An Analysis of the Garlic Industry in Occidental Mindoro

Date

6-2015

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Loida E. Mojica

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Abstract

This study served to explain the minimal developments in terms of volume of production in the garlic industry in Occidental Mindoro. More specifically, this study aimed to describe the current structure and status of the industry; identify its problems, weaknesses and gaps; determine its strategic direction in the future and identify potential investment and development options available. The study adopted the industry analysis as research design in order to capture the current industry scenario and be able to explore and identify problems, weaknesses and gaps in the industry. In addition, analysis of the problem flow, costs and returns, dominant economic traits, driving forces in the industry, key success factors has been undertaken.

Garlic farming in Occidental Mindoro is practiced in the four municipalities of San Jose, Magsaysay, Rizal and Calintaan (SAMARICA area). Generally, Occidental Mindoro garlic production is just part of the farmer’s multi-cropping system. Annually, the garlic industry in Occidental Mindoro consists of an estimated 1,652 farms utilizing around 440 hectares of land harvested for garlic, with ten to thirty laborers per farm. It produces around 2,000 metric tons of garlic annually, valued at about 140 million pesos, or about 20% of the total value of the national production. Volume of production remains stable through the years. A high dependence to imported garlic from China has been observed, as well as a decreasing rate of growth in garlic farming in the country. Furthermore, there is low vertical integration, narrow distribution, and limited number of buyers. Moreover, technology adoption is limited at the production level.

It was found out that the minimal development in the industry was caused by various factors such as the lack of marketing support, ineffective support policies and programs, lack of direct linkage to processing, low garlic availability and predominance of other crop industries, The other factors seen to affect garlic production were price fluctuations, lack of capital and limited marketing and distribution channels.

The problems and weaknesses of the industry were found to be interrelated with one another. Garlic in Occidental Mindoro is only a secondary crop next to rice. Since rice farming is a relatively bigger industry, less attention has been given to garlic farming resulting to poor implementation of secondary crop-related support programs and policies. Poor implementation of support services partly affects also the marketing support for garlic. Infrastructure and roads were of poor condition, adversely affecting distribution of produce. These problems, along with decreasing supply of rice straw and the aging population of farmers amplify the problem of low availability of Mindoro- produced garlic in the local market. This low availability of garlic creates an opportunity for imported garlic to capture a substantial portion of the local garlic market.

Cost and return analysis shows high input dependence of the production system but unexpectedly high returns on investment. The industry’s dominant economic traits include small market size and slow market growth, low number of buyers, small scale of production (leading to non-attainment of economies of scale), garlic as alternative crop, and low availability of garlic on the market. The identified driving forces in the industry includes high profit potential, production incentives through government support programs, rice farming, globalization, cost of inputs, market price of garlic and alternative produce and highly integrated marketing, processing and support subsystems. Key success factors are favorable market conditions, suitable weather conditions, good crop management practices, production volume and efficiency, and inherent characteristics of garlic (e.g. pungency, weather-resiliency).

The industry is expected to remain in its current status in the coming years characterized by low production due to ineffective programs, poor transportation system, lack of marketing support, slow technology development and small market base. To address the different challenges faced by the industry, future development efforts must focus on encouraging and empowering garlic producers to expand garlic production, enhancing and improving processing possibilities/technologies and infrastructure, developing improved varieties or finally adopting commercialization of competitive varieties, and establishing direct channels for local produce to processing institutions.

In addition, as a form of support, the government has included garlic production in its organic agriculture program. This may serve as a new opportunity for investment since there is an increased awareness and demand for organically-grown produce.

Language

English

LC Subject

Garlic industry

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2015 M17 S83

Notes

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Document Type

Thesis

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