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VALUE CHAIN ANALYSIS AND

COMPETITIVENESS STRATEGY:
FRESH MANGO IN MINDANAO

PHILIPPINE RURAL DEVELOPMENT PROGRAM


I-PLAN Component, Mindanao Cluster
FINAL REPORT

Meriam L. Buguis
Table of Contents

EXECUTIVE SUMMARY ........................................................................................................................... 1


Section 1: INTRODUCTION .................................................................................................................. 4
A. BACKGROUND INFORMATION AND OBJECTIVES....................................................................... 4
B. OBJECTIVES OF THE STUDY ........................................................................................................ 8
C. SCOPE, METHODOLOGY AND APPROACH ................................................................................. 9
Section 2: OVERVIEW OF THE MANGO INDUSTRY ............................................................................ 10
A. PRODUCT DESCRIPTION ........................................................................................................... 10
B. PRODUCTION TRENDS.............................................................................................................. 12
1. Global Production ................................................................................................................ 12
2. Philippine Production........................................................................................................... 19
3. Mindanao Production .......................................................................................................... 24
Section 3: NATURE AND STRUCTURE OF THE INDUSTRY .................................................................. 36
A. VALUE CHAIN MAPPING........................................................................................................... 36
B. KEY PLAYERS AND FUNCTIONS ................................................................................................ 38
C. NATURE OF INTERIM RELATIONSHIPS ..................................................................................... 47
D. PRICE AND COST STRUCTURE .................................................................................................. 49
Section 4: MARKETS AND MARKET OPPORTUNITIES ........................................................................ 56
A. MARKETS AND MARKET TRENDS ............................................................................................. 56
B. PRICE TRENDS .......................................................................................................................... 66
Section 5: SUPPORT SERVICES........................................................................................................... 69
A. FINANCIAL SERVICES ................................................................................................................ 69
B. NON-FINANCIAL SERVICES ....................................................................................................... 71
Section 6: ENABLING ENVIRONMENT ............................................................................................... 74
A. FORMAL RULES, REGULATIONS, AND POLICIES ..................................................................... 74
B. INFORMAL RULES AND SOCIO-CULTURAL NORMS .................................................................. 74
Section 7: CONSTRAINTS AND OPPORTUNITIES ............................................................................... 75
Section 8: COMPETITIVENESS DIRECTIONS ....................................................................................... 81
A. COMPETITIVENESS VISION ....................................................................................................... 81
B. PRIORITY CONSTRAINTS, OPPORTUNITIES AND INTERVENTIONS ........................................... 82
Section 9: RECOMMENDATIONS AND CONCLUSIONS ...................................................................... 95
List of Tables
Table 2.1 Common Mango Varieties and its characteristics ............................................................................. 11
Table 2.2 Mango, Mangosteen and Guava World Production, 2010-2012...................................................... 12
Table 2.3 Production Volume of Top Producing Countries ............................................................................... 13
Table 2.4 Total Area Planted to Mangoes, in hectare ....................................................................................... 14
Table 2.5 Philippines Mango Production by Region for CY 2009-2013 ............................................................. 20
Table 2.6 Top Mango Producers by Region and Province ................................................................................. 20
Table 2.7 Top 10 Provinces by Volume and Yield, 2013.................................................................................... 21
Table 2.8 Population of Mango Bearing Trees .................................................................................................. 22
Table 2.9 Carabao Mango Production .............................................................................................................. 23
Table 2.10 Production Performance: Zamboanga Peninsula, 2009-2013.......................................................... 26
Table 2.11 Production Performance: Northern Mindanao, 2009-2013 ............................................................. 28
Table 2.12 Production Performance: Davao Region, 2009-2013 ....................................................................... 30
Table 2.13 Production Performance: SOCCSKSARGEN, 2009-2013 ................................................................... 32
Table 2.14 Production Performance: CARAGA Region, 2009-2013 ................................................................... 34
Table 2.15 Production Performance: ARMM, 2009-2013 .................................................................................. 35
Table 3.1 BPI Accredited Mango Nursery Operators in Mindanao ................................................................... 40
Table 3.2 Average Production Cost per kg, 2011-2013 ..................................................................................... 41
Table 3.3 Buyers Preferred Supply Areas .......................................................................................................... 46
Table 3.4 Mango’s Average Production Cost and Returns per hectare in the Philippines,.............................. 50
Table 3.5 Cost of Mango Orchard Establishment ............................................................................................. 51
Table 3.6 Cost and Maintenance Per Year of Non-Bearing Trees (2-5 years old) ............................................. 52
Table 3.7 Farmgate Price of Different Mango Varieties Per Region ................................................................. 53
Table 3.8 Comparative Buyers Mango Price ..................................................................................................... 54
Table 3.9 Relative Financial Position of Players in the Value Chain of Fresh Mango in Mindanao................... 55
Table 3.10 Income/Profit Analysis ..................................................................................................................... 55
Table 4.1 Philippine Export of Fresh Mango in Value, 2009-2013 ..................................................................... 56
Table 4.2 Size Standard Classification for fresh Mango ..................................................................................... 58
Table 4.3 Export Volume of Top Exporting Countries, 2009-2013..................................................................... 58
Table 4.4 Export Value of Top Importing Countries ........................................................................................... 59
Table 4.5 Major Importing Countries of Mangoes, fresh/dried ......................................................................... 61
Table 4.6 Import from other countries of other ASEAN Countries .................................................................... 62
Table 4.7 Mango Supply Utilization ................................................................................................................... 63
Table 4.8 Percentage Distribution of Household by Buying Frequency of Mango, by Region .......................... 64
Table 4.9 Annual Per Capita Consumption, by Region ....................................................................................... 65
Table 4.10 Average Buying Price of Importing Countries .................................................................................. 66
Table 4.11 Average Price of Philippine Mango by Export Destination .............................................................. 67
Table 4.12 Farmgate Price Per Region of Common Variety ............................................................................... 68
Table 7.1 Constraints and Opportunities ........................................................................................................... 75
Table 8.1 Priority Constraints, Opportunities and Interventions ....................................................................... 82
List of Figures
Figure A. 1 Summary of Major Constraints and Proposed Interventions ............................................................ 3
Figure 1.1 General Value-Chain Map .................................................................................................................. 7
Figure 2.1 Top 10 Mango Exporters by Volume ................................................................................................ 15
Figure 2.2 Top 10 Mango Exporters by Value .................................................................................................... 16
Figure 2.3 Top 10 Mango Importers by Volume ................................................................................................ 17
Figure 2.4 Top Mango Importers by Value ........................................................................................................ 18
Figure 2.5 Philippine Mango Production for CY 2013 ........................................................................................ 19
Figure 2.6 Actual, Target and Projections of Mango Production in Mindanao .................................................. 24
Figure 2.7 Zamboanga Peninsula Area Planted and Yield .................................................................................. 25
Figure 2.8 Northern Mindanao Area Planted and Yield ..................................................................................... 27
Figure 2.9 Davao Region Area Planted and Yield ............................................................................................... 29
Figure 2.10 SOCCSKSARGEN Area Planted and Yield ......................................................................................... 31
Figure 2.11 CARAGA Region Area Planted and Yield ........................................................................................... 33
Figure 2.12 ARMM Area Planted and Yield ........................................................................................................ 34
Figure 3.1 Marketing Channel for Fresh Mango Value Chain in Mindanao ....................................................... 38
Figure 3.2 Fresh Mango Value Chain Map ......................................................................................................... 39
Figure 3.3 Mango Growers Adoption of Improved S & T-based Technologies .................................................. 43
Figure 3.4 Buyers Preferred Supply Areas in Mindanao .................................................................................... 45
Figure 4.1 Philippine Export Volume by Destination ......................................................................................... 60
Figure 4.2 Philippine Export in Value by Destination ......................................................................................... 60
Figure 4.3 Thailand and Philippines Export Volume Trend, 2000-2009 ............................................................. 62
Figure 4.4 2013 Supply utilization Report for Fresh Mango .............................................................................. 63
Figure 4.5 Philippine’s Annual Farmgate Price for Carabao Mango .................................................................. 67
Figure 9.1 Mango Activity Flow.......................................................................................................................... 96
Figure 9.2 Horizontal and Vertical Relationship Between Producers and Processors/Exporters ...................... 97
Figure 9.3 Major Constraints and Interventions to Increase Productivity ......................................................... 99
Figure 9.4 Interventions to Increase Profitability ............................................................................................ 100
Figure 9.5 Hierarchical Relationship Based on CBI Market Information Database .......................................... 102
Figure 9.6 Mango Global Value Chain .............................................................................................................. 103
ACRONYMS

