Working Paper No. 2018-08

MARKETING OF AGRICULTURAL PRODUCE IN SELECTED AREAS IN AND ,

Agnes R. Chupungco

Center for Strategic Planning and Policy Studies (formerly Center for Policy and Development Studies) College of Public Affairs and Development University of the Philippines Los Baños College, 4031 Philippines

Telephone: (63-049) 536-3455 Fax: (63-049) 536-3637 Homepage: https://cpaf.uplb.edu.ph/

The CSPPS Working Paper series reports the results of studies by the Center researchers and CPAf faculty, staff and students, which have not been reviewed. These are circulated for the purpose of soliciting comments and suggestions.

The views expressed in the paper are those of the authors and do not necessarily reflect those of CSPPS, the agency with which the authors are affiliated, and the funding agencies, if applicable.

Please send your comments to:

The Director Center for Strategic Planning & Policy Studies (formerly CPDS) College of Public Affairs and Development University of the Philippines Los Baños College, Laguna 4031 Philippines Email: [email protected]

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ABSTRACT

This paper provides marketing information that could guide industry stakeholders in responding to the demands of consumers and end users. It can also serve as input in policy design to sustain the agricultural sector in the municipalities under study. Secondary data on number of rice and vegetable farmers, area planted, and rice and vegetable production were obtained from the Municipal Agriculture Office (MAO) of the respective municipalities, Data on other agricultural commodities and basic information about agricultural traders and trading activities in Pamplona and Milagros were obtained as well. Only a few agricultural traders operate in both municipalities; only seven agricultural traders in Pamplona and five traders in Milagros were interviewed. It was found that marketing was not a much of a concern in majority of the study sites and that the only major problem was vegetables being left to rot in the field when there is high production. Traders would not want to buy these vegetables even with prior commitment to buy the produce. Hence, crop programming should be practiced. Farmers should be aware of the negative consequences of planting too many similar crops at the same time. They should have good information on how the market works in their locality and should acquire some business sense. In addition, market linkages must be created with the help of the local government unit. Developing more markets would entice farmers to plant more crops.

Keywords: agricultural produce, marketing, marketing linkages, rice, vegetables

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TABLE OF CONTENTS

Page I. Introduction 1 II. Methodology 1 III. Results and Discussion 2 3.1 Pamplona, Camarines Sur 2 3.1.1 Rice production and disposal 2 3.1.2 Production and disposal of other crops 3 3.1.3 Poultry and livestock 4 3.1.4 Survey of agricultural traders 5 3.1.5 Marketing practices 5 3.2 Milagros, Masbate 8 3.2.1 Rice production and disposal 8 3.2.2 Production of other crops and market 14 3.2.3 Poultry and livestock 17 3.2.4 Other sources of income 18 3.2.5 Survey of agricultural traders 18 3.2.6 Marketing practices 18 IV. Conclusions 20 V. References 20

List of tables

Page Table 1. Number of rice farmers, area planted, and production of palay in 2 the study sites of Pamplona, Camarines Sur, 2014 Table 2. Number of vegetable farmers, area planted and production of 3 vegetables in the study sites of Pamplona, Camarines Sur, 2014 Table 3. Number of trader-respondents, by crop, in the study sites in 5 Pamplona, Camarines Sur, 2014 Table 4. Quantity handled by palay/rice traders and market prices of 6 palay/rice produced in the study sites of Pamplona, 2014 Table 5. Quantity handled and market prices of vegetables (including root 7 crops) in the study sites in Pamplona, 2014 Table 6. Estimated marketing cost, marketing losses, and marketing profit 8 (per kilogram) of traders for vegetables traded in the study sites, Pamplona, Camarines Sur, 2014 Table 7. Number or rice farmers, area planted, and production in the study 9 sites, Masbate, 2014 Table 8. Crop disposal patterns per farm, Masbate, 2013 wet season and 11 2014 dry season (in kg) Table 9. Average area planted to rice (ha), Masbate, 2013 wet season and 12 2014 dry season

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Page Table 10. Rice disposal patterns (%), Masbate, 2013 wet season and 2014 12 dry season Table 11. Disposal patterns of other crops (%), Masbate, 2013 wet season 15 and 2014 dry season Table 12. Number of vegetable farmers, area planted, and production in 15 study sites of Milagros, Masbate, 2014 Table 13. Estimated farm prices and retail prices of vegetables, Milagros, 17 2015 Table 14. Quality handled by palay/rice traders and market prices of 19 palay/rice produced in the study sites, Milagros, Masbate 2014

List of figures

Page Figure 1. Rice disposal, wet season, Masbate, 2013-2014 14 Figure 2. Rice disposal in Masbate, 2014 dry season 14

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MARKETING OF AGRICULTURAL PRODUCE IN SELECTED AREAS IN CAMARINES SUR AND MASBATE, PHILIPPINES

Agnes R. Chupungco

I. Introduction The agricultural commodities produced and marketed in the municipalities of Pamplona, Camarines Sur and Milagros, Masbate are rice, corn, vegetables, poultry, and livestock. How these products were distributed and marketed as well as what marketing problems were encountered by farmers and traders are discussed in this paper. Specifically, this paper describes the status of marketing agricultural produce in the study sites of the CRDES 2 Project in Pamplona and Milagros. In Pamplona, the study sites that were selected were barangays Veneracion, Tampadong, Batang, Tambo, and Del Rosario. In Milagros, the chosen barangays were Narangasan, Capaculan, Tawad, Cayabon, and . Barangays were chosen based on size of area allotted for rainfed rice production and poverty incidence.

