BU R&D Journal Amano & Mojados: Value Chain Analysis 21 (3): 21-33, Supplementary Issue | ISSN (Print): 0016-4139 of Pen Shell (Baloko) in the Province of Sorsogon, journal.bicol-u.edu.ph

Value Chain Analysis of Pen Shell (Baloko) in the Province of Sorsogon, Philippines

Viola L. Amano1,* and Julieta V. Mojados2 1Bicol University Jesse M. Robredo Institue of Governance and Development, Legazpi City 2Bicol University College of Business, Economics and Management, Legazpi City *Corresponding author: [email protected]

Abstract

Sorsogon Bay is home to the pen shell (Atrina pectinata), locally known as Baloko. This study was designed to assess the existing value chains of pen shell and identify areas for improvement. The sites covered were the municipalities along in the province of Sorsogon, Philippines. It employed the tracer methodology where only the processors and fisherfolks connected to the traders were selected as respondents of the study. Primary data were gathered through semi-structured questionnaires. Secondary data were used to establish a good understanding of the pen shell industry in the areas of the study. Results show that the adductor muscle or tinga is a substitute for scallops, thus, an export product. The other parts of pen shell or rambit are also of high demand. The highest volume of pen shell catch occur during October to April during the northeast monsoon (amihan) and gradually decline from May to September during the southwest monsoon (habagat) months. The value chain maps reflect the whole meat and semi-processed value chains, the two distinct marketing practices traced in the pen shell industry. The actors in the two value chains are the fisherfolks, processors, traders, and exporters. The enablers are the fisherfolks’ organization, local government unit (LGU), Bureau of Fisheries and Aquatic Resources (BFAR), City Fisheries and Aquatic Resources Management Council (CFARMC), microfinance institutions, Department of Trade and Industry (DTI), and Phil Export. There is uneven distribution of value added in both chains. More value is created and captured by the processors while the fisherfolks have negative gains. The value-added captured by the processors and traders are higher in semi-processed practice. There is the need to focus on the supply of pen shell, the effects of pollution of Sorsogon Bay, market information, technology to preserve the quality of products, industry association, and basic researches on pen shell under Sorsogon Bay condition.

Keywords: Atrina pectinata, pen shell, value chain, value chain analysis

Introduction or more radiating ribs that fan out across the shell. It may also have erect, tubular spines found on sandy Pen shell (Atrina pectinata) is one of the current bottoms in shallow water. It attaches with its byssal dominant mollusk species found in Sorsogon Bay. It is threads, pointed end down. Pen shells have considerable locally known as baloko, a meaty shellfish that can be economic importance as food, and they produce pearls prepared in many ways such as fried, adobo, or cooked of moderate value. Along the approach of the seaport in in coconut milk with chili to taste like the extemely Sorsogon Bay, residents of mostly fishermen sell fresh hot Bicol express. It is now a popular wet market meat of this mollusk from ₱35 to ₱60/kg (depending on commodity in Sorsogon Province as exotic delicacy for the volume of stocks) and make it available to buyers. seafood lovers. Baloko is a member of family Pinnidae whose meat resembles that of a hybrid scallop and Pen shell is now being acknowledged as one of the mussel with tentacle-like extension. This mollusk has a top marine products identified in Sorsogon province, long, triangular, or wedge-shaped shell, and the pointed which has the potential to augment the income of the end is anchored in sandy, shallow bottoms. fisherfolk sector. This replaced the green mussel (Perna viridis or tahong) industry that collapsed since the red A stiff pen shell can be up to 12 in long and 6.5 in tide occurrence in 2006 up to early 2009. This condition wide. It has a brown or purplish-brown color and 15 has given way to green mussel farmers and fisherfolk BU R&D Journal, Vol. 21, Supplementary Issue ISSN (Print): 0016-4139 Amano & Mojados: Value Chain Analysis of Pen Shell (Baloko) in the Province of Sorsogon, Philippines journal.bicol-u.edu.ph to resort to the gathering of baloko. This eventually led being able to make these distinctions regarding the to the increase in production volume of 525 kg/day of nature of returns throughout the various links in operation per diving team of five members (C. Legazpi, the chain, policy makers are assisted in formulating personal communication, March 30, 2017). appropriate policies and making necessary choices. These may be to protect particularly threatened links or Pen shell scallop (Figure 1A) being a major product facilitate upgrading of other links in order to generate has considerable economic importance not only to greater returns. fisherfolk sector but also to other ancillary business sectors, which significantly augment their income Value chain analysis has proved to be very useful to due to increasing demand since its introduction to the the Philippine Rural Development Project (PRDP) of the market. Unfortunately, there are limited processed Department of Agriculture, which utilized this tool to products available in the market, except from its semi- determine the value-creation and rational distribution processed form. of benefits among the actors involved in the chain. PRDP employed the value chain approach in the preparation Given the economic significance of the pen shell of the Provincial Commodity Investment Plan (PCIP) industry in the , research and development and in identifying priority interventions and programs efforts should be focused towards determining the to invest in (Baleza, 2015). status of the industry to identify areas for improvement. This can be done by subjecting the industry to the lens Thus, this study was designed to assess the existing of the value chain approach such that an overview of value chain of pen shell in the province of Sorsogon the industry, value chain map showing the functions, and identify areas for improvement. Specifically, it business links between the operators and enabling aimed to provide an overview of the pen shell industry environment, and overall value added can be in the province of Sorsogon, develop value chain map determined. for pen shell showing the production and marketing functions performed by the operators, vertical business The value chain analysis determines the chain of links among the operators, support service providers, activities that a firm in a specific industry performs in and enabling services or policies, determine the overall order to deliver a valuable product or service for the value added generated by the chain and shares of the market. The idea of the value chain is based on the different stages, and identify areas for improvement of process view of organizations that it is made up of the pen shell value chain. inputs, transformation processes, and outputs. Each stage of the chain is linked to each other. In each stage, additional value or return is expected to be created and Materials and Methods captured by an industry. Focusing on all links in the chain and on all activities in each link helps to identify which activities are subject to increasing returns and The study sites (Figure 1B) covered in this study which are subject to declining returns. As a result of were the municipalities along Sorsogon Bay, which are

