Cardava Value Chain Analysis

PHILIPPINE RURAL
DEVELOPMENT
PROJECT (PRDP)
I-PLAN Component
Mindanao Cluster
VALUE CHAIN ANALYSIS AND

COMPETITIVENESS
STRATEGY:
CARDAVA BANANA
Mindanao
DEPARTMENT OF
AGRICULTURE
Mindanao Regions
MB/II.- CARDAVA VCA STUDY, DA-PRDP- MINDANAO
CLUSTER
October
2014Pgina 0
CONTENTS
CONTENTS
EXECUTIVE SUMMARY
Page
6
Section 1: INTRODUCTION
10
A.
Background Information and Objectives
10
B.
VCA Objectives
11
C.
Methodology and Approach
12
Section 2: OVERVIEW OF THE INDUSTRY
13
A.
Production Description
13
B.
Production Trends
15
Section 3: NATURE AND STRUCTURE OF INDUSTRY
28
A.
Value Chain Mapping
28
Key Players and Function
34
C.
Nature of Interfirm Relationship
42
D.
Price and Cost Structure
44
Section 4: MARKETS AND MARKET OPPORTUNITIES
49
A.
Markets and Market Trends
49
B.
Price Trends
54
Section 5: SUPPORT SERVICES
56
A.
Financial Services
56
B.
Non-Financial Services
56
Section 6: ENABLING ENVIRONMENT
58
A.
Formal Rules, Regulations, and Policies
58
B.
Informal Rules and Socio-Cultural Norms
58
Section 7: CONSTRAINTS AND OPPORTUNITIES
60
Section 8: COMPETITIVENESS DIRECTIONS
66
A.
Competitiveness Vision
66
B.
Priority Constraints/Opportunities and Interventions
67
Section 9: CONCLUSIONS AND RECOMMENDATIONS
81
Annex 1, 2, 3, 4, 5, AND 6: PRIORITIZATION OF

INTERVENTION STRATEGY PER REGION
82
MB/II.- CARDAVA VCA STUDY, DA-PRDP- MINDANAO CLUSTER
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LIST OF TABLES
N
o.
Title
Page
Key Cardava Products Traded in Mindanao
15
World production of Banana, 2009 and 2013
15
Breakdown of Banana Production (In MT) by Genotypes: 2010
16
Cardava Production in the Philippines by Region ranked

according to Volume, 2013
18
Top Ten Cardava Producing Provinces in the Philippines, 2013
19
Cardava Production Trends in Zamboanga Peninsula, 2009 to

2013
21
Cardava Production Trends in Northern Mindanao, 2009 to 2013
22
Cardava Production Trends in Davao Region, 2009 to 2013
23
Cardava Production Trends in SOCCSKSARGEN, 2009 to 2013
25
10
Cardava Production Trends in CARAGA, 2009 to 2013
26
11
Cardava Production Trends in ARMM, 2009 to 2013
27
12
Banana Chips Exporters in Mindanao
38
13
First Fry Facilities and Subcontractors in Mindanao
40
14
Indicative Costs and Return for 1 hectare of Cardava Banana
44
15
Relative Financial Position of VC Players: 1 kilo of fresh banana
47
16
Relative Financial Position of VC Players: 1 kilo of banana chips
47
17
Volume and Value of Banana Chips Exports, 2007 to 2011
50
18
Size Classification of Cardava Banana
51
19
Banana Shipments from Mindanao, 2009
53
20
Farm Gate Price of Cardava in Mindanao Regions, 2009 to 2013
55
21
Constraints and Opportunities
60
22
Summary of Constraints/Opportunities and Interventions
79
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LIST OF FIGURES
N
o.
Title
Page
USES AND BY-PRODUCTS OF CARDAVA BANANA
13
BANANA GENOTYPES AND CONSUMPTION GROUPS
17
PERCENTAGE BREAKDOWN OF BANANA PRODUCTION IN THE

PHILIPPINES BY GENOTYPE, 2013
18
BREAKDOWN OF BANANA PRODUCTION IN THE PHILIPPINES

BY ISLAND GROUP, 2013
20
PERCENTAGE BREAKDOWN OF BANANA PRODUCTION IN

MINDANAO REGIONS BY GENOTYPE, 2013
20
VALUE CHAIN MAP FOR FRESH CARDAVA FOR RETAIL

MARKETS
28
FLOW OF CARDAVA FROM MINDANAO TO KEY URBAN

CENTERS
29
TYPICAL MODE OF DELIVERY TO BUYING STATIONS IN

MINDANAO
29
VALUE CHAIN MAP FOR PROCESSED BANANA
30
COLLECTION OF CARDAVA FROM BUYING STATION IN

MAGUINDANAO FOR DELIVERY TO DAVAO BANANA CHIPS
EXPORTER
31
11
FLOW OF CARDAVA TO PROCESSOR-EXPORTERS
31
12
VALUE CHAIN MAP FOR CARDAVA SNACK FOOD
32
13
BANANA CUE VENDOR BUYING CARDAVA FROM A

PROCESSING PLANT
33
14
GEOGRAPHIC FLOW OF CARDAVA
33
15
PHILGAP CERTIFIED CARDAVA FARM IN DAVAO DEL SUR
35
16
EXAMPLE OF A WELL-MAINTAINED CARDAVA FARM IN DAVAO

DEL SUR
36
17
TYPICAL BUYING STATIONS IN MINDANAO
37
18
CARDAVA REJECTS AT BUYING STATION
37
19
KEY PROCESSES IN BANANA CHIPS PRODUCTION
39
20
CARDAVA SNACK FOOD INDUSTRY
41
21
RELATIVE FINANCIAL POSITION OF VC PLAYERS: FRESH

CARDAVA TO MANILA MARKET
46
22
RELATIVE FINANCIAL POSITION OF VC PLAYERS: BANANA

CHIPS FOR EXPORT MARKET
48
23
AVERAGE PERCENTAGE SHARE TO EXPORT SALES BY KEY

DESTINATION COUNTRIES, 2007 TO 2011
49
10
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24
COMMON QUALITY PROBLEMS ENCOUNTERED BY

PROCESSORS/CONSOLIDATORS
52
25
AVERAGE FARM GATE PRICE OF CARDAVA IN MINDANAO

REGIONS, 2009 TO 2013
54
26
SYNTHESIS OF COMPETITIVENESS VISION 2014-2020
66
ACRONYMS
ACEF
ACPC
ACCESS
AFMP
AMCFP
ASEAN
ARC
ARMM
BAFPS
BACs
BAS
BAPC
BFAD
BSWM
BPI
DA
DA-BAR
DENR
DOH
DOST
DTI
FAO
FEP
FGD
GAP
GBEs
GATT
GMP
ha
IQF
KII
LBP
LGU
MFIs
MFI
Agricultural Competitiveness Enhancement Fund

Agricultural Credit Policy Council
Accelerating Change in the Countryside thru Equity
Sharing Strategy
Agri-Fishery Microfinance Program
Agro-Industry Modernization Credit Finance Program
Association of Southeast Asian Nations
Agrarian Reform Communities
Autonomous Region in Muslim Mindanao
Bureau of Agricultural and Fisheries Product Standards
Bank-Accredited Cooperatives
Bureau of Agricultural Statistics
Bukidnon Agricultural Productivity Center
Bureau of Food and Drugs
Bureau of Soils and Water Management
Bureau of Plant and Industry
Department of Agriculture
Department of Agriculture Bureau of Agriculture
Research
Department of Environment and Natural Resources
Department of Health
Department of Science and Technology
Department of Trade and Industry
Food and Agriculture Organization
Farmer Entrepreneurship Program
Focus Group Discussion
Good Agricultural Practices (Global GAP)
Grading and Bailing Establishments
General Agreement on Tariffs and Trade
Good Manufacturing Practices
Hectare(s)
Individually Quick Frozen
Key Informant Interview
Land Bank of the Philippines
Local Government Unit
Micro Financing Institutions
Most Favoured Nation
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MLGU
MRDP
MT
NCCAP
PCIP
PDP
PLGUs
PRDP
PSA
RCEP
SAS
SOCCSKSAR
GEN
SUCs
VCA
WII
Municipal Local Government Units

Mindanao Rural Development Program
Metric Tons
National Climate Change Action Plan
Provincial Commodity Investment Plan
Philippine Development Plan
Provincial Local Government Units
Philippine Rural Development Project
Philippine Statistics Authority
Regional Comprehensive Economic Partnership
Sustainable Agriculture Standard
South Cotabato, Cotabato, Sultan Kudarat, Sarangani
and General Santos City
State Universities and Colleges
Value Chain Analysis
Weather-based index
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EXECUTIVE SUMMARY
This report provides an overview and analysis of the Cardava industry in
Mindanao with the aim of identifying main leverage points and key strategies to
improve competitiveness and promote development in a pro-poor and
sustainable manner. It will provide the basis for the formulation of the Provincial
Commodity Investment Plan and will lay the foundation for PRDPs cooperation
with the private sector and other government agencies active in the Cardava
industry.
Bananas are generally classified into two main categories: cooking bananas and
dessert bananas.
Cooking bananas are categorically known as balbisiana
cultivars. There are numerous cooking banana cultivars such as the Cardava,
Abutan, Inabaniko, Turangkog, Sabang puti, Mundo, Gubao, Saba sa Hapon and
Bigihan. However, the most common cultivar in the Philippines with both social
and economic importance is the Cardava or Saba.
Same as with the dessert banana, Cardava is rich in carbohydrates. It is,
however, less valued as a fresh product even when mature, as it still contains
starch at this stage. The Cardava is consumed necessarily cooked, whether
green or ripe. In some cases, Cardava is consumed as an alternative staple food
in lieu of rice.
The Cardava can be processed into various product forms such as chips, sauce,
flour, and made into snacks. To date, the most dominant users of Cardava are
the banana chips industry, snack food subsector, and home consumption for the
preparation of various traditional Filipino desserts and dishes such as the
pochero.
The banana chips industry requires the processed grade Cardava while those
intended for home consumption would generally be medium to jumbo sizes.
Small ripe bananas go to the snack food market. In a way, the varying
requirements of these three dominant users provide markets for different
qualities and sizes of banana.
The Philippines is the only producer of Cardava banana. Other countries such as
Thailand, Indonesia, Ecuador, and African nations have their own local cooking
banana varieties. There are ambiguities with regards to production statistics on
the cooking bananas. The FAO statistics distinguish between banana and
plantain but it is not clear what these two terms cover. The most indicative
statistics on cooking bananas is from Lescot (2010) of Fruitrop/CIRAD Market
News Service. Based on the 2010 statistics, cooking bananas which included
plantains (under CIRAD categorization) comprised 41% of total world banana
production. The Philippine Cardava or Saba variety accounted for about 6% of
the estimated 47,208,190 MT cooking banana world production in 2010.
In the Philippines, Cardava is grown nationwide. According to the Bureau of
Agricultural Statistics (BAS)/Philippine Statistics Authority (PSA), the country
produced 2,556,986.07 MT of Cardava, cultivated in 183,479.01 hectares. The
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top three Cardava producing regions in the Philippines in 2013 were Davao
Region, SOCCSKSARGEN, and Northern Mindanao.
National average yield in 2013 was 13.94 MT per hectare. The top 3 high
yielding regions in Philippines are SOCCSKSARGEN (36.77 MT/ha), Davao Region
(24.21 MT/ha), and Northern Mindanao (22.61 MT/ha). Except for Caraga and
ARMM, regions in Mindanao had higher productivity than the rest of the
Philippines. It is possible for farm yields to be from 50 to 80 kilos/bunch with the
combination of improved pest control management, use of clean planting
materials (tissue, cultured) and appropriate fertilizer application.
Mindanao regions accounted for 60% of the national Cardava production. The
top 2 cardava producing provinces in Mindanao and in the Philippines in 2013
were North Cotabato with 272,733.03 MT and Davao del Sur 271,165.41 MT.
Cardava comprised about 21.7% of Mindanaos overall banana production. Total
production in Mindanao in 2013 decreased by 7% over 2012 performance.
Among Mindanao regions, Davao had the highest percentage of decrease in
production with an average of 3.09% per year, mainly due to typhoon Pablo
devastation and Panama buntok disease, with Compostela Valley as the most
affected area with a dramatic decrease of 52% in its production volume from
152,903.96Mt in 2012 to 74,201.17MT in 2013.
On the other hand,
SOCCSKSARGEN registered a steady average growth of 2.28% annually.
In Zamboanga Peninsula and Caraga, Cardava comprised a higher percentage of
the banana production while in ARMM, quantity of Cavendish and Cardava
production in 2013 was almost of the same level.
Davao Region, Northern
Mindanao, and SOCCSKSARGEN produced more Cavendish than Cardava in 2013.
It would seem that areas with significant number of Cavendish banana
plantations had higher yields than areas that were predominantly producing
Cardava.
There are basically two types of Cardava production system in Mindanao. The
first one is the backyard production, which is the more prevalent system in
Mindanao. Under this system, Cardava banana is grown in backyards of rural
households and in small farms. Size of farms under this system ranges from 0.25
to 1 hectare. The second system employed by farmers is the intercropping or
mix crop production. In this system, Cardava banana can be a primary or
secondary crop or planted together with dessert bananas. Farms classified under
this system range from 1 to 3 hectares.
Traders perform the important tasks of negotiating, collecting, sorting, and
transporting. Traders also act as financiers in the chain. There are the different
types of traders depending on their scope of operations: Agents/Local
Traders/Buying
Stations;
Assemblers/Consolidators;
Consignee;
Jobbers/Wholesalers:
Although there is an increasing number of medium and high end restaurants
serving Cardava based snacks by giving it a twist (e.g., serving with ice cream,
mixing relatively expensive ingredients), the biggest segment engaged in the
preparation and retail sales of maruya,
turon, and banana cue are the
microprocessors and the street food vendors. The street food vendors are
important market channels particularly for matured bananas (undersize/over
size). A vendor purchases from 300 to 1,000 kilos per month depending on
location. Vendors source their bananas from farmers, traders, and the wet
markets.
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Nationwide, there are about thirty-five banana chips exporters. Twenty-five

companies are located in Mindanao and, of which, twenty-one (21) have their
factories in Davao Region (DTI RODG Study). About 60% of the 25 exporters have
production capacity of more than 50 tons per day. Processors, especially the big
companies, indicated that they are only able to utilize 60% to 80% of their
capacity due to difficulties in sourcing Cardava. Some exporters also tried
supporting first fry facilities but only a few have been successful. For a first
frying facility to be viable, it should have a wide base of suppliers of Cardava and
a production capacity of at least 4 tons daily. Exporters are generally willing to
provide some assistance (e.g., supply of coco oil, technical assistance), but only
after the facility has proven its reliability and trustworthiness.
More farmers especially in Davao Region and SOCCSKSARGEN are taking on
more functions in the chain such as collective marketing and training services.
The more established cooperatives have ventured into first frying operations.
Agrarian reform communities are generally into the production of banana chips
for the local market. Cooperatives linked to lead firms (e.g., processors,
assemblers) appear to be more successful in scaling up their operations than
those who are trying to penetrate on their own the banana chips retail market
Marketing relationships between traders and farmers are informal and
characterized by the concept of the suki system or personalized economic
relations. The suki system, which is similar to the preferred supplier-buyer
relations, proliferated in efforts to find ways to minimize risks and vulnerabilities
to opportunistic behaviour and cheating (both trader and farmer). Players see
the market as homogenous and in terms of the next actor in the chainthe
person who bought their produce. Traders, on the other hand, are often reluctant
to share information on where products are sold. Compliance with product and
process standards is weak. To date, there is now openness among processors to
develop longer-term and more collaborative relationships with farmers. The big
processors are incrementally integrating backwards into farming communities
especially those who can offer them specific advantages such as big volume,
organic/natural farming, and consistent quality.
Main Cardava-based product that is currently exported is the banana chips.
There are three main market segments for banana chips, namely: a) the food
processing market; b) the retail market; and c) the catering market. The food
processing market is by far the largest segment for the banana chips, thus
putting pressure on prices. During the recent years, Vietnam has become a
transshipment point for banana-chip exports to China. Vietnam benefits from the
trade as it enjoys advantageous tariff rates due to bilateral pacts with China.
Some Chinese buyers prefer to buy first fry chips and have these processed
further in Vietnam. The big European import companies order an average of 25
40 footer containers of banana chips per year per company while medium and
small importers order in average 10 40 footer containers per year per company.
They shift between Thailand and Philippine suppliers.
Although the Philippines has remained the leading exporter of banana chips,
competition is also intensifying from countries like Vietnam, Thailand, and
Malaysia in key export markets. Markets are increasingly concerned with the
specifications of both products and processes further back along the value chain
in a number of different ways: a) quality and safety - based upon product and
process controls: b) conformance with social and environmental standards; c)
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traceability and authenticity; d) reliability and guaranteed supply in order to

avoid stock outs; e) just-in-time delivery; and f) product differentiation and
innovation as a means of adding value and margins.
About 62% of total available supply or an average of 600,000 to 800,000 MT are
sold in the domestic market. Mindanao banana (all types) production for the
domestic market goes to Cebu and Metro-Manila largely through ports in
Cagayan de Oro, Agusan, Ozamis, Iligan, and Surigao. Based on 2009 data, about
73% of the banana shipped out of Mindanao seaports originated from the port in
Cagayan de Oro.
To sustain and grow the world market for Cardava, the industrys vision of
creating long-term competitiveness and sustainability centers on the
establishment of an efficient and integrated supply chain management geared
towards the achievement of the following:
a) Adequate supply and widespread use of tissue cultured planting materials
to minimize risks of pest and disease infestation and, consequently,
ensure stable supply of Cardava
b)
Improved access to, availability, use, and utilization of organic fertilizer

and other inputs appropriate for Cardava banana farming while reducing
environmental costs
c) Enhanced flow and quality of extension services for Cardava farming to

facilitate adoption of GAP for improved productivity and product quality
d) Improved access to GMP compliant postharvest and distribution
technologies and facilities to reduce postharvest losses and maintain
product quality
e) Availability and access to improved processing technologies, product
development services, and GMP and Halal compliant common service
facilities to facilitate the production of commercially viable Cardava-based
products
f) Improved physical/infrastructure linkages to input, support, and product
markets
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Section 1:
INTRODUCTION
A.
BACKGROUND INFORMATION AND OBJECTIVES1
The agricultural sector strategy (Agri-Pinoy) embodied in the Philippine