This paper provides marketing information that can enable industry stakeholders respond effectively to consumer demand. These can likewise serve as inputs in policy design and formulation to develop the industry. In addition, the findings can help farmers increase their disposable income through informed decisions related to the marketing of their produce.

II. Methodology

Data on number of rice and vegetable farmers, area planted, and production of rice and vegetables in Pamplona and Milagros were obtained from the Municipal Agriculture Office (MAO) of these two towns. Data on other agricultural commodities as well as basic information on agricultural traders and trading activities were also gathered.

There were only a few agricultural traders in both study municipalities. Only seven agricultural traders in Pamplona and five traders in Milagros were interviewed. The trader-respondents were asked about their marketing practices and the problems they faced. The profits of these traders were likewise estimated.

A benchmark survey involving 150 rice farmers each in Pamplona and Milagros (30 farmer- respondents in each of the five barangays covered in Pamplona and in each of the five barangays covered in Milagros) was conducted in 2015. Farmers were chosen through purposive sampling. This survey collected data on production and disposal of rice and vegetables for the 2013 wet season and the 2014 dry season. Some farmers also planted root crops.

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III. Results and Discussion 3.1 Pamplona, Camarines Sur Agricultural commodities produced in Pamplona were mostly palay, vegetables, root crops, and chickens. The major vegetables grown were eggplant, string beans, bittergourd, cabbage, okra, gourd, and squash.

3.1.1 Rice production and disposal In 2014, there were 2,161 rice farmers in Pamplona cultivating a total palay area of 4,654 ha. Total palay production in this town was recorded at 16,753 t, with an average of 3.6 t/ha.

The number of rice farmers in the five study sites of Pamplona ranged from 96 in Del Rosario to 163 in Barangay Tambo (a total of 608, comprising 28%) (Table 1). The total palay area covered by the five barangays was 1,061 ha (23% of total palay area in Pamplona), with the lowest, 125 ha, recorded in Batang and the highest, 329 ha, noted in Del Rosario. Average palay production was estimated at 3.60 t/ha in the study sites and all the barangays of Pamplona.

For all barangays, 20% of the palay produce were allotted for home consumption and for seeds. As to the volume of palay/rice sold, 12% was sold in Naga and 88% was sold in other areas of Pamplona. Newly harvested palay was bought by traders at PhP 10/kg. Milled rice was usually sold at PhP 38/kg at the public market.

Table 1. Number of rice farmers, area planted, and production of palay in the study sites of Pamplona, Camarines Sur, 2014

Item Batang Del Tambo Tampadong Veneracion Rosario Rice farmers 120 96 163 122 107 (no.) Total area 125 329 274 158 175 planted to palay (ha) Average area 1.04 3.43 1.68 1.30 1.64 planted to palay per farmer (ha) Total palay 450 1184 986 569 630 production (t) Palay 3.60 3.60 3.60 3.60 3.60 production per ha (t) Source: Municipal Agricultural Office, Pamplona, Camarines Sur

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3.1.2 Production and disposal of other crops The total number of vegetable farmers in the study sites was 226 (46% of the total in Pamplona). Average area planted to vegetables per farmer ranged from 0.29 ha in Veneracion to 0.85 ha in Batang.

Average vegetable production per hectare in Pamplona in 2014 was 7.51 tons/ha in the municipality of Pamplona. Among the five barangays, vegetable production per hectare was lowest in Tambo (7.29 t) and highest in Veneracion (8.22 t) (Table 2).

Vegetables were grown more for sale than for home consumption. Of the volume of vegetables sold, 90% was sold in Naga, particularly in the Naga public market, while the rest were sold in the barangay where the vegetables were produced. A small volume went to Metro (when the price is high).

Table 2. Number of vegetable farmers, area planted and production of vegetables in the study sites of Pamplona, Camarines Sur, 2014

Item Batang Del Tambo Tampadong Veneracion Rosario Vegetable 44 38 25 63 56 farmers (no.) Total area 37.5 14.5 14 50.4 16 planted to vegetables (ha) Average area 0.85 0.38 0.56 0.80 0.29 planted to vegetables per farmer (ha) Total 281.26 106 102 390.50 131.50 vegetable production (t) Vegetable 7.50 7.31 7.29 7.75 8.22 production per hcetare (t)

There were 15 traders in Brgy. Tampadong who finance the palay and vegetable production of farmers and who buy their produce upon harvest. It was pointed out that the main problems in the area were inadequate financing for crop production and poor marketing of agricultural commodities. Low prices of products are observed during harvest as many farmers harvest the same crop at the same time.

