Marketing Costs Structure Study Series 3
MARKETING COSTS STRUCTURE FOR MANGO
Agricultural Marketing Statistics Analysis Division BUREAU OF AGRICULTURAL STATISTICS DEPARTMENT OF AGRICULTURE
September 2002
Marketing Cost Structure for Mango
FOREWORD
The third of the serialized report for the Studies on Marketing Costs Structure for Selected High Value Commercial Crops features the results of the research for mango which was conducted in the second semester of 2001 under the GMA-HVCC Program.
The results of the studies may help the marketing participants in their production and marketing decisions and the policy makers in the formulation of the types of assistance and interventions to improve marketing efficiencies for crops of commercial value.
Other series will feature the results of marketing costs studies for other crops such as calamansi, papaya, potato, rose and orchids.
ROMEO S. RECIDE Director
ii Marketing Cost Structure for Mango
TABLE OF CONTENTS
FOREWORD …………………………………………………………………………………… ii
I. Study Procedures………………………………………………………………………… 1 Team Composition……………………………………………………………………… 1
Research Sites ………………………………………………………………………… 1 Selection of Sample Respondents…………………………………………………… 2 Data Processing………………………………………………………………………… 2 Report Preparation……………………………………………………………………… 2
II. Limitations………………………………………………………………………………… 3
III. Discussion of Results……………………………………………………………………… 3
Geographic Coverage…………………………………………………………………… 3 Distribution of Respondents…………………………………………………………… 3 Types of Marketing Participants……………………………………………………… 3 Profile of Respondents…………………………………………………….…………… 4
Marketing Practices and Functions……………………………………….…………… 7 Procurement …………………………………………………………………………… 7 Distribution …………………………………………………………………………… 8 Geographic Flow………………………………………………………..……………… 8
Marketing Channels……………………………………………………..……………… 15 Marketing Costs………………………………………………………………………… 21 Labor ………………………………………………………………….………………… 21 Transportation ………………………………………………………………………… 21
Material Inputs ………………………………………………………………………… 22 Miscellaneous and Other Operating Costs ………………………………………… 22 Depreciation …………………………………………………………………………… 22 Aggregated Marketing Costs …………………………………………….………… 23 Total Marketing Costs …………………………………………………..…………… 23
Marketing Costs by Point of Destination …………………………………………… 23 Marketing Margins …………………………………………………………………… 31 Marketing Costs of Processors ……………………………………………………… 33
VI. Problems/Constraints Encountered……………………………………………………… 40
Statistical Tables ……………………………………………………………………………… 41
Annex …………………………………………………………………………………………… 111
iii Marketing Cost Structure for Mango
STATISTICAL TABLES
1 MANGO : Distribution of respondents, by type, by province/municipality, 2001 42
2 MANGO : Distribution of respondents, by type of
marketing participants, by province, 2001 43
3 MANGO : Number and percentage distribution of farmer-respondents, by size of farm, by
province, 2001 44
4 MANGO : Number and percentage distribution of farmer-respondents, by tenurial status, by province, 2001 45
5 MANGO : Distribution of trader-respondents by type of business, by province, 2001 46
5a MANGO : Distribution of trader-respondents, by
type of marketing participants, by type of business, by province, 2001 47
6 MANGO : Distribution of trader-respondents, by nature of capitalization, by province,
2001 49
6a MANGO : Distribution of trader-respondents, by type of marketing participants, by nature of capitalization, by province, 50
7 MANGO : Distribution of trader-respondents, by length of experience, by province, 2001 52
8 MANGO : Major sources and destinations, by
location, by province, 2001 53
9 MANGO : Trading Pattern, by activity in selected provinces, 2001 55
iv Marketing Cost Structure for Mango
10 MANGO : Distribution of respondent by manner of procurement, by province, 2001 56
10a MANGO : Distribution of respondents, by type of marketing participants, by manner of procurement, by province, 2001 57
11 MANGO : Distribution of respondents, by mode of payment in buying stocks, by province, 2001 59
11a MANGO : Distribution of trader-respondents, by
marketing participants, by mode of payment in buying stocks, by province, 2001 60