A & F Sector Agriculture and Fisheries Sector


AFMP Agriculture and Fisheries Modernization Plan
BAS Bureau of Agriculture Statistics
BOC Bureau of Customs
BPI Bureau of Plant and Industry
UN-COMTRADE United Nations –Commodity Trade
DA Department of Agriculture
DAR Department of Agrarian Reform
DBP Development Bank of the Philippines
DENR Department of Environment and Natural Resources
DOST Department of Science and Technology
DTI Department of Trade and Industry
FAO Food and Agriculture Organization
FGD Focus Group Discussion
GAP Good Agriculture Practices
HWT Hot Water Treatment
HVCDP High Value Commercial Development Program
I-BUILD Intensified Building-Up of Infrastructure and Logistics for Development
I-PLAN Investment for AFMP Planning at the Local and National Levels
I-REAP Investments for Rural Enterprises and Agricultural and Fisheries Productivity
I-SUPPORT Implementation Support to PRDP
KII Key Informant Interview
LBP Land Bank of the Philippines
LGU Local Government Unit
MD Mandays
MinDA Mindanao Development Authority
MLGU Municipal Local Government Unit
MRDP Mindanao Rural Development Project
NGO Non-Government Organizations
NCCAP National Climate Change Action Plan
PDP Philippine Development Plan
PRDP Philippine Rural Development Project
SEC Security and Exchange Commission
VHT Vapor Heat Treatment
EXECUTIVE SUMMARY

