Analysis of the Value Chain for Abaca (Musa Textilis) Fiber in Selected Areas in Catanduanes

Date

5-2016

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Loida E. Mojica

Committee Member

Nanette A. Aquino, Jeanette Angeline B. Madamba, Dinah Pura T. Depositario

Abstract

This study seeks to analyze the value chain for abaca fiber in the selected areas in Catanduanes which is the top abaca-producing province in the country. This research contains analysis on the problems and constraints affecting the value-adding activities in the chain and keys for better positioning and competitiveness of the commodity in the market. To attain the objective of this study, a mapping of the value chain was done in order to identify the core processes, actors and their roles in the chain, product flow, supporting actors, and linkages present in the value chain. Moreover, an analysis on the value chain was done with the use of the Diagnostic Framework for Industrial Value Chains (UNIDO, 2011). Analysis on value addition was also done in this research in order to identify the activities in the chain that adds greatest value to the product and to find points that need upgrading.

The results show that, there are three value chains for abaca fiber in Catanduanes which are (1) value chain 1 or the traditional value chain; (2) value chain 2 or chain that uses Philippine Fiber Development Authority (PhilFIDA) tissue culture for input supply; and (3) value chain 3 or the Glatfelter Catanduanes Sustainability Initiative (CASI) value chain.

In value chain 1 or the traditional value chain map for abaca fiber in Catanduanes, there is no strict specialization that an actor can take on more than one role or be involved in more than one core process. Abaca producers, in the traditional abaca value chain in Catanduanes are playing three roles in the chain such as in the input supply, production, and primary processing. Abaca producers sell directly to the sub-traders, buying stations, and grading and baling establishments (GBEs). In this chain, marketing intermediaries also show business interactions such that sub-traders can sell to either buying stations or GBEs. Buying stations and GBEs, on the other hand, directly sell to the secondary processors who transform the product for final sale.

Value chain 2 is the value chain for abaca fiber in Catanduanes which utilizes PhilFIDA tissue culture as their input for production. Value chain 1 or the traditional chain starts with the PhilFIDA abaca nursery as the actor involved in input supply. Abaca producers in this chain take on the roles in production and primary processing. Abaca producers go through the same marketing channels as exhibited in value chain 1.

Value chain 3 for abaca fiber in Catanduanes specifically represents the value chain for abaca under the Glatfelter Catanduanes Abaca Sustainability Initiative (CASI). The chain starts with the abaca producers who are CASI members. The producers in this chain also take on three roles as they are involved in input supply, production, and primary processing. These producers directly sell abaca fiber to the sub-traders who are also CASI members. The CASI sub-traders then sell their consolidated abaca fiber to the GBE which is affiliated with Glatfelter CASI.

Value chain 1 is primarily constrained by the lack of value-adding activities at the farm- level such as input supply, production and primary processing due to: (1) the absence of high quality planting materials; (2) asymmetry of information between actors in the chain in terms of price, product standards, and availability of research extension; (3) lack of good machinery for primary processing; (4) lack of infrastructure and transport services; and (5) absence of good storage and drying facilities.

Value chain 2 is primarily constrained by the same problems besetting value chain 1, except for the absence of high quality planting materials since farmers in this chain receive PhilFIDA tissue culture for their inputs.

Value chain 3 faces lesser constraints than the other value chains. In fact, the primary problems in this chain are in form of: (1) the absence of good planting materials; (2) absence of quality stripping machines for primary processing; and (3) the lack of road infrastructure and transportation services for producers.

It was recommended that the strategic alternatives that the actors should take on are: (1) for farmers to connect with non-government organizations and farmers’ associations to reduce information asymmetry; (2) for farmers to learn how to grade abaca to increase their value-adding activities by selling high grade abaca at higher prices; (3) for sub-traders to engage in contracts with farmers to strengthen their business relationships with the latter; (4) for buying stations and GBEs to become more involved in their supply chain to ensure good quality supply of abaca fiber.

Furthermore, it is suggested that the government intervene in the chain through the creation of programs that would address sustainability in production which would consequently lead to the increase in productivity in the province; development of road network for better logistic services; and strengthen the role of abaca nurseries so that they can serve as information centers.

Language

English

LC Subject

Abaca industry, Production (Economic theory)

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2016 M17 T35

Notes

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Document Type

Thesis

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