A B

Figure 1. Pen shells (A) and the study areas in the province of Sorsogon (B)

22 BU R&D Journal, Vol. 21, Supplementary Issue Amano & Mojados: Value Chain Analysis ISSN (Print): 0016-4139 of Pen Shell (Baloko) in the Province of Sorsogon, Philippines journal.bicol-u.edu.ph the pen shell producing areas. The sites covered were Secondary data were used to establish a good barangays of Sorsogon City, namely: Bitan-O, Balogo, understanding of the pen shell industry in the areas of Rizal, and Bulabog. Other municipalities in Sorsogon the study. These included data on volume and value of such as Casiguran and Juban were also covered in the production, prices, and other market information. study.

Purposive sampling was employed in the study to Results and Discussion identify fisherfolks, processors, traders, and exporters of pen shells in the province of Sorsogon. Only the The Pen Shell Industry Profile traders who were registered with the LGU were selected as respondents of the study. The traders were identified Bicol region has four major fishing grounds: first and the processors and fisherfolks connected to San Miguel Bay, , Gulf, and them were traced and chosen as respondents. Sorsogon Bay measuring a total of 1,666.28 km2. The region’s coastline measures 3,116.10 km. Sorsogon With the assistance of the Office of the Provincial Bay is recognized as an essential fishing ground in Agriculture (OPAg) in Sorsogon, the research team the Philippines for small pelagic, demersal fishes, and was able to locate the respondents of the study. The shellfishes (Olano et al., 2009). It is an enclosed bay respondents were the value chain players of fresh whole surrounded by five coastal municipalities, namely: meat and semi-processed pen shells. This was based on Casiguran, Castilla, Magallanes, Juban, and Sorsogon the dominant traders (major buyers) of pen shells in the City. According to Serafin Lacdang, head of the covered areas. Based on the survey, there were seven Fisheries Division of the Provincial Agricultural Office, dominant traders in Sorsogon province as summarized Sorsogon Bay is home to pen shell that has emerged as in Table 1. the second top earner for local fisherfolks next to green mussel or tahong. Primary data were gathered through semi- structured questionnaires, which were based from the In the Philippines, pen shell is marketed as a whole questionnaires of completed researches on supply chain meat or processed by shellfish harvesters to separate and value chain of the researchers. The questionnaires the adductor muscle as an export commodity. The were designed in such a way that it captured all the adductor muscles of pen shell are scallop-like and very quantitative and qualitative information needed in expensive when it is marketed as an export commodity answering the objectives of the study. This enabled the (₱331.25/kg compared to ₱198.00/kg). The adductor study to understand the dynamics in the chain and the muscle or locally known as tinga is a substitute for behavioral and institutional features of the transactions scallops. The other parts of pen shell or rambit are also of involved to place the analysis in proper context.