The Philippine Development Program (PDP) which lays down the fundamental plan of the country to
achieve “inclusive growth” identified several strategies to be adopted which include increase on
investments and employment across an efficient value chain through strengthening the agriculture
exports by focusing resources on high-value crops. PDP included mango as one of the commodities
which Philippines has a comparative advantage in the world market. Hence, it is identified as among
the priority crops in the High Value Commercial Crops (HVCC) Program

This report provides an overview and analysis of the fresh mango value chain, linking the national
context to the regional and provincial contexts, with the aim of identifying main leverage points and
key strategies to improve Mindanao 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 PRDP’s cooperation with the private sector and other
government agencies active in the mango industry.

The Philippines has been performing in the international mango industry ranking 12th among major
mango producing countries in the world. The country contributes almost 2% to the 42 million metric
tons world production in 2012. However, based on FAO statistics which includes guavas and
mangosteen, the country’s production performance showed an average decreasing trend of 3.63%
per annum from 2010 to 2012, a slight difference from BAS data for mango production with a
negative growth rate of 3.54% . The top three producing countries are India, China and Kenya with
36.19%, 10.44%, and 6.60% respective share. Food and Agriculture Organizations (FAO) of the
United Nations declared that from 2010 to 2012, world production for mangoes, mangosteen and
guavas had been consistently increasing by an average of 6.41% annually.

In the national context, the mango industry continues to be one of the backbone industries of the
country’s agriculture sector contributing an average of P14.5 Billion per year to agriculture GVA from
2001-2013. It ranks 2nd as the most important fruit in the country in terms of value next to banana
and ranks 3rd in terms of volume of production and area after banana and pineapple. It supports
about 2.5 million farmers all over the Philippines.1

While it may seem that the Philippines is maintaining its position in the global mango industry and
not lagging in its GVA in the recent years, total performance of the mango industry falls behind the
goals set forth in its PDP. Specific targets for mango in the PDP includes increase in production from
its yield of 4.10 MT/ha in 2009 to 5.06 MT/ha in 2016 and from a net profit-cost ratio of P0.73 in
2009 to P0.98 in 2016. But barely two years from the conclusion of the implementation of PDP in
2016, significant growth for mango industry was not been fully carried out as demonstrated by the
country’s production volume and export performance. In 2013, average yield of mango is recorded
at 4.35 MT, a 16.32 % gap from the national target production output of 5.06 MT. It needs to achieve
an annual growth rate of 5.44 % from 2014-2016 to achieve the target. Actual annual growth rate
from 2011-2013 is recorded at distance rate of 1.68% only.

1 th
DA’s HVCDP presentation during the 16 Mango Congress

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From P0.73 net-profit cost ratio in 2009 it went down to P0.60 in 2013, with a growth rate pegged at
9% in 2012 over 2011 and a decrease by 5% in 2013. Assuming the average annual growth rate for
2011 to 2013 is1.62%, the net-profit cost ratio is at P0.63, but supposing the growth rate experience
in 2012 will bear a P0.77 net profit cost ratio.

The productivity of mango is highly dependent on farm inputs. A year round production can now
become possible with the right inputs and proper care and management of the plantation. Given the
right application of technologies being introduced by government agencies and credible research
institutions, an 8MT-15MT yield is not impossible as experienced by most growers. However, the
lack of capital to finance the high cost of inputs constrain them to do so. This means the lack of
access to financing services that is responsive to the needs and fitting to the financial capacity of the
farmers/growers.

Low productivity is also attributed to other causes such as unpredictable weather which accordingly
is something that is new to Mindanao in the recent years.

In terms of its market, it is well established within the country and internationally with the
expanding demand both for fresh fruit and processed products. At present, the Philippines is
exporting fresh mango to 48 countries all over the world. Its major export markets are Japan and
Hongkong with 52.9 % and 35.7% respective shares in terms of value.2 Other export destinations are
Singapore, Korea, United States of America, Australia, New Zealand, Canada, United Kingdom and
Switzerland.

Philippine export performance of fresh mango however had been plummeting over the years. From
a total export value of $15,187,758 in 2011, it went down to $15,239,937 in 2012 and as low as
$13,296,869 in 20133. But despite this, because of the premium quality it has established, Philippine
Mango still is gleaming with opportunities in the world market. It has a high demand in the world
market, specifically, the Carabao variety which is considered the sweetest mango in the world 4

The declaration of the US Department of Agriculture (USDA) allowing the importation of Philippine
Mango in the US Mainland also poses expanding opportunities not only for Mindanao but also for
other mango-producing provinces in the country.