12 MANGO : Distribution of respondents, by manner
of distribution, by province, 2001 62
12a MANGO : Distribution of respondents by type of marketing participants, by manner of distribution, by province, 2001 63
13 MANGO : Distribution of respondents, by manner of payment in distribution, by province, 2001 65
13a MANGO : Distribution of respondents, by type of marketing participants, by manner in payment for distribution, by province, 2001 66
14 MANGO : Labor costs incurred by activity/practice, by province, 2001 68
14a MANGO : Labor costs incurred by marketing participants, by activity/practice, Metro
Manila, 2001 70
14b MANGO : Labor costs incurred by marketing participants, by activity/practice, Pangasinan, 2001 71
v Marketing Cost Structure for Mango
14c MANGO : Labor costs incurred by marketing participants, by activity/practice, Iloilo,
2001 72
14d MANGO : Labor costs incurred by marketing participants, by activity/practice, Guimaras, 2001 73
14e MANGO : Labor costs incurred by marketing participants, by activity/practice, Cebu, 2001 74
14f MANGO : Labor costs incurred by marketing participants, by activity/practice, Davao City, 2001 75
14g MANGO : Labor costs incurred by marketing
participants, by activity/practice, Davao del Sur, 2001 76
14h MANGO : Labor costs incurred by marketing participants, by activity/practice,
General Santos City, 2001 77
15 MANGO : Transportation costs incurred by activity/practice, by province, 2001 78
15a MANGO : Transportation costs incurred by marketing participants, by activity/practice, Metro Manila, 2001 79
15b MANGO : Transportation costs incurred by
marketing participants, by activity/practice, Pangasinan, 2001 79
15c MANGO : Transportation costs incurred by marketing participants, by
activity/practice, Iloilo, 2001 80
15d MANGO : Transportation costs incurred by marketing participants, by activity/practice, Guimaras, 2001 80
vi Marketing Cost Structure for Mango
15e MANGO : Transportation costs incurred by marketing participants, by activity/practice, Cebu, 2001 81
15f MANGO : Transportation costs incurred by
marketing participants, by activity/practice, Davao City, 2001 81
15g MANGO : Transportation costs incurred by marketing participants, by
activity/practice, Davao del Sur, 2001 82
15h MANGO : Transportation costs incurred by marketing participants, by activity/practice, General Santos City,
2001 82
16 MANGO : Cost of material inputs, by activity/practice/cost item, by province,
2001 83
16a MANGO : Cost of material inputs incurred by marketing participants, by activity/practice/cost item, Metro Manila, 2001 84
16b MANGO : Cost of material inputs incurred by marketing participants, by activity/practice/cost item, Pangasinan, 2001 84
16c MANGO : Cost of material inputs incurred by marketing participants, by activity/practice/cost item, Iloilo, 2001 86
16d MANGO : Cost of material inputs incurred by marketing participants, by activity/practice/cost item, Guimaras, 2001 87
vii Marketing Cost Structure for Mango
16e MANGO : Cost of material inputs incurred by marketing participants, by
activity/practice/cost item, Cebu, 2001 88
16f MANGO : Cost of material inputs incurred by marketing participants, by activity/practice/cost item, Davao City,
2001 89
16g MANGO : Cost of material inputs incurred by marketing participants, by activity/practice/cost item, Davao del
Sur, 2001 90
16h MANGO : Cost of material inputs incurred by marketing participants, by activity/practice/cost item, General
Santos City, 2001 91
17 MANGO : Other operating costs by cost item, by province, 2001 92
17a MANGO : Other operating costs incurred by marketing participants, by cost item, Metro Manila, 2001 93
17b MANGO : Other operating costs incurred by
marketing participants, by cost item, Pangasinan, 2001 93
17c MANGO : Other operating costs incurred by marketing participants, by cost item,
Iloilo, 2001 94
17d MANGO : Other operating costs incurred by marketing participants, by cost item, Guimaras, 2001 94
17e MANGO : Other operating costs incurred by marketing participants, by cost item, Cebu, 2001 95
viii Marketing Cost Structure for Mango
17f MANGO : Other operating costs incurred by marketing participants, by cost item,