There is a designated “bagsakan” in each barangay where farmers bring their produce and sell to traders (who usually have trucks).

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Vegetables were usually delivered to the wholesalers and wholesaler-retailers at the Naga public market from 6 pm to 7 am. These traders have no permanent stalls, paying a market fee of PhP 10/day if they bring in up to 10 bags of 45-50 kg or PhP 20 if it is more than 10 bags. Marketing assistance was said to have not been provided by the LGU to farmers and traders.

In Brgy. Veneracion, farmers’ wives bring their vegetables to the public markets in Naga (6 women), Pasacao (10 women), (10 women), and (6 women) on market days. These women deliver the goods to the trader-buyers. Payment is given after the sale.

Big traders have trucks. Other traders use jeeps, tricycles, or motorized pedicabs in doing business.

There are assembler-wholesaler-retailers who buy farmers’ produce in the barangays and do retailing of these commodities initially in the Naga public market. Since this group only has a limited number of hours to do retailing in this market, whatever products are left with the traders are sold to retailers already based in the market.

In Brgy. Veneracion, there are two vegetable traders (one also markets chicken) coming from the place and three vegetable traders coming from Brgy. Tampadong. Veneracion has two assembler-wholesalers (residents of this barangay) of palay, one of whom sells the palay to NFA. The other trader sells the palay to another assembler- wholesaler in . Occasionally, a palay trader from Tambo goes to Veneracion to buy palay and then either sells dry palay to NFA or mills it in his own rice mill and sells it as rice.

There are no coconut traders in the area. Twenty-five establishments make copra in Veneracion and deliver the same to a trader in Pasacao. The trader in turn brings and sells the copra to a coconut oil processing plant in , .

Sweet potato is usually grown for home consumption. A few kilograms is sold sometime in February and September.

3.1.3 Poultry and livestock One trader from Veneracion buys live chicken from this barangay and from Pasacao and sells the same to Naga and Pasacao. Everything is paid in cash and it is the seller who usually dictates the price. Normally, he does it twice a month, handling about 25 chickens a month. Buying price is PhP 100-110/kg; selling price is PhP 130/kg in Naga and profit is estimated at PhP 7.50/chicken.

Seventy-five percent of the chickens are sourced from Pasacao; the rest, from Veneracion. Seventy percent, though, is sold in Naga while the other 30% goes back to Pasacao. Thursdays and Sundays are market days. Farmers also buy vegetables from Veneracion and sell it only in Pasacao if the volume is small (e.g., 1-3 bags only).

Three meat retailers from Pasacao and four meat retailers from Tambo go to the barangay to buy four pigs each per month. About three animal traders from Brgy.

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Quitang, Pasacao buy cattle and carabao and sell the same at the livestock auction market in Padre Garcia, .

3.1.4 Survey of agricultural traders Seven agricultural traders were interviewed in Pamplona. Of these traders, two were palay traders (one, an assembler-wholesaler of palay and the other, an assembler- wholesaler-miller-retailer); one, an assembler-wholesaler of vegetables; three, wholesaler-retailer of vegetables; and one, a wholesaler-retailer of chickens (Table 3). They have engaged in trading from 4 to 36 years, with an average of 16 years.

Table 3. Number of trader-respondents, by crop, in the study sites in Pamplona, Camarines Sur, 2014

Type of trader Number Years in trading (ave. no.) Palay/rice Assembler-wholesaler 1 12 Assembler-wholesaler-retailer 1 4 Total 2 Vegetables Assembler-wholesaler 1 15 Wholesaler-retailer 3 16 Total 4 Chicken Wholesaler-retailer 1 36

The operating capital used in the trading of agricultural products in 2014 was estimated at PhP 100,000–300,000 for palay/rice traders and PhP 3,000–40,000 for the other agricultural traders. Rice traders used 60-100% of their own money, while other traders used 50-100% for operating capital. One rice trader borrowed from a relative with no interest, whereas the two traders borrowed from the rural bank and CARD bank with some interest.

3.1.5 Marketing practices Aside from sourcing agricultural products handled from their own rice/vegetable farms, traders buy from regular sources or “suki.” These traders likewise have regular buyers of their products.

The interviews revealed that the buying prices and selling prices of palay in 2014 were PhP 13.50–17/kg and PhP 14.00–17.50/kg, respectively, with a price margin of just PhP 0.50/kg (Table 4). Almost all palay produced in Pamplona was reported to have been sold to a major buyer-trader based in Pili, Camarines Sur, the Partido Rice Mill. A very small proportion is sent to a rice mill in Tambo. The rice traders interviewed said that the Partido Rice Mill can somehow influence or dictate the price of palay in the .

