Analysis of Production and Marketing Practices of Black Pepper Farms in Alfonso, Cavite

Date

5-2018

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Faustino Q. Arrienda II

Committee Member

Hanna D. Miranda, Glenn N. Baticados, Agnes T. Banzon, Normito R. Zapata, Jr.

Abstract

The Philippines is the 19th largest producer of black pepper in the world. However, it was observed that black pepper production has been declining while importation is gradually increasing. Among the local producers of black pepper, Cavite is the second largest producer in terms of land area. As of 2016, approximately 15.9% of the total black pepper farming area in the Philippines is from the province of Cavite. Specifically, the municipalities of General Aguinaldo and Alfonso in Cavite are the key contributors to black pepper production in the region.

This research aims to analyze the production and marketing practices of black pepper farms in Alfonso, Cavite. The socio-demographic profile of the farmers and traders were presented and the different production and marketing practices were described in this study. This study would help the farmers and traders identify the problems in their practices and the industry as a whole. It would also help in the formulation of different recommendations that will help the key players become more competitive and resilient. This study provided information that may influence the decisions and strategies of the government and private investors who have a stake in the black pepper industry.

Descriptive research design was used for this study. Thirty one farmers served as the respondent of this study. Moreover, one wholesaler and three retailers were also interviewed. The other important industry information was obtained from key informants in the Municipal Agriculture Office and Provincial Agriculture Office. Descriptive statistics like frequency counts, mean, mode and range were used to present the profile of the respondents. The supply-demand gap of the industry was forecasted using the exponential smoothing technique.

The analysis of this study gives various important points to consider. There is a huge difference in the supply and demand of black pepper in the country. The Philippines lacks the supply needed in order to meet the demand for black pepper. Also, the farmers and traders in the industry are greatly affected by the prevailing price in the market. The farmers and traders sell black pepper for Php 200-300 and Php 350, respectively. Their level of production and willingness to focus on their black pepper farm is affected by the price of the product. Farmers are also greatly affected by the bargaining power of buyers. Hence, when prices are unfavorable, the farmers opt to stock their harvest until the price increase. In terms of competition, the farmers and traders do not consider each other as rivals.

Most farmers in the area observe similar farm management practices and all of them are engaged in multi-cropping. Majority of the farmers still do the traditional practices when it comes to maintenance and primary processing of black pepper. One reason for this is the inability of farmers to acquire machineries and technologies needed to improve the practices being implemented in the farm. Many farmers distributed their products to different intermediaries. Most of them sell to the roaming buyers while a few sell directly to retailers and end users. The farmers and wholesaler sell black pepper in its whole form while retailers sell whole and ground black pepper.

The strengths, weaknesses, opportunities, and threats in the industry were also identified. The strengths of the industry in Alfonso are the good flavor of the black pepper, low investment cost, farmers’ willingness to expand and availability of information. Meanwhile, the weaknesses that were identified include the farmers’ lack of knowledge when it comes to black pepper farming, ease of shifting to other crops, absence of direct market, reluctance of the youth to engage in farming, and lack of association among black pepper farmers in the municipality. There are also opportunities that are identified. The opportunities include the increasing global demand for black pepper, huge supply- demand gap, presence of industrial buyers, and accessibility of supply to the farm. The uncontrollable climate is a huge threat for the black pepper industry. Another threat is the decreasing market price of black pepper that has a huge effect on the key players in the industry.

There are several problems and prospects in the industry. The problems of the industry are the changing prices of black pepper, farmers’ lack of knowledge in new farming methods, importation of black pepper in the country, decreasing agricultural land, lack of government support and issues in the management succession of black pepper farms. The prospects of the industry include the prevailing gap in the supply and demand, urbanization of Cavite which results to increase in population and food establishments in nearby municipalities, and proximity to Tagaytay City which is a famous tourist spot. Given these problems, it is recommended for the farmers to efficiently and effectively utilize the land. This involves using the standard plant spacing of the black pepper vines while practicing multi-cropping. Farmers in Alfonso plant an average of 1,170 vines in one hectare farm which is smaller compared to the standard plant density of 1,700 vines. Large scale farmers should also employ forward integration in which they will be the one to sell their produce. The farmers will be able to sell black pepper in a much higher price. For the government, they should improve their processes like the way they record the data. Lastly, black pepper farmers in Alfonso should establish an association which would help them distribute the black peppers being produced in the municipality. The association can also help with the acquisition of different technologies that will be able to help the members with their production.

Language

English

LC Subject

Black pepper (plant), Pepper (Spice) industry, Marketing, Product control

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2018 M17 C78

Notes

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Document Type

Thesis

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