Development Plan (PDP) for 2011-2016 advances the principles of inclusive
growth, food staple sufficiency, natural resource management and area-based
development. Agri-Pinoy also includes the following new strategies: (i)
institutionalizing regionally-based, spatial planning (ii) developing a systems
approach for both planning and resource allocation; (iii) providing the critical
infrastructure needed by priority value chains; and (iv) building a more resilient
production base to accommodate fluctuations in global markets and effects of
climate change. Complementing the Agri-Pinoy strategy is the National Climate
Change Action Plan (NCCAP) which highlights the priority to be given to the rural
sector in pursuing climate adaptation measures.
The Philippine Rural Development Program (PRDP), a flagship program of the
Department of Agriculture (DA), is aligned with the Agri-Pinoy strategy. It is a sixyear program (2013-2019) designed to establish the governments platform for a
modern, climate-smart and market-oriented agri-fishery sector. Externally, it will
focus on expanding market access and improving competitiveness. Internally, it
will introduce reforms in operating the DA bureaucracy. Specifically, it aims to
achieve the following development objectives:
Overview of PRDP was taken from the Program Information Document World Bank website
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At least, 5% increase in annual real household incomes of farmer

beneficiaries;
30% increase in income for targeted beneficiaries of
enterprise development
7% increase in value of annual marketed output
20% increase in number of farmers & fishers with improved access to DA
services
To facilitate the achievement of above objectives, the program has four main
components, namely:
I-PLAN: Investment for AFMP Planning at the Local and National levels
I-BUILD:
Intensified Building-Up of Infrastructure and Logistics for
Development
I-REAP: Investments for Rural Enterprises and Agricultural and Fisheries
Productivity
I-SUPPORT: Implementation Support to PRDP
The design of PRDP and its implementation aspects draw heavily on the
experiences of the Mindanao Rural Development Projects (MRDP 1 and 2), a
program that has been successfully implemented over the past decade. The
program adopts a value chain development approach as a platform for
promoting inclusive, climate resilient, and sustainable growth in key agricultural
subsectors and value chains.
The Cardava banana is one of the selected priority products on which the PRDP
will concentrate during Year 1 of PRDP implementation. Cardava accounts for
41% of the land area planted to banana in the Philippines. Export industry is
concentrated in Mindanao with Cardava as one of the most important raw
materials. The Cardava is among the three cultivars included in the Banana
Industry Cluster, which is among the top priority clusters being promoted and
supported by the government under the National Convergence Initiative (NCI).
The Cardava is economically and socially important for many sectors in
Mindanao for the following key reasons:
a) For the thousands of Cardava banana farmers, a Cardava plant is the
equivalent of having money grown on trees. Banana is fast-growing fruit
crop that starts fruiting in 8 to 12 months from field-planting. With minimal
expenditures on inputs or other care, a household can harvest a small
number of bananas on a weekly basis, bring them to a market for sale and
use the proceeds to buy food, i.e. the very definition of food security.
b) Cardava is the main raw material for banana chips which is among the
countrys top exports. To date, demand exceeds supply.
c) Thousands of street food vendors derive a significant portion of their
income from selling Cardava-based snack food.
d) It is one of the important sources of food in the rural areas. Cardava
banana is often used to extend, supplement or substitute staple food such
as rice and corn. Banana may be the new potatoes in the future. A
research carried out by CGIAR agricultural partnership says that bananas
may replace potatoes in some developing nations as a result of climate
Pgina 11
change. An enterprise in Davao has started the promotion of banana fries

both in the local and export market.
e) Almost every part of the Cardava banana can be economically utilized.
The inflorescence is consumed as vegetable. The peels can be made into
patties and can be a good substitute for meat. The leaves are used as
wrapping and decorative materials. The pseudo stem is chopped finely,
cooked and used as feed for livestock. Waste materials can be composted
and processed into organic fertilizer.
f) It can be grown in marginal areas and has low input requirements.
B. OBJECTIVES OF THE VCA

The decision to shift to a Mindanao cluster level value chain analysis was borne
out of the need for the six regions to jointly exploit the trade potentials of
Cardava banana in the domestic and export markets. The cluster approach also
recognizes that the 6 regions in Mindanao are interdependently linked with each
other in various functions in the chains particularly with regards to inputs
markets and distribution or marketing of Cardava. The cluster level approach to
value chain analysis also hopes to bring cohesiveness into the various Cardava
development initiatives that would be undertaken on a provincial basis.
This report provides an overview and analysis of the Cardava banana value chain
with the aim of identifying main leverage points and key strategies to improve
Mindanaos competitiveness and promote development in a pro-poor and
sustainable manner. It will provide the basis for the formulation of the Provincial
Commodity Investment Plan and will lay the foundation for PRDPs cooperation
with the private sector and other government agencies active in the Cardava
industry. Specifically, the value chain analysis aims to:
a) Provide an in-depth understanding of the range of factors and relationships
that affect the performance of the Cardava industry in Mindanao, including
end markets, enabling environment and coordination/cooperation among
firms.
b) Identify in a participatory process the systemic chain level issues that hinder
or promote the gainful participation of rural households, sustainability of the
chain, and its competitiveness in general.
c) Under a participatory process, identify and prioritize interventions needed to
overcome bottlenecks throughout the chain that would foster value chain
competitiveness and climate change resiliency.
d) Identify and explore how to catalyze private and public sector stakeholders in
the Cardava industry to collaborate for improved industry performance
C. METHODOLOGY AND APPROACH

An initial desk study was conducted to collect and summarize information from
currently available reports and studies. It provided guidance to issues that
needed to be the focus of field research. The field work component of the study
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was conducted using qualitative research techniques particularly value chain

analysis workshops, key informant interviews (KII), and focus group discussions
(FGDs). Key informants and participants to the workshops and FGDs consisted of
farmers, traders, processors, exporters, and representatives from relevant
government agencies. Key informant interviews were used for collecting data
on individuals perspectives, experiences, and quantitative data.
FGDs were
effective in generating broad overviews of issues of concerns to the groups or
subgroups represented and in the triangulation/vetting of information obtained
from the KII.
Constraints and interventions were identified and further elaborated based on
iterative and inductive analysis of responses during the KII and FGD/Stakeholders
Workshop primarily from the following perspectives:
Context of key informants and FGD participants
Third party observations (e.g., government agencies,

providers, VC
facilitators with experience in Cardava VC development projects, etc.)
were important for suggesting important issues to explore and for
substantiating the results of the company interviews
Past assessment studies of the Philippine Cardava banana industry
Competitiveness is generally defined as the ability to efficiently produce goods

(and services) for which there is high demand that leads to increased income
generation capacities that are sustainable in the future. Strategy is about choice
--- choosing what to do to build competitiveness from a long list of viable and
promising options. Given the competing and varied incentives and motivations
among and between stakeholders and players, the process required iterative
ranking and prioritization and arriving a consensus on what needs to be done
within the next 5 years. The competitiveness strategies proposed in this report
reflect the choices made as a result of extensive analysis of the industrys key
constraints and a dialogue with stakeholders and players.
Section 2:
OVERVIEW OF THE INDUSTRY
A. PRODUCT DESCRIPTION
Bananas are generally classified into two main categories: cooking bananas and
dessert bananas.
Cooking bananas are categorically known as balbisiana
cultivars. There are numerous cooking banana cultivars such as the Cardava,
Abutan, Inabaniko, Turangkog, Sabang puti, Mundo, Gubao, Saba sa Hapon and
Bigihan. However, the most common cultivar in the Philippines with both social
and economic importance is the Cardava or Saba.
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Unlike the Cavendish which is cultivated primarily by large plantations, Cardava

is grown in backyards of rural households and in small farms. It can be cultivated
in nearly all kinds of soil but deep and friable loam soil with good drainage and
aeration offers higher production and better fruit quality. Areas with uniform
warm and humid conditions with a minimum rainfall of 60 inches annually,
whether through heavy and evenly spaced rainfall and a temperature between
27 and 30 degrees centigrade offers the most favorable condition for growing
Cardavabanana.
Cardava bunches are big with 8 to 16 hands having 12 to 20 fingers per hand.
The fruits are short and stubby and highly angular. The skin is thick and yellow
when ripe. The flesh is white, starchy, and fine textured, making it ideal for
cooking and processing.
Same as with the dessert banana, Cardava is rich in carbohydrates. It is,

however, less valued as a fresh product even when mature, as it still contains
starch at this stage. The Cardava is consumed necessarily cooked, whether
green or ripe. In some cases, Cardava is consumed as an alternative staple food
in lieu of rice.
The Cardava can be processed into various product forms such as chips, sauce,
flour, and made into snacks. To date, the most dominant users of Cardava are
the banana chips industry, snack food subsector, and home consumption for the
preparation of various traditional Filipino desserts and dishes such as the
pochero.
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Banana chips are thin slices of banana which are deep-fried to become crispy.
Chip products may be sweetened, honey-dipped, unsweetened, cinnamon- or
chocolate-flavored and salted. Chips are available in various cuts such as whole,
halves, quarters, diagonals, diced and broken cuts. These are consumed as a
snack or used as ingredient for breakfast cereals, muesli, mixed fruits, and
chocolates. Products are mainly geared for the export market.
The most popular snacks made of Cardava are the banana cue (whole fried
bananas dipped in brown sugar and sold in bamboo skewers) and turon (fried
banana spring rolls). Another popular Cardava-based snack is the maruya or
banana fritters. These are usually consumed as mid-afternoon snacks. The snack
foods are sold via street vendors, school canteens, and restaurants. During the
recent years, a Davao-based manufacturer has started exporting frozen turon
and boiled banana to countries with significant Filipino and Asian population. A
banana chips company in Davao has also expanded into individually quick frozen
(IQF) snack products.
The banana chips industry requires the processed grade Cardava while those
intended for home consumption would generally be medium to jumbo sizes.
Small ripe bananas go to the snack food market. In a way, the varying
requirements of these three dominant users provide markets for different
qualities and sizes of banana.
Other by-products of the Cardava banana are the catsup, vinegar, and flour. In
Lanao del Norte, one agrarian reform cooperative is engaged in the manufacture
of catsup. Production though is still low and market is currently limited within
the locality and neighboring provinces (via trade fairs).
The puso or the dark red inflorescence of the banana is also edible. Aside from
cooking the puso into the traditional ginataan or kilawin, it can also be
made into vegetarian patties.
Banana peels are traditionally used as feeds or converted into organic fertilizer.
Another alternative use of banana peels is as meat substitute and extenders. It
can also be utilized as a material for making paper and paper boards. The leaves
are used as packing materials in markets and traditional wrappings of native
dishes.
While Davao Region is the main producer of banana chips, Northern Mindanao is
the largest supplier of fresh Cardava for the retail markets and local Cardava
based snack food in key urban areas in the Philippines.
Although
SOCCSKSARGEN has companies engaged in banana chips, a greater percentage
of its production is sold fresh either to banana chips exporters or to traders
dealing with the fresh retail market. Caraga also produces banana chips with a
significant percentage geared for the export market. Maguindanao in ARMM is a
key supplier of fresh banana for banana chips companies in Davao. Production in
other provinces of ARMM is sold fresh in the local market. All of the regions in
Mindanao have thriving Cardava-based snack food businesses consisting mainly
of street vendors --- from ambulant vendors selling boiled bananas in bus
stations to turon and maruya stalls near schools, parks, and malls.
Table 1. Key Cardava Products Traded in Mindanao

Region
Fresh
Banana for
Banana
Chips
Snack
Food
IQF
Cardava
Pgina 15
Retail
Market
(Local
Market)
Snacks
(for Export)
Zamboanga
Peninsula
Northern Mindanao
subcontract
or
Davao Region
SOCCSKSARGEN
Caraga
ARMM
Legend
Dominant
Secondary
Source: KII/FGD
Other by-products of the Cardava banana are the catsup, vinegar, and flour. In
Lanao del Norte, one agrarian reform cooperative is engaged in the manufacture
of catsup. Production though is still low and market is currently limited within
the locality and neighboring provinces (via trade fairs).
The puso or the dark red inflorescence of the banana is also edible. Aside from
cooking the puso into the traditional ginataan or kilawin, it can also be
made into vegetarian patties.
Banana peels are traditionally used as feeds or converted into organic fertilizer.
Another alternative use of banana peels is as meat substitute and extenders. It
can also be utilized as a material for making paper and paper boards. The leaves
are used as packing materials in markets and traditional wrappings of native
dishes.
B. PRODUCTION TRENDS
1. Global Production
Bananas (Musa spp.), including dessert banana, plantain, and cooking banana,
are the eighth most important food crop in the world, and the fourth most
important in the least developed countries (FAOSTAT, 2013). Bananas are
produced in 135 countries and territories across the tropics and subtropics. The
vast majority of producers are smallholder farmers who grow the crop for either
home consumption or for local markets (less than 15% of the global production
of more than 100 million MT is exported). The international banana export trade
(17 million MT approximately) is worth some US$ 7 billion per year.
Pgina 16
Table 2. World production of Banana, 2009 and 2012

Country
Volume
(MT) 2009
%
Share
Volume
(MT) 2012
%
Share
100,223,70
2
100%
World
101,992,7
43
100%
26,469,500
26.4%
India
24,869,490
24.4%
Philippines
9,013,186
9.0%
China,
mainland
10,550,000
10.3%
China, mainland
8,833,904
8.8%
Philippines
9,225,998
9.0%
Ecuador
7,637,324
7.6%
Ecuador
7,012,244
6.9%
Brazil
6,783,482
6.8%
Brazil
6,902,184
6.8%
Indonesia
6,373,533
6.4%
Indonesia
6,189,052
6.1%
Tanzania
3,006,400
3.0%
Angola
2,991,454
2.9%
Guatemala
2,544,240
2.5%
Guatemala
2,700,000
2.6%
Mexico
2,232,361
2.2%
Tanzania
2,524,740
2.5%
Colombia
1,993,759
2.0%
Mexico
2,203,861
2.2%
25,336,013
25.3%
Others
World
India
Others
Country
26.3%
26,823,720
Source: FAOSTAT (updated)
World banana productionincreased from 100,223,702 MT in 2009 to 101,992,743

MT in 2012.With the significant increase in Chinas production, Philippines
dropped from being the 2nd largest producer in 2009 to 3rd place in 2012. India
remains the top producer of banana in the world. The country accounted for
about 9% of the global banana production in 2012. Philippine production
increased from 9,013,186 MT in 2009 to 9,225,998 MT in 2012.
Table 3. Breakdown of Banana Production (In MT) by Genotypes:

2010
Region
(World)
Cooking Banana
Dessert Banana
Total
Plantain
(AAB)
Highland
Bananas +
ABB +
others
Cavendish
Gros
Michel
+others
N. America
4,000
7,890
100
11,990
S. America
5,314,743
513,913
12,235,024
3,710,437
21,774,117
C. America
972,800
106,876
6,523,545
100,000
7,703,221
Caribbean
956,216
508,246
931,491
239,242
2,635,195
W.C. Africa
8,198,008
912,396
2,337,310
491,242
11,938,956
E. Africa
1,137,036
14,670,783
2,467,884
680,703
18,956,406
31
9,667
1,913,543
9,316
1,932,557
1,299,184
12,058,539
29,486,825
7,260,348
50,104,896
1,431
543,210
304,423
69,924
918,988
N.
ME
Africa
Asia
Oceania
Pgina 17
Table 3. Breakdown of Banana Production (In MT) by Genotypes:

2010
Region
(World)
Europe
Total
Percentage
Cooking Banana
Dessert Banana
Total
Plantain
(AAB)
Highland
Bananas +
ABB +
others
Cavendish
Gros
Michel
+others
101
1,010
435,236
1,020
437,367
17,879,550
29,328,640
56,643,171
12,562,332
116,413,69
3
41%
59%
100%
Source: Lescot 2010

The Philippines is the only producer of Cardava banana. Other countries such as
Thailand, Indonesia, Ecuador, and African nations have their own local cooking
banana varieties. There are ambiguities with regards to production statistics on
the cooking bananas. The FAO statistics distinguish between banana and
plantain but it is not clear what these two terms cover. The most indicative
statistics on cooking bananas is from Lescot (2010) of Fruitrop/CIRAD Market
News Service. Based on the 2010 statistics, cooking bananas which included
plantains (under CIRAD categorization) comprised 41% of total world banana
production. The Philippine Cardava or Saba variety accounted for about 6% of
the estimated 47,208,190 MT cooking banana world production in 2010.
Pgina 18
2. Domestic Production
Based on BAS data, the country produced 8,645,748.66MT of cardava in 2013 in
445,934.67 hectares of land, withCardava accounting for about 29% of national
banana production, Cavendish (49%) and Lakatan (11%). Latundan and other
cultivars accounted for about 11%.
Cardava is cultivated in 183,479.01 hectares in 2013. Collectively, Mindanao

accounted for 41% of the area planted to Cardava. Total national production was
reported at 2,556,986.07 MT. The top three Cardava producing regions in the
Philippines in 2013 were Davao Region, SOCCSKSARGEN, and Northern
Mindanao.
Table 4 .Cardava Production in the Philippines by Region ranked

according to Volume, 2013
Region
Volume
(MT)
Area (Ha)
Yield
(MT/ha)
% Share
to RP
Volume
Philippines
2,556,986.0
7
183,479.01
13.94
100%
Davao Region
487,433.13
20,136.00
24.21
19.1%
SOCCSKSARGEN
356,727.43
9,702.00
36.77
14.0%
Northern Mindanao
295,655.65
13,076.00
22.61
11.6%
Cagayan Valley
255,377.19
15,792.00
16.17
10.0%
Western Visayas
203,869.72
18,929.00
10.77
8.0%
Eastern Visayas
169,426.82
14,646.80
11.57
6.6%
ARMM
145,612.72
15,173.50
9.60
5.7%
Zamboanga
Peninsula
138,878.30
8,540.00
16.26
5.4%
123,176.13
12,941.00
9.52
4.8%
Central Visayas
Pgina 19
Caraga
101,025.42
8,671.43
11.65
4.0%
Mimaropa
98,915.44
11,848.71
8.35
3.9%
Calabarzon
77,558.71
17,582.33
4.41
3.0%
Bicol Region
43,196.36
9,514.00
4.54
1.7%
Central Luzon
29,128.29
2,429.00
11.99
1.1%
Ilocos Region
21,451.93
3,144.23
6.82
0.8%
9,552.81
1,353.00
7.06
0.4%
CAR
Source: BAS/PSA
National average yield in 2013 was 13.94 MT per hectare. The top 3 high
yielding regions in Philippines are SOCCSKSARGEN (36.77 MT/ha), Davao Region
(24.21 MT/ha), and Northern Mindanao (22.61 MT/ha). Except for Caraga and
ARMM, regions in Mindanao had higher productivity than the rest of the
Philippines. It is possible for farm yields to be from 50 to 80 kilos/bunch with the
combination of improved pest control management, use of clean planting
materials (tissue-cultured) and appropriate fertilizer application.
Table 5. Top Ten Cardava Producing Provinces in the Philippines,