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Table 4. Quantity handled by palay/rice traders and market prices of palay/rice produced in the study sites of Pamplona, 2014

Source Quantity Buying Selling Buyer procured price price (kg) (PhP/kg) (PhP/kg) Assembler-wholesaler- miller Palay Other farmers in the 150,000 13.50 – 14-17 Rice miller five study sites 16.50 (Partido ricemill in Pili, Camarines Sur) Rice Own farm in Tambo 10,000 Milled in 35 Wholesaler in own rice Pasacao mill Rice 30,000 33 35 Wholesaler- millers/wholesalers retailer in in the study sites Tambo Assembler-wholesaler- miller-retailer Palay Own farm 5,000 - 14-17 Ricemiller (Partido rice mill in Pili, Camarines Sur) Other farmers in the 100,000 14-17 14.50-17.50 Rice miller five study sites (price (Partido margin of ricemill) PhP 0.50/kg) Rice Own farm in Tambo 5,000 Milled in 40 Consumers own rice buying in mill Tambo satellite market

Rice in milled form was sold at the retail price of PhP 35–40/kg. Wholesale price of rice was about PhP 33/kg. The profit of traders in the buy-and-sell of palay was PhP 0.30–0.50/kg compared with that of rice, which was PhP 1.00–1.40/kg. While per- kilogram profit of traders seems small, trading bigger volumes of palay/rice would mean larger profits. Rice millers would have bigger profits from value-adding activities such as drying and milling about PhP 2.66–6.30/kg of palay in Southern (Chupungco et al. 2013).

In the case of vegetables (including root crops), the quantity procured in 2014 for the wholesaler-retailer was a total of 7 t from their own farms and 96 t from other farmers; 24 t from own farm and 96 t from other farmers were procured for the assembler-wholesaler (Table 5). Although the assembler-wholesaler did not incur any marketing losses and had a marketing cost of only PhP 0.02/kg compared with the

6 wholesaler-retailer’s loss of PhP 0.04 and marketing cost of PhP 0.88/kg, profit was PhP 2.00/kg for the former and much larger at PhP 5.00 for the latter (Table 6). The assembler-wholesaler had her marketing outlet in , whereas the wholesaler-retailers had their outlets in Pasacao and Naga.

Table 5. Quantity handled and market prices of vegetables (including root crops) in the study sites in Pamplona, 2014

Source Quantity Average Average Buyer-trader procured buying selling (kg) price price (PhP/kg) (PhP/kg) Wholesaler-retailer Wholesaler-retailer in Pasacao (90%)

Walk-in buyers in Pasacao (10%) (PhP 5.51/kg profit) From farmers Bitter gourd 2, 600 40 50 Eggplant 10, 400 20 30 Okra 2, 600 25 40 String beans 1, 300 35 40 Squash 15, 600 15 25 Sili 1, 300 50 60 Sweet potato 26, 000 10 20 Bangkokan/taro 10, 400 15 25 (like gabi) Cassava 20, 800 7 12 Purple yam 2, 600 10 20 (Ube) Gabi 2, 600 30 35 Total 96, 200 Wholesaler-retailer Wholesaler in Naga (50%)

Wholesaler in Pasacao (50%) (PhP 4/kg profit) Own farm Bitter gourd 576 - 50 String beans 1, 440 - 25 Sili 1, 200 - 130 Ginger 2, 400 - 42 Gabi leaves 720 - 12 Bangkokan/taro 240 - 25 Assembler- Wholesaler in wholesaler Divisoria (100%) (PhP 2/kg profit)

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Own farm Eggplant 24, 500 - 4-32 From other farmers Eggplant 48, 000 2-30 4-32 Bitter gourd 48, 000 10-60 12-62

Table 6. Estimated marketing cost, marketing losses, and marketing profit (per kilogram) of traders for vegetables traded in the study sites, Pamplona, Camarines Sur, 2014

Item Amount (PhP) Assembler-wholesaler Marketing cost 0.002 Marketing losses 0 Profit 1.99 Wholesaler-retailer Marketing cost 0.88 Marketing losses 0.04 Profit 5.50

3.2 Milagros, Masbate Agricultural commodities produced in the municipality of Milagros, Masbate, were mostly palay, some vegetables and root crops, and poultry and livestock (which include turkey, goat, cattle, and horse).

3.2.1 Rice production and disposal In 2014, the number of rice farmers in the study sites ranged from 99 in Capaculan to 141 in Narangasan, averaging 115 (Table 7). The average area planted to palay per farmer was lowest at 2.58 ha in Tawad and highest at 4.33 ha in Narangasan. Palay production per hectare was estimated at 3.06 t/ha, on the average, for all five barangays. Of the palay or rice produced in 2014, the MAO estimated that a large proportion (75%) was for home consumption; 15% was sold to rice millers in Milagros, particularly in the three study sites (one cooperative in Narangasan was just given a rice mill by the DA in late 2014); and 5% was sold to the NFA in Milagros. The remaining 5% was milled by farmers and sold to barangay residents. Some rice traders come mostly from Barangay Jamorawon of Milagros, which is quite far from ; they go to the study sites to buy rice. Some farmers sell some two to five sacks (50 kg/sack) of palay when they need cash. Others who got PhP 1,000 or PhP 2,000 loan from private individuals pay two sacks and three sacks of palay, respectively, after harvest. No marketing problem in rice was reported because there are many traders buying rice at a good price. The traders who are all from Milagros buy the palay from farmers, then have the palay milled, and sell the rice to buyers/consumers. All are consumed in Masbate.

