Value Chain Finance Analysis of Calamansi in Oriental Mindoro, 2017

Date

6-2017

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Christian Paul L. Fang

Committee Member

Ma. Eden S. Piadozo, Isabelita M. Pabuayon

Abstract

This study was done to describe the financing condition of calamansi value chain participants in Oriental Mindoro. Descriptive analysis was done to describe the participants involved and value-adding activities being performed in the value chain. The cost and returns analysis was employed to describe the sources and uses of capital by each participant in the value chain. The capital and credit requirements, credit utilization, credit cost, and repayment performance of each value-chain participant were also assessed. The rate of return on assets (RROA) was also computed to determine which activity was more profitable. The credit-related problems as well as other internal and external problems encountered by the value chain actors were also identified.

Data were collected from 44 value chain participants who were farmers, assembler- wholesalers, and processors of calamansi from three municipalities such as Naujan, Victoria, and Socorro in Oriental Mindoro through the use of pre-tested questionnaire.

The highest operating capital during peak and lean seasons was found among processors amounting to PhP28.27/kg and PhP50.61/kg, respectively due to hired labor as processing calamansi involves many value-adding activities. In addition, the household size is not enough to the manpower they get since no family labor was reported. Farmers, on the other hand, incurred the least operating capital amounting to PhP2.22/kg during peak season and PhP3.26/kg during lean season. However, farmers had the highest investment capital amounting to PhP713,056.00. Moreover, assembler-wholesalers had the least investment capital among the calamansi value chain participants. The capital was sourced from either cash savings, loan, or both cash savings and loan.

The processors had the highest net cash income (PhP25.82/kg for peak season; PhP23.06/kg for lean season) while the traders earned the least. Despite having other sources of income, farmers, assembler-wholesalers, and processors alike needed credit to finance their operations. Processors had the highest credit need (PhP225,272.58) while the traders had the least credit need. It seemed that calamansi trading is not the main source of income of assembler-wholesalers.

Assembler-wholesalers tend to borrow credit from informal lenders while farmers and processors borrow credit from both formal and informal sources. All of the calamansi value chain actors pay their credit in the form of cash. Even though farmers borrowed fertilizers from input suppliers, payment of this credit is still in the form of cash. Most of the participants utilized their loans on its intended purpose. Likewise, the participants were found to have high repayment rate.

Among the major problems encountered by calamansi value chain actors were high prices of inputs, high interest rate, shortage of calamansi production, and inaccessibility for formal lending.

Based on the findings of the study, it is recommended that government should take action to link calamansi value chain participants with financial institutions to provide the participants appropriate financial products that would help them reduce their credit needs.

Language

English

LC Subject

Calamansi Industry, Finance

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2018 E2 L28

Notes

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Document Type

Thesis

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