2013
Province
Volume
(MT)
Area (Ha)
Yield
(MT/ha)
% to RP
Volume
North Cotabato
272,733
6,335
43.05
11%
Davao del Sur
271,165
6,685
40.56
11%
Isabela
160,271
8,620
18.59
6%
Lanao del Norte
153,414
3,860
39.74
6%
Maguindanao
90,879
8,138
11.17
4%
Samar
85,070
3,506
24.26
3%
Iloilo
80,393
7,275
11.05
3%
Compostela Valley
74,201
3,992
18.59
3%
Oriental Mindoro
73,988
6,770
10.93
3%
Davao Oriental
72,826
3,542
20.56
3%
Source: BAS/PSA
The following provinces in Mindanao were among the top producers of Cardava in
the Philippines in 2013: a) North Cotabato - 272,733.03 MT; b) Davao del Sur 271,165.41 MT, and; c) Lanao Del Norte - 153,414.20 MT. Davao del Sur caters
primarily to banana chips exporters while Lanao del Norte sells to fresh retail
markets in key urban areas. North Cotabato, on the other hand, is trying to
penetrate the fresh retail market so as to have a more diversified base of buyers.
Seven of the ten major producers of Cardava are provinces in Mindanao. These
ten provinces accounted for 53% of the Cardava production in 2013.
Mindanao regions accounted for 60% of the national Cardava production.
Cardava comprised about 21.7% of Mindanao overall banana production. In
Zamboanga Peninsula and Caraga, Cardava comprised a higher percentage of
the banana production while in ARMM, quantity of Cavendish and Cardava
production in 2013 was almost of the same level.
Davao Region, Northern
Mindanao, and SOCCSKSARGEN produced more Cavendish than Cardava in 2013.
Pgina 20
It would seem that areas with significant number of Cavendish banana

plantations had higher yields than areas that were predominantly producing
Cardava.
Pgina 21
Zamboanga Peninsula
A
Cardava production in the region slightly decreased from 140,001.57 MT in 2009
to 138,878.30 MT in 2013. The steep decline in 2011 was caused by bugtok
infestation primarily in Zamboanga del Norte. Despite the increase in area
planted in cardava, yield and productivity in Zamboanga del Norte continued to
be in a declining trend. Average yield decreased by an average of 6.29% per
year. Zamboanga del Norte though remains the top cardava producing province
in the region.
Zamboanga City registered positive growth rate during the last five years. It had
the 2nd highest production volume in 2013 and the highest average yield 22.50
MT per hectare. Increase in production volume can be primarily attributed to
increase in productivity. There was no significant increase in area planted
between 2009 to 2013. Production Trends in Zamboanga Peninsula, 2009
to 2013
Table 6.- Cardava Production Trends in Zamboanga Peninsula, 2009 to
2013
Indicators
2009
ZAMBOANGA PENINSULA
Volume
140,001.
Annual %
Growth
Rate
2010
2011
2012
2013
143,631.
131,130.
131,883.
138,878.
-0.16%
Pgina 22
57
Area Planted
8,351.00
Average Yield
16.76
Zamboanga del Norte
68,301.7
Volume
1
Area Planted
3,865.00
Average Yield
17.67
Zamboanga del Sur
22,602.3
Volume
3
Area Planted
2,100.00
Average Yield
10.76
Zamboanga Sibugay
12,545.4
Volume
7
Area Planted
625.00
Average Yield
20.07
Zamboanga City
36,552.0
Volume
6
Area Planted
1,761.00
Average Yield
20.76
06
8,399.00
17.10
80
8,541.00
15.35
57
8,550.00
15.42
30
8,540.00
16.26
0.45%
-0.60%
68,052.4
4
3,891.00
17.49
55,283.7
1
4,017.00
13.76
50,905.7
2
4,020.00
12.66
48,824.7
4
4,030.00
12.12
-5.70%
0.85%
-6.29%
25,877.3
3
2,122.00
12.19
25,613.8
3
2,125.00
12.05
29,699.3
9
2,070.00
14.35
37,164.8
7
2,048.00
18.15
12.89%
-0.50%
13.72%
12,244.1
3
625.00
19.59
12,390.1
5
634.00
19.54
12,708.3
3
685.00
18.55
12,906.7
6
685.00
18.84
0.58%
1.92%
-1.23%
37,457.1
6
1,761.00
21.27
37,843.1
1
1,765.00
21.44
38,570.1
3
1,775.00
21.73
39,981.9
3
1,777.00
22.50
1.88%
0.18%
1.68%
Source: PSA/BAS
Northern Mindanao
Table 7.- Cardava Production Trends in Northern Mindanao, 2009 to 2013
Indicators
2009
NORTHERN MINDANAO
259,750.
Volume
36
12,831.0
Area Planted
0
Average Yield
20.24
Bukidnon
21,000.0
Volume
0
Area Planted
1,630.00
Average Yield
12.88
Annual
%
Growth
Rate
2010
2011
2012
2013
269,395.
26
12,972.0
0
20.77
291,200.
03
13,084.0
0
22.26
294,605.
18
13,080.0
0
22.52
295,655.
65
13,076.0
0
22.61
20,970.0
0
1,630.00
12.87
20,915.0
0
1,630.00
12.83
20,875.0
0
1,629.00
12.81
20,770.0
0
1,630.00
12.74
2.76%
0.38%
2.34%
-0.22%
0.00%
-0.24%
Pgina 23
Camiguin
Volume
Area Planted
Average Yield
Lanao del Norte
4,847.73
960.00
5.05
4,778.98
960.00
4.98
4,850.09
960.00
5.05
4,576.63
957.00
4.78
4,252.54
952.00
4.47
-2.46%
-0.17%
-2.31%
153,251.
00
Area Planted
3,803.00
Average Yield
40.30
Misamis Occidental
30,306.0
Volume
0
Area Planted
2,149.00
Average Yield
14.10
Misamis Oriental
50,345.6
Volume
3
Area Planted
4,289.00
Average Yield
11.74
156,938.
09
3,803.00
41.27
160,903.
34
3,860.00
41.68
154,569.
27
3,860.00
40.04
153,414.
20
3,860.00
39.74
0.02%
0.30%
-0.27%
35,864.7
5
2,190.00
16.38
41,115.8
0
2,245.00
18.31
43,160.2
8
2,245.00
19.23
46,727.9
1
2,245.00
20.81
10.84%
0.89%
9.52%
50,843.4
4
4,389.00
11.58
63,415.8
0
4,389.00
14.45
71,424.0
0
4,389.00
16.27
70,491.0
0
4,389.00
16.06
8.00%
0.00%
9.66%
Volume
Source: PSA/BAS
During the period 2009 to 2013, Cardavaproduction in Northern Mindanao

increased by an average of 2.76% per year. Although still small, Cardava
production consistently increased from 2009 to 2013. Misamis Occidental had
the highest average growth rate at 10.84% followed by Misamis Oriental at 8%.
Production in Lanao del Norte and Bukidnon seemed to have reached a plateau
during the last 5 years. On the other hand, production from Misamis Occidental
increased by an average of 18% per year.
Lanao del Norte wasthe highest producing province at153,414MT accounting for
51% of the total production. Misamis Oriental ranked second with a total
production of 70,491.00 MT or 24% of regions production. Misamis Occiental
accounted for 16% of the regions production. Bukidnon and Camiguin produced
20,770.00 MT and 4,252.54 MT respectively.
In terms of average yield, Northern Mindanao ranked 3rd with 22.61 MT/ha,
which is still quite low compared against the 36.77 MT achieved
SOCCSKSARGEN. Lanao del Norte had the highest average yield at 39MT per
hectare. Misamis Occidental had the highest average annual growth rate in
yield at 10% followed by Misamis Oriental at 7%. This was attributed to
improvements in agronomic practices.
Between the period 2009 and 2013,
yield in Lanao del Norte and Bukidnon slightly decreased by about 1%. Camiguin
had the lowest average yield at less than 5 MT per hectare.
Davao Region
Despite the significant decrease in production from 571,431Mt in 2012 to
487,433Mt in 2013, Davao Region is still the leading producer of cardava in
Mindanao and in the country. Production in the region went down due to the
Pgina 24
devastation of farms caused by Typhoon Pablo and aggravated by infestation of

bugtok and Panama diseases in 2012. During 2013 and 2014, the region focused
on rehabilitation of affected farms. Davao Region is also the leading producer of
banana chips.
Davao del Sur has consistently been the top producer of cardava in the region
and accounted for 57% of the total production in the region in 2013. During the
past years, the average yield has always been above 40 MT per hectare. Yield
slightly declined during the recent years due to disease infestation. The province
was able to minimize the spread of the disease through good agronomic
practices.
Compostela Valley, the second largest producing province in the Region, posted
a huge decline in its production from 152,903 MT in 2012 to 74,201 MT in
2013. The province was among those that was badly damaged by Typhoon Pablo
and the Panama infestation. USAID, in partnership with the Mindanao
development Authority (MinDA), launched in 2013 the USD 5 Million Typhoon
Pablo Disaster Recovery Assistance Plan to support the rehabilitation and
expansion of production areas of cardava and other crops.
Table 8.- Cardava Production Trends in Davao Region, 2009 to 2013
Indicators
2009
2010
2011
2012
Annual %
Growth
Rate
2013
DAVAO REGION
Volume
Area Planted
Average Yield
Davao del Norte
576,522. 579,464. 582,529. 571,431. 487,433.

91
55
14
00
13
21,866.0 21,943.0 22,150.0 22,165.0 20,136.0
0
0
0
0
0
26.37
26.41
26.30
25.78
24.21
-3.09%
-1.58%
-1.64%
44,748.4
1
4,302.00
10.40
45,377.2
6
4,353.00
10.42
47,041.3
7
4,365.00
10.78
47,724.4
7
4,378.00
10.90
47,720.4
6
4,356.00
10.96
1.33%
0.25%
1.06%
274,391.
76
6,680.00
41.08
272,411.
54
6,680.00
40.78
273,087.
60
6,685.00
40.85
270,946.
19
6,685.00
40.53
271,165.
41
6,685.00
40.56
-0.24%
0.01%
-0.25%
69,448.4
0
Area Planted
3,984.00
Average Yield
17.43
Compostela Valley
165,699.
Volume
68
Area Planted
5,330.00
73,182.0
0
4,000.00
18.30
76,104.7
5
4,200.00
18.12
78,162.6
5
4,250.00
18.39
72,826.0
1
3,542.00
20.56
0.97%
-2.22%
3.59%
166,082.
75
5,340.00
164,230.
82
5,340.00
152,903.
96
5,290.00
74,201.1
7
3,992.00
-11.04%
-5.02%
Volume
Area Planted
Average Yield
Davao del Sur
Volume
Area Planted
Average Yield
Davao Oriental
Volume
Pgina 25
Table 8.- Cardava Production Trends in Davao Region, 2009 to 2013

Indicators
DAVAO REGION
Average Yield
Davao City
Volume
Area Planted
Average Yield
2009
2010
2011
2012
Annual %
Growth
Rate
2013
31.09
31.10
30.75
28.90
18.59
-8.04%
22,234.6
6
1,570.00
14.16
22,411.0
0
1,570.00
14.27
22,064.6
0
1,560.00
14.14
21,693.7
3
1562
13.89
21,520.0
8
1,561.00
13.79
-0.64%
-0.11%
-0.53%
Source: PSA/BAS
SOCCSKSARGEN
SOCCSKSARGEN has been the only region that had a steady growth in all
indicators. Production volume increased from 320,277.32 MT in 2009 to
356,727.43 MT in 2013. During the last five years, area planted to Cardava
increased by 0.76% per year. Average yield also grew by 1.46% annually.
SOCCSKSARGEN is the second largest producer of cardava in the country after
Davao Region.
North Cotabato contributed 77% of the regions production, becoming the largest
producing province in the country in 2013, ahead of Davao del Sur. In 2013,
North Cotabato had the largest area planted with 6,335 hetares as well as the
highest yield at 43.05Mt/ha. Among the provinces in the region, Sarangani
posted the highest percentage increase in production in 2013 with an average
increase of 6.24% per year. From 28,794 MT in 2009, Saranganis production
increased to 37,780 MT in 2013. It also had the second highest average yield at
40.62 MT per hectare. Sultan Kudarat, on the other hand, had the highest
percentage decrease in production and the lowest average yield at 11.04 MT per
hectare. South Cotabato had he third highest yield in the Region with 32.03 MT
per hectare.
Table 9.- Cardava Production Trends in SOCCSKSARGEN, 2009 to 2013

Indicators
Annual %
Growth
Rate
2009
2010
2011
2012
2013
320,277.
32
9,346.00
34.27
321,522.
95
9,296.00
34.59
334,400.
71
9,421.00
35.50
348,476.
78
9,333.00
37.34
356,727.
43
9,702.00
36.77
SOCCSKSARGEN
Volume
Area Planted
Average Yield
2.28%
0.76%
1.46%
Pgina 26
Table 9.- Cardava Production Trends in SOCCSKSARGEN, 2009 to 2013

Indicators
2009
2010
2011
2012
2013
Annual %
Growth
Rate
North Cotabato
Volume
Area Planted
Average Yield
Sarangani
Volume
Area Planted
Average Yield
South Cotabato
Volume
Area Planted
Average Yield
Sultan Kudarat
Volume
Area Planted
Average Yield
243,628.
10
5,950.00
40.95
246,169. 255837.9
66
9
5,960.00 5,960.00
41.30
42.93
265,981.
80
5,975.00
44.52
272,733.
03
6,335.00
43.05
2.39%
1.29%
1.03%
28,794.4
4
728.00
39.55
28,524.1
5
730.00
39.07
31,587.0
0
916.00
34.48
35,884.0
0
925.00
38.79
37,780.0
0
930.00
40.62
6.24%
5.55%
0.54%
27,140.5
0
893.00
30.39
27,176.0
1
906.00
30.00
28,149.4
2
910.00
30.93
28,951.1
7
916.00
31.61
29,465.8
8
920.00
32.03
1.71%
0.60%
1.08%
20,714.2
8
1,775.00
11.67
19,653.1
3
1,700.00
11.56
18,826.3
0
1,635.00
11.51
17,659.8
1
1,517.00
11.64
16,748.5
2
1,517.00
11.04
-3.83%
-2.91%
-1.08%
Source: PSA/BAS
CARAGA
Caraga is also in the process of rehabilitating the Cardava damaged by
successive typhoons during the last two years. The region has also been hit by
the Panama disease that affected all types of bananas in Mindanao. Land Bank
of The Philippines has opened a window designed to help farmers fund the
rehabilitation and/or expansion of their production areas.
Agusan del Norte is the top producer of cardava in the region followed by Agusan
del Sur and Surigao del Sur. Surigao had the highest average yield at 20.30 MT
per hectare.
Table 10.- Cardava Production Trends in CARAGA, 2009 to 2013

Indicators
2009
2010
2011
2012
2013
Annual %
Growth
Rate
CARAGA
Pgina 27
Table 10.- Cardava Production Trends in CARAGA, 2009 to 2013

Indicators
Volume
Area Planted
Average Yield
Agusn del Norte
Volume
Area Planted
Average Yield
Annual %
Growth
Rate
2009
2010
2011
2012
2013
109,531.
51
9,394.00
11.66
114,201.
17
9,417.00
12.13
111,910.
81
8,800.00
12.72
108,041.
40
9,030.17
11.96
101,025.
42
8,671.43
11.65
-1.55%
-1.54%
-0.02%
58,564.2
9
3,315.00
17.67
54,645.2
2
3,305.00
16.53
50365
3,300.00
15.26
43,486.1
1
3,275.00
13.28
39,176.0
0
2,750.12
14.25
-6.62%
-3.41%
-3.87%
16,432.9
5
3,570.00
4.60
23,784.8
3
3,575.00
6.65
29,030.0
5
3,585.00
8.10
35,321.0
8
3,545.00
9.96
31,249.0
5
2,950.00
10.59
18.03%
-3.47%
26.03%
7,483.32
802.00
9.33
6,842.55
680.00
10.06
5,204.21
680.00
7.65
6,541.37
1,786.31
3.66
-0.72%
24.44%
-11.32%
28,287.8
0
1,735.00
16.30
25,673.2
1
1,235.00
20.79
24,030.0
0
1,530.17
15.70
24,059.0
0
1,185.00
20.30
-2.66%
-6.10%
4.95%
Agusan del Sur

Volume
Area Planted
Average Yield
Surigao del Norte
Volume
6,787.00
Area Planted
804.00
Average Yield
8.44
Surigao del Sur
27,747.2
Volume
7
Area Planted
1,705.00
Average Yield
16.27
Source: PSA/BAS
ARMM
The region produced an average of 134,697 MT of Cardava per year, which made
it as the fourth largest cardava producingregion in Mindanao, yet is still the
Region with the lowest average yield at 9.60Mt/ha. On theother hand, ARMM
registered the highest average growth among theregions in Mindanao accounting
for 3.5% annually, with Maguindanao as the top producing province in the region.
ARMM also managed to remain less affected by diseases and luckily free of
typhoons and major natural calamities.
Maguindanao contributed 62% to total production in the Region in 2013, while
Tawi-tawi had the lowest contribution with 3%. Lanao del Sur with almost the
same area planted in the past 5 years had the highest average yield in the
region at 11.7Mt/ha, nonetheless, still way below leading producing province in
Mindanao as well as the Mindanaos average yield of 20.26MT/ha in 2013.
Basilan posted the lowest average yield in the region and in Mindanao with
3MT/ha.
Pgina 28
Table 11.- Cardava Production Trends in ARMM, 2009 to 2013

Indicators
Annual %
Growth
Rate
2009
2010
2011
2012
2013
123,782.
29
14,493.0
0
8.54
131,333.
07
14,621.4
5
8.98
134,062.
76
14,989.5
0
8.94
136,543.
97
15,165.0
0
9.00
145,612.
72
15,173.5
0
9.60
14,556.8
4
3,739.00
3.89
14,531.9
5
3,739.00
3.89
14,814.0
3
3,739.00
3.96
14,122.5
5
3,815.00
3.70
13,516.7
5
3,824.00
3.53
-1.43%
0.45%
-1.84%
27,435.0
0
1,200.00
22.86
27,410.0
0
1,200.00
22.84
27,140.0
0
1,200.00
22.62
27,149.4
9
1,300.00
20.88
27,982.5
2
1,300.00
21.53
0.40%
1.67%
-1.17%
66,761.0
4
7,591.00
8.79
74,491.3
4
7,750.00
9.61
77,975.6
4
8,137.50
9.58
81,292.1
1
8,138.00
9.99
90,878.5
0
8,138.00
11.17
7.23%
1.44%
5.40%
10,877.1
1
1,600.00
6.80
10,830.8
0
1,570.00
6.90
10,030.0
0
1,550.00
6.47
10,028.0
0
1,550.00
6.47
9,414.25
1,550.00
6.07
-2.69%
-0.63%
-2.13%
4,152.30
363.00
11.44
4,068.98
362.45
11.23
4,103.09
363.00
11.30
3,951.82
362.00
10.92
3,820.70
361.50
10.57
-1.60%
-0.08%
-1.52%
ARMM
Volume
Area Planted
Average Yield
Basilan
Volume
Area Planted
Average Yield
Lanao del Sur
Volume
Area Planted
Average Yield
Maguindanao
Volume
Area Planted
Average Yield
Sulu
Volume
Area Planted
Average Yield
Tawi-tawi
Volume
Area Planted
Average Yield
3.53%
0.94%
2.47%
Source: PSA/BAS
Pgina 29
Section 3:
NATURE AND STRUCTURE OF THE
INDUSTRY
A.
VALUE CHAIN MAPPING
FRESH CARDAVA FOR RETAIL MARKET
Marketing channels for fresh banana can be further subdivided into the
following:
a) Cardava for retail markets in Metro Manila, Cebu, and other key urban
centers
Northern Mindanao is the dominant player in this chain along with Davao Region
and SOCCSKSARGEN. The region ships out most of its banana to Manila and
Cebu primarily via Cagayan de Oro and Ozamis. Bananas are collected weekly
from farmers at their farms or these are brought at the nearest buying stations.
Assemblers usually work with buying stations and agents and pick up the
bananas collected weekly or twice a week. The assemblers sell the bananas to
consignees based in key urban areas. The consignees sell the bananas to
wholesalers and jobbers who, in turn, distribute these to wet markets and
Pgina 30
supermarkets. In the wet markets, the greater percentage goes to the banana
cue/turon/ and other Cardava-based snack food vendors.
For business to be viable, intermediaries deal with both Cardava and dessert
bananas. Consequently, farmers in Lanao del Norte usually plant Cardava and
dessert bananas in their farms. Attempts have been made by some cooperatives
to enter this segment but were generally not so successful so far due to lack of
volume (dealt mainly with Cardava) and limited scale of operations. Volume and
ability to keep bananas in good condition are key success factors including
reliable partners in bagsakan centers in Metro Manila, Cebu, and other key urban
areas.
b) Cardava for retail markets within the locality/province

