Analysis of the value addition and distribution in the rice value chain in the Philippines

Issue Date

7-2018

Abstract

Farmers are often the marginalized actors in the rice value chain (VC), who participate as palay producers only, and allegedly, received less of the total value addition. This study aimed to identify and analyze the distribution of added value in the rice VC, assess how much value is created by the chain, who are the chain actors benefiting from this added value, and how much of the value is distributed to rice farmers in particular. Field survey was conducted to sample VC actors in top 20 rice-producing provinces and major demand centers in the country using different sets of structured questionnaires. Cost and return analysis and relative financial distribution of added cost, profit, and price of milled rice per function in the rice VC, respectively. The rice VC consists of core functions from input provision and production, paddy aggregation, rice processing, and marketing performed by VC actors: farmers, paddy traders, rice millers, wholesalers and retailers, respectively. Results showed that from palay production to marketing of milled rice, the total value added cost was PhP 31.33/kg, of which farmers received the highest profit share of 58%. Miller-traders obtained a profit share of 9%; retailers had 11%, while paddy traders and wholesalers got the lower profit share of 58%. Miller-traders obtained a profit share of 9%; retailers had 11%, while paddy traders and wholesalers got the lower profit share of 5% and 6%, correspondingly. However, on the average, farmers produce only 8 tons/year and trade small marketable surplus, and profit is earned from a 4-month cropping period. Conversely, the other VC actors’ profits are increased by volume, fast stocks turnover, integration of functions, and investments for quality improvement. Empowering farmers by integrating them into rice VC will capture the total value addition and consequently increase their income.

Source or Periodical Title

Philippine Journal of Crop Science

ISSN

0115-463X

Volume

43

Issue

Supplement no. 1

Page

129-130

Document Type

Article

Language

English

Subject

Rice; Rice farming; Rice marketing

En – AGROVOC descriptors

RICE; MARKETING; FARMERS; INCOME; MARKETING CHANNELS; VALUE ADDED; PROFIT; COSTS; ECONOMIC ANALYSIS; PHILIPPINES

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