Table 1. Respondents of the study.

Respondents Area Fisherfolks Assemblers/Processors Traders Exporters Sorsogon City - - 3 - Bitan-o 30 1 - - Rizal 13 2 - - Balogo 7 - - - Bulabog - - 3 - Casiguran - - 1 - City - - - 1 Pasay/Naga City - - - 1 Total 50 3 7 2

23 BU R&D Journal, Vol. 21, Supplementary Issue ISSN (Print): 0016-4139 Amano & Mojados: Value Chain Analysis of Pen Shell (Baloko) in the Province of Sorsogon, Philippines journal.bicol-u.edu.ph

Figure 2. Fishing gears used in gathering of pen shells high demand by Bicolanos and, lately, became popular of May, seawater in Sorsogon Bay is clear and pen even to tourists. shell gathering is relatively easy. However, during southwest monsoon or habagat, the seawater is blurry Sorsogon City Agriculture Office (CAO) has making gathering of pen shells difficult. Likewise, recorded 1,866 registered fishing boats (bancas) during the habagat months there were usually three to (1,282 motorized and 584 non-motorized) in 2016. four typhoons per month that visited the province of Less than 10% of these were gatherers of pen shell. Sorsogon (PAGASA, 2016). The fishing gears (Figure 2) commonly used include fishnet or sinaya, goggles or sirip, gloves, compressors Quality Grades of Pen shells and hose. According to Sorsogon Sangguniang Panlungsod Resolution No. 1163 Series of 2005 Section 20, the use There are no standard quality grades for pen shells. in the city waters of air compressors, self-contained Through their experience, the processors and traders are underwater breathing apparatus (SCUBA) or any form able to classify the pen shell as small, medium, and large of underwater breathing device shall be unlawful except by visual inspection. The fisherfolks sell the pen shells for the construction, operation, and maintenance of unclassified or rambol and the traders are the ones who licensed fish corals, fish pens, fish cages, mussel/oyster classify the pen shell according to sizes. The adductor farms, pearl farms, and in fishery or aquatic research muscle or tinga are not classified. This means that by legitimate institution. This helped regulate the over the classification made is not required by the market extraction of shellfish in Sorsogon Bay particularly pen and only practiced by the traders and processors as a shells and carpet shells. bargaining tool to lower the price especially when there are greater number of small sizes. Sorsogon Sangguniang Similar to other fishery commodity, pen shell Panlungsod Resolution No. 1163 Series of 2005 Section production is seasonal and affected by northeast 20 prohibits the gathering of pen shell shorter or below monsoon or amihan (October to April) and southwest 22.5 cm in shell length (classified “large”). This indicates monsoon or habagat (May to September). The data that traders and processors should only buy large pen from the fisherfolk respondents reflect the seasonality shell to comply with the law. of catch in the research areas (Figure 3). The highest volume of pen shell catch (4,222 kg) occurred during December to April during the northeast monsoon Domestic Production and Consumption of Pen shells (amihan) in green-colored grid and gradually declined from May to November during the southwest monsoon There is very little literature on the biology of pen (habagat) months, presented in dark yellow grid. shell in Sorsogon Bay. Reproductive effort is unstudied. Fisherfolks claimed that during January to early part Quantitative data on gonad mass or egg number relative

24 BU R&D Journal, Vol. 21, Supplementary Issue Amano & Mojados: Value Chain Analysis ISSN (Print): 0016-4139 of Pen Shell (Baloko) in the Province of Sorsogon, Philippines journal.bicol-u.edu.ph

Figure 3. Seasonality of Pen shells to body size are difficult to obtain in this species. But lengths (mm) were estimated as follows: 1 year (14.51 it is obvious visually that the fully-developed gonad cm), 2 years (19.47 cm), 3 years (22.24 cm), 4 years makes a small proportion of the tissue than in oysters (24.47 cm), 5 years (26.09 cm), 6 years (27.33 cm), 7 or scallops. However, there have been many studies on years (28.31 cm), 8 years (29.11 cm), 9 years (29.76 cm), the number of spawning seasons studied in other areas and 10 years (30.35 cm). The specified size of pen shells of the world. Baik (2002) and Chung and colleagues allowed by the city ordinance is not shorter than 22.5 (2006) reported that the number of spawning season cm. This connotes that three years is required for the of A. pectinata is once a year by qualitative histological pen shell to grow into harvestable size. analysis. It is assumed that the number of spawning seasons during the year of bivalve species vary with The production data (Table 2) provided by the latitudinal gradients (locations) of the world. National Stock Assessment Program (NSAP) in Tabaco City and the Office of the Provincial Agriculture (OPAg) According to the growth curves for the mean of Sorsogon indicated the very low production of pen shell height fitted to the von Bertalanffy equation by shells. The high demand for pen shells particularly of Baik and colleagues (2001), ages (year) and mean shell the export market remained unsatisfied. The highest