Farmers with limited volume bring their bananas to wholesalers in the wet
market. Bananas are sold both by kilo and by bugkusor bundled (100 pcs. or
equivalent to 13-14 kilos). In some cases, farmers sell their produce directly to
households within their proximity through door-to-door marketing or via
makeshift stalls and sari-sari stores.
Pgina 31
There are also traders/shippers who sell in the local market. Bananas that are
almost ripe and small are usually sold in wet markets within the region.
Bananas produced in ARMM are generally sold within the immediate locality.
PROCESSED BANANA (BANANA CHIPS/IQF SNACK FOOD)

Banana processing is dominated by the banana chips industry. A greater
percentage of the banana chips produced by Mindanao is intended for the export
market.
During the recent years, Mindanao banana chip exporters have
diversified into the production of individually quick frozen (IQF) Cardava snack
foods.
The processed banana supply chains can be categorized as follows:

a)Processed Banana for Export
This chain is dominated by Davao Region. Bananas are collected weekly from
farmers at designated pick-up points either by traders or directly by the banana
chips exporters. An exporter would usually have an agent or local consolidator
to scout and procure bananas in a particular barangay or municipality. Agents
are usually paid on a commission basis.
Pgina 32
Some exporters have set-up satellite processing plants in areas with significant
Cardava banana production. Others tried to set-up or work with first fry
processing plants to reduce transportation costs. Many of those who tried
though felt that it was difficult to sustain for various reasons: a) inconsistent
quality; b) high cost of production due to lack of economies of scale and pole
vaulting of suppliers; and c) threat of recipes being passed on to competitors.
As such, the general preference among exporters is to set-up and operate their
own plants in area/s with significant volume of Cardava. Four Seasons, one to
the large processors of banana chips in Davao Region, for example, is eyeing to
set-up a plant in North Cotabato. G and L, another major processor, has a plant
in Davao del Sur which is the 2 nd largest Cardava producing province in the
Philippines.
Pgina 33
b) Banana Chips for Local Market

Processors selling to the local market get their supply directly from farmers (for
agrarian reform cooperatives), local agents, and from the wet market. Volume
required by individual processors is relatively low. The banana chips are mainly
sold in pasalubong outlets.
CARDAVA SNACK FOOD
Turon, banana cue, maruya and other Cardava snacks are sold both in formal and
informal food establishments with the street food vendors/stalls having the
Pgina 34
bigger market. In Davao Region, vendors buy their supply of fresh banana from
processors, wet market, and from buying stations/intermediaries. With the all-in
procurement system, many of the medium and large scale processors sell the
non-process grade banana to vendors at PhP 8-12/kilo (fluctuates depending on
procurement price of bananas for chips).
Non-process grade are either
undersize, or oversize and over 90 days maturity.
In areas other than Davao Region, main source of banana would either be the
wholesalers or the retailers depending on volume required.
As can be seen from the different marketing channels, there is a vibrant trade of
Cardava between and among Mindanao regions. Figure 14 shows the flow of
products within and outside Mindanao.
Pgina 35
B. KEY PLAYERS AND FUNCTIONS

1. Input Provision
Key inputs in Cardava farming are the planting materials, fertilizer, and
pesticides. For planting materials, majority of the farmers use suckers and corm
bits which are sourced either from own farms or from neighboring farms. In
effect, production of planting material is largely a function of crop production and
agronomic practices used in the farm affect the quality of planting materials. The
common practice of using suckers and corms has contributed to the spread of
pests and disease. Although farmers indicated that they usually treat the suckers
to ensure that these are pest free, fungal, bacterial and viral pathogens are not
eradicated. Farmers generally do not recognize infested or diseased planting
material nor do they fully understand the life-cycles and transfer mechanisms of
pests and diseases, especially given the continual evolution of new races and
pathogens. Based on interviews, the prevalent use of suckers vis--vis tissue
cultured plantlets are due to the following reasons:
-
Tissue culture plantlets are not readily available.

Conventional planting materials entail minimal cost or no cost at all except
own labor. Tissue cultured plantlets are considered by farmers to be very
expensive.
Pgina 36
Conventional planting materials require less input and can be planted

immediately in the field, unlike the more fragile tissue-culture plantlets,
which need to be hardened before planting. Tissue-culture plantlets also
require appropriate management practices right after being transplanted
to the field
The longevity of fields planted with tissue-culture plantlets tends to be
shorter than the one for fields established with conventional planting
materials.
Farmers are not aware of tissue cultured plantlets and its benefits
The Davao Region has the most number of suppliers of tissue culture plantlets.
One of the biggest suppliers of tissue culture plantlets is Bio Trends (of Lapanday
Corporation). In Region 10, only Bukidnon has a functioning tissue culture
laboratory. The facility in Lanao del Norte has temporarily suspended its
operations and in need of fund infusion to re-start its operations.
In
SOCCSKSARGEN, only Plantarium Biotech is known to produce tissue cultured
planting materials for Cardava but company is primarily focused on the dessert
banana varieties.
In recent years, an increasing number of farmers are planting the Giant Cardava.
The Giant Cardava was first grown/discovered in the municipalities of Santa
Maria and Malita in Davao del Sur. Sagrex Foods, Inc. was among the first to use
the variety in the production of banana chips and frozen turon. It is being
propagated by the company through its nominated tissue culture laboratory.
Farmer usage of farm inputs such as fertilizer, insecticides and pesticides is
currently very low. Key reasons for not using fertilizer are the following: (1) they
have no money for buying fertilizer, (2) fertilization is not necessary since they
are still able to harvest every week or twice a week and cardava has always been
grown without too much care and fertilizer , and (4) fertilization is not practical
because their production is only small scale.In some banana producing areas
such as Malitbog and Tubod, thereis a growing number of farmers who are using
organic fertilizer. Organic fertilizer is prepared by farmers themselves or bought
from fertilizer producers. Many of the organic fertilizer commercially sold within
the region have not been subjected to scientific and laboratory testing. Likewise,
these are not formulated specifically for Cardava banana.
In the production of banana chips, key inputs are coconut oil and sugar. Large
processors usually source the coconut oil directly from the mill. Microprocessors
buy oil from supermarkets. Oftentimes, the price of coconut oil influences the
procurement price of Cardava banana. When oil price is high, large processors
tend to lower their buying price of banana to keep their prices competitive.
2. Farming
There are basically two types of Cardava production system in Mindanao. The
first one is the backyard production, which is the more prevalent system in
Mindanao. Under this system, Cardava banana is grown in backyards of rural
households and in small farms. Size of farms under this system ranges from 0.25
to 1 hectare. Farmers generally use suckers or culms from their own farms. Very
minimal input goes into this system of production. In cases where farmers use
inputs, they apply compost and manure. Family members share responsibilities
in planting, crop maintenance, and harvesting. Some farmers visit their bananas
only when it is time to harvest the fruits.
Pgina 37
The second system employed by farmers is the intercropping or mix crop

production. In this system, Cardava banana can be a primary or secondary crop
or planted together with dessert bananas. Farms classified under this system
range from 1 to 3 hectares. In many cases, farmers use a mix of organic and
inorganic fertilizer (trickle off from fertilizer applied to intercropped crops).
Generally, the banana farms are considered as major sources of income and, as
such, are better taken cared of than the backyard farms. However, soil testing
as basis of fertilizer application is rarely done.
Good Agricultural Practices (GAP) is not widely adopted.
There are
Cardavafarmers thoughwho arealready applying GAP in their farms. The first and
only GAP certified Cardava farm is located in Sulop Davao del Sur. It is owned
and managed by Cardava Integrated Inland Farming, a cooperative composed of
agrarian reform beneficiaries.
Banana is harvested when it is still green and requires a further 5 to 10 days to

ripen. Two persons are usually needed in harvesting, namely the cutter and the
helper. The cutter nicks the pseudo stem in such a way that the bunch is lowered
gently. The backer then positions himself below the bunch and takes hold the
lower end of the fruit stalks as the bunch is laid on his shoulder. The cutter then
cuts the peduncle of the fruit. From harvest to delivery, about 10% 20% of the
banana is wasted due to bruises and scratches due to poor packing and
handling.
Pgina 38
Cardava provides a steady cash flow for farming households. Income, however,
varies depending on practices and input application.
Lack of nutrient
replenishment and poor agronomic practices can lead to a non-sustainable
situation reducing yields and productive life. Current average bunch weight is
about 20 kilograms except in Tubod Lanao del Norte, North Cotabato, and
Davao del Sur (especially Malita) where a typical bunch weighs from 40 to 50
kilograms. In well-managed farms, a bunch can weigh as high as 80 kilograms.
Evidently, there is good scope to increase income of farmers by increasing
varietal performance, use of clean and improving production practices through
appropriate use of inputs and good quality clean planting materials.
Bugtok disease, which is manifested by the discoloration and hardening of the
fruit even when ripe, continues to threaten Cardava production in Mindanao. The
main reason for Bugtok infection is the prevalent poor agronomic practices of
farmers (and the prevalent use of suckers and corms from own farms.
Progressive farmers prevent Bugtok infection by bagging, early debudding, and
application of sodium chloride (table salt). Other diseases affecting Cardava
production are Sigatoka, Panama wilt, mosaic, and bunchy top.
3. Trading
Traders perform the important tasks of negotiating, collecting, sorting, and
transporting. Traders also act as financiers in the chain. The following are the
different types of traders depending on their scope of operations:
Pgina 39
Agents/Local Traders/Buying Stations: Agents scout and procure banana from

farmers in a particular barangay/municipality. They are usually affiliated with
processors and assemblers/shippers. In some areas, tricycle drivers also act as
agents of farmers. They pick up the bananas from the farmers, scout for best
price offer, oversee the weighing, and deliver back the payment to the farmers.
Tricycle drivers charge hauling fee/fare and are also paid commission.
Pgina 40
The local traders usually have buying stations along the highway. Most of those
with buying stations are engaged in the trading of various commodities. There
are also traders who pick up the bananas from the farms (depending on volume
and accessibility. Buying stations generally do not have sorting and storage areas
adequately protected from environmental hazards and pests. The lack of proper
sorting and storage facilities results to damages and bruises which contribute to
significant postharvest losses.
Assemblers/Consolidators: They usually collect from several local traders and
take care of the delivery to processor or the shipment of the bananas to Manila
or Cebu. In the case of cooperatives, they source directly from their farmermembers.
Traders in Northern Mindanao usually carry other banana varieties such as
Latundan and Lakatan to fill up a 10 footer container van. From the collection
point to the port, the bananas are transported in a truck. Loaded bunches are
closely packed and layered with green banana leaves or sliced banana trunks to
prevent shaking and bruises and to protect from heat and rain during transport.
Consignee: They source from several assemblers from different regions. The
shipper and consignee are the key players in the supply chain for they handle
the biggest volume of bananas. The greatest risk occurs during sea transport for
2 days because of high transit temperatures and the bulk-loading practice. This
can result in over ripening since a week has already elapsed since harvesting.
Jobbers/Wholesalers: distribute the bananas to retailers. Manila-based jobbers
and wholesalersgenerally get bulk of supply from consignees. For wholesalers in
the region, they get from local traders and directly from farmers.
4. Processing
Processors cum Exporters
Table 12.- Banana Chips Exporters in Mindanao

Note: This is not a complete list.
Region
Company
Zamboanga Peninsula
Alviars Banana Crackers
Northern Mindanao
B-G Fruits and Nuts Manufacturing Corporation
Davao Region
Arcmen Food Industries Corporation

CJ Uniworld Corporation
DOLE Philippines
Finelineasia Group of Companies
Four Season Fruits Corporation
- Also produces IQF Cardava snack food
GSL Food Enterprise
Koki Food International
Pacific Fruits International
Prime Fruits International
Pgina 41
Table 12.- Banana Chips Exporters in Mindanao

Region
Company
Profood Corporation
- Also producing IQF snack food
Royce Food Corporation
Sagrex Foods Incorporated
- Also produces IQF Cardava snack food
See International
Snap Snax Ventures, Inc.
Tagum Commodities Corporation/El Coco
Tropical Synergy
SOCCSKSARGEN
Greenville Agro Corporation

South Cotabato Agri, Inc.
Caraga
Celebes Agricultural Corporation

BGC Worldwide/Basic Fruits Corporation
Nationwide, there are about thirty-five banana chips exporters. Twenty-five

companies are located in Mindanao and, of which, twenty-one (21) have their
factories in Davao Region (DTI RODG Study). About 60% of the 25 exporters have
production capacity of more than 50 tons per day. Processors, especially the big
companies, indicated that they are only able to utilize 60% to 80% of their
capacity due to difficulties in sourcing Cardava.
Pgina 42
Processing activities are relatively simple and technology is matured. It is the

price, quality, and availability of Cardava that are critical to its operation and
competitiveness. Price of coconut oil is also critical to competitiveness of the
industry.
Sagrex Foods, Inc., a Davao-based corporation pioneered the production of
frozen ripe boiled Cardava banana including banana fries, spring roll and other
microwavable Cardava snack packs. The company has already started selling to
the United States, Middle East and Canada. The company sources some of its
raw materials and semi-processed products from Bukidnon. Sagrex uses the
giant Cardava variety. Another Davao-based banana chips exporter who has
diversified into frozen Cardava snack food for the export market is Four Seasons.
The company sources its supply from Davao and Region 12 but has plans of
setting up satellite plants in various parts in Mindanao if there is a critical mass
of Cardava banana supply. Four Seasons prefer to use the native Cardava
variety. Profood has also launched its IQF Cardava products.
In line with the growing demand for natural food products, exporters are
increasingly shifting to using bananas grown with minimal chemical inputs.
Celebes Agricultural Corporation, a company based in Butuan City, specializes in
the production of organic banana chips. Some companies like Koki Foods
International went for the Kosher certification to differentiate their products.
Four Seasons promotes its banana chips and snack food as all natural food
products.
First Fry Facilities/Subcontractors
Pgina 43
Some exporters also tried supporting first fry facilities but only a few have been
successful. For a first frying facility to be viable, it should have a wide base of
suppliers of Cardava and a production capacity of at least 4 tons daily. Exporters
are generally willing to provide some assistance (e.g., supply of coco oil,
technical assistance), but only after the facility has proven its reliability and
trustworthiness.
Peelers comprise bulk of the workers in banana chips
companies and first frying facilities. Table 13 presents a list of some of the
companies engaged in first frying and production of semi-processed/intermediate
Cardava products.
Table 13.- First Fry Facilities and Subcontractors in Mindanao

Region
Company
Northern Mindanao
NM Enterprises
- Supplies to NM Enterprises
- Also produces banana chips and other Cardava based
snack food for local market
Davao Region
Kooperatiba sa Nagkahiusang Mag-uuma sa San Isidro

UFFAP-IMCOOP
SITARBA Multi-Purpose Cooperative
Mampising CARP Beneficiaries Cooperative
Kabayugan Magamay Atipolo Solar Power Association
(KAMASPA)
Mayo ARB Multi-Purpose Cooperative
SOCCSKSARGEN
Magpet Agro Industrial Resources Cooperative

Pigcawayan
facility)
Fruits
Association
(newly
established
Micro Processors
Microprocessors are mostly household-based enterprises operating with makeshift facilities. Some of the microprocessors are Agrarian Reform Communities
(ARC). The ARCs have better facilities and packaging than majority of the
individual micro businesses. Many of these enterprises do not have the BFAD
license to operate due to non-compliance to Good Manufacturing Practices
(GMP). The areas which are not usually GMP compliant are the peeling and
cooking areas. Products are usually sold in the local market and pasalubong
stores.
5. Production and Vending of Snack Foods

Although there is an increasing number of medium and high end restaurants
serving Cardava based snacks by giving it a twist (e.g., serving with ice cream,
mixing relatively expensive ingredients), the biggest segment engaged in the
preparation and retail sales of maruya, turon, and banana cue are the street
food vendors. It is very common to see Cardava-based snack food in rolling carts
or makeshift sidewalk stalls where there are churches, schools, recreational
Pgina 44
parks, or jeepney terminals, and outside the malls. Most construction workers,
sales ladies, office workers, and other low- and medium-income groups grab a
bite of this street food during the afternoon break time. Street food in the
Philippines is not only a convenience and an economic phenomenon; it is a
lifestyle.
A street food business is a small, fast, cash operation. Each street food
enterprise is small in size, requires relatively simple skills, basic facilities and
small amounts of capital, yet they are very numerous and have considerable
potential for generating income and employment. The street food industry
provides employment to women and migrants with low educational background.
The prices of street food are low and the urban poor benefit from this. The street
food vendors are important market channels particularly for matured bananas
(undersize/over size). A vendor purchases from 300 to 1,000 kilos per month
depending on location. Vendors source their bananas from farmers, traders, and
the wet markets. In Davao region, vendors also get their supply of banana from
the processing plants.
C. NATURE OF INTERFIRM RELATIONSHIP