Newly harvested palay (with 21-24% moisture content [MC] in the wet season and 18-20% MC in the dry season) was bought by traders at PhP 12 and PhP 15/kg during the wet season and dry season, respectively. Higher quality palay with 18-20% MC

8 can be sold to rice millers at PhP 18-20/kg. NFA buys class A palay with 14% MC at PhP 17.50/kg.

Table 7. Number or rice farmers, area planted, and production in the study sites, Masbate, 2014

Item Narangasan Capaculan Tawad Bacolod Cayabon Rice farmers (no.) 141 99 110 113 111 Total area planted to 610.74 305.68 283.54 300.87 379.73 palay (ha) Average area planted 4.33 3.09 2.58 2.66 3.42 to palay per farmer (ha) Total palay production 1868.86 935.38 867.63 920.66 1161.97 (t) Palay production per 3.06 3.06 3.06 3.06 3.06 hectare (t) Percent of volume of rice sold that went to the  Barangay 20 20 50 60 60  Other areas in 15 15 5 20 20 Milagros  Masbate City 50 50 40 20 20  Manila 0 0 0 0 0  Other areas 15 15 5 0 0 Source of data: Municipal Agricultural Office, Milagros, Masbate, 2015.

There are 11 rice mills in the study sites (one each in Cayabon and Tawad, 2 in Capaculan, 3 in Narangasan, and 4 in Bacolod). Milling recovery was about 50-60% and market prices were based on prevailing market prices. Milling fee is generally PhP 1.50/kg of palay (but only PhP 1.25/kg for members of the cooperative). The miller can buy fine rice bran at PhP 10/kg and coarse rice bran at PhP 5-7/kg. They sell the same at PhP 12.50 and PhP 8/kg, respectively, to traders. Retail prices of these byproducts are PhP 15 and PhP 10/kg, respectively, in the stores.

The rice millers’ profit is usually 25-30% of their capital. It is about PhP 2-3/kg of rice, sometimes up to PhP 4/kg. They buy palay during harvest season, dry the palay, and store it in their warehouse. They accept only orders of at least 100 bags (50 kg/bag) of rice from traders, selling these at PhP 1500/bag (PhP 30/kg) if paid in cash and PhP 2000/bag (PhP 40/kg) if sold on credit. Rice is sold at a retail price of PhP 32-36up to PhP 40-45/kg in the public market. NFA rice is sold at PhP 27/kg for up to 5 kg per customer.

It is estimated that 50% of the palay produced in Milagros is sold directly to rice millers; the other 50%, to assembler-wholesalers. Milled rice is then sold to wholesalers and retailers and directly to consumers. A wholesaler’s profit is estimated at PhP 10-15/bag of rice (PhP 0.20-0.30/kg) compared with that of retailers at PhP 25- 30/bag (PhP 0.50-0.60/kg). Rice farmer’s profit is estimated at PhP 30,000/ha per

9 cropping in irrigated areas and PhP 15,000 in rainfed areas. Milagros is said to have a rice surplus.

The benchmark survey results showed that average palay production was 3,672 kg per farm or 2,102 kg/ha for the 2013 wet season; the corresponding figures for the 2014 dry season were 2,221 kg per farm or 1354 kg/ha (Table 8). The wet-season harvest was higher (by 65%) than the dry-season harvest as there was a water supply problem during the dry season. Of the 150 farmers who planted palay in the wet season, only 90 farmers did so in the dry season (Table 9). Moreover, average production of palay per hectare was higher in the wet season crop.

Of the wet-season rice harvest, 36% was for home consumption compared with the 37% (23% for Bacolod; 49% for Narangasan) that was sold. This was followed by 16% given as payment in kind for loans or debts. Small percentages, 7% and 2%, were reserved as seed and given away, respectively (Table 10, Fig. 1).

For the dry-season harvest, 32% was sold and 31% was consumed at home, followed by 19% for payment in kind and 11% for seeds (Table 10, Fig. 2). The proportions sold and used for home consumption were larger for the wet-season crop by 5%.

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Table 8. Crop disposal patterns per farm, Masbate, 2013 wet season and 2014 dry season (in kg)

Crop Sold Home consumption Payment in kind Seeds reserved Given away Others Total harvest Wet Rice 16667 990 580 226 49 161 3672  Narangasan 1962 814 601 285 40 230 3932  Capaculan 2281 1070 623 263 41 254 4531  Tawad 1383 625 494 132 34 0 2668  Cayabon 1485 1001 596 236 36 87 3441  Bacolod 1214 1427 583 210 93 230 3757 String beans 52 2 0 2 0 0 55 Corn 561 0 0 24 0 0 585 Squash 51 0 0 0 0 0 51 Mungbean 25 0 0 0 0 0 25 Okra 4 5 0 4 0 0 13 Onion 45 1 0 7 0 0 53 Pechay 30 10 0 13 0 0 53 Eggplant 2 1 0 0 0 0 3 Dry Rice 1006 604 369 230 51 52 2221  Narangasan 1234 746 535 295 29 36 2874  Capaculan 1083 685 321 221 13 43 2356  Tawad 1183 236 273 134 17 0 1598  Cayabon 1092 584 335 240 133 5 2144  Bacolod 334 747 380 238 86 211 1995 Corn 178 0 0 1 0 0 179 Eggplant 25 0 0 0 0 0 25

