) movement from viajeros in the different municipality to other viajeros and/or end-consumers. From the vegetable farmers, the vegetables are distributed to Tanay Public Market in Plaza Aldea, Cogeo, and Sampaloc in varying percentages depending on the demand of the area.
The costs incurred by the key players in the distribution system are transportation and labor costs. It was observed that there is an indirect relationship between the two costs for the vegetable farmers. While for the viajeros, there is a direct relationship with the costs they are incurring.
Gross margin is dependent on the farmgate price set by the vegetable farmers since this will be the baseline to how much the viajeros and other players will price their product to their consumers. Although at times there is a large supply present in the market, key players are forced to become price-takers; thereby decreasing their margin.
To analyze the profit earned by the key players, costs up to production to income generated were obtained. From this, it was seen that farmers involved in bottle gourd production has the highest percentage share. This can be attributed to the little to no transportation cost they are shouldering to sell their items. For the viajeros, snap beans distribution gives them the highest income because of the large volumes they are transporting.
Existing relationships in the distribution system of the top five high-value vegetables in Tanay mainly revolve on the suki system. From this market-exchange relationship, key players can set the price of the products they are selling. On the contrary, for the viajeros to market center/wholesalers/retailers relationship, viajeros focused in the study has no loyal/frequent buyers. Thus, competition is hard for them since buyers tend to acquire vegetables from those who can sell at the lowest price possible.
Through this, the researcher was able to identify three marketing channels, namely: (1) vegetable farmer to end-consumer; (2) vegetable farmer to viajero to end consumer; and (3) vegetable farmer to viajero to market centers/wholesalers & retailers to end-consumers.
The problems identified in the distribution system of high-value vegetables in Tanay, Rizal are the following poor handling and postharvest activities, the proximity of viajeros to farmers, haggling among channel members, incentives to increase production, lack of available cooperatives for farmers, access to government support, inaccessible/poor quality of farm-to-market roads, lack of trucking and transportation services, limited market access, lack of postharvest and storage facilities, poor mobile phone signal, accessibility of Tanay Public Market to buyers, and unstable prices.
Through this, it was recommended that for the vegetable farmers, they should cluster to form cooperatives, employ proper and handing and postharvest interventions. For the viajeros, proper vegetable handling should be employed. Aside from this, they should also start establishing suki relationships with other key players in the distribution systems. Because of the lack of trucking and transportation services, it is recommended for the private sector/private individuals to invest in trucking and transportation services to cater to the needs of the key players.
For the government, it is recommended that they enhance community access roads, farm-to-market roads, and bridges, provide storage and postharvest facilities, and trading centers and enforce strict price monitoring to stabilize prices. Lastly, it is recommended for future studies and research to study the complete flow of the high value vegetables from source to destination.
Language
English
LC Subject
Produce trade. Production and marketing
Location
UPLB College of Economics and Management (CEM)
Call Number
LG 993 2020 M17 E88
Recommended Citation
Estrella, Stella Faye B., "Analysis of the Production and Marketing Practices of Selected High-Value Vegetables in Tanay, Rizal" (2020). Undergraduate Theses. 10762.
https://www.ukdr.uplb.edu.ph/etd-undergrad/10762
Document Type
Thesis