1. Horizontal Relationships
More farmers especially in Davao Region and SOCCSKSARGEN are taking on
more functions in the chain such as collective marketing and training services.
The more established cooperatives have ventured into first frying operations.
Pgina 45
Agrarian reform communities are generally into the production of banana chips
for the local market.
Cooperatives linked to lead firms (e.g., processors, assemblers) appear to be
more successful in scaling up their operations than those who are trying to
penetrate on their own the banana chips retail market. Success in fresh banana
collective marketing and first fry operation hinges on capacity to consolidate
large volume of bananas and access to capital and transport facilities.Linkages
with lead firms and secure markets also jumpstarted the upgrading process.
There is still a need though to strengthen associations and cooperatives currently
engaged in collective enterprises. Recurrent internal organizational problems
and operational inefficiencies as they grow more successful can be addressed
through continuing organizational development assistance. Shared goals and
their close link to real market opportunities will be central in further promoting
the success of the horizontal collaboration. The best trigger for closer
collaboration at the farmers level is the pursuit of bigger and guaranteed
markets.
Relationship among banana traders is generally adversarial. Banana traders
compete with one another in cornering producers supplies by occasionally
buying at higher prices - say, 25 or 50 centavos higher per kilo.
Cooperation and collaboration among exporters is via the banana chips exporters
association which is based in Davao. The association holds a banana congress
annually.
Most of the activities of the association are geared towards
improvement of supply base, tariff and market access issues, and market
development.
2. Vertical Relationship and Supply Chain Governance
The shortage of Cardava and the entry of Manila buyers after a typhoon hit
Luzon sometime in 2007 served as an impetus for Davao-based processors and
traders to search for alternative options to ensure that they are able to get their
Cardava supply requirements at a price that still allowed them to operate at a
profit. To date, there is now openness among processors to develop longer-term
and more collaborative relationships with farmers. The big processors are
incrementally integrating backwards into farming communities especially those
who can offer them specific advantages such as big volume, organic/natural
farming, and consistent quality. Banana chips companies like Sees International,
Celebes, G and L, and Four Season have gradually shifted their approach to
supply chain development from an exclusively price offer and compliance point
of view to a capacity building perspective with a focus on improving productivity,
efficiency, and quality.
Sees International and Celebes seem to be sourcing
from Malitbog and their focus is primarily on the production of organically grown
banana. Sagrex International is working with communities in Bukidnon interested
to expand their production of the giant Saba.
Some of the key preconditions that entice processors and big traders to enter
into strategic alliances with Cardava farmer groups are the following:
-
Demonstration of capability to meet basic quality requirements which

implies the need for some upgrading and a good understanding of the
required standards
Pgina 46
Access to a significant volume of Cardava which calls for a well-functioning

horizontal collaboration and a cooperative or association which has
significant influence among their members and other farmers in the area
or a good scheme that will encourage farmers to consistently allocate a
portion of their produce to the collective marketing/production while
allowing them to sell also to other market channels.
Willingness to invest --- Processors are more inclined to invest when they
see that the communities themselves have invested their own
money/assets. Somehow, this provides a guarantee that the communities
will work towards making the venture a success.
Aligned goals and objectives both in the short and medium term
Farmer groups are more likely to enter into strategic alliances with processors
and assemblers even if the agreed price is sometimes a few centavos lower than
prevailing market prices based on the following conditions:
-
Prompt payment and willingness for on-site weighing and quality control
Transparency/honesty in terms of their production cost structure
Value adding services such as training and mentoring
Willingness to invest even if this comes in small parcels
Provision of coco oil (for first fry communities) since they find it hard to
source these at lower prices due to their lack of capacity to buy in bulk
Social involvement in the community which in the Philippines is a very

important factor (e.g., attendance during events of the associations and/or
the communities).
Willingness for community members to visit their plants --- it gives them a
sort of belongingness and being an important part of the companys
operations
Inclusion in companys goals and objectives
In areas farther from the base of operations of processors and assemblers,

farmers main contact is the local intermediary. Marketing relationships between
traders and farmers are informal and characterized by the concept of the suki
system or personalized economic relations. The suki system, which is similar
to the preferred supplier-buyer relations, proliferated in efforts to find ways to
minimize risks and vulnerabilities to opportunistic behaviour and cheating (both
trader and farmer). The depth of the suki relationship differs with each relation
but over time, repetitive transactions with the same person develops trust. On
both sides, there is reduced search, negotiation, and monitoring costs because
the suki lives up to the norms and values of reciprocity and comes close to
becoming part of the family mindset. The bonds between people engaged in
exchange are determined by informal rules or social institutions and serve to
enforce the terms of the exchange. Suki relationships are often strengthened by
Pgina 47
the provision of credit by trader to farmer or by processor/upstream actor to local

trader.
In the above described supply chains, farmers are generally not aware of the end
user of their produce. Players see the market as homogenous and in terms of
the next actor in the chainthe person who bought their produce. Traders, on
the other hand, are often reluctant to share information on where products are
sold. Compliance with product and process standards is weak.
Generally, many of the constraints to the development of win-win relationships
are rooted on behaviours and attitudes. Typical behavioural obstacles include the
following:
-
Aversion to learning or a lack of motivation to learn, often related to

communication in the supply chain and the practice of all-in
procurement (i.e., one price for all grades and sizes), which provides
disincentives for upgrading.
Value chain participants do not learn from their actions over time because
the most significant consequences of action at any level accrue to the final
product, resulting in a vicious cycle of actions and blame.
Lack of trust results in opportunism, duplication of effort and a lack of

information sharing. The problem of mistrust creates various other
problems, such as the fear of relinquishing control.
The attitudes of business as usual or we have always done it this way

are equally real threats, as they keep people in their comfort zones and
create resistance to the transformation required for collaborative
initiatives.
D.PRICE AND COST STRUCTURE

1. Income and Profit
Table 14.- Indicative Costs and Return for 1 hectare of Cardava
Banana
Assumption: 625 hills/hectare
High input farm: a greater percentage of the inputs organic inputs
Amount (in PhP)
Items
Low Input Low Yield

Farm
High Input High Yield

Farm
Planting Materials
1,000
10,125
Fertilizer
1,000
6,000
Farm Establishment
Pest Control
5,000
Weed control
1,000
4,000
Land
5,000
8,000
Pgina 48
Table 14.- Indicative Costs and Return for 1 hectare of Cardava

Banana
Assumption: 625 hills/hectare
High input farm: a greater percentage of the inputs organic inputs
Preparation/Planting/Labor
Total
Cost
Establishment
8,000
33,125
Bagging
2,500
10,000.00
Fertilizer
1,000
4,000.00
Annual Production Cost
Weed control
2,000.00
Pest control
2,000.00
Labor: Farm Maintenance
5,000
12,500.00
Harvesting
5,000
20,000.00
Transportation
5,000
20,000.00
800
3,312.25
19,300
73,812
10,000 kilograms
40,000 kilograms
1.93
1.85
Unit Price/kg
5.00
5.00
Gross Income
50,000
200,000
Net Income
30,700
126,188
Profit Margin
61%
63%
Input/output Ration
2.59
2.71
Establishment cost
Total Production Cost
Yield (in kilograms)
Unit Cost/kg
Income
Source: KII/FGD
The high input farms used as basis in the above costing use more of organic
inputs than chemical inputs. These farms invest in farm maintenance and, more
or less, practices are aligned with GAP. Yields of these farms range from 40 MT to
60 MT per hectare. Harvest is done usually twice a week. On the other hand, the
low-input is the typical farm where labor and input investments are very minimal.
For low input farms, annual net income would only be about PhP 30,000 to PhP
35,000. Yield is generally between 8 to 10 tons per hectare. In many cases,
farmers do not buy planting materials and use suckers from their own farm or
from neighbors.
For both types of farms though, transportation cost comprise a big chunk of the
expenses.
The cost indicated is for roads that are relatively good --- gravel
roads, not so many potholes, and not so muddy.
Table 14 also shows that the output: input ratio is higher for high input farms
compared to the low maintenance farms. This demonstrates better profitability
and efficiency in enterprise management amongst the high input farms as
compared to the low input farms. Evidently, there is good scope to increase
Pgina 49
income of farmers by increasing varietal performance and improving production

practices through appropriate use of inputs as well as use of clean planting
materials.
2. Relative Financial Position of Players

Fresh Banana for Manila Market
The consolidator incurs the highest percentage of added cost which is comprised
mainly of transportation, ice, and labor costs. Given the perishability of Cardava,
consolidators face the highest risk. Main concern of consolidators is to be able to
move the products as fast as possible from the farm to the consignee in Manila.
While consolidator gets the highest percentage share of the profit, it is not
proportionate to his/her percentage share of the added cost. To improve their
profitability, consolidators aim for high volume and send a mix of Lakatan,
Latundan, and Cardava per shipment (at the minimum 20 footer container).
Farming accounts for 12% of the production and distribution costs. Percentage
share to profit is 43%. Although farmers generate the highest profit, the amount
or absolute value that actually accrues to an individual farmer is small for the
following reasons:
a) Volume is spread thinly among the farmers: there are about 50 consolidators
vis--vis more than 50,000 Cardava farmers in Mindanao. A consolidator
typically sources from 5 to 10 traders. Each trader sources fresh Cardava
from hundreds of farmers.
b) Smallness of operations; lack of economies of scale
c) High post-harvest losses estimated at 20% to 40% which erodes profit margin
Pgina 50
d) Unstable yields
Table 15-. Relative Financial Position of VC Players: 1 kilo of fresh

banana
Assumptions:
Harvesting and transportation costs shouldered by trader
Based on Northern Mindanao costing
Player
Prod
uct
Costs
Profit
Margins
Total
Unit
Cost
Adde
d
Unit
Cost
%
Added
Unit
Cost
Unit
Price
Unit
Profit
%
Profit
Unit
Margi
n
% to
Price
Farmer
Fresh
1.00
1.00
12%
4.00
3.00
46%
4.00
27%
Trader
Fresh
5.50
1.50
18%
7.00
1.50
23%
3.00
20%
Consolida
tor
Fresh
13.00
6.00
71%
15.00
2.00
31%
8.00
53%
Total
8.50
6.50
15.00
Source: KII
Banana Chips for Export Market
Table 16.- Relative Financial Position of VC Players: 1 kilo of

banana chips
Assumption:
4 kilos of fresh Cardava needed to produce 1 kilo of banana chips
Based on Davao Region costing
Player
Prod
uct
Costs
Profit
Margins
Total
Unit
Cost
Adde
d
Unit
Cost
%
Added
Unit
Cost
Unit
Price
Unit
Profit
%
Profit
Unit
Margi
n
% to
Price
Farmer
Fresh
7.60
7.60
19%
22.00
14.40
47%
22.00
31%
Trader
Fresh
27.00
5.00
13%
32.00
5.00
16%
10.00
14%
First Fry
Chips
(1st
fry)
50.00
8.00
45%
53.00
3.00
10%
21.00
30%
Exporter
Chips
62.00
9.00
23%
70.00
8.00
26%
17.00
24%
9.60
100%
Total
30.40
70.00
Source: KII
A kilogram of banana chips requires more or less 4 kilograms of fresh banana.

From the indicative FOB price of PhP 70/kilo of chips, the first fryers and
exporters contribute the highest added cost at 45% and 25% respectively. First
fryers contribute the biggest share of the production cost as labor is more
intensive, and more oil is consumed in first frying than in 2nd frying done by
processors. Traders, on the other hand, contribute 13% of the added cost which
Pgina 51
is comprised primarily of transportation and hauling costs.

19% of the added cost.
Farming accounts for
Gross profit per kilo of chips is about PhP 30.40. Of the estimated PhP 30.40
profit generated per kilo of chips, farmers have the highest percentage share at
47% followed by exporters at 26%.
Profit that accrues to first fryers is only
about PhP 3 to 5 per kilo. For a first frying facility to be financially viable, it has
to have the economies of scale, access to coconut oil and sugar at wholesale
prices, and efficient production and procurement system. Most exporters though
do their own first frying.
In terms of trading position, farmers have the highest risk and are price-takers
primarily due to the perishability of the product. Farmers who sell collectively
and with high volume are in a better bargaining position. Local traders, on the
other hand, have the smallest investment and usually pass increases in
transportation to farmers. Exporters in the local scene are the price-makers but
in relation to importers have some capacity to participate but not always in
favorable terms. In the EU, agents and importers largely control the trade of
banana chips. They perform various roles --- packer, refiner of the product,
processor into final product, re-exporter. Discussions with key EU importers
sometime in 2008 indicated that profit margin per unit is relatively low and tight
for banana chips. From both the perspectives of the importers and exporters, it is
low margin high volume business.
Viability of the business hinges on
economies of scale, cost efficiency, and cost effectiveness.
Pgina 52
Section 4:
MARKETS AND MARKET OPPORTUNITIES
A. MARKETS AND MARKET TRENDS
1. Export Market
Main Cardava-based product that is currently exported is the banana chips.
There are three main market segments for banana chips, namely: a) the food
processing market; b) the retail market; and c) the catering market. The food
processing market is by far the largest segment for the banana chips, thus
putting pressure on prices. The major consumer is the breakfast cereal industry.
Chips are sold in two forms: whole and broken with price differences of about
US$ 0.05 to 0.10. Banana chips for the retail market are mainly sold as readyto-eat snacks.
Main outlets are the health food stores or sections in
supermarkets. Importers selling to retail markets require higher quality and
added features such as Bio and all natural. All natural and organic banana
chips command a premium price in the market.
Pgina 53
During the recent years, Vietnam has become a transshipment point for bananachip exports to China. Vietnam benefits from the trade as it enjoys advantageous
tariff rates due to bilateral pacts with China. Some Chinese buyers prefer to buy
first fry chips and have these processed further in Vietnam. The big European
import companies order an average of 25 40 footer containers of banana chips
per year per company while medium and small importers order in average 10 40
footer containers per year per company. They shift between Thailand and
Philippine suppliers.
Table 17.- Volume and Value of Banana Chips Exports, 2007 to

2011
Year
Volume (MT)
Value (US$)
2007
32,993
40,725,000
2008
33,398
49,126,000
2009
30,347
38,350,000
2010
28,085
40,274,000
2011
30,142
50,575,000
Source: DTI/Presentation of DTI Undersecretary Merly Cruz
GSL Premium Food Export and Four Seasons, two of worlds leading suppliers of
banana chips, collectively export about 2,000 MT of banana chips per month.
According to them, there is an increasing demand for banana chips. During the
recent Salon International de lAlimentation or SIAL Paris fair, banana chips were
among the most saleable products in the Philippine booth. From 2007 to 2011,
Philippines exported an average of 30,993 MT of banana chips.
Pgina 54
Although the Philippines has remained the leading exporter of banana chips,
competition is also intensifying from countries like Vietnam, Thailand, and
Malaysia in key export markets. Markets are increasingly concerned with the
specifications of both products and processes further back along the value chain
in a number of different ways: a) quality and safety - based upon product and
process controls: b) conformance with social and environmental standards; c)
traceability and authenticity; d) reliability and guaranteed supply in order to
avoid stock outs; e) just-in-time delivery; and f) product differentiation and
innovation as a means of adding value and margins.
Export of frozen cooked banana (turon, boiled banana, fries, etc.) is gradually
increasing. The companies are targeting the 12 million Filipinos living abroad --the Kingdom of Saudi Arabia (KSA) has 1,019,577 Filipinos, the United States of
America has four million, Malaysia 822,910, Canada 437,940, Japan 258,977 and
United Arab Emirates 250,000. Other countries that have thousands of Filipinos
also include Italy, Mexico, United Kingdom, Taiwan, Singapore, Hong Kong,
Australia, Kuwait, South Korea and Germany. Sagrex exports annually over 12
containers of Saba to the Middle East, US, Canada and other Asian markets
2. Domestic Market
System of grading and classifying Cardava type bananas is provided in the
Philippine National Standard (PNS) formulated by the Bureau of Agriculture and
Fisheries Product Standards (BAFPS). However, in many cases, traders and
retailers follow the all-in procurement system but still observe the following
minimum requirements as set forth in the PNS:
-
The fruit must be reasonably clean, free from diseases, insects, molds, and
other contaminants.
The use of chemical process for ripening is allowed provided it conforms to
PNS/SAO 74.
Pesticide residues shall meet the requirements of the Codex Alimentarious
Commission Volume 2.
The above requirements are checked by buyers using visual observation (matamata).
Size is determined according to the diameter and length of the fruit. Traders
generally classify the cardaba on whether these are processed grade (for the
banana chips market), for the snack food market, and for the fresh market .
Table 18.- Size Classification of Cardava Banana

Size
Length (cm)
Diameter (cm)
>14
>4.5
Large
12 - 14
4.5
Medium
10 - 12
4.0
Small
Not <8
3.5
Extra Large
Source: PNS
Based on the PNS, the following are the three classes of Cardava banana based
on general appearance, quality, and condition:
Pgina 55
a) Extra Class: Bananas in this class are of superior quality. Hands must be
matured, clean, well-formed, and well-trimmed. Likewise, the hands must
be free from decay, split fingers, loose fingers, bruises, blemishes, and
discoloration caused by diseases, insets, latex burn, and other deformities.
b) Class I: These are bananas classified as good quality. Hands must have the
same characteristics as the Extra Class bananas.
c) Class II: Bananas in this class do not qualify for inclusion in the above 2
classes but satisfy the minimim requirements.
Hands are matured,
reasonably clean, fairly well formed, and well-trimmed. These are also
relatively free from decay, split fingers, loose fingers, bruises, blemishes,
discolorations, and other deformities.
Traders generally do not provide premium prices for Extra Class and Class 1
bananas but they do not accept bananas that do not meet the minimum
requirements. In the retail market, prices are oftentimes aligned to the
classification system.
Total available supply of Cardava in Mindanao is generally just about 60% to
70% of its total production. Postharvest lesses are estimated to be about 30% to
40% of total production. About 32% of available supply (production less
postharvest losses/feeds) is utilized for banana chips and other processed
products. The largest bulk goes to the processing companies geared for the
export market. Industry players estimate that processing companies are able to
source an average of 350,000 MT of Cardava per year. Total annual requirement
of processors/exporters in Mindanao is estimated to be about 450,000 MT. The
processors selling to the local market consume an aggregate of 15 to 20 MT of
Cardava per year.
Banana chips exporters prefer the native variety rather than the Giant Cardava.
They are strict with quality standards. Quality of banana significantly affects the
quality of banana chips. Bananas delivered to exporters should conform to the
following standards: a) semi-mature (90 to 105 days); b) unripe, green color of
skin; c) light yellowish color of flesh; and d) not less than 3 inches in length.
With increasing demand for healthy food products, exporters prefer organically
grown bananas.
On average, about 25 percent of bananas delivered to
processors are classified as rejects. Main causes of rejects are immature
harvesting, late harvesting, and bruises and damage during storage and transit.
Pgina 56
For Philippine supermarkets, the banana chips are among the slow moving
products and, thus, no significant orders are made. Likewise, in many cases,
presentation is poor compared to similar products in the same categories. There
is a general preference for potato chips type of products rather than the usual
presentation of banana chips.
Basic requirements for suppliers: GMP/permit to operate and bar code which
many of the processors are not able to comply with. Suppliers would have to
invest in the promotion of the products and in development of similar product
formats such as the potato chips.
Banana chips are currently more saleable as pasalubong. The product can
potentially be saleable if positioned as a healthy snack food. To be successful in
this positioning, it is important that the chips are produced without preservatives
and artificial additives and all other ingredients are healthy (e.g. low glycemic
sugar, low cholesterol oil, etc.).
About 62% of total available supply or an average of 600,000 to 800,000 MT are
sold in the domestic market. Mindanao banana (all types) production for the
domestic market goes to Cebu and Metro-Manila largely through ports in
Cagayan de Oro, Agusan, Ozamis, Iligan, and Surigao. Based on 2009 data, about
73% of the banana shipped out of Mindanao seaports originated from the port in
Cagayan de Oro, an additional 15% came from the port in Nasipit, Agusan, while
about 4% were loaded in Sasa Wharf in Davao City. One of the advantages of
Northern Mindanao aside from quality is that it takes only 30 hours for shipment
Pgina 57
to reach Manila from Cagayan de Oro. It takes 56 hours to reach Manila from
General Santos and 48 hours from Davao.
Table 19.- Banana Shipments from Mindanao, 2009

Port of Origin
Quantity
(in MT)
% Share to
National Banana
Shipment
Iligan City
1,233.05
0.49
Cebu, Siquijor
Ozamis City
4,959.32
1.99
Cebu, Manila
182,381.23
73.04
Cebu, Manila,
Iloilo, Tagbilaran,
Bacolod, Butuan
10,229.81
4.10
Manila, Cebu,
Iloilo, Zamboanga
1,489.47
0.60
Manila
0.26
Cebu
Cagayan de Oro
City
Sasa Wharf, Davao
City
TEFASCO,
City
Davao
Makar
General
City
Wharf,
Santos
Nasipit, Agusan del