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Crop Sold Home consumption Payment in kind Seeds reserved Given away Others Total harvest Kamote 20 0 0 0 0 0 20 Mungbean 31 0 0 6 0 0 36 Pepper 10 0 0 0 0 0 10 String beans 30 0 0 0 0 0 30

Table 9. Average area planted to rice (ha), Masbate, 2013 wet season and 2014 dry season

Barangay Wet season Dry season Farmers (no.) Area (ha) Farmers (no.) Area (ha) Narangasan 30 2.00 19 1.43 Capaculan 30 1.45 21 1.47 Tawad 30 1.37 16 1.07 Cayabon 30 2.35 20 2.67 Bacolod 30 1.55 14 1.46

Table 10. Rice disposal patterns (%), Masbate, 2013 wet season and 2014 dry season

Crop Sold Home consumption Payment in kind Seeds reserved Given away Others Total harvest Wet Rice 37.24 36.06 15.86 6.48 1.51 2.84 100.00  Narangasan 48.74 24.11 15.27 7.55 1.56 2.77 100.00  Capaculan 41.66 33.40 13.68 6.13 1.38 3.74 100.00  Tawad 41.88 33.25 18.17 5.47 1.24 0.00 100.00  Cayabon 31.55 42.34 16.68 7.24 1.24 0.94 100.00  Bacolod 22.53 47.09 15.61 5.99 2.12 6.67 100.00

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Crop Sold Home consumption Payment in kind Seeds reserved Given away Others Total harvest Dry Rice 31.75 31.30 18.89 13.52 2.16 2.38 100.00  Narangasan 37.62 29.81 17.42 11.47 2.48 1.19 100.00  Capaculan 34.94 33.84 15.14 14.24 0.70 1.14 100.00  Tawad 42.43 28.75 17.54 10.08 1.21 0.00 100.00  Cayabon 26.88 29.56 22.38 18.50 2.47 0.21 100.00  Bacolod 13.81 34.69 23.21 12.27 4.61 11.41 100.00

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Rice disposal_Wet season (Masbate) 1.51 6.48 2.84 Sold

15.86 37.24 Home consumption

Payment in kind

36.06 Seeds reserved

Given away

Figure 1. Rice disposal, wet season, Masbate, 2013-2014

Rice disposal_Dry season (Masbate)

2.16 2.38 Sold 13.52 31.75 Home consumption 18.89 Payment in kind

Seeds reserved 31.3

Given away

Figure 2. Rice disposal in Masbate, 2014 dry season

3.2.2 Production of other crops and market Next to rice, corn had the highest production among the crops grown in both seasons: 585 kg in the wet season and 179 kg in the dry season (Table 8). Corn was mostly sold, 93% in the wet season and 67% in the dry season (Table 11). There were four corn farmers in the wet season and two in the dry season. Although they produced a lot of corn and corn was sold at a low price, no marketing problem was observed. Corn was mostly sold as boiled corn and some were sold as feed to poultry and fishpond owners. All the corn produced was consumed in the province and not exported to other provinces.

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Table 11. Disposal patterns of other crops (%), Masbate, 2013 wet season and 2014 dry season

Crop Sold Home Seeds reserved Total harvest consumption Wet String beans 62.50 18.75 18.75 100.00 Corn 92.87 0.00 7.13 100.00 Squash 90.00 10.00 0.00 100.00 Mungbean 100.00 0.00 0.00 100.00 Okra 50.87 31.74 17.39 100.00 Onion 84.91 1.89 13.20 100.00 Pechay 57.14 19.05 23.80 100.00 Eggplant 80.00 20.00 0.00 100.00 Dry Corn 66.67 0.00 33.33 100.00 Eggplant 100.00 0.00 0.00 100.00 Sweet potato 100.00 0.00 0.00 100.00 Mungbean 75.00 0.00 25.00 100.00 Pepper 100.00 0.00 0.00 100.00 String beans 100.00 0.00 0.00 100.00

Vegetable farmers in the five study sites numbered 158-250 in 2014, planting in an area of 0.024-0.078 ha on the average (Table 12). With production averaging 0.82- 2.18 t/ha, the barangays produced vegetables from as low as 8.28 t in Narangasan to as high as 25.31 t in Cayabon.