Table 2. Pen Shell production in the province of Sorsogon

Years Production (kg) Demand (kg) Unmet Demand (kg) 2006 No data 121,874.66 2007 0 102,893.41 -102,893.41 2008 0 103,922.34 -103,922.34 2009 0 104,961.56 -104,961.56 2010 0 106,011.18 -106,011.18 2011 0 107,071.29 -107,071.29 2012 70,813.60 128,142.00 -57,328.40 2013 46,032.12 369,223.42 -323,191.30 2014 57,800.58 370,315.66 -312,515.08 2015 204,333.66 431,418.82 -227,085.16 2016 18,822.23 432,533.00 -413,710.77 Source: NSAP, OPAg and Exporters

25 BU R&D Journal, Vol. 21, Supplementary Issue ISSN (Print): 0016-4139 Amano & Mojados: Value Chain Analysis of Pen Shell (Baloko) in the Province of Sorsogon, Philippines journal.bicol-u.edu.ph production of pen shell of 204,333.66 kg was recorded the prices vary greatly depending on the products. Fresh in 2015. There was no data in 2006 and there was no pen shells are bought at ₱3.00 per piece. The fresh whole recorded gathering of pen shells from 2007 to 2011 meat which includes the internal organs (rambit) and because of the red tide infestation in Sorsogon Bay. This the adductor muscles (tinga) can be purchased at ₱80.00 gave way to its growth and preservation as harvesting, to ₱100.00/kg. The prices for internal organs without selling, transporting and eating them have been banned adductor muscles ranged from ₱30.00 to ₱35.00/kg. like all other shell fish species from Sorsogon bay. In the However, exporters set the prices for adductor muscles later part of 2012, gathering of pen shells commenced from US$5.25 to US$9.00/kg. even though it was still banned. It can be observed that even though extraction has just been done for few Value Chain Mapping months, the catch of 70,813.60 kg was significantly high. The prohibition of harvesting due to red tide There were two emerging products traced in the enabled the pen shells to grow and mature before they pen shell industry: the fresh whole meat (adductor were harvested. It can also be observed that the quantity muscles or tinga and other internal organs or rambit) harvested still was not enough to satisfy the demand of and the semi-processed pen shell (adductor muscles or the market. It can be noted that the production further tinga only). The Value Chain Maps prepared were based declined in 2016 to 18,822.23 kg due to over extraction on these two products. aggravated by the worsening condition of Sorsogon bay The Deutsche Gesellschaft für Technische (based on Resolution Sorsogon Sangguniang Panlungsod Zusammenarbeit (GTZ) model (2007) was adopted in No. 1163 Series of 2005). this study. The Value Chain Map for fresh whole meat pen shell (Figure 4), wherein the first chain operators Domestic Prices were the fisherfolks who carried out the input provision Similar to other fishery products, the data on the tasks of gathering and selling their catch to the traders. domestic prices of pen shells are inadequate. However, The subsequent activity was trading wherein the during the conduct of the research, it was found out that common tasks were receiving the fresh pen shells, de-

Figure 4. Value Chain Map for Whole Meat Pen Shell (Adopted GTZ Model)