Davao City, 2001 96
17g MANGO : Other operating costs incurred by marketing participants, by cost item, Davao del Sur, 2001 97
17h MANGO : Other operating costs incurred by marketing participants, by cost item, General Santos City, 2001 97
18 MANGO : Imputed cost of depreciation by material/facilities/equipment used, by province, 2001 98
18a MANGO : Imputed costs of depreciation incurred
by marketing participants, by
material/facilities/equipment used, Metro Manila, 2001 99
18b MANGO : Imputed costs of depreciation incurred
by marketing participants, by
material/facilities/equipment used, Pangasinan, 2001 99
18c MANGO : Imputed costs of depreciation incurred
by marketing participants, by
material/facilities/equipment used, Iloilo, 2001 100
18d MANGO : Imputed costs of depreciation incurred by marketing participants, by
material/facilities/equipment used, Guimaras, 2001 100
18e MANGO : Imputed costs of depreciation incurred by marketing participants, by
material/facilities/equipment used, Cebu, 2001 101
ix Marketing Cost Structure for Mango
18f MANGO : Imputed costs of depreciation incurred
by marketing participants, by material/facilities/equipment used, Davao City, 2001 101
18g MANGO : Imputed costs of depreciation incurred
by marketing participants, by material/facilities/equipment used, Davao del Sur, 2001 102
18h MANGO : Imputed costs of depreciation incurred
by marketing participants, by material/facilities/equipment used, General Santos City, 2001 102
19 MANGO : Total marketing costs, by cost item, by
province, 2001 103
20 MANGO : Total marketing costs, (cash and non- cash), by major item, by province, 2001 106
21 MANGO : Total marketing costs (cash and non- cash) by province, 2001 107
22 MANGO : Marketing costs incurred by mango processors, selected provinces, 2001 108
23 MANGO : Distribution of respondents, by problems encountered, by province, 110
x Marketing Cost Structure for Mango
LIST OF FIGURES
1 MANGO: Trading Pattern, by province, 2001……………………………………………… 5
2 Geographic Flow of Mango in Pangasinan, 2001………………………………………… 10
3 Geographic Flow of Mango in Guimaras, 2001…………………………………………… 11
4 Geographic Flow of Mango in Iloilo, 2001………………………………………………… 12
5 Geographic Flow of Mango in Davao City, 2001…………………………………………… 13
6 Geographic Flow of Mango in Davao del Sur, 2001……………………………………… 14
7 Marketing Channels for Mango in Pangasinan, 2001……………………………………… 16
8 Marketing Channels for Mango in Guimaras, 2001………………………………………… 17
9 Marketing Channels for Mango in Iloilo, 2001……………………………………………… 18
10 Marketing Channels for Mango in Davao City, 2001……………………………………… 19
11 Marketing Channels for Mango in Davao del Sur, 2001…………………………………… 20
12 Total Marketing Costs for Mango, by Point of Destination, Pangasinan, 2001………… 26
13 Total Marketing Costs for Mango, by Point of Destination, Iloilo, 2001………………… 27
14 Total Marketing Costs for Mango, by Point of Destination, Guimaras, 2001………….. 28
15 Total Marketing Costs for Mango, by Point of Destination, Davao City, 2001………… 29
16 Total Marketing Costs for Mango, by Point of Destination, Davao del Sur, 2001……. 30
17 Marketing Costs for Mango, by level of Marketing Participants, Pangasinan, 2001… 35
18 Marketing Costs for Mango, by level of Marketing Participants, Guimaras, 2001…… 36
19 Marketing Costs for Mango, by level of Marketing Participants, Iloilo, 2001…………. 37
20 Marketing Costs for Mango, by level of Marketing Participants, Davao City, 2001…. 38
21 Marketing Costs for Mango, by level of Marketing Participants, Davao del Sur, 2001 39
xi Marketing Cost Structure for Mango
MARKETING COSTS STRUCTURE FOR MANGO
I. STUDY PROCEDURES
Mango (Mangifera indica L.) is one of the country’s superior agricultural products. This fruit thrives best in areas with five months continuous dry period. After harvest, its movement from the supply to the demand areas involves long distances. The study team determined the flow and the corresponding costs incurred by marketing participants in the process of distributing the commodity from the farmers to consumers. The study was conducted jointly with the study on the utilization of the commodity.