Table 12. Number of vegetable farmers, area planted, and production in study sites of Milagros, Masbate, 2014

Item Narangasan Capaculan Tawad Bacolod Cayabon Vegetable farmers (no.) 250 193 158 246 203 Total area planted to 6 15 10 8 15 vegetables (ha) Average area planted to 0.024 0.078 0.063 0.033 0.074 vegetables per farmer (ha) Total vegetable 8.28 12.32 9.28 17.41 25.31 production (t) Vegetable production 1.38 0.82 0.93 2.18 1.69 per hectare (t) Percentage of volume of vegetables sold that went to: 16.06 20.30 18.20 12.30 15.32 Barangay Other areas in Milagros 37.50 33.59 43.20 32.60 28.42 Masbate City 36.12 15.23 14.18 30.50 38.16 Manila 0.02 0 0 0 0

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Item Narangasan Capaculan Tawad Bacolod Cayabon Other areas 10.30 22.20 21.70 24.60 16.26 For seeds 0 0 2.72 0 1.84 Source: MAO, Milagros, Masbate, 2015

The MAO estimated that almost all vegetables grown were for home consumption. Of the vegetables sold, 12-20% went to the barangay; 28-43%, to other areas in Milagros; 14-38%, to Masbate City; and 10-25% to other areas (excluding Metro Manila). Among the study sites, only Narangasan sold some of its produce to Metro Manila (0.02%).

Major vegetables produced in Milagros were “pakbet” vegetables. The 2015 survey, found that crops other than rice and corn planted for both seasons were stringbeans, mungbean, and eggplant. Squash, okra, onion, and pechay were planted only during the wet season, whereas sweet potato and pepper were grown only during the dry season. Total harvest ranged from 2 kg for eggplant to 55 kg for stringbeans for the wet season and from 10 kg for pepper to 36 kg for mungbean for the dry season. As for crop disposal, most of the produce were sold: from 51% for okra to 100% for mungbean in the wet season and from 75% for mungbean to 100% for all other crops.

The main marketing problem in vegetables is lack of buyers when there is high production. No trader wants to buy (even with prior commitment to buy the produce of farmers) and hence, vegetables are left to rot in the field. Farmers tend to shift to high-value commercial crops as these which demand a higher price than “pakbet” vegetables. It was claimed, however, that selling price of traders does not go down that low as there are only two to three middlemen (all from Milagros). The price of “pakbet” vegetables is still about PhP 30/kg and traders make profit.

There is deficit in vegetable supply, especially during the dry season. Hence, they buy vegetables from Masbate City, but at a high price. Some vegetables bought in Masbate City come from mainland Bicol (e.g., ) and .

Farm prices and retail prices of vegetables and root crops produced in Milagros in 2015 are presented in Table 3.13. Retail prices of vegetables were noted to be 40% to more than 100% higher than farm prices. Selling price of wholesalers was about PhP 2/kg higher than their buying price.

There is a municipal food terminal in Milagros that is open daily, but Sunday is the biggest market day for vegetables, fish, chicken, and livestock. This food terminal can serve as the “bagsakan” for farmers’ produce. It was advised, however, that supply should be steady or stable so that traders would keep on coming to the “bagsakan.” Some farmers also suggested to have a study tour (“Lakbay Aral”) so they can look for markets for their produce.

The MAO, when there is a chance, helps farmers create market linkages. They also advise farmers to practice crop programming to avoid very low prices for products put out in high volume.

A few mobile vegetable vendors sell vegetables in places far from the market. Farmers, especially those residing in remote areas, only plant for home consumption.

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Agricultural traders do not want to go to their farms due to inaccessibility and high marketing costs.

Table 13. Estimated farm prices and retail prices of vegetables, Milagros, 2015

Vegetable Farm price Retail price (PhP/kg) (PhP/kg) Pechay 5 10 Ampalaya (bittergourd) 30-40 70-80 Eggplant 20 30 Tomato 20 40 Squash 1200/70 kg or 30 17.14/kg Okra 10/100 pcs 5/7 pcs Sitao (stringbeans) 10/20 pcs = 0.50/pc 1/pc Sweet potato 10 20 Cassava 80/can of 20 kg 160/can of 20 kgs or 4/ kg or 8/kg Sili 5-80 70-120

3.2.3 Poultry and livestock Among livestock animals raised, cattle was most dominant with 5,192 head of cattle in 2014. These were owned only by 34 ranchers in Milagros. Eighty percent of the cattle traded (yearlings and cattle that could not reproduce) were shipped to the Padre Garcia, Batangas auction market (where traders from Batangas, Manila, and Urdaneta, meet); the rest, 20%, were sold in Masbate. Traders from Milagros, Masbate, and Batangas go to the ranch to buy the cattle. Five cattle were slaughtered every Sunday for sale in the public markets.

Carabaos are used mainly as working animals. In 2014, there were 1307 head of pigs raised by 32 farmers in Milagros. Swine traders are from Masbate City. Some pigs were shipped to Metro Manila. Not lower than 10 pigs were being slaughtered per day for sale in public markets. No marketing problem in swine was reported.

Mostly live goats were sold. Traders buy goats from house to house and let bus conductors transport it to buyers in Masbate City (more than 50%), 30-40 minutes away from Milagros), or in Metro Manila. Chickens, except for some native ones, were not raised in Milagros. Chickens are intended for home consumption and recreation (e.g., cockfighting). Farmers do not know much about the technology involved in raising commercial chickens. About 30 boxes (50 kg/box) of dressed chickens were bought from per week.

Turkey is for home consumption. Horse is used as mode of transport.