26 BU R&D Journal, Vol. 21, Supplementary Issue Amano & Mojados: Value Chain Analysis ISSN (Print): 0016-4139 of Pen Shell (Baloko) in the Province of Sorsogon, Philippines journal.bicol-u.edu.ph meating of pen shells (the process of separating the function were the same for both chains. The consumers meat from the shell), transporting, wholesaling, or for the adductor muscles or tinga were the export retailing and providing cash payment to fisherfolks. The market, which were in Japan and America, according consumers of this chain were the residents of Sorsogon to the exporter (C. Reyes, personal communication, City and local tourists. The enablers, which assisted the June 30, 2017). The rambit are sold in the local market. actors in the primary production were the fisherfolks The enablers of the fisherfolks were the same for both organization Unyon ng Mga Mandaragat ng Sorsogon chains. LGU, MAO, and BFAR were the enablers of the Association (UMASA), the local government unit (LGU) processors. DTI was an enabler for both processors and of Sorsogon, the Municipal Agriculture Office (MAO), the traders. The Philippine Exporters Confederation, the City Fisheries and Aquatic Resources Management Inc. (PHILEXPORT) as an enabler was the umbrella Council (CFARMC), the Bureau of Fisheries and organization of the Philippine exporters. Aquatic Resources (BFAR), the Office of the Provincial Agriculture (OPAg)–Fishery Section in Sorsogon, and Value Addition the Union of Fisherfolks of Balogo (UFOB). There were also microfinance institutions that provided additional All of the fisherfolks from both chains incurred capital for the fisherfolks. The Department of Trade and net loss from their gathering operation (Table 3). In the Industry was the sole enabler for the trading function. Whole Meat Pen shell value chain, the sales generated for one kg of whole meat was ₱54.00, which was Figure 5 illustrates the Value Chain Map for semi- equivalent to an average of 18 pieces of pen shells. The processed pen shell. The value chain also started from total cost was ₱91.14 resulting to a net gathering loss the input provision by the fisherfolks whose tasks of ₱37.14. In the Semi-processed pen shell value chain, were gathering and selling the fresh pen shells to the 67 pieces of pen shells on the average were needed to processors. The succeeding function is processing produce 1 kg of adductor muscles, which generated wherein the tasks commenced with procuring fresh pen ₱198.00 sales. When total cost of ₱238.91was deducted shells, de-meating, separating adductor muscle (tinga) from the sales, it resulted to ₱40.91 net loss. from other internal organs (rambit), washing, sorting, packaging, freezing, and delivering the adductor It can be observed that in both chains, operating muscles to exporters in the cities of Tabaco, Naga or expenses were significantly high due to low catch of pen Pasay (cities outside of the province), and selling the shells (Table 4). They continuously dive in search for pen rambit to wholesalers or retailers. The tasks in the trading shells. This in turn resulted to very high labor expenses.

Figure 5. Value Chain Map for Semi-Processed Pen Shell (Adopted GTZ Model)

27 BU R&D Journal, Vol. 21, Supplementary Issue ISSN (Print): 0016-4139 Amano & Mojados: Value Chain Analysis of Pen Shell (Baloko) in the Province of Sorsogon, Philippines journal.bicol-u.edu.ph

Table 3. Cost and Return Analysis Per Kilogram of the total cost was very high due to the high cost of fresh Gathering Pen Shell pen shells. This was due to the large quantity of pen shells required for one kilogram of adductor muscles or Value Chain tinga. This is so because the pen shells were bought on rambol basis and majority of catch, during the conduct Item Whole Semi- Meat Pen processed of this study, were small and medium sizes. The net Shell (₱) Pen Shell (₱) income was also affected by other expenses. Labor Cash Returns expense accounted for the payment of labor services for de-meating and removing the adductor muscles Sales 54.00 198.00 (tinga) including other processing activities such as Total Returns 54.00 198.00 washing, checking for rejects, packaging, and freezing. Cash Costs Marketing cost incurred was due to communication and transaction costs. The products were delivered to Operating Expenses 51.33 132.67 the exporters incurring transportation cost. Other cost Labor Expense 16.04 44.91 was paid for miscellaneous expenses that the processors Other Expenses 15.13 46.19 incurred during the processing activities. Non-cash Total Cash Costs 82.50 223.77 costs were also accounted for such as depreciation due to fixed assets used and losses from spoilage. The Non-Cash Cost adductor muscles (tinga) require the application of Depreciation Cost 8.64 15.13 Total Non-Cash Cost 8.64 15.13 Total Costs 91.14 238.91 Table 4. Cost and Return Analysis Per Kilogram of Net Gathering (37.14) (40.91) Processing of Pen Shell Income (Loss) Net Cash Income Value Chain (28.50) (25.77) (Loss) Item Semi-Processed Pen Return on Cost Shell (₱) -40.75 -17.12 (ROC) (%) Cash Returns Sales 250.00 Other Sales 75.00 The operating expenses included the gasoline, crude Total Returns 334.00 oil and food of the fisherfolks. Labor expense covered Cash Costs the payment for the fisherfolks and for the water boy. The role of the water boy was to safeguard the hose of Fresh Pen Shell 198.00 the air compressor from folding and to prevent water Labor Expense 12.72 from entering the boat while the fisherfolks were Marketing expense 7.04 gathering pen shells. Other costs were the payment for registration of their fishing gears such as boat, engine, Transportation Expense 4.74 and compressors. The depreciation costs were expense Other Expenses 2.34 incurred for the use of boat and other fishing gears. This Total Cash Costs 224.84 in turn resulted to very high labor cost as well as fuel and Non-Cash operating expenses. The return on cost (ROC) indicates that for every ₱100.00 of cost, the fisherfolks incurred Depreciation Cost 34.34 net loss of ₱40.75 for the whole meat pen shell value Losses from Wastage 9.73 chain and ₱17.12 for the semi-processed pen shell. Total Non-Cash Cost 44.07 The processors in the semi-processed value chain Total Costs 268.91 generated ₱56.09 net income (Table 4). High net income Net Processing Income 56.09 can be attributed to high sales revenue brought about Net Cash Income 100.16 by sales of tinga at ₱250.00/kg and the by-product of 2.5 kg of rambit at ₱30.00/kg. It can be observed that Return on Cost (ROC) (%) 20.86

