Book Series No. 158/1996 r Marketing of Agricultural Commodities by Producer Groups in the Philippines Edited by Aida R. Librero and Anita G. Tidon lional Development Research Centre ARCHIV ne Council for Agriculture, Forestry 113022 I Resources Research and Development rtment of Science and Technology 1DRC - Lib. 1 1 Dear Reader: The formation of producer groups to undertake marketing functions is a cooperative strategy to minimize inefficiencies in the marketing system and to enable farmers to avail themselves of better returns to their produce. This strategy is resorted to as an alternative marketing scheme to fairly distribute market benefits to a wider number of market participants and help maintain the competitive structure of the market through pricing and efficient resource use. This publication documents the marketing efficiency of farmers' organizations and rural-based marketing cooperatives. It presents an assessment of the implications of these groups on the social and economic well-being of farmers, as well as the impact of relevant policies and programs, support and other services on the performance and sustainability of these groups. This volume is intended to be a useful reference to all those involved in cooperative marketing. Sincerely yours, WILLIAM D. DAR Executive Director PHILIPPINE COUNCIL FOR AGRICULTURE, FORESTRY AND NATURAL RESOURCES RESEARCH AND DEVELOPMENT Paseo de Valmayor, Los Baiios 4030, Laguna, Philippines, P.O. Box 425 Tel. Nos. 536-0014 - 536-0015/536-0017-536-0020 & 536-0024 Manila Liaison Office: Rm. 103 Gr. Floor, DOST Bicutan, Tagig, Metro Manila Tel. No. 837-1651 DA-ATI Office, Quezon City Tel. No. (02) 978541 loc. 225 Fax No. (63) (094) 536-0016 /536-0132 E-mail: [email protected] Book Series No. 158/1996 Marketing of Agricultural Commodities by Producer Groups in the Philippines Edited by Aida R. Librero and Anita G. Tidon INTERNATIONAL DEVELOPMENT RESEARCH CENTRE PHILIPPINE COUNCIL FOR AGRICULTURE, FORESTRY AND NATURAL RESOURCES RESEARCH AND DEVELOPMENT Department of Science and Technology First Printing 1996 ISBN No. 971-20-0439-2 Bibliographic Citation: Librero, A.R. and A.G. Tidon. Marketing of agricultural commodities by producer groups in the Philippines. Los Banos, Laguna: PCARRD and IDRC, 1996. 419p. - (Book Series No. 158). Foreword Farmers and traders are two of the most important entities in the Philippine agricultural marketing system. Farmers are mostly price takers, thus, marketing cooperatives and producer groups (PGs) are viewed as alternative to make farmers better off because through collective action, they can market their products more efficiently and bargain for cheaper prices of production inputs. But how efficient are the cooperatives and PGs in performing marketing functions compared with private traders? What marketing services do these organizations provide to farmer-members? What marketing constraints and problems do they face? What are their coping mechanisms? What are the welfare effects of these organizations to the farmer-members? To answer these questions, the Socio-Economics Research Division (SERD) of the Department of Science and Technology-Philippine Council for Agriculture, Forestry and Natural Resources Research and Development (DOST-PCARRD), through the financial assistance of the International Development Research Centre (IDRC), conducted a research program on Marketing of Agricultural Commodities by Small Producer Groups in the Philippunes. The program analyzed the performance of various PGs and rural-based farmer-managed organizations engaged in marketing major agricultural commodities in the country. The program focused on major agricultural commodities of seven geo-political regions of the Philippines. Six academic institutions participated in the program, namely: Isabela State University (ISU), Central Luzon State University (CLSU), the University of the Philippines Los Banos (UPLB), Camarines Sur State Agricultural College (CSSAC), Visayas State College of Agriculture (ViSCA), and the University of Southern Mindanao (USM). This book presentsthe output of