Norte
Surigao del Norte
673.54
39,430.14
15.79
4,251
1.70
Destinations
Manila,
Iloilo,
Bohol
Cebu,
Bacolod,
Southern Leyte
Traders and farmers interviewed indicated that export of banana to other regions
outside of Mindanao is on an increasing trend but price competitiveness and
freshness are important criteria. For Mindanao to remain competitive vis--vis
other Cardava producing areas in Luzon, consolidators opt to lower their profit
margin and aim for high volume sales. Banana trading suffered a decline in the
previous years due to supply constraints brought about by the destruction of
many farms caused by Typhoon Sendong.
The biggest market for Cardava in the domestic market is the Cardava-based
snack food subsector consisting primarily of street vendors, canteens, and
restaurants. Street food vendors usually procure the stock of Cardava on a daily
basis from the wet market, trader, or processors (in the case of Davao City). A
vendor would usually buy about 10 to 50 kilos of Cardava on a daily or bi-weekly
basis. Vendors generally buy ripe, oversize, and undersize bananas. Ripe
bananas are generally cheaper compared to the matured banana.
In a snapshot survey conducted sometime in 2008, banana cue was the top
favorite of low-income workers and school children. Respondents, however,
expressed the need for variety and more hygienic presentation but within the
same price range. Similarly, vendors wanted to expand their product lines to
retain and attract more customers given the increasing numbers of low-end fast
food chains. With low profit margin, vendors needed to sell to a critical mass in
order to generate enough income to cover basic daily needs.
Pgina 58
Cardava-based dishes and snack food are also mainstays in the menu of many of
the hotels, restaurants, and caterers. Cardava bananas sold in supermarkets are
usually the Extra Class and Class I. In Metro Manila supermarkets, a piece of
Cardava banana costs from PhP 3 5 per piece of PhP 30/kilo.
Demand for Cardava both for banana chips and the fresh market is generally
lowest during the months of April, May, and June. For the banana chips
subsector, production is generally low as companies use this period as an
opportunity to perform maintenance in their plants in preparation for the peak
season and to finalize negotiations. In the fresh subsector, vendors purchase
fewer bananas during vacation time as bulk of their customers are usually the
students.
B. PRICE TRENDS
1. Export Market
Major threats to the growth of the industry are its price competitiveness and its
ability to maintain quality particularly for large volume orders. Banana chips are
fast becoming a commodity with price an important issue. Price fluctuations
range from 1% to 5%. Importers generally switch suppliers between Philippines
and Thailand from time to time primarily due to price and quality considerations.
Feedbacks indicate that Thailand is fast becoming preferred supplier in terms of
price, flexibility in payment terms, reliability, and their ability to offer a wider
range of goods in similar categories including strong support and relations
between the private sector and government.
2. Domestic Market
Pgina 59
Based on interviews, farm gate price of Cardava fluctuates between PhP 4 to 7

per kilo. At the time of interview, the farm gate price hovered between PhP 4.00
to 5.00 even in Maguindanao. Based on BAS data, average price in Maguindanao
was at PhP 17.78. Unfortunately, farmers interviewed were not aware of this
significantly high price. The highest price enjoyed by farmers in Mindanao was
about PhP 10 to 12 per kilo sometime during the end of 2013 to March 2014.
The farm gate price of Cardava for local consumption is primarily based on
supply and demand. This is usually determined by the consignees. As bananas
ripen, the price becomes lower.
Generally, banana chips exporters and agents offer a slightly higher price if a
farmer or a group of farmers is able to consistently supply more than 1 metric
ton of banana per delivery. Main determinant of price is distance between pickup point and plant location. Another factor that affects the buying price of
Cardava for the banana chips industry is the price of coconut oil. Banana and
coco oil comprise the largest cost in the production of banana chips. Since coco
oil price is outside of their control, slightadjustments are usually made in the
purchase price of Cardava as export price of banana chips is usually fixed for a
specific period.
Table 20.- Farm Gate Price of Cardava in Mindanao Regions, 2009

to 2013
Price per Kilo (PhP/kg)
Region
2009
2010
2011
2012
2013
Annual
%
Growth
Pgina 60
Rate
Philippines
6.19
6.87
6.51
7.01
8.35
6.98%
Mindanao
5.81
6.76
5.94
7.06
8.84
10.44
%
Zamboanga Peninsula
6.32
6.66
7.17
7.37
8.41
6.61%
Northern Mindanao
9.1
11.83
7.87
6.64
7.61
-3.27%
Davao Region
4.78
4.89
4.76
5.51
7.77
12.51
%
Soccsksargen
3.86
4.94
5.2
5.29
6.99
16.22
%
Caraga
4.72
5.12
5.94
5.83
7.28
10.85
%
ARMM
6.05
7.1
4.7
11.71
14.95
29.42
%
Source: BAS/PSA
Section 5:
SUPPORT SERVICES
A. FINANCIAL SERVICES
Smallholders generally do not have the collateral nor signed contracts with
buyers that they can present to banks. As such, farmers and resource poor
players generally have limited access to formal finance and are also hesitant to
Pgina 61
avail of loans from banks and MFIs. Resource poor players, therefore, borrow
money from informal sources such as traders because these are accessible;
require no collateral and voluminous documents like those required by formal
lending institutions.
Demand side barriers that limit the access of smallholders to financial services
can be summarized as follows:
a) Weak producer organizations/ High risk aversion among farmer groups: many
of financial products are anchored on cooperatives/associations
b) Dominance of spot transactions which make it impossible for smallholders to
present marketing agreement as collateral (e.g., for LBP-DA Food Supply
Chain Program )
c) Low financial literacy and financial management skills
d) Low productivity, margins, and cash flow for servicing loans
Financial institutions in the Philippines have quite a wide range of products and
add-in services that attempt to serve the needs of Cardava farmers while
managing the risks of lending to them. The cash flow-based lending, for
example, that uses regular household cash flow analysis and collects payments
frequently provides a valuable line of credit for households engaged in farming
activities but may not be appropriate among marginal farmers who do not have
other sources of income. Production cost-based lending provides more promise to
increase profits and help marginal farmers without other sources of income to
mitigate the uncontrollable risks to agriculture.
B. NON-FINANCIAL SERVICES
Government agencies especially the local government units are the main
providers of extension services to the Cardava banana farmers. Services are
provided for free and/or socialized payment tending to heavy subsidy. During the
recent years, the Department of Agriculture Agricultural Training Institute (ATI),
local government units, and the Bureau of Agricultural and Fisheries Product
Standards (BAFPS) have been working together to promote the adoption of Good
Agricultural Practices among smallholders. Owing to resource constraints,
outreach, depth, and breadth of services are limited. The resource limitations of
the local government necessitated that budgets and extension personnel are
allocated to all agricultural sectors.
Learning among smallholders is generally via peer coaching or on-the-job
training (older family members teaching the younger generation). The informal
mentors are proficient in the traditional banana farming system but lack the
exposure to new technology and practices to ensure high yield and consistent
product quality. Likewise, whether services are embedded or fee-based or even
free, farmers are more receptive to services with immediate impact on income.
Farmers are generally very risk adverse resulting to low buy-in, and low level of
adoption of new technology and practices. This is sometimes because impact of
services received in the past was not that tangible.
Support services are available to
businesses. The Department of
Development and Design Center
label design services. DTI has
assist processors in the different areas of their

Trade and Industry (DTI) through the Product
of the Philippines (PDDCP) offers package and
also been working with processors in the
Pgina 62
development of new variants of the banana chips.

DTI, DA, and local
government units have been active in supporting the participation of enterprises
and farmer groups in domestic and international trade fairs. Likewise, the
Department of Science and Technology (DOST) and DTI provide training on Good
Manufacturing Practices (GMP) and HazardAnalysis and Critical Control Points
(HACCP).
In in intermittent basis, street food vendors receive enterprise development
training and assistancein upgrading their facilities from the local government
units, the Department of Labor and Employment (DOLE). There is, however, a
lack of services that would help them improve their products and compliance to
food safety.
Section 6:
ENABLING ENVIRONMENT
Pgina 63
A. FORMAL RULES, REGULATIONS, AND POLICIES

Key policies that are relevant to the banana chips industry are:
1. Policy and implementing guidelines for food safety are in place but
implementation has been constrained by:
-
Lack of providers to provide assistance and assess GAP/GMP

compliance
Too technical presentation creating immediate resistance among
farmers and enterprises
Farmers and enterprises lack awareness and knowledge on its benefits
and scopes
Stakeholders lack capability to comply with market requirements in
terms of quality standards, competitive prices and food safety
LGU extension officers generally not equipped and trained to enforce
food safety regulations
Lack of harmonization between private and public GAP/GMP/HACCP
audit requirements.
Implementation of food safety policies has to be addressed alongside policy

harmonization and capability building.
2. Poor road condition results to high transportation costs and limited access to
product and support markets. These infrastructure investment requirements
are public goods and should be funded by the government.
3. For more than a decade, most government efforts to expand access to
agricultural credit have been channelled through the Agricultural
Competitiveness Enhancement Fund (ACEF) and Agro-Industry Modernization
Credit Finance Program (AMCFP). Outreach, todate; of the two programs have
been limited. The Agri-Agra Reform Credit Act of 2009 (Republic Act 10000)
signed in February 2010 has not also been effective in facilitating
smallholders access to financial services. There is a need for government to
put in place a sound risk management framework to address the issues that
are at the core of private sector reluctance to lend and farmers hesitation to
avail of formal financial services.
B. INFORMAL RULES AND SOCIO-CULTURAL NORMS

1. Informal rules can contribute to the effectiveness of formal rules. If the norm
is to abide by formal rules (e.g., adherence to grading standards even if the
buyer does not always check), then it becomes less costly to enforce the
regulations. If this is not the case (e.g., all in procurement as the norm in
cocoa bean trading) then the standards set by government agencies become
a paper tiger or a substantial amount of resources is needed to enforce the
regulations (e.g., buyers have to send their own people to check on quality
right at the point of purchase). Norms of civic cooperation reduce
enforcement costs by leading individuals to internalize the value of standards
and regulations even when the probability of detection for violation is
negligible.
Pgina 64
2. The major sources of social capital among Filipino farmers are kin networks,
home neighborhood, farm neighborhood, and membership in a farmers
association. Filipinos particularly in rural areas give premium to interpersonal
relations. Kinship reigns above all the social relations of Filipino farmers
followed by farm neigbor relationship. It is characterized by strong ties,
mutual trust, and norms, which promote coordination and cooperation for
mutual benefit. Harnessing the kinship/interpersonal relations factor can
reduce transaction cost in the sharing and diffusion of farming technology.
3. Another value related to loyalty is utang na loob or debt of gratitude. It is
expected that those who are helped in their time of need will return the favor
when the opportunity comes. So, a trader or a lead farmer or buyer sharing
technology with kins and peers can also be regarded a form of repayment
from utang na loob or depositing a help to be withdrawn later when need
arises (e.g., trader expects that farmer will give him some priority when cocoa
bean supply is tight).
4. Buying in tingi or piecemeal is the norm rather than an exception in the
Philippines. Long before multinationals and large local companies began
producing product sachets, sari-sari stores (neighbourhood stores) would buy
household items such as sugar, vinegar, shampoo, cooking oil, cigarettes,
etc. in bulk and sell these to the customers in piecemeal: by the stick, by the
piece, by the tablespoon or cup. The tingi system has spread into various
industries such as telecommunications where it became possible for users to
buy phone credit or load for as low as PhP 5.00.
The tingi or piecemeal mentality influences much of what the Filipinos do. The
tingi mentality is also reinforced with Filipinos relatively low propensity to
save, and preference for immediate gratification. This is manifested even in
little things, such as their preference for instant prize promotions rather
than loyalty programs which might require them to accumulate points toward
a larger prize (De Veyra 2004). Spending more to purchase sachets today
instead of saving up to buy in bulk would be consistent with this tendency.
Likewise, the dominance of the tingi mentality can also be correlated to
general aversion of Filipinos to risks.
As such, in the conduct of training and capacity building activities as well as
introduction of new technology and innovations, the program can build the
design around this tingi mentality to have higher chances of success and
adoption.
Pgina 65
Section 7:
CONSTRAINTS AND OPPORTUNITIES
Table 21.- Constraints and Opportunities
Opportunities
Constraints
Province
INPUT PROVISION
Use of tissue cultured
planting materials can
significantly
improve
yield of farmers
Village level nurseries
can potentially reduce
cost of tissue cultured
planting materials and
provide
additional
income to farmers
Limited supply of good ZAMBOANGA PENINSULA

quality
disease
free Zamboanga del Norte
Zamboanga del Sur
planting materials/ Lack Zamboanga Sibugay
of
tissue
culture Zamboanga City
laboratories
Low willingness among
farmers to invest in good
quality planting materials
NORTHERN MINDANAO
Bukidnon
Camiguin
Lanao del Norte
Misamis Occidental
Misamis Oriental
DAVAO REGION
Davao del Norte
.Davao del Sur
Davao Oriental
Compostela Valley
Davao City
SOCCSKSARGEN
North Cotabato
Sarangani
South Cotabato
Sultan Kudarat
CARAGA
Agusan del Norte/Butuan City
Agusan del Sur
Surigao del Norte
Surigao del Sur
ARMM
Basilan
Lanao del Sur
Maguindanao
Sulu
Tawi-tawi
The choice of planting material has a significant impact on both yield and fruit
quality. Farm productivity has come under increasing threat from the spread of
viruses and other phytosanitary problems transmitted in vegetative planting
material. The common practice of using suckers and corms from own farm or
from neighbors has contributed to the spread of pests and disease.Farmers
decision on which planting material to use is primarily determined on issues of
accessibility and affordability.
Proper application and
management of fertilizer
High cost of chemical

inputs
ZAMBOANGA PENINSULA
Zamboanga del Norte
Zamboanga del Sur
Pgina 66

Opportunities
and pesticides together
with
use
of
quality
good
agronomic
practices can potentially
result to yield of 50 to 80
kilos per bunch
Agri-waste can be used
in the production of
organic fertilizer. There
are
also
existing
enterprises engaged in
production of organic
fertilizer
but
not
specifically for banana
Constraints
Limited availability and
commercial distribution
of organic fertilizer and
inputs
Lack of understanding
among farmers on cost
benefits of proper and
efficient use of
fertilizer/Only very few
farmers apply fertilizer
Province
Zamboanga Sibugay
Zamboanga City
NORTHERN MINDANAO
Bukidnon
Camiguin
Lanao del Norte
Misamis Occidental
Misamis Oriental
DAVAO REGION
Davao del Norte
.Davao del Sur
Davao Oriental
Compostela Valley
Davao City
Low level of purchasing

power
among SOCCSKSARGEN
North Cotabato
smallholders
Sarangani
South Cotabato
Sultan Kudarat
CARAGA
Agusan del Sur
Surigao del Norte
Surigao del Sur
ARMM
Basilan
Lanao del Sur
Maguindanao
Sulu
Tawi-tawi
Bananas remove large amounts of soil nutrients with the harvest of fruit bunch.
Lack of nutrient replenishment can lead to reduced yields and shorter productive
life. Use and application of fertilizer are primarily based on available money and
assessment of potential returns. Most farmers refer to a lack of money to buy
inputs when discussing the problems to increase the productivity of their
farms.Anecdotal evidence also suggest that many of the farmers have been
applying fertilizers without regular soil tests to determine the exact type of
fertilizers that are required to improve and maintain soil fertility
Although there are a number of organic fertilizer available in Mindanao, efficacy
and effectiveness of many of the products have not been scientifically tested.
The production of organically grown Cardava can provide Mindanao with a
competitive advantage over other Cardava and banana chips producing
areas/countries especially with the increasing attention given to food safety and
the effects of chemical inputs to both people and the environment.
FARMING
Upgrading of low cost
indigenous technologies
that have good potentials
of improving farm
productivity and reduce
Limited outreach of
existing extension
services
Cardava traditionally
ZAMBOANGA PENINSULA
Zamboanga del Norte
Zamboanga del Sur
Zamboanga Sibugay
Zamboanga City
Pgina 67

Opportunities
incidence of pest and
disease infestation
There are progressive
farmers in Lanao del
Norte, North Cotabato,
and Davao Region
especially Davao del Sur
who have been trained in
GAP and are willing to
share best practices with
peers
Interest among
cooperatives and traders
to increase volume/
yields to get premium
prices (traders pay
higher prices if
farmers/groups deliver
significant volume)
Constraints
grown with minimal
investments on farm
maintenance
Low uptake and adoption
of Good Agricultural
Practices
Province
NORTHERN MINDANAO
Bukidnon
Camiguin
Lanao del Norte
Misamis Occidental
Misamis Oriental
DAVAO REGION
Davao del Norte
.Davao del Sur
Davao Oriental
Compostela Valley
Davao City
SOCCSKSARGEN
North Cotabato
Sarangani
South Cotabato
Sultan Kudarat
CARAGA
Agusan del Sur
Surigao del Norte
Surigao del Sur
ARMM
Basilan
Lanao del Sur
Maguindanao
Sulu
Tawi-tawi
Although Cardava provides a steady cash flow for farming households, profits are
below what can be possibly generated from a well-managed Cardava farm. Low
productivity and income translate to issues on price competitiveness and erratic
supply base.
Improving agricultural practices would address issues of
productivity, efficiency, and quality. This would improve profit margins of all
actors in the chain particularly the smallholders.
Cardava production in Mindanao is affected by a number of pests and diseases.
Poor agronomic practices have been identified as one of the key causes of the
widespread pest and disease infestation. Adoption of good agronomic practices
will also contribute to reducing rejects due to fruit quality issues.
GAP promotion related interventions by DA/ATI/HVCDP, non-government
organizations (NGOs) and private sector have contributed to significant
improvement in production and productivity. However, the reach has not been
extensive enough, leaving a large segment of Cardavafarmers out of the benefits
of those interventions.
Adoption of GAP among farmers has also been slow and low. In many cases,
there is still a lack of understanding among farmers on cost benefits of GAP
compliance. The Filipino farmers are calculating and generally reluctant to
changes in their farming activities for this is their way of life. They have the
"wait-and-see" attitude. Although many farmers are very much open to new
ideas and technology, there are more farmers who would first want to see a
Pgina 68

Opportunities
Constraints
Province
working model or system before they follow the lead. Likewise, farmers also lack
the resources to comply with GAP. To facilitate adoption of GAP, farmers need
both training and on-farm mentoring and monitoring including assistance in
aligning current production system to GAP at the least cost.
PROCESSING
Implementation and
adoption of standards
such as GMP can play a
positive role in providing
the catalyst and
incentives for the
modernization of the
banana chips industry
and the adoption of safer
and more sustainable
production and
processing activities
which can be
differentiation factors
that can institutionalize
market competitiveness
Lack of access to skills

and resources to comply
with GMP (especially
micro enterprises)
Street food preparation
not aligned with food
safety protocols
ZAMBOANGA PENINSULA
Zamboanga City
NORTHERN MINDANAO
Bukidnon
Misamis Oriental
DAVAO REGION
Davao del Sur
Davao del Norte
Davao City
Davao Oriental
Compostela Valley
SOCCSKSARGEN
North Cotabato
Sarangani
CARAGA
Agusan del Norte
GMP compliance is a basic requirement to get permits to operate which are

necessary to penetrate institutional buyers and to work with big exporters.
Without the basic BFAD certification, enterprises are not able to penetrate bigger
and more lucrative markets.
Microprocessorsmake use of makeshift cooking facilities and areas. Poor
processing facilities are compensated with use of premium quality Cardava which
is more expensive.
A common prejudice held against street foods are that they are unsafe to eat
(dirty). Food products are often prepared and stored under non-sanitary
conditions. The preparation and processing of food also influence nutrient loss
and, thus, affect the nutritional quality of the product. Similarly, ingredients can
enhance or deteriorate health and nutrition benefits of ready to eat Cardava
based meals and snacks. Likewise, it also affects perceived value of products.
MARKETING
The shelf-life of bananas
can be prolonged by
proper
storage
and
postharvest handling
Poor
postharvest ZAMBOANGA PENINSULA
handling and facilities Zamboanga del Norte
Zamboanga del Sur
especially among buying Zamboanga Sibugay
stations resulting to high Zamboanga City
levels of losses
NORTHERN MINDANAO
Bukidnon
Misamis Oriental
Pgina 69