28 BU R&D Journal, Vol. 21, Supplementary Issue Amano & Mojados: Value Chain Analysis ISSN (Print): 0016-4139 of Pen Shell (Baloko) in the Province of Sorsogon, Philippines journal.bicol-u.edu.ph food grade preservative 12 hours before harvesting to only obtained net trade income of ₱31.91. The higher prevent spoilage. However, delays in the transport due net trade income of the semi-processed pen shell value to unavoidable circumstances result to the spoilage. chain was due to high sales and low cash costs. The high sales revenue generated in whole meat pen shell value The cost-and-return analysis revealed that the chain was brought about by the reasonably high selling processors were better off than the fisherfolks in both price of rambit with tinga worth ₱100.00/kg. Based on value chains since they got an ROC of 20.86% even the interview with the exporter, consumers preferred though the processing costs were substantially high. whole meat even if the price is quite high because of the They obtained net profit from their operation, which delectable taste of adductor muscle. On the other hand, indicates their profitability. the traders in semi-processed pen shell value chain were also able to create clear-cut profit by selling the rambit The traders in both chains obtained high ROC of at ₱60.00/kg. Low trading costs made positive impact 27.69% for whole meat pen shell and 31.91% for the on the profit earning performance of this venture. semi-processed pen shell (Table 5). This means that for every ₱100.00 of total cost, the traders in whole meat The research team analyzed the cost and return per pen shell value chain generated ₱27.69 net trade income kilogram of semi-processed pen shell traded in the export while the traders in the other value chain who sold rambit market (Table 6). The ROC of 9.67% was obtained by the exporters, which means that for every ₱100.00 of total cost, the exporters obtained net trade income of ₱9.67. The table reveals that the exporters earned considerable Table 5. Cost and Return Analysis Per Kilogram of Gathering of Pen Shell amount of profit albeit the high exporting costs. Bulk

Value Chain Whole Meat Semi- Table 6. Cost and Return Analysis of Exporting of Item Pen Shell processed Semi-Processed Pen Shells (kg) (Rambit & Pen Shell Tinga) (₱) (Rambit) (₱) Value Chain Cash Returns Item Semi-Processed Pen Shell (₱) Sales 100.00 60.00 Cash Returns Total Returns 100.00 60.00 Sales 331.25 Cash Costs Total Returns Raw Material 54.00 30.00 Cash Costs Labor Expense 9.00 7.50 Adductor Muscle 250.00 Marketing expense 2.71 1.35 Marketing Cost 2.27 Transportation 2.01 1.58 Expense Rental of Facility 16.75 Other Expenses 1.10 1.70 Labor 4.00 Total Cash Costs 68.82 42.13 Transportation 12.50 Non-Cash Cost Other Costs 4.00 Depreciation Cost 7.45 2.25 Total Cash Costs 289.72 Losses from Wastage 2.04 1.11 Non-Cash Cost Total Non-Cash Cost 9.49 3.36 Depreciation Cost 12.32 Total Costs 78.31 45.49 Total Non-cash Cost 12.32 Net Trade Income 21.69 14.52 Total Costs 302.04 Net Cash Income 31.18 16.87 Net Exporting Income 29.21 Return on Cost Net Cash Income 41.53 27.69 31.91 (ROC) (%) Return on Cost (ROC) (%) 9.67