There are however several issues that hinder the growth of the industry despite the expanding
opportunities. Figure A.1, illustrate summary of key constraints and proposed interventions
identified by players during the stakeholder’s conference to address the long-term competitiveness
of direction of the industry

2
Niecep.dti.gov.ph
3
Philippine Merchandise Exports to the World from PSA as processed by DTI-EMB, as of June 3, 2014
4
Guinness Books of Record, 1995

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Figure A. 1 Summary of Major Constraints and Proposed Interventions

Input Transformat
Production Assembly Distribution Final Sale
provision ion

1. High investment cost 1.Susceptibility to pest 1.Inadequate High transportation Low buying price due
1.Low supply of export
2. Lack of financial and diseases knowledge of sorters cost due to limited to:
grade
resources 2.Non-compliance to and harvesters on transport 1.Inability to plan and
2.No VHT, WHT and
3. Limited access to GAP and other proper handling services, poor farm to monitor production
Post-harvest facilities
financing and input technologies 2.Ineffective market roads and 2.Limited level of
materials 3.Unpredictable harvesting method distance of market buyers
weather and equipment 3.Disaggregate sector
Constraints and multi layer
marketing

1.R & D to improve 1.Organize and train 1. Trainings and 1. Strengthen


1.Provision of Free resistance to pest and sorters and harvesters technical assistance on inplementation of 1.Trainings on planning
input materials diseases 2.Provision of buyers standard FMR (I-BUILD and monitoring
2.LGU to provide 2. Continues technical mechanical fruit requirements Program) 2.Through I-REAP
financing program assistance for picker and other (sizes, texture, ripeness, 2.LGUs to develop encourage private or
GAP, HACCP and other equipment for and maximum MRL) barangay access roads Cooperative's
food safety harvesting 2. provision of post- going to key investment on
requirements 3.R & D harvest facilities (I-REAP) production areas VHT, WHT and other
treatment facilities
Interventions
Industry mapping and clustering
Organizing and strengthening of associations and cooperatives
Development and Administration of Mindanao Mango Industry Website
Improved accessibility > Improved >Reduced post- >Improved export >Reduced cost >Higher buying
Desired Results to farm inputs productivity harvest losses performance price, higher net-
>Increased efficiency profit ratio
>Improved quality >Improved quality >Improved quality
produced produced >Reduced opportunity
losses

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Section 1: INTRODUCTION

It has been roughly three years into the implementation of the Philippine Development Plan (PDP)
2011-2016. Undoubtedly, there have been dramatic achievements relative to the targets set by this
comprehensive national plan, primary of which is the robust economy as touted in the Midterm
Update. With at least 7 percent gross domestic product (GDP) growth for five consecutive quarters5,
said update as of 2014 mentions among other progress the following: low and stable inflation, a
sound financial system, and a sustainable fiscal and external position.

However, same study shows that inclusive growth through poverty reduction has been elusive. Far
from the PDP’s plan of broad distribution of the benefits of economic growth, only three of the
country’s 17 regions account for two-thirds of the GDP. The country remains lagging in its attempt to
alleviate poverty with about a quarter of the population considered income poor. And agrarian
reform, still the country’s “boldest attempt at asset reform” is at best, on its way to completion.

Evidently, achievements against the main goal of the Plan which is inclusive growth have not yet
been fully materialized much less felt by the masses. The empowerment and integration of
smallholders in relevant economic activities have not been well-demonstrated.

“An important lesson derived from the first three years of Plan implementation is that good
governance is an effective platform for implementing development strategies.”And inclusive market
development promotes economic growth with poverty reduction by facilitating the integration of
large numbers of micro- and small enterprises into competitive value chains.6

The strategy of inclusive growth has strong appeal in agriculture, where a successful smallholder-led
strategy for inclusive growth can precipitate a structural transformation that increases productivity,
incomes, and food security in rural areas. Defined in terms of increased productivity and efficiency,
upgrading, plays an essential role in bringing smallholders into higher value markets because it
increases smallholder contributions to value added. It is in the accomplishment of sustained and
inclusive growth that, among others, value chain development is being used.

This particular study focuses on the value chain of the fresh mango, one of the priority commodities
which the PRDP will concentrate during Year 1 of PRDP implementation.

A. BACKGROUND INFORMATION AND OBJECTIVES

Agri-Pinoy: Key to address employment and poverty problems

The Philippine Rural Development Program (PRDP), a flagship program of the Department of
Agriculture (DA), is designed to establish the government platform for a modern, inclusive, value-
chain oriented, and climate resilient agriculture and fisheries sector. PRDP also aims to deepen
governance, transparency and accountability mechanisms at all stages of the project cycle. It also
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Philippine Development Plan 2011-2016, Midterm Update with Revalidated Result Matrices, 2014
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Field Report No.18, Smallholders and Inclusive Growth in agricultural Value Chains, January 20114

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intends to operationalize a local level convergence platform among related national line agencies
and other stakeholders (private sector, civil society, producers, and academe). The design of PRDP
and its implementation aspects draw heavily on the experiences of the Mindanao Rural
Development Projects (MRDP 1 and MRDP 2), a program that adopts a value chain development
approach as a tool for promoting inclusive, climate resilient, and sustainable growth in key
agricultural subsectors and key players in the value chain.