Opportunities
Constraints
Province
Misamis Occidental
Camiguin
Lanao del Norte
DAVAO REGION
Davao del Norte
Davao del Sur
Davao Oriental
Compostela Valley
Davao City
SOCCSKSARGEN
North Cotabato
Sarangani
South Cotabato
Sultan Kudarat
CARAGA
Agusan del Sur
Surigao del Sur
ARMM
Maguindanao
Handling the produce at the postharvest stage is as important as maintaining the

quality of the fruit at the farm production level. Postharvest losses at buying
stations can reach up to 20% due to lack of appropriate facilitiesand losses to
vermin and other pests.
The very large population
in the Philippines and
increasing consciousness
for healthy snack food
provides opportunities to
develop the local market
for
other
processed
Cardava based products
Growing market for halal
products
Weak demand for banana

chips in local market
ZAMBOANGA PENINSULA
Zamboanga del Sur
Zamboanga City
Lack
of
product NORTHERN MINDANAO
differentiation/ available Bukidnon
Misamis Oriental
product formats
Lack of value addition in
ARMM provinces
DAVAO REGION
Davao del Sur
Davao City
SOCCSKSARGEN
North Cotabato
Sarangani
CARAGA
Agusan del Norte
ARMM
Maguindanao
Lanao del Sur
Basilan
Sulu
Tawi-tawi
Trade of banana chips is often limited within the locality and pasalubong shops.
To broaden the market base and increase frequency of purchase of banana chips
in the local market, a new marketing concept has to be introduced to (re)position
the product in the minds of the consumers. A positioning that combines gourmet
snack food, with an ecological and healthy lifestyle can potentially add to the
current volume of sales without affecting current positioning as a pasalubong
Pgina 70

Opportunities
Constraints
Province
product.
The lack of initiatives among processors especially the micro enterprises and
collective/coop-based enterprises to develop and diversify products can be
attributed to the following: a) lack of knowledge of potential market segments
and its requirements and product standards are based on locally accepted
norms; b) weak product development skills; andc) smallness of operations and
current markets including limited individual capacity to invest in product
development.
In ARMM provinces (especially the island provinces), trade of Cardava is usually
just within the locality. The processing of banana into halal snackproducts
canprovide opportunity for small producers and farmer groups to increase the
value added to primary production.
LGU willing to cost share
in the construction and
maintenance of farm to
market roads.
Poor farm to market

roads
All Mindanao provinces except

Basilan, Sulu, and Tawi-tawi
Good roads can reduce

cost
of
transactions,
delays in delivery, and
postharvest losses
A significant number of farms are located in areas where roads are unpaved and,
oftentimes, narrow for trucks to pass. There is a significant difference in the cost
of moving goods in rural areas on dirt roads as opposed to on paved roads. This
difference is usually reflected back on the price received by farmers. Likewise,
road conditions and, consequently, the high transport costs, provide
disincentives for traders to source from these areas. This limits the options of
farmers to a few traders and forces them to be price takers. Rough roads and
potholes combined with poor packaging contribute to postharvest losses.
Pgina 71
Section 8:
COMPETITIVENESS DIRECTIONS
A. COMPETITIVENESS VISION
The industrys vision of creating long-term competitiveness and sustainability

centers on the establishment of an efficient and integrated supply chain
management geared towards the achievement of the following:
g) Adequate supply and widespread use of tissue cultured planting materials to
minimize risks of pest and disease infestation and, consequently, ensure
stable supply of Cardava
h) Improved access to, availability, use, and utilization of organic fertilizer and
other inputs appropriate for Cardava banana farming while reducing
environmental costs
Pgina 72
i) Enhanced flow and quality of extension services for Cardava farming to

facilitate adoption of GAP for improved productivity and product quality
j) Improved access to GMP compliant postharvest and distribution technologies
and facilitiesto reduce postharvest losses and maintain product quality
k) Availability and access to improved processing technologies,
product
development services,
and GMP and Halal compliant common service
facilities to facilitate the production of commercially viable Cardava-based
products
l) Improved physical/infrastructure linkages to input, support, and product
markets
B. PRIORITY
CONSTRAINTS/OPPORTUNITIES
INTERVENTIONS
AND
Drawing on findings from the end markets and value chain analysis and the focal
points of action identified by VC actors and stakeholders, below are the proposed
intervention strategies and approaches to improve market competitiveness of
the Mindanao Cardava banana industry while promoting broad based growth and
climate change resilience. Prioritization of interventions for each of the Cardava
producing provinces is presented in Annexes 1 to 6 while specific approaches for
each province are indicated in Table __.
Input Provision
1. Strengthen local capacity to commercially produce and distribute high

yielding and disease resistant planting materials
Although tissue culture technology is well developed in the Philippines, tissue

cultured plantlets are not readily available to many of the banana smallholders
due to insufficient and relatively underdeveloped distribution channels. A limited
understanding of the benefits of tissue cultured planting materials has also
contributed to limited uptake among farmers.
The proposed strategy to promote the use of tissue cultured planting materials
among farmers rather than the conventional suckers from own farm or neighbors
which have greater risk of being infected with diseases is focused towards the
development of improved and efficient market pathways to deliver clean planting
materials. The set of suggested intervention approaches consists of two basic
components, namely: a) strengthening the supply of tissue cultured planting
materials; and b) stimulating the demand for these planting materials.
Key supply side interventions consist of the following:
a) Establishment and/or scaling up of existing tissue culture laboratories in key
Cardava producing provinces. Main objective is to enable laboratories to
produce plantlets at the most economical cost and in sufficient quantity
throughout the year.
Pgina 73
b) Set-up of community-based nurseries for acclimatization and as distribution

centers to ensure accessibility and reduce risks of damage due to poor
packaging and transport.
c) Upgrading of seed banks to support the operations of the tissue culture
laboratories
To stimulate effective demand for tissue cultured plantlets, PRDP can implement
a voucher based program or a Plant Now Pay Later scheme or other similar
demand creation mechanisms rather than the usual distribution of free planting
materials which undermine the development of effective demand and supply. In
a voucher program, farmers pay for a portion of the cost of planting materials
and redeem the voucher to a program accredited supplier of their choice. A
voucher program helps increase effective demand by making farmers aware of
the improved planting materials available within the locality and allowing them
the opportunity to acquire small quantities of these materials at low risk and
investment to test on their farms, which they might then purchase for
themselves in subsequent seasons. The use of vouchers can also help in
strengthening cash flow of nurseries as well as encourage operators to provide
good quality to generate repeat clients.
It is also recommended that PRDP develops the capacity of nurseries to deliver
embedded technical assistance to their clients. Assistance to nurseries in the
establishment of model farms as learning venues where clients can visually
validate results to make informed decisions is also deemed necessary.
Successful Cardava production by farmer-clients will create sustainable market
for nurseries. In recognition of farmers inherent inclination to trust more on
peers accounts of lessons learned, cross-trainings and exchange visits among
nurseries and laboratories should be promoted to accelerate dissemination of
good practices and its adoption. Media may also be tapped to assist in the
dissemination of emerging good practices and success stories.
2. Strengthen supply and demand for certified/accredited organic fertilizer

parallel to promoting proper fertilizer management and application
Studies show that continuous cultivation using low external inputs decreases soil
fertility and crop yields. A combination of mineral and organic fertilizers is
necessary to sustain and improve crop production on depleted soils. Fertilizer
use can improve banana production but recommendations should be site-specific
and should address existing nutrient deficiencies in farmers fields.
It is, therefore, proposed that program supports the development of a vibrant
market for organic fertilizer, which is 50% to 75% cheaper than chemical inputs.
Likewise, there is a need to provide farmers with access to services to guide
them in proper fertilizer management and application to boost productivity
parallel to improving profitability. Specific interventions under this strategy
would consist of the following:
(1) Set-up of community-based organic fertilizer plant and/or upgrading and
scaling up of existing fertilizer enterprises including assistance to get the
necessary certification/ accreditation.
Establishment of community-based plant for technological inputs will reduce
dependence on expensive external inputs and facilitate shift towards
Pgina 74
sustainable, regenerative production systems. This will also contribute to

employment generation and solid waste management.
Aside from assistance in setting up the necessary infrastructure, capacity
building support should also be geared towards helping enterprises produce
fertilizer (from agri-waste materials such as banana peels, trunks, coco husk,
etc.) that match agro-ecological zones and cropping systems of banana
growers in their area parallel to increasing their productivity, production
capacity, and product quality. This will enable fertilizer enterprises to offer
consistent and reliable supply of alternative fertilizer products of better
quality and improved effectiveness at lesser cost, which will result to lower
production costs of Cardava.
. Training and coaching on business
management and marketing will assist CBPUs to improve its internal
infrastructure to better serve the clients while ensuring its financial viability.
(2) Development of distribution network/ retail network to ensure proximity of
supply to farmers
Program may want to explore the viability of utilizing sari-sari stores as
among the retail outlets. Producers may want to explore the viability of
distributing these in small affordable packs in line with the sachet or tingi
mentality of smallholders and their cash flow. The small pack approach is
intended to enable smallholders to achieve incremental gains in yield and
income over a few seasons and ultimately graduate to using the required
fertilizer application
(3) Development of capacity of organic inputs providers and retailers to deliver
technical advice to farmer clients and basic soil test analysis or via
partnership with providers of soil analysis
Promotion of fertilizer use must be complemented with extension services to
ensure that fertilizers have the correct formulation to meet local soil needs,
are applied in the correct amount and at the optimal point in the planting
cycle, and are used alongside complementary inputs such as improved
planting materials. Without proper application, fertilizer use can actually
decrease profitability by creating a significant added cost without a
corresponding increase in crop yields. As such, in addition to assisting
fertilizer producers to scale up their production capacities, they must also be
capacitated to deliver advisory services to their farmer clients. It may also be
possible to integrate soil testing services with fertilizer distribution. Fertilizer
demand must be promoted with an integrated approach to increasing the
profitable use of fertilizer by farmers through extension services, and linking
farmers to output markets.
d) Interventions to create effective demand
Demand for fertilizer may be stimulated through the following approaches: i)
demo farms highlighting organic fertilizer use and appropriate crop and soil
management; ii) point-of-sale knowledge transfer; iii) voucher programs (as
described under planting materials) or similar market-based based
mechanisms; and iv) tri-media dissemination of emerging good practices and
success stories.
Farming
Pgina 75
3. Improve farmers access to skills and resources that would enable them to
adopt good agronomic practices parallel to ensuring that there are sufficient
market-based incentives to facilitate chain wide upgrading
The proposed strategy involves the development and/or strengthening of

localized capacity for learning and innovation through promotion of inter-firm
cooperation and support to set-up and/or strengthening of community-based
extension services delivery system. This will facilitate access of farmers to
technology and resources that will enable them to improve their agronomic
practices parallel to improving chances of the latter adopting the practices to
their benefit. Technology transfer will focus on enabling farmers to incrementally
shift to production systems aligned to principles of GAP and sustainable farming.
This will address communities need for increased farm productivity, reduced
production risk, maximized use of land or better resource allocation, and
enhanced diversity and ecological balance. GAP adoption will also facilitate
improved compliance to food safety which has become a primordial factor of
quality and competitiveness both for domestic and export markets. Likewise, it
will contribute to streamlining social and environmental sustainability in Cardava
production.
The following are the key interventions under this strategy:
a) Formation of farmer training groups or learning clusters organized around
consolidators (e.g., cooperatives, assemblers) or lead firms (banana chips
processors).
This will involve the organization of interested farmers into farmer training
groups. Each group will have lead farmers selected based on interest,
experience, and leadership qualities. Lead farmers will receive in-depth training
on GAP and may be compensated with the produce from the project supported
demonstration farms. The lead farmers will provide training to peers with lead
firms or consolidators providing the marketing perspectives and market
assurance.
Upgrading is a collaborative undertaking among all participants in a chain.
Establishing clear standards and goals that are communicated on a regular basis
is critical to successful upgrading. As such, the participation of farmers and their
buyers in the upgrading process is important. Based on experiences also,
farmers are more receptive to new practices and technology when lead firms or
buyers are involved in the upgrading process. It gives them some confidence
that upgrading will result to tangible benefits.
b) Development of lead farmer-trainers per cluster including delivery and
financial sustainability schemes
This is aimed at complementing the extension services provided by ATI, LGUs,
and input suppliers. Diversity of extension provision, from government extension
officers to community-based and value chain-based providers, will give farmers
greater choice of sources of information, knowledge, and skills to support the
long-term sustainability of their farm enterprise,
An influential core group of farmer-trainers can be leveraged to involve their
peers and make that one small shift that produces widespread change. Aside
from providing training services, the members of this core group can become
Pgina 76
role models and help to reduce uncertainty about a new idea by adopting it, and
then conveying a subjective evaluation of the innovation to peers.
To avoid volunteerism fatigue, it is crucial to develop financial sustainability
schemes. Community trainers can, perhaps, be given a commission from sales
of bananas of the group he/she is working with or a share in the sales from
demonstration farms.
c) Harmonization of pricing structure based on standards and improvement of
supply chain governance
Many (mis)trust issues stem from varying interpretations and uneven
implementation of standards and price structure. Harmonization of interpretation
of standards and reflecting these in the price structure will provide incentives for
upgrading.
Effectiveness of collaboration among and between value chain players and their
consequent collective adherence to standards depend to a great extent on
whether they view themselves as having shared goals and mutual interests.
Therefore, it may be necessary also for PRDP to provide organizational
development support as well as conduct social marketing campaigns. However,
the best trigger for tighter collaboration and cooperation is the pursuit of bigger
markets and better prices.
d) Interventions to stimulate adoption of GAP/sustainable farming practices
To begin a dialogue about upgrading, there is need to first identify issues that
participants could readily connect with. By linking the benefits of upgrading to
farmers priority issues and developing an understanding of the impacts each
actor could have on the whole value chain, there is a high probability that
participants at different points on the value chain can be encouraged and
motivated to work together. At the time of the field work up to the Stakeholders
Consultation, for example, a key issue among farmers was the high incidence of
pests and diseases during the recent years. It may be difficult for value chain
actors to see how an abstract concept such as good practices will result in
tangible benefits to them. Using an incremental approach, PRDP can start with
those improvements that address the most pressing needs of producers, buyers,
and traders.
It is recommended to employ participatory learning methods, such as
demonstration plots and hands-on training, to build knowledge of less wellunderstood areas, such as pest control. Conduct of friendly competition is also a
way to make learning and upgrading fun. The contests can provide incentives to
farmers to become aligned with GAP, while simultaneously demonstrating the
effects of good practices. Good practices and innovative solutions that will
emerge from the competitions can be incorporated into the GAP manual and
training modules, helping capture and further disseminate new learning. The
competitions are also a way to quickly monitor farmers understanding of
different elements of GAP and take corrective action whenever necessary.
It is also suggested to involve media in the dissemination of technical and
market information, as well as in highlighting successful initiatives and
innovations. Disseminating information in a variety of waysprint materials, in-
Pgina 77
person events, competitions, and main-stream mediaensures that as many

value chain actors as possible can hear and understand the messages.
Processing
4. Improve capacity of enterprises to comply with GMP

This will involve the set-up of GMP/HACCP compliant toll processing facility or
upgrading of existing facilities for production of banana chips and similar
products. This can also serve as an incubator/R and D laboratory for promising
Cardava-based products.
Rather than developing a single one size fits all provider", the project can work
with a range of providers in order to be able to match competencies and
structures of different groups of players at various links in the chain. Providers of
food safety related services may consist of progressive farmers, traders and
leaders in communities, graduating food technology students, government
technicians, and food technologists. It is important that the development of
modules is done in coordination with key VC players especially buyers to ensure
integration of market standards and requirements.
Snack Food/Street Food Vendors
Although this supply chain is dominated by players from poor communities, a
significant volume of Cardava produced by smallholders is marketed through this
supply chain. PRDP may want to explore the viability of a GMP compliant
common service facility/community food kitchen to serve as commissaries for
healthy and nutrient dense Cardava-based meals and snacks. This will address
concerns on food safety, nutrition, and sustainable production. Providing an
environment conducive to hygienic and eco-friendly preparation and sale of food
will catalyze uptake of good practices, improve productivity and overall
perception of street food.
Parallel to this, PRDP can develop a pool of GMP trainors consisting of
progressive vendors. There is also a need to support the development and
downloading of commercially viable Cardava recipes to the informal food service
industry to stimulate growth in demand and improve profit margins.
This may be supported with the development and promotion of hygienic snack
food carts under a rent-to-own scheme or similar mechanism. Care, however,
must be given that interventions do not displace existing vendors.
Marketing
5. Development and/or upgrading of marketing infrastructure for all types of

banana to enhance collective marketing and bulk storage
This strategy involves the establishment of a GMP compliant packing house cum
trading center supported with extension services on good postharvest practices.
For packing house and trading center to be commercially viable, it is important
Pgina 78
that area has the volume that is sufficiently attractive to lead firms and
consolidators. A basic prerequisite is for farmers to be willing to collectively
market their produce. As such, interventions will also include organizational
development and the promotion of win-win relationships between farmers
groups and consolidators or lead firms.
A GMP compliant packing house cum trading center equipped with an
appropriate level and scale of post-harvest technology can play a pivotal role in
providing a clean environment for the proper washing, sorting, grading,
packaging, and storage of bananas. It is a critical and important component of
the infrastructural base to support value adding and quality and safety
management in fresh banana supply chains. Presence of packing houses cum
collection centers within the proximity of Cardava production areas will also
reduce hauling and transport costs of farmers.
6. Upgrading of existing processed products and development of related
products that Mindanao can sustain as a marketing proposal in the domestic

market with a view of laying the groundwork for export sales
It is suggested that PRDP supports the product and market development of

Cardava-based food products targeting the healthy food sector. Product research
and development are important aspects of the processed snack food industry
given increased competition with the entry of more players and the influx of
imported brands. The big players in the snack food industry have their own
research and development teams to come-up with new and interesting products
in better and attractive packaging to attract a wider range of consumers.
In addition to the pasalubong market, a potential niche for the Cardava-based
food products is the healthy gourmet markets. An emerging trend in the snack
industry is to make classic favorites more appealing to the health conscious. To
cash in on the healthy food trend, food manufactures have to make adjustments
to their formulas by using ingredients that are all-natural or organic, low in
calories, no preservatives and chemical additives, etc. The healthy positioning
has also to be reflected in the packaging (e.g., eco-friendly materials) and in the
whole operations. The major challenge and opportunity for Northern Mindanao
enterprises is to combine tradition, health, and convenience into high quality
new food solutions produced efficiently.
Possible directions that the processed Cardava subsector can pursue:
a) Development of all natural healthy snack food. Aside from formulation of
healthy delicious recipes, this also implies using ingredients that are all
natural (e.g., naturally farmed eggs, muscovado or other healthy sugar, lowfat milk from organically raised cattle, etc.).
b) Moving away from the one size fits all concept of production and focus on
the tastes and recipes that appeal to different demographics (e.g., infants,
elderly, Halal food products, etc.)
c) Premium quality flour for gluten free applications
Marketing support ranging from trade fair participation, selling missions,
brochures, etc. should be built around the agreed image and product
differentiation factors. This can also serve as an incentive for producers to
Pgina 79
upgrade their products and processes in order to be a part of the marketing

campaign.
7. Construction and/or upgrading of farm to market roads

Farm-to-market road rehabilitation or construction will help farmer to access
markets and vital services.
Improvements of rural infrastructure can reduce
transportation and labor costs and, more generally, the cost of transaction.
Shorter travel time and good road conditions will minimize risks of product
deterioration. The overall reduction of transaction costs will contribute to
improving price competitiveness and/or better profit margins that can help
farmers cope with price fluctuations. Public investments in road infrastructure
can potentially stimulate agribusiness investment, vertical coordination with
buyers, and inclusion of small farmers in remote areas.
Pgina 80
Table 22.- Summary of Constraints/Opportunities and Interventions

Constraints/Opportuni
ty
Province
Intervention Strategy and

Approach
Who Can Do It?

