Comparative and competitive advantage of onion production in Nueva Ecija, 2016

Date

6-2016

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Ma. Eden S. Piadozo

Abstract

The ASEAN Economic Community poses new greater competition for the Philippine onion industry especially in Nueva Ecija. To determine if the Philippine can withstand this competition, the cost and price competitiveness analyzes were used in this study. The primary data were generated from the onion farmers in the top three onion producing municipalities of Nueva Ecija and onion traders. Data from the Philippine Statistics Authority-Bureau of Agricultural Statistics and Food and Agricultural Organization were also obtained to further evaluate the competitiveness of onion production. At the time of the study, 106 farmer-respondents were interviewed in the top three producing municipalities of Nueva Ecija: Bongabon, Rizal, and San Jose City. There are two types of arrangements in producing onion. These are farmer-respondents under financier-wholesaling arrangement and farmer-respondents owning a farmland. The study revealed that Nueva Ecija has a comparative and competitive advantage in producing onion, both in the export and import scenario for farmer-respondents owning a farmland. This means that the opportunity cost of producing one unit of onion was lower than the foreign exchange it earns/saves using shadow and market prices. However, for the farmer respondents under the financier-wholesaling arrangement, comparative and competitive advantage exists in the import scenario. This means that the opportunity cost of producing one unit of onion was lower than the foreign exchange it saves both using shadow and market prices. It also showed that Onion White is more competitive than Red Creole due to its relatively large volume of harvest resulting to a much lower cost per unit. In fact, its export and import parity prices are both greater than 1, implying that the industry has an export and import competitiveness for the said variety. Furthermore, this only means that Onion White can compete in the international trading arena given the looming AEC. On the other hand, the results revealed that the import parity price of Red Creole is greater than 1. This only indicates import competitiveness for the said variety. With this, it is more advantageous to produce Red Creole in the country and sell it in the domestic market, rather than to export and import it. All these would show that the onion industry in Nueva Ecija can compete advantageously with the production of onion White under AEC. Thus, the following measures are recommended for the Philippine onion to be more competitive: the government should provide support through Philippine Onion Research Institute (PHILORINS) which is tasked to promote and advance the scientific and technological expertise of the Filipinos regarding onion production in order to realize the optimum potential of its resources thereby increasing their yield and the academe with major field in agriculture should also be tapped to align their research and development priorities towards the enhancement of the country?s onion production as well as its competitiveness in the world market.

Language

English

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2016 A14 M35

Document Type

Thesis

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