29 BU R&D Journal, Vol. 21, Supplementary Issue ISSN (Print): 0016-4139 Amano & Mojados: Value Chain Analysis of Pen Shell (Baloko) in the Province of Sorsogon, Philippines journal.bicol-u.edu.ph of the costs was due to high cost of adductor muscles. by the chain. In both chains, the selling price of pen shell This was inevitable as the exporters cannot dictate their was on a per piece basis at ₱3.00 each, regardless of size. own price due to low supply of pen shells. They tend to The locals called it rambol basis. The fisherfolks knew that adopt the existing price in the market. Costs of rental, the price of the pen shells was very low but the traders transportation, and depreciation were also prominent, and processors were their suki (loyal buyer) and would which resulted to decrease in net exporting income. purchase all their catch even if some of the shells were One exporter claimed that although the transportation small. In the whole meat pen shell value chain, instead service provider was charging them with significantly of creating value for their catch, the fisherfolks incurred high fee, they had no choice but to concede because a net loss of ₱37.14/kg. The value addition map reveals that was the only transport service provider which has the piteous condition of the fisherfolks, which is critical regular transport schedule in the Bicol region. There to the pen shell industry if not addressed immediately. was no shipping cost since the importer of the product The blank box in the figure shows that fisherfolks shouldered the cost from Manila up to the country of were not able to capture any benefit from the chain. In destination. comparison with the fisherfolks, the traders captured all of the value-added in the chain (100%). They were able The cost-and-return analysis reveals that to earn reasonable profit although they were burdened processors and traders, as well as the exporters, were with losses due to spoilage. at an advantage compared with the fisherfolks in both chains. They obtained net profit from their operation, In semi-processed pen shell value chain, the which indicates profitability. The ROCs of processors fisherfolks have similar fate as that of the fisherfolks in were much higher compared to all other operators. The the whole meat pen shell value chain. They incurred net traders in both chains ranked second. The exporters loss of ₱40.91. An addition of ₱56.09/kg was obtained by also earned profit though not as much as the traders and the processors, which has 56.19% net value added. They processors had. obtained this from sales of adductor muscles or tinga at ₱250.00/kg, plus the sales of other internal organs or Figure 6 illustrates the value addition map for rambit at ₱30.00/kg. The processors sold the adductor whole meat pen shells, and Figure 7 for semi-processed muscles to exporters while the other internal organs pen shells. The maps presented the value-added and were sold to local traders. The traders of rambit acquired captured at different stages and the overall value added an additional value of ₱14.52/kg corresponding to

Figure 6. Value-Added and Shares of the Different Operators for Whole Meat Pen Shell Value Chain

30 BU R&D Journal, Vol. 21, Supplementary Issue Amano & Mojados: Value Chain Analysis ISSN (Print): 0016-4139 of Pen Shell (Baloko) in the Province of Sorsogon, Philippines journal.bicol-u.edu.ph

Figure 7. Value-Added and Shares of the Different Operators in Semi-processed Pen Shell

14.54% net value added. The exporters of tinga, on of value creation. It is worth mentioning that these the other hand, created added value of ₱29.21, which fisherfolks were unaware of how much they were losing corresponds to 29.27% net value added. Similar to the because they do not have insights on proper recording Whole Meat Pen Shell Value Chain, the blank box in the of the financial transactions. The data can be used to figure shows that fisherfolks were not able to capture further study and assess the legal framework relevant any benefit from the chain. The highest value-added was to the chain development particularly on fishery. The captured by the processors. The exporters were next in traders may use the value chain maps in evaluating rank followed by the traders. Due to the transformation their decision to adopt proper inventory management made by the processors more value was created and to improve their efficiency. The efficiency gain is likely captured. The additional effort of the exporters to to translate into improved competitiveness resulting to sell in international market created additional value. greater market share and, thus, value creation of the Likewise, the selling activities of the traders provided trader. additional value to the product. Areas of Improvement The value addition maps disclosed the uneven distribution of value added in both chains. Likewise, The following areas of concern were derived the maps revealed that more value was created and from the findings of the study and were the basis for captured by the traders of pen shells. This is so because the recommendations for improvement of the value for the whole meat pen shell value chain, they were chain. able to procure the pen shells on rambol basis, which entails lower per unit cost. The gatherers were not Dwindling supply of raw pen shell. According to able to command higher price for their catch because the Sorsogon OPAG Fishery Section, this is due to over- of this mode of selling. They did not classify their extraction that even the small sizes are gathered. There catch as to sizes, and therefore, they were bound to is an existing ordinance in Sorsogon City regarding the follow the price that the traders dictated. The data also use of fishing gears and acceptable pen shell size for reflect the unfortunate condition of the fisherfolks in gathering. What is lacking is the strict implementation both chains that need immediate intervention by the of the ordinance. The assistance of the Bantay Dagat may concerned government agencies. Dwindling pen shell be sought to help in ensuring that the ordinance will be catch adversely affected the gathering activity of the strictly followed. fisherfolks, which resulted to significant losses instead Pollution of Sorsogon Bay. According to