the research program. In conducting the research, a Program Advisory Committee was formed composed of representatives from the Cooperative Development Authority (CDA), Department of Agriculture (DA), National Economic and Development Authority (NEDA), and Land Bank of the Philippines (LBP). Likewise, a national workshop was organized by PCARRD in cooperation with the CDA and the LBP to disseminate the research findings and derive policy recommendations. Results are expected to provide valuable inputs to (a) policy makers in making modifications on existing policies to improve the overall performance and economic efficiency of PGs performing marketing functions; and (b) researchers who may desire to conduct more intensive and broader studies on marketing by small PGs. WILLIAM D. DAR Executive Director iv Acknowledgment We wish to express our sincerest thanks and appreciation to the following for all the assistance provided to us in the conduct of this research program: IDRC for providing financial support and to Dr. John D. Graham for sharing his expertise and technical assistance; The Program Advisory Committee members: Mr. Harold D. Dacumos, vice president, LBP, Dr. Ma. Piedad Geron, former deputy director, Agriculture Staff, NEDA, Dr. Vicente U. Quintana, former administrator, CDA, Mr. Jose Manto and Mr. Rodolfo Guieb, senior agriculturists, DA, for their comments and suggestions in various stages of the project; All project and study leaders for their active participation and cooperation in conducting the program; Ms. Violeta Cordova for painstakingly reviewing individual reports at the early phase of report preparation; The management of the sample producer groups and the sample farmers, traders, and key informants for providing the needed information; LBP and CDA for the listing of cooperatives and financial support for the national workshop; DOST-PCARRD for the counterpart funds and support in conducting the program; Ana Regulacion and Joselito Kalaw of SERD-PCARRD for typing the manuscripts; The Applied Communication Division (ACD) of PCARRD for its assistance in the production of the publication; and The staff of the SERD for their support and cooperation during the implementation of this research program. v Contents Foreword iii Acknowledgment v List of Authors ix List of Acronyms xii Part Introduction I - Chapter 1 - Marketing of Agricultural Commodities by Producer Groups: Conceptual Framework and Methodology 1 Aida R. Librero and Albert P. Aquino Chapter 2 - A Macro Overview of the Production-Marketing- Consumption Systems for Agricultural Products 12 Aida R. Librero and Anita G. Tidon Part II - Cereals Chapter 3 - Marketing of Rice by Small Producer Groups in Selected Regions of the Philippines 62 Georgina J. Bordado, Ma. Excelsis M. Orden, Lydia P. Oliva, and Alberto R. Domingo Chapter 4 - Marketing of Com by Small Producer Groups in Selected Regions of the Philippines 120 Alberto R. Domingo, Isabelita M. Pabuayon, and Lydia P. Oliva vi Part III - Commercial Crops Chapter 5 - Marketing of Fruits by Small Producer Groups in Cagayan Valley and Central and Southern Mindanao 158 Lydia P. Oliva, Alberto R. Domingo, and Loma G. Valdez Chapter 6 - Marketing of Root Crops by Small Producer Groups in Eastern Visayas 193 Jose M. Alkuino, Jr. and Leonilla S. Parilla Chapter 7 - Marketing of Onions by Small Producer Groups in Central 229 Luzon Eduardo G. Marzan, Jr. Chapter 8 - Marketing of Coconut by Small Producer Groups in 276 Southern Tagalog, Bicol, and Eastern Visayas Isabelita M. Pabuayon, Georgina J. Bordado, and Jose M. Alkuino, Jr. Part IV - Livestock Chapter 9 - Marketing of Cattle by Small Producer Groups in Southern Tagalog 328 Jose M. Yorobe, Jr., Ma. Eden S. Piadozo, and Dario M. Musa Chapter 10 - Marketing of Swine by Small Producer Groups in Central Luzon, Southern Tagalog, and Bicol 372 Luzviminda M. Galang, Eduardo G. Marzan, Jose M. Yorobe, Jr., and Georgina J. Bordado vii Part V - Integration Chapter 11 - Marketing of Agricultural Commodities by Producer Groups in the Philippines 404 Aida R. Librero and Anita G. Tidon viii