Under the PDP, increase in the growth of agriculture and fishery sector (is identified as among the
key strategies geared towards achieving inclusive growth and poverty reduction. This agricultural
sector strategy or the “Agri-Pinoy” goes with two of the Government’s Five Major Guide Posts based
on the President’s 16-point Agenda.

Challenges

The A&F sector will need to overcome numerous challenges to be able to realize its potentials.
Among these are (a) low productivity and production; (b) slow market growth and poor linkage to
value-adding activities; (c) weak institutions and policies; (d) weak governance and resource
degradation; and (e) vulnerability to climate risks and disasters.

Redefined Objectives and strategies

With the mentioned challenges, PDP Midterm update has redefined its aims for agriculture and
fisheries sector into (a) increase productivity in the sector; (b) increase forward linkage with the
industry and services sectors; and (c) improve sector resilience to risks, including climate change.
Further, interventions will be directed towards increasing the productivity of key commodities, such
as palay, corn, sugarcane, pineapple, coconut, coffee, banana, mango, livestock and poultry and
fisheries, among others.

In order to facilitate the linkage of agriculture to the industry and services sectors, farmers and
fisherfolk will be trained in value-adding, agri-business development and value chain management
activities. Farmers and fisherfolk groups and cooperatives will be strengthened and, where possible,
transformed into MSMEs that can transact with other MSMEs in industry and services.

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VALUE CHAIN ANALYSIS: TOOL TO REALIZE A SUSTAINED AND INCLUSIVE AGRI-FISHERY
MODERNIZATION

In a study7 conducted to investigate the participation of smallholders in the agricultural value chain,
inclusive growth is defined as economic growth that reduces poverty, inclusive growth incorporates
low-income households and individuals into growing economies and market systems. In agriculture,
inclusive growth means developing the agricultural sector in a way that generates broad-based
benefits for rural populations while improving economic productivity and food security at the local
and national levels.

Further, it says that by integrating large numbers of small-scale agricultural producers into
competitive value chains, a successful smallholder-led strategy for inclusive growth can support a
structural transformation of the agricultural sector. The benefits of such a structural transformation
include increasing incomes for smallholders. When smallholders invest to increase their own
productivity, this can have a positive effect on competitiveness for the entire value chain.

The term “inclusive,” as applied to value chains, highlights the emphasis placed on benefits for
microenterprises, smallholders, and the low-income individuals and households who operate them.
More generally,⁸ an inclusive market system is one that benefits large numbers of low-income
households.

A value chain includes the full range of activities and services required to bring a product or service
from its conception to sale in its final market. The conceptual framework for analyzing value chains
includes both structural and dynamic features of the system. The structural elements, depicted in
the general value chain map (Figure 1.1), include all the firms and other actors involved in the value
chain, the vertical and horizontal linkages between these actors, supporting markets, and the
business enabling environments within which actors make their decisions. The dynamic elements in
the value chain framework include the characteristics of the relationships between firms and the
ability of the value chain to remain competitive by upgrading in response to changing end market
demands and requirements.

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Field Report No.18, Smallholders and Inclusive Growth in agricultural Value Chains, January 20114

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Figure 1.1 General Value-Chain Map Global
Retailers

National Enabling Environment


National
Retailers
Sector-specific
Exporters
providers
Wholesalers

Cross-cutting
providers Buyers

Financial (Cross-
cutting)

Input Suppliers

Entry point for the implementation of value chain interventions under the DA-PRDP is at the
provincial level with an aim to gradually scale these up to other viable areas of regions in Mindanao.

Coverage of Study

This study covers the Mindanao region: Zamboanga Peninsula (Region IX), Northern Mindanao
(Region X), Davao Region (Region XI), SOCCSKSARGEN (Region XII), CARAGA (Region XIII), and
Autonomous Region in Muslim Mindanao (ARMM). Among the priority products on which the PRDP
will concentrate during Year 1 of PRDP implementation are mango (intended for fresh mango as final
product), green coffee beans, and coco coir. Also identified as relevant to the growth specifically for
the ARMM region is Cavendish banana.

Opportunities and challenges with the growing demand for Mango

Mango is one of the priority crops in the Philippines, and it is being supported by the different
Philippine Government Agencies through major programs of the Department of Agriculture,
Department of Trade and Industry, Department of Science and Technology and other local
government agencies.

The Philippine Mango which has been known for its taste and aroma has created a premium niche in
the world market. The high and increasing demand in the international market for fresh and frozen
mango offers a lot of opportunities to the mango industry.