31 BU R&D Journal, Vol. 21, Supplementary Issue ISSN (Print): 0016-4139 Amano & Mojados: Value Chain Analysis of Pen Shell (Baloko) in the Province of Sorsogon, Philippines journal.bicol-u.edu.ph fisherfolks, there are two big companies that dispose Conclusion and Recommendations chemicals in the rivers, which are connected to Sorsogon Bay. These, together with the disposal of garbage and The value chain maps reflect the whole meat and sewerage of residents along the coast of Sorsogon bay, semi-processed value chains, the two distinct marketing make the seawater of the bay polluted. The Philippine practices traced in the pen shell industry. The actors in Clean Water Act specifically prohibits these practices. the two value chains are the fisherfolks, processors, The Local Government Unit of Sorsogon City should traders, and exporters. The enablers are the fisherfolks’ strictly implement this law with the assistance of the organization, LGUs, BFAR, BFARMC, CFARMC, barangay officials. microfinance institutions, DTI, and Phil Export.

Lack of Market Information of Fisherfolks. The There is uneven distribution of value added in fisherfolks were price takers and cannot negotiate for both chains. More value is created and captured by the better price because of the lack of market information. processors while the fisherfolks have negative gains. They do not know the options where they can sell their The value-added captured by the processors and traders pen shell catch. This is also the reason why they do not are higher in semi-processed practice. engage in value adding. Based on the interview of the fisherfolks, they are not aware that selling the tinga The areas of improvement will provide solutions and rambit separately will provide them higher income. to the problems on the supply of pen shell, pollution The market information may be provided by BFAR or of Sorsogon Bay, market information, technology to OPAg. preserve the quality of products, industry association, and research on the biology, ecology, growth, and Inadequate Technology to Preserve the Quality reproduction of pen shell under Sorsogon Bay condition. of Tinga. Losses incurred by processors of pen shells were due to spoilage. This was caused by the improper techniques used to preserve the quality of tinga during Acknowledgment transport. The food grade preservatives are applied by the exporters and not by the traders. This can already be done by the traders to prevent the discoloration of the The authors wish to express great appreciation products. Improvement in the logistics should also be to Bicol University Research and Development done to prevent delays in the transport of the product. Management Division (BURDMD) for providing the project funds. We also thank the head and staff of the Absence of Viable Industry Association. Office of Provincial Agriculture–Sorsogon, the City Fisherfolks have organizations but with very limited Agriculture Office–Sorsogon, the Municipal Agriculture activities. Processors and traders are not organized at Office–Juban, the National Stock Assessment Program– all. Industry association is needed to cater to the needs BFAR, and the Local Government Unit–Sorsogon City. of the sector and obtain greater bargaining power. Unity of actions and decisions of the sector is also facilitated. It is very important for the organizations of References fisherfolks to be active and consider consolidating the products so they can sell directly the tinga to exporters Baik, S. H. (2002). Reproduction, age and growth of the pen to capture more value. shell Atrina pectinata on the west coast of Korea [Ph. D. Thesis]. Kunsan National University. Inadequate Research on the Biology, Ecology, Growth, and Reproduction of Pen Shell Under Baik, S. H., Chung, E. Y, Park, K. H., & Ryu, D.K. (2001). Age Sorsogon Bay Condition. Much of the studies and growth of the pen shell, Atrina (Servatrina) pectinata conducted on pen shell were in other countries and even japonica (Reeve), on the west coast of Korea. The Korean Journal of Malacology, 17, 71–78. these studies indicate the inadequateness of their studies along biology, ecology, growth, and reproduction of Baik, S. H., Kim, K. J., Chung, E. Y., Choo, J. J., & Park, K. H. pen shell. Such studies are needed to be able to come up (2001). Seasonal variations in biochemical components with a good plan for sustainable fishing of pen shell in of the visceral mass and adductor muscle in the pen shell, Sorsogon Bay. Atriana pectinata. The Korean Journal of Malacology,17, 71–78.

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Chung, E. Y., Baik, S. H., & Ryu, D. K. (2006). Reproductive biology of the pen shell, Atrina (Servatrina) pectinata on the Boryeong coastal waters of Korea. The Korean Journal of Malacology, 22(2), 143-150.

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