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3.2.4 Other sources of income Farmers got other sources of income by working mostly as on-farm labor and engaging in fishing and construction/carpentry. According to the OIC MA, about five to nine families are into making furniture from bamboo.

3.2.5 Survey of agricultural traders Since there were only a few agricultural traders in Milagros, Masbate, only five were interviewed for the study. These were the Narangasan Multipurpose Cooperative, two rice retailers (from Cayabon), and two rice millers (one each from Bacolod and Tawad).

Except for the multipurpose cooperative that handles rice (68%), poultry and livestock (27%), and other crops (5%), other trader-respondents only handled palay or rice. The rice retailers had PhP 20,000 each as operating capital; the rice millers, PhP 400,000- 500,000, and the cooperative, PhP 1.15 million (PhP 1million from the Department of Agriculture Regional Field Unit 5) and PhP 150,000 own capital). Of the five traders, only one, a rice retailer, borrowed half of her operating capital from the bank. She borrows this amount every 6 months at 16% interest rate per annum.

The number of years in the trading business of the 5 respondents ranged from 1 to 40 years with an average of 10 years. The cooperative has been in the trading business only for 2 years.

3.2.6 Marketing practices Except for the Narangasan Multi-purpose Cooperative, which also hires a locator/commission agent to look for sources of agricultural products aside from having regular sources, the two rice millers and two rice retailers relied only on regular sources for the palay/rice they handle/trade. As to buyers of agricultural commodities, the cooperative likewise scout for buyers in addition to having regular buyers. The rice millers and rice retailers just depend on regular buyers. Only the cooperative set the requirement of 13% MC from their sources of palay.

Palay bought was either picked up or delivered, depending on the agreement between the buyer and the seller. Buying prices were determined by the buyers based on the NFA price for three trader-respondents. The other two trader- respondents used prevailing market prices as basis.

The cooperative buys palay from its members, one of the incentives given to cooperative members. One hundred farmers sold palay to the cooperative. The other reasons for choosing sources of palay were accessibility and their being already regular sources of palay. All the palay bought were paid in cash.

For the cooperative, the number of days of palay procurement was usually 1 month during the dry season and 4 months during the wet season or as long as there is supply. Average length of time from procurement to disposal of palay/rice was 15 days. Peak months were October-December and March-April.

In 2014, the cooperative was able to sell 6,250 kg of palay to wholesalers and 46,875 kg of rice to wholesaler-retailers and consumers (Table 14). Milling recovery was

18 about 50%. On the other hand, the rice miller sold 2,000 kg of rice to wholesaler- retailers, retailers, and consumers; the two rice retailers sold a total of 22,375 kg to consumers.

The cooperative and the rice miller charged a milling fee of PhP 1.25/kg of palay. Buying prices of palay from farmers were high at P 17.50–18.00/kg, while buying prices of rice from rice millers were PhP 30.00–34.00/kg. Retail prices of rice were in the PhP 38.00–43.00/kg range.

The cooperative could not estimate yet its profits as it has just operated for 2 years. The OIC-MAO though estimated the rice miller’s profits to be within the range of PhP 2-4/kg of rice. Marketing and processing costs of rice millers include transportation cost, drying cost, milling cost, sacks and other packaging materials, storage cost, and labor and license fees, among others.

Based on the data given by the two rice retailers, price margins were PhP 8-9/ kg with marketing costs incurred on packaging materials, transport cost, license fees, market fees, and barangay permit. Profit is estimated at about PhP 7/kg of price sold, deviating largely from the

Table 14. Quality handled by palay/rice traders and market prices of palay/rice produced in the study sites, Milagros, Masbate 2014

Source Quantity Buying Selling Buyer Produced price price handed (kg) (PhP/kg) (PhP/kg) Cooperative Palay 6250 18/kg of 20/kg of Wholesalers from palay palay municipalities of Catangan and Placer in Rice 93,750 18/kg of 37-40/kg Masbate palay of rice Wholesaler-retailers from municipalities of and Mobo in Masbate and direct to consumers Mill Mill service fee at PhP service 18,000 1.25/kg of palay Rice miller Rice 1500 17.50/kg of 38-40/kg Wholesaler-retailer and palay of rice retailers consumers

Mill 360,000 Mill service fee at PhP service - 1.25/kg if palay consumers Rice retailer Rice 22375 30-34 38-43 Consumers

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IV. Conclusions Marketing is not much of a concern in the two municipalities of Pamplona and Milagros aside from Barangay Tampadong where poor marketing of agricultural commodities was reported. The main problem cited by the majority was that vegetables are left to rot in the field when there is high production as traders would not want to buy these vegetables even with prior commitment to buy the produce. To alleviate the problem, crop programming should be done. Farmers should be aware of the negative consequences of planting too many similar crops at the same time. They should have good information on how the market works in their locality and they should possess some business sense.

Market linkages can likewise be created with the help of the local government unit. Developing more markets would greatly help and would entice farmers to plant more crops.

V. References

Chupungco AR, Nguyen MR, Rabang MJM, Foronda CA, Umali MG. (2013) Rice marketing in Southern Luzon, Philippines. Philipp. J. Crop Sci. 38(1): 12-23.

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