In 2013, Bureau of Statistics point out that the Philippines has an existing production area of
187,837.68 hectares producing a volume of 816,199.13 MT, with 30.34 % of the volume production
coming from Mindanao. Mindanao, with a total production area of 76,043.30 hectares has an

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average yield of 3.26 MT per hectare only in the same year. Though records show a positive growth
for Mindanao, it is still lower than the national average yield, with 4.35 mt/ha.

Roughly two years before the targeted conclusion of the PDP, significant growth for mango industry
is yet to be achieved as demonstrated by the country’s production volume and export performance.
Mindanao’s productivity in terms of average yield is still a far distant from the PDP target of 5.06
mt/ha. It is significant however to note that while the average yield is more than half below the
target, six out of twenty seven provinces has a yield more than the said 2016 target. These provinces
are Zamboanga Del Norte (5.10 mt), Zamboanga del Sur (8.24mt), Zamboanga Sibugay (5.73mt),
Misamis Oriental (8.56 mt), Agusan del Norte(8.54mt) and Misamis Oriental with the highest yield at
8.62mt. The six provinces contributed to more than half (50.69%) of Mindanao’s production volume.

B. OBJECTIVES OF THE STUDY

Given this economic importance of the mango industry, it is imperative that VCA be conducted to
identify, assess and enhance the relevant roles of players in the chain. More importantly, through
VCA inclusive economic growth is achieved by ensuring that smallholders are actively participating in
and reaping benefits from growth derived from the value chain.

Value chain approach takes a market system perspective with a focus on the pivotal role of end
market demand and the identification of leverage points where interventions can catalyze improved
value chain competitiveness². Interventions will then be determined following a facilitation approach
leading to behavior changes among value chain actors, new or more cooperative relationships within
the value chain, and/or improvements in the business enabling environment.

This study specifically defines the players that compose the structure of the value chain. It will define
the structure of a value chain which includes all the participating firms and other agents, and is
further characterized in terms of the following five structural elements8:

• End markets which are always the starting point for value chain analysis. This identifies the
demand in the end market in order to define the opportunities that drive the value chain.

• Vertical linkages which connect firms at different levels of the value chain, from input suppliers to
producers, processors, wholesalers, distributors, exporters, and so on, all the way to the retail level.
The study therefore identifies the commercial relationships involved in bringing the product up
through the value chain.

• Horizontal linkages that connect firms at the same level of the value chain. Important functions of
horizontal linkages at the producer level is presented and analyzed. This includes product
aggregation, access to inputs and services, access to information, and the empowerment of small
firms and farmers to advocate for change.

• Supporting markets which include firms and organizations that provide business support services
to the firms in the value chain whether cross-cutting (i.e. financial, transportation, and

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Field Report No.18, Smallholders and Inclusive Growth in agricultural Value Chains

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communication services) sector-specific (i.e. firms providing technical advice and specialized
services).

• The business enabling environment at the local, national and international level which consists of
all the formal and informal rules that help define the context within which decision makers operate.
Significant influences include international food safety standards to national trade policy, inflation
rates, natural disasters, municipal regulations, and cultural and social norms. .

This study also aims to define the dynamic features in the value chain framework correspond to the
emergent properties of the market system. Some of the dynamic features with important
implications for project implementation include value chain governance, relationships between
firms, and the pace of learning and upgrading:

• Value chain governance. This study will also identify the sector or player that wields power and
has the ability to exert control over the behavior of other agents in the system. Awareness of the
governance structure in the system can be useful in identifying possible interventions and opening
pathways for the generation, transfer, and spread of knowledge leading to innovation.

• Inter-firm relationships that support healthy competition and value chain competitiveness.
Defining inter-firm relationships will derive information and incentives, thus improving the
responsiveness of firms to changes in end market requirements.

• Upgrading at the firm level is defined in terms of investments that increase value added (i.e.
investing of farmers in new inputs, training, or irrigation in order to cultivate climate-resilient
varieties)

C. SCOPE, METHODOLOGY AND APPROACH

This study spans the Mindanao region, specifically Zamboanga Peninsula (Region IX), Northern
Mindanao (Region X), Davao Region (Region XI), SOCCSKSARGEN (Region XII), CARAGA (Region XIII),
and Autonomous Region in Muslim Mindanao (ARMM).

Data gathering through desk study preceded field work. In the desk study, relevant information were
gathered from current and relevant studies and publications. The field work component of the study
was conducted using qualitative research techniques particularly key informant interviews (KII) and
focus group discussions (FGDs). Key informants and participants of the FGDs during the regional
stakeholders’ conferences consisted of farmers, traders, and representatives of input companies and
relevant government agencies of the covered regions.

Key informant interviews were used for collecting individuals’ perspectives, experiences, and
quantitative data. During the stakeholders’ conferences in the areas covered, FGDs were conducted
to generate broad overviews of issues and concerns from the groups or subgroups represented and
in the triangulation/vetting of information obtained from the KII. Constraints were identified and
further processed analyzing responses and using the “why” analysis as a tool in extracting the root
cause/s of the problems during the KII and FGD/Stakeholders Workshop.

