Status, Problems and Prospects of Abaca Fiber Industry in Baco, Oriental Mindoro

Date

4-2011

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Nimfa Beatris D. Montes

Request Access

For non-UP researchers, requests for access to this material may be directed to the CEM Library at cemlibrary.uplb@up.edu.ph or to the UKDR administrator at uscs-mainlib.uplb@up.edu.ph

Abstract

The study was conducted to present the status, problems and prospects of the abaca fiber industry in Baco, Oriental Mindoro.

The study was conducted with the following specific objectives: a) to identify the key players engaged in the abaca fiber industry and present the profile of entrepreneurs engaged in the industry; b) describe and analyze the practices in terms of production, processing, marketing, personnel, and financial aspects; c) to identify the problems encountered in each aspect of the industry; d) to identify investment opportunities and/or development entry points in the industry for entrepreneurs and government and/or non- government organization, respectively; and e) to formulate recommendations to address the identified problems, issues and prospects to promote the development, competitiveness and sustainability of abaca fiber industry in Baco, Oriental Mindoro.

Seventy (70) abaca farmers, 14 abaca farmer-strippers, and 5 licensed abaca traders were interviewed in the study. The main tool as to get these respondents was purposive sampling. Primary data were gathered through questionnaires and personal interviews. Secondary information was gathered from government agencies specifically DTI, DOST, PCARRD, BAS and FIDA. The analyses were mainly descriptive. The study employed SWOT analysis and competitive analysis using Porters Five Forces model.

According to the results, abaca fiber industry in the province has become the main source of income for many individuals, especially those who are engaged in the industry. It has generated employment for 5 traders, 263 farmers, and 14 abaca strippers. The extraction of the abaca fiber was affected by factors such as the skills and technical know-how of the strippers on fiber extraction and the physical condition of the abaca tree which is very critical.

All five abaca traders in the municipality of Baco were Class D traders which sells less than 25,000 kilograms of abaca fiber in a year. The most critical part of the trading sector is the insufficiency of high quality fiber which results to not meeting the demand of the processors.

The overall assessment of the industry is that, it is in its growth stage. There has been an entry point especially in the processing and trading sector of the industry for interested individuals since there have been an increased demand for abaca fiber and products in the local market especially abroad. The industry is labor-intensive rather than capital intensive thereby making it easy for anyone to be in the business.

The major identified problems in the abaca fiber industry were the following: a.) low farm productivity; b.) insufficient facilities for extracting high quality abaca fibers; c.) low supply of high-quality fibers; d.) lack of operating capital; e.) competition among traders; and f.) delayed payment from the processors to the traders and traders either pay the strippers from their own money or pay them later.

Although Eastern Visayas and Bicol region are two pioneer provinces in terms of abaca fiber industry, Oriental Mindoro has its competitive advantage over the provinces, which is the variety of the fiber planted in Oriental Mindoro is Luno, which is naturally white in color, strong in durability, and long. These characteristics are qualified for export market.

Competitive analysis showed that the rivalry among competing firms was moderate to stiff since there was a low product differentiation. The threat to entry for the processing sector is generally low since the industry is more on labor-intensive thereby making it easy for anyone to start a similar business. On the other hand, there was an insufficient supply of fiber which increases the bargaining power of these suppliers. The bargaining power of buyers is high since buyers dictate the designs and preferences. In addition, the level of the entry of substitutes in the industry is high since the customers can easily resort to substitutes if they find the items expensive.

The prospects and opportunities of the industry are as follows: 1) increasing demand for abaca fiber in the international market; 2) continuous development for technologies and varieties that can increase the fiber yield; and 3) government support and assistance to increase the status of the industry. Opportunities include: existing and known buyers of the abaca fiber locally and abroad, and potential export markets.

Recommendations for the industry players are as follows: 1) abaca farmers should continuously practice intercropping to maximize the productivity of their farms; 2) abaca farmes should be given more incentives to produce more abaca and avoid shifting to other agricultural crops; 3) improve the growing industry of tinagak; 4) participate in different seminars and livelihood training offered by the government institutions and LGUs; 5) abaca strippers should be able to adapt to innovations and changes in technologies regarding more efficient extraction of abaca fibers; 6) abaca traders should continuously maintain the quality of the fibers by clissfying them correctly; 7) abaca processors must ensure adequate supply of high quality abaca fiber and this can be implemented through closer ties with suppliers; and 8) industry players especially farmers and abaca strippers should explore the possibility of establishing small cottage industries using abaca as raw materials.

Language

English

LC Subject

Abaca (Fiber), Abaca industry--Philippines

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2011 M17 D56

Notes

Viewing access to electronic resources is restricted solely to UP Gmail accounts. Any access and share requests from external organizations and personal email accounts will be promptly declined.

Document Type

Thesis

Link to Full Text

Share

COinS