Public
Private
INPUT PROVISION
Limited supply of good
quality
disease
free
planting materials/ Lack
of
tissue
culture
laboratories
ZAMBOANGA PENINSULA
Zamboanga del Norte (1 to
6)
Zamboanga del Sur (2 to 6)
Zamboanga Sibugay (2 to 6)
Zamboanga City(2 to 6)
Low willingness among

farmers to invest in good
quality planting materials
NORTHERN MINDANAO
Bukidnon (1 to 6)
Camiguin (2 to 6)
Lanao del Norte (1 to 6)
Misamis Occidental (2 to 6)
Misamis Oriental (2 to 6)
Opportunities
Use of tissue cultured
planting materials can
significantly
improve
yield of farmers
Village level nurseries
can potentially reduce
cost of tissue cultured
provide
additional
income to farmers
DAVAO REGION
Davao del Norte (1 to 6)
Davao del Sur (1 to 6)
Davao Oriental (1 to 6)
Compostela Valley (1 to 6)
Davao City (1 to 6)
SOCCSKSARGEN
North Cotabato (1 to 6)
Sarangani (2 to 6)
South Cotabato (2 to 6)
Sultan Kudarat (2 to 6)
CARAGA
Agusan del Norte/Butuan
City
(1 to 6)
Agusan del Sur (2 to 6)
Surigao del Norte (2 to 6)
Surigao del Sur (2 to 6)
Strengthen local capacity to DA/PRDP

Cooperatives
commercially
produce
and - Technical and - Management
distribute
high
yielding
and
financial
and operations
disease
resistant
planting
support
of nurseries
materials
BPI/DOST/ HVCDP
(1) Establishment
and/or - Technical
upgrading of existing tissue
assistance
culture laboratories
- R and D
(2) Establishment of community- PLGU/MLGU
based nurseries
- Coordination
- Monitoring
(3) Implementation of voucher - Follow-through
program
or
similar
extension
mechanisms
to
encourage
services
farmers to use clean planting - Organizational
materials of the high yielding
Development
varieties.
- Management
and operations
(4) Development of capacity of
of tissue culture
nursery operators to provide
laboratories
technical advice
Existing
tissue
(5) Support
the
establishment culture
and/or upgrading of seed laboratories
banks.
- Mentoring
and
technical
Pgina 81

ty
Province
ARMM
Basilan (2 to 6)
Lanao del Sur (2 to 6)
Maguindanao (1 to 6)
Sulu (2 to 6)
Tawi-tawi(2 to 6)
High cost
inputs
of
chemical
Limited availability and

commercial distribution
of organic fertilizer and
inputs
Lack of understanding
among farmers on cost
benefits of proper and
efficient
use
of
fertilizer/Only very few
farmers apply fertilizer
Low level of purchasing
power
among
smallholders
Opportunities
Proper application and
management of fertilizer
and pesticides together
ZAMBOANGA PENINSULA
5)
NORTHERN MINDANAO
Bukidnon (1 to 5)
Camiguin (2 to 5)
DAVAO REGION
Davao City (1 to 5
SOCCSKSARGEN
Sarangani (2 to 5)
CARAGA

Approach
(6) Documentation
dissemination
good practices
of
and
emerging
Who Can Do It?

Public
Private
guidance
Strengthen supply and demand DA/PRDP

Cooperatives
for certified/accredited organic - Technical
and - Management
fertilizer parallel to promoting
financial support
and
proper fertilizer management and
operations of
application
ATI
fertilizer
- Training
and
business
(1) Set-up of community-based
technical
- Promotional
organic fertilizer plant and/or
assistance
campaign
upgrading and scaling up of
existing fertilizer enterprises PLGU/MLGU
including assistance to get the - Organizational
necessary
certification/
development
accreditation
- Follow through
extension
(2) Implementation of voucher
services
program or similar tool to - Organization of
stimulate purchase and use of
training
and
organic fertilizer/inputs and
similar activities
reduce risk averseness among - Coordination of
farmers
voucher
program
or
(3) Set-up of demo farms to
similar
showcase benefits and venue
mechanism
for learning
Pgina 82

ty
with
use
of
quality
good
agronomic
practices can potentially
result to yield of 50 to 80
kilos per bunch
Agri-waste can be used in
the production of organic
fertilizer. There are also
existing
enterprises
engaged in production of
organic fertilizer but not
specifically for banana
Province
City
(1 to 5)
ARMM
Basilan (2 to 5)
Lanao del Sur (2 to 5
Sulu (2 to 5)
Tawi-tawi(2 to 5)

Approach
Who Can Do It?

Public
Private
(4) Development of distribution

network/ retail network to
ensure proximity of supply to
farmers
(5) Develop capacity of organic
inputs providers and retailers
to deliver technical advice to
farmer clients and basic soil
test analysis or via partnership
with providers of soil analysis
FARMING
Limited
existing
services
outreach
of
extension
Cardava
traditionally
grown
with
minimal
investments
on
farm
maintenance and inputs
Low uptake and adoption
of Good Agricultural
Practices
ZAMBOANGA PENINSULA
6)
Zamboanga Sibugay 1 to 6)
NORTHERN MINDANAO
Bukidnon (1 to 6)
Camiguin (1 to 6)
DAVAO REGION
Improve farmers access to skills

and resources that would enable
them to adopt good agronomic
practices parallel to ensuring that
there are sufficient market-based
incentives to facilitate chain wide
upgrading
DA/PRDP
Cooperatives
- Technical
and - Base
of
financial support
delivery
of
services
ATI
- Management
- Training/
of
demo
technical
farms
assistance
(1) Formation of farmer training - Support
to
groups or learning clusters
certification
organized around consolidators
HVCDP
(2) Development of lead farmer - Training/
trainers per cluster including
technical
Pgina 83

ty
Opportunities
Upgrading of low cost
indigenous technologies
that have good potentials
of improving farm
productivity
There are progressive
farmers in Lanao del
Norte, North Cotabato,
and Davao Region
especially Davao del Sur
who have been trained in
GAP and are willing to
share best practices with
peers
Interest among
cooperatives and traders
to increase volume/
yields to get premium
prices (traders pay
higher prices if
farmers/groups deliver
significant volume)
Province
Davao City (1 to 6)
SOCCSKSARGEN
Sarangani (1 to 6)
CARAGA
City
(1 to 6)
ARMM
Basilan (1 to 6
Lanao del Sur (1 to 6)
Sulu (1 to 6)
Tawi-tawi(1 to 6)

Approach
delivery
and
financial
sustainability schemes
Who Can Do It?

Public
assistance
BAFPS
- Technical
assistance
- Development of
low-cost
measures
to
comply
with
certification
(3) Participatory
development
(with farmers, multinational/
agents, traders) of modules on
sustainable farming practices
to ensure buy-in and ownership
of
stakeholders
and
conformance
to
market
requirements
including
technical assistance in the PLGU/MLGU
development
of
training - Organizational
approaches that allow quick
development
wins to motivate and sustain - Follow through
adoption
extension
services
(4) Conduct of competitions to - Organization of
motivate adoption, stimulate
training
and
innovation,
and facilitate
similar activities
identification of emerging good - Support
practices as basis for regular
certification
updating of modules
(5) Dissemination
good practices
of
emerging
(6) Harmonization
of
pricing
structure based on standards
and improvement of supply
Pgina 84
Private

ty
Province

Approach
Who Can Do It?

Public
Private
chain governance
PROCESSING
Lack of access to skills
and resources to comply
with GMP
(especially
micro enterprises)
Opportunity
Implementation
and
adoption of standards
such as GMP and HACCP
and
other
relevant
quality standards can
play a positive role in
providing the catalyst
and incentives for the
modernization
of
the
banana chips industry
and the adoption of safer
and more sustainable
production
and
processing
activities
which
can
be
differentiation
factors
that can institutionalize
market competitiveness
ZAMBOANGA PENINSULA
Zamboanga City(1 and 2)
NORTHERN MINDANAO
Bukidnon (1 and 2)
Misamis Oriental (1 and 2)
DAVAO REGION
Davao del Sur (1 and 2)
Davao City(1 and 2)
Davao del Norte (1 and 2)
Davao Oriental (1 and 2)
SOCCSKSARGEN
North Cotabato (1 and 2)
Sarangani (1 and 2)
CARAGA
City
(1 and 2)
Improve capacity of enterprises to

comply with GMP
(1) Set-up
of
GMP/HACCP
compliant
toll
processing
facility
and/or
upgrading
support
to
cooperatives
currently engaged in banana
processing
(2) Development of a core group
of local experts to provide
hands-on
training
and
mentoring to CSF users
DA/PRDP
Cooperatives
- Technical
and - Base
of
financial support
delivery
of
services
DOST/DTI
- Management
- GMP
Training/
of
Common
technical
Services
assistance
Facilities
- Product
Development
Technical
Assistance
PLGU/MLGU
- Organizational
development
- Follow through
extension
services
- Organization of
training
and
similar activities
ATMM
Maguindanao (1 and 2)
MARKETING
Poor
postharvest
ZAMBOANGA PENINSULA
Development and/or upgrading of
Pgina 85
DA/PRDP
Cooperatives

ty
Province
handling
and
facilitiesespecially among
buying stations resulting
to high levels of losses

3)
Opportunities
NORTHERN MINDANAO
Bukidnon (1 to 3)
Misamis Oriental(1 to 3)
Camiguin (1 to 3)
The shelf-life of bananas

can be prolonged by
proper
storage
and
postharvest handling
DAVAO REGION
Compostela Valley(1 to 3)
Davao City (1 to 3)
SOCCSKSARGEN
Sarangani (1 to 3)
CARAGA
City
(1 to 3)

Approach
marketing
infrastructure
to
enhance collective marketing and
bulk storage
Who Can Do It?

Public
Private
- Technical
and
financial support
- Management
and operations
of
common
service
facilities
PhilMech
(1) Foster
linkages
between - Technology
farmer
groups
and
transfer
exporters/processors including - Customization of
the development of business
equipment/
models and its piloting
- facilities to fit in
with terrain and
(2) Establishment
and/or
requirements of
upgrading of buying stations
area
(collection point,
sorting,
storage) for all types of PLGU/MLGU
banana
- Follow through
assistance
(3) Set-up of pool of mentors to - Organizational
provide training on good
development
postharvest practices and to
foster an entrepreneurial mind ATI/DTI
set
- Enterprise dev
training
ARMM
Weak demand for banana

chips in local market
ZAMBOANGA PENINSULA
Zamboanga del Sur (1 and
Upgrading of existing processed

products and development of
Pgina 86
DA/PRDP
- Technical
and
Cooperatives
- Management

ty
Lack
of
product
differentiation/ available
product formats
Opportunity
The very large population
in the Philippines and
increasing consciousness
for healthy snack food
provides opportunities to
develop the local market
for
other
processed
Cardava based products
Poor farm to market

roads
Province
2)
Zamboanga City(1 and 2)
NORTHERN MINDANAO
Bukidnon (1 and 2)
Misamis Oriental(1 and 2)
DAVAO REGION
Davao del Sur (1 and 2)
Davao City (1 and 2)
SOCCSKSARGEN
North Cotabato (1 and 2)
Sarangani (1 and 2)

Approach
Who Can Do It?

Public
related products that Mindanao

financial support
can sustain as a marketing
proposal in the domestic market DOST/DTI
with a view of laying the - Product
groundwork for export sales
Development
Technical
(1) Process
and
product
Assistance
development support targeting - Market
healthy snack food and halal
Development
markets
(2) Brand
and
market PLGU/MLGU
development
campaign
- Organizational
CARAGA
development
City
- Follow through
(1 and 2)
extension
services
ARMM
Organization of
Maguindanao(1 and 2)
Basilan, Sulu, Tawi-tawi /1 and 2)
training
and
similar activities
All
provinces
except
Basilan, Sulu and Tawi-tawi
Construction and/or upgrading of

farm to market roads
Opportunity
LGU willing to cost share
in the construction and
maintenance of farm to
market roads.
Pgina 87
Private
of Collective
Enterprises
Pgina 88
Section 9:
CONCLUSIONS AND RECOMMENDATIONS
1. Strengthening the processed banana (chip and IQF) and fresh market (home
consumption and snack food) supply chains will help stabilize the incomes of
participants in the chains, particularly farmers, and provide the latter with
diversified markets for their produce. The upgrading strategy should involve
moving farmers and supply chains into progressively higher-value markets in
small steps, with specific attention to product, process, and functional
upgrading. Main thrusts of the interventions should focus on the following
competitiveness issues:
a) Reliability and predictability of supply
b) Productivity and efficiency improvements from farm to distribution
c) Improvement of capacity and capability to comply with quality and food
safety standards
d) Reduction of postharvest losses
e) Product differentiation and diversification (organic/all natural healthy food
products, Halal food products, low-cost safe and healthy snacks, etc.)
f) Functional upgrading (farmers taking up additional functions such as
nursery operations, organic fertilizer production and distribution, collective
marketing, processing, etc.)
2. The huge demand for halal food products in the world market is an
opportunity that ARMM can potentially anchor its development directions for
the next coming years. Commercial production and distribution of Halal
processed Cardava snack foods may be among the product opportunities that
the region can explore.
3. The typical response to bridge the demand supply gap has been to increase
the area under Cardava cultivation but yield (productivity) has remained low
in many areas in Mindanao. This has led to higher production cost. Increasing
area under Cardava cultivation is not sustainable more so with the growing
scarcity of fertile lands. A more sustainable approach would be to promote
yield intensification through improved productivity. Farmers in Davao del Sur
and North Cotabato have shown the yields as high as 40 MT per hectare is
possible.
Pgina 89
ANNEX 1:
PRIORITIZATION OF INTERVENTION
STRATEGY:
ZAMBOANGA PENINSULA
Ranking and Prioritization of intervention Strategy per Province
Ranking and Prioritization: Zamboanga Peninsula
Intervention Strategy
ZDN
ZDS
Sibugay
ZC
Strengthen local capacity to

commercially produce and
distribute high yielding and
disease resistant planting
materials
Strengthen supply and demand for

certified/accredited organic
application

upgrading

comply with GMP

marketing infrastructure to
bulk storage

proposal in the domestic market
with a view of laying the

Pgina 90
ANNEX 2:
STRATEGY:
NORTHERN MINDANAO
Ranking and Prioritization: Northern Mindanao

Mis
Or
Lanao
Bukidn
on
Mis
Occ
Camig
uin

materials
Strengthen supply and demand

for certified/accredited organic
application

upgrading

comply with GMP

bulk storage
Pgina 91

ANNEX 3:
STRATEGY:
DAVAO REGION
Ranking and Prioritization: Davao Region
Davao
del
Norte
Davao
del Sur
Davao
City
Davao
Orienta
l
Compost
ela

materials

application

upgrading
Pgina 92
comply with GMP

bulk storage


ANNEX 4:
STRATEGY:
SOCCSKSARGEN
Ranking and Prioritization: SOCCSKSARGEN
South
Cotabat
o
North
Cotabat
o
Saranga
ni
Sultan
Kudarat

materials

application
Pgina 93

upgrading
comply with GMP

bulk storage


ANNEX 5:
STRATEGY:
CARAGA
Ranking and Prioritization: Caraga

Agusan
del
Norte/
Butuan
City
Agusan
del Sur
Surigao
del
Norte
Surigao
del Sur
Pgina 94

materials
application

upgrading

comply with GMP

bulk storage


ANNEX 6:
STRATEGY:
ARMM
Ranking and Prioritization: ARMM
Pgina 95
Lanao
del Sur
Basilan
Maguinda
nao
TawiTawi

materials

application

upgrading
Improve capacity of enterprises

to comply with GMP

bulk storage


Pgina 96

Cardava Value Chain Analysis

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PHILIPPINE RURAL

VALUE CHAIN ANALYSIS AND

Background Information and Objectives

Methodology and Approach

Section 2: OVERVIEW OF THE INDUSTRY

Section 3: NATURE AND STRUCTURE OF INDUSTRY

Value Chain Mapping

Key Players and Function

Nature of Interfirm Relationship

Price and Cost Structure

Section 4: MARKETS AND MARKET OPPORTUNITIES

Markets and Market Trends

Section 5: SUPPORT SERVICES

Section 6: ENABLING ENVIRONMENT

Formal Rules, Regulations, and Policies

Informal Rules and Socio-Cultural Norms

Section 7: CONSTRAINTS AND OPPORTUNITIES

Section 8: COMPETITIVENESS DIRECTIONS

Priority Constraints/Opportunities and Interventions

Section 9: CONCLUSIONS AND RECOMMENDATIONS

Annex 1, 2, 3, 4, 5, AND 6: PRIORITIZATION OF

MB/II.- CARDAVA VCA STUDY, DA-PRDP- MINDANAO CLUSTER

Key Cardava Products Traded in Mindanao

World production of Banana, 2009 and 2013

Breakdown of Banana Production (In MT) by Genotypes: 2010

Cardava Production in the Philippines by Region ranked

Top Ten Cardava Producing Provinces in the Philippines, 2013

Cardava Production Trends in Zamboanga Peninsula, 2009 to

Cardava Production Trends in Northern Mindanao, 2009 to 2013

Cardava Production Trends in Davao Region, 2009 to 2013

Cardava Production Trends in SOCCSKSARGEN, 2009 to 2013

Cardava Production Trends in CARAGA, 2009 to 2013

Cardava Production Trends in ARMM, 2009 to 2013

Banana Chips Exporters in Mindanao

First Fry Facilities and Subcontractors in Mindanao

Indicative Costs and Return for 1 hectare of Cardava Banana

Relative Financial Position of VC Players: 1 kilo of fresh banana

Relative Financial Position of VC Players: 1 kilo of banana chips

Volume and Value of Banana Chips Exports, 2007 to 2011

Size Classification of Cardava Banana

Banana Shipments from Mindanao, 2009

Farm Gate Price of Cardava in Mindanao Regions, 2009 to 2013

Constraints and Opportunities

Summary of Constraints/Opportunities and Interventions

MB/II.- CARDAVA VCA STUDY, DA-PRDP- MINDANAO CLUSTER

USES AND BY-PRODUCTS OF CARDAVA BANANA

BANANA GENOTYPES AND CONSUMPTION GROUPS

PERCENTAGE BREAKDOWN OF BANANA PRODUCTION IN THE

BREAKDOWN OF BANANA PRODUCTION IN THE PHILIPPINES

PERCENTAGE BREAKDOWN OF BANANA PRODUCTION IN

VALUE CHAIN MAP FOR FRESH CARDAVA FOR RETAIL

FLOW OF CARDAVA FROM MINDANAO TO KEY URBAN

TYPICAL MODE OF DELIVERY TO BUYING STATIONS IN

VALUE CHAIN MAP FOR PROCESSED BANANA

COLLECTION OF CARDAVA FROM BUYING STATION IN

FLOW OF CARDAVA TO PROCESSOR-EXPORTERS

VALUE CHAIN MAP FOR CARDAVA SNACK FOOD

BANANA CUE VENDOR BUYING CARDAVA FROM A

GEOGRAPHIC FLOW OF CARDAVA

PHILGAP CERTIFIED CARDAVA FARM IN DAVAO DEL SUR

EXAMPLE OF A WELL-MAINTAINED CARDAVA FARM IN DAVAO

TYPICAL BUYING STATIONS IN MINDANAO

CARDAVA REJECTS AT BUYING STATION