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Section 2: OVERVIEW OF THE MANGO INDUSTRY

A. PRODUCT DESCRIPTION

The Mango, scientifically named as Mangiferaindica which is also referred as the King of Fruits, is a
tropical fruit belonging to the Anacardiaceae family. Native to India, it is now being produced in over
90 countries worldwide and is 2nd to banana as most consumed tropical fruit in the world. According
to the Food and Agriculture Organization (FAO), Asia accounts an average share of 74 % for year
2009-2012 of mango, mangosteen and guava production. Americas and Africa on the other hand
average regional shares on production are approximately 12% and 14 %, respectively.

Mangoes grow best in tropical places like India, Thailand, China, Indonesia, Philippines and in other
parts of the world with temperature ranging from 21°C to 30°C, relatively cool dry season and a well
distributed rainfall. During the flowering and fruiting period it is favorable during dry season or
rain/moisture free so that fungal development can be avoided. India, China, Indonesia and Pakistan
were among the top producers in 2012 while the Philippine ranked 12th in production volume.

Mango is the national fruit of the Philippines and is considered as one of the most important fruit
crops in the country, next to bananas and pineapple. In the study9 conducted in 2013 by the Bureau
of Statistics, it second as the most consumed fruit by household respondents. Accordingly, about
34.07% of household respondents consumed mango second to banana with 56.75% of households
reporting consumption. Buying of mango for consumption was indicated by 74.03% to 87.53% of
the consuming households.

Mango is the third largest fruit export of the country next to Cavendish Banana and Pineapple.
Among its varieties, the Carabao Mango also known as the Manila Super Mango is the prime export
variety. Other varieties are Pico, Katchamita and Pahutan.

The Carabao which originated from India, Burma and Malaysia is considered as one of the finest and
sweetest variety in the world. It is elongated and kidney-shaped, with yellow pulp, sweet and tender
taste, and slight aroma.

The Pico and Katchamita also originated from India. Other varieties such as Pahutan, Dubul, Binoboy
and Senorita can also be found in the country. Varieties of mango that can be found in the
Philippines are further described in Table 2.1. Aside from its texture and taste, Mango contains a lot
of nutritional values such as Vitamins A, B and C, and is rich in minerals, fiber and provitamins.

9
BAS. (August 2013). Consumption of Selected Agricultural Commodities in the Philippines

10
Table 2.1 Common Mango Varieties and its characteristics

Variety Description
Carabao  Considered as one of the best mango varieties in the world because of its tender
taste and slight aroma. Originated from India, Burma and Malaya. Tree has
coarse, large and conical trunk with shallow and small cracks on bark, canopy
dome shaped.
 Fruit is elongated and kidney-shaped, weighs about 240 grams, with thin, and
yellow pulp.
 About 82.32% of the Philippines mango volume production is “Carabao” variety.
(80.54% of varieties produced in Luzon, 91.43% of Visayas and 81.10% of
Mindanao production).
Pico  originated from India, Burma and Malaya (Indo-Burma region); tree has upright
growth, open crown; has deeper cracks on bark ; kidney-shaped fruit weighing
about 230 grams; distinct beak on the apex, flesh is fibrous and thick, light
orange yellow and sweeter than “Carabao” variety
Katchamita  Originated from India , has compact crown and lower tree stand than “Carabao”
and “Pico” ; fruit is small to medium, rounded/oval, green skin with yellowish
flesh and preferably eaten as green

Fresh mangoes are also used in so many ways aside from it is being consumed as a table fruit. The
green or immature mango is used as appetizer, salad ingredient and for shakes and juices. The ripe
mango can also be processed as puree, juices, jam, dried mango, ice-cream and mango pie.

About 4% of the world mango productions are being processed as mango pulps and juices10 In the
Philippines, majority of mango production are consumed locally or exported as fresh. About 8.2 % of
the productions are being processed as mango pulps and juices11.

In Mindanao, there are also various product forms of mangoes produced by major mango processors
such as dried mangoes, mango purees and concentrates in SoCSKSarGen; Frozen mangoes, dried
mangoes, purees and juices in Davao Region; and other processed products such as mango jams,
mango preserves particularly be micro and small processors in other regions. Mindanao mango
produced also supplied processors in Cebu and Manila.

Mango is produced primarily for the fresh-fruit market both for export and local consumption, which
is the coverage of this study, because of the better buying price it offers. Producers or contractors
usually resorted to selling their produced to processors either because of excess of supply or
because of its poor quality.