Team Composition
The staff of the Agricultural Marketing Statistics Analysis Division (AMSAD), Crops Statistics Division (CSD), Agricultural Accounts and Statistical Indicators Division (AASID) and the Statistical Operations Coordination Division (SOCD), all of the BAS, conducted the study from the 4th week of September to the 1st week of December, 2001. At least two (2) staff from the BAS’ central office and one from the provincial operations center (POC) in each supply province participated in field operations. The team hired emergency data collectors (EDCs) to facilitate the conduct of interview. The training of the EDCs was undertaken at the POC.
The team interviewed sample respondents and key informants using the structured questionnaires prepared by staff. Only farmers and traders who actually engaged in producing/trading mango from July 2000 to June 2001 were selected and interviewed.
Research Sites
The study covered key supply and demand areas in Luzon, Visayas and Mindanao. The tracing approach was used in the identified supply areas, namely, Pangasinan, Iloilo, Guimaras, Davao City and Davao del Sur.
For each province, the fieldwork started at the farm level. Top five (5) producing barangays in the province were chosen based on BAS production data.
From the farm level, the research team traced the traders identified by the farmer-respondents as buyers of their produce. Most of them were located in the trading centers. The study then moved to the next point of sale consisting of the
1 Marketing Cost Structure for Mango
retail markets within the province and/or trading centers in the partner provinces. The demand areas in Pangasinan include several municipalities within the province. Mangoes from Guimaras went to Iloilo and Cebu; Iloilo mangoes were consumed mostly within Region 6 provinces. Mango produced in Davao provinces were traded in Davao, General Santos and Cebu Cities. Metro Manila was covered primarily as a major demand area for these provinces.
Selection of Sample Respondents
At each level of the marketing system, key informants, traders and farmers were interviewed.
At the farm level, the chairman/other officers of the barangays, members of farmer associations and cooperatives served as key informants in locating farmer respondents and other information on mango marketing practices. The results of the listing made under “Ginintuang Masaganang Ani High Value Commercial Crops Project” served as reference in identifying the barangays and the names of the farmer-respondents.
The total number of respondents in the supply province were 40 farmers and three (3) traders per type/classification.
Data Processing
The research team performed on-field validation of the data gathered at the farm level against the information given by respondents at the trading center level to 1) integrate the findings, 2) ensure the accuracy of primary data on costs; and 3) facilitate the compilation of survey returns.
At the central office, the survey returns were compiled manually. The summary tables were generated out of the compiled returns.
Report Preparation
The research team prepared the technical report that described the components of the marketing costs structure of mango produced in Pangasinan, Guimaras, Iloilo, Davao City and Davao del Sur. The report also contained the marketing costs borne by traders in the demand provinces consisting of Cebu, General Santos City and Metro Manila.
2 Marketing Cost Structure for Mango
II. STUDY LIMITATIONS
The study traced the flow and the marketing costs of mango from the production areas to the demand areas. At the demand province/site, the study concentrated only on the costs incurred in marketing mango coming from a supply province, and not for the mangoes produced in the demand province itself. For instance, in Cebu City, the costs borne by traders of mango from Guimaras were covered but not the costs of moving mango produced in the producing municipalities within Cebu province.
III. DISCUSSION OF RESULTS
The study focused primarily on the costs borne by marketing participants in moving the commodity from the supply level to the consumption level. The results will be discussed according to the major costs components.
Geographic Coverage
The study covered five (5) supply provinces that included Pangasinan, Guimaras, Iloilo, Davao City and Davao del Sur. The demand provinces/areas consisted of the cities of Cebu, General Santos and Metro Manila.
Distribution of Respondents
There were two groups of respondents for the study: farmers and traders. Of the total of 313 respondents, 200 were farmers and 113 were traders. The details on the distribution of respondents by study areas are presented in Table 1.
The team also interviewed nine processors for the purpose of determining the utilization of mango (there is a separate report on this). However, those processors were asked also on their marketing costs, results of which can be found on the last part of this report.
Types of Marketing Participants. Farmers and traders were the major type of marketing participants. The trader-respondents were further classified based on their sphere of influence in performing their procurement and distribution activities. Those who devoted resources to both functions are referred to as assembler-distributors (A-Ds). Table 2 shows the type of marketing participants encountered in the study.
3 Marketing Cost Structure for Mango