10
FAO Statistics
11
FAO Statistics

11
B. PRODUCTION TRENDS

1. Global Production

The Food and Agriculture Organization(FAO) of the United Nations estimates for Mangoes,
Mangosteen and Guava Production in 2012 has totaled to about 42,139,873.31 MT and a 6.41 %
average annual growth rate from 2010-2012 has been noted. Asia accounted for almost three-
fourths of the world production while Africa’s, America’s and Oceania’s respective average share
accounted for 13.75 %, 11.96 % and .12% as shown in Table 2.2. In terms of growth rate, Africa
recorded the highest growth from 2011-2012 with a growth rate of 51 %. The increase of Africa’s
production was mostly contributed by Kenya. Kenya mango production has increased by 337% in
2012. 12

Table 2.2 Mango, Mangosteen and Guava World Production, 2010-2012

Sub-group Production Volume (in MT) Share to world production Average


Growth Rate
2010 2011 2012 In MT In % In %
Total 37,221,108.73 39,095,713.99 42,139,837.31 39,485,553.34 100.00 6.41
Production
Asia 28,135,791.00 29,559,085.42 30,170,117.31 29,288,331.24 74.17 3.56
Africa 4,421,429.00 4,731,867.55 7,135,528.00 5,429,608.18 13.75 28.91
America 4,615,226.73 4,764,014.02 4,785,005.00 4,721,415.25 11.96 1.83
Oceania 48,662.00 40,747.00 49,187.00 46,198.67 0.12 2.22
Source: FAOSTAT

Among the countries in the world, India tops in mango production with a volume of 15,250,000 MT
accounting for 36.2% of the world production in 2012. This is followed by China Kenya, Thailand and
Indonesia. The Philippines which ranked 8th in 2008 and 10th in 2009, went down to rank 12thin 2012
with a total volume production of 786,528 MT in 2012, contributing about 2% of the total world
production. Tables 2.3 shows the volume produced of top producing countries in 2010-2012.

Average world mango productivity has been improving in the years 2010 to 2012. From an annual
yield of 7.49 metric tons per hectare in 2010, it grew to 8.16 mt/ha in 2012, showing an average
annual growth rate of 6.41%. In 2012, Kenya recorded the highest yield at 48.78 mt/ha, next is Brazil
with 16.04 yield, followed by Pakistan, Egypt and Indonesia with respective yield of 11.21 MT, 10.21
MT, and 10.20 MT. In the same year, the Philippine mango industry recorded the lowest productivity
among the top 12 producing countries at 3.97 MT only with a decreasing growth rate of -3.63%.

12
Food and Agriculture Organization of the United Nations Statistics Division

12
Table 2.3 Production Volume of Top Producing Countries
(Including Guavas and Mangosteen, in MT)
Rank Country 2010 2011 2012 Average Average
in Volume Yield Volume Yield Volume Yield Growth yield
2012 Rate
World 37,221,109 7.49 39,095,714 7.66 42,139,837 8.16 6.41% 7.77

1 India 15,026,700 6.50 15,188,000 6.61 15,250,000 6.63 0.74% 6.58

2 China, ML 4,000,000 8.89 4,350,000 9.56 4,400,000 9.57 4.95% 9.34

3 Kenya 593,499 12.61 636,585 10.74 2,781,706 48.78 172.12% 24.05

4 Thailand 2,550,595 8.20 2,600,000 8.20 2,650,000 8.33 1.93% 8.25

5 Indonesia 1,287,287 9.78 2,131,139 10.23 2,376,339 10.20 38.53% 10.07

6 Pakistan 1,845,528 10.62 1,888,449 10.98 1,950,000 11.21 2.79% 10.94

7 Mexico 1,632,649 9.33 1,827,314 9.28 1,760,588 9.00 4.14% 9.20

8 Brazil 1,189,651 15.82 1,249,521 16.36 1,175,735 16.04 -0.44% 16.07

9 Bangladesh 1,047,849 8.12 889,176 8.00 945,059 7.62 -4.43% 7.92

10 Nigeria 850,000 6.54 850,000 6.54 860,000 6.52 0.59% 6.53

11 Egypt 505,741.00 7.93 598,084.00 8.42 786,528.00 10.21 24.88% 8.85

12 Philippines 843,508.00 4.26 800,551.00 4.10 783,225.00 3.97 -3.63% 4.11

Source: FAOSTAT

As to area planted to bearing mango trees there was a 2% increase in production area for year 2010
to 2012. Total world production area in 2012 is 5,167,300 ha. India, the top producing country,
accounted almost half of the total area planted with 2,300,000 ha. Thailand, which ranked 5th in
terms of production volume and considered as the major competitor of the Philippines, had a total
area of 318,000 ha. Among the top producing countries, Indonesia showed the largest area
expansion from 131,674 ha in 2010 to 233,000 hectares in 2012. Thailand has increased by 3.19%
from 2010 to 2012, while the Philippines area planted decreases by 0.39%

13
Table 2.4 Total Area Planted to Mangoes, in hectare
Including Mangosteen and Guava of Top Producing Countries
Country Year Share in
2010 2011 2012 2012, in
%
Volume Area Volume Area Volume Area
planted planted planted
World 37,221,109 4,967,293 39,095,714 5,101,839 42,139,837 5,167,300 100.00

India 15,026,700 2,312,300 15,188,000 2,297,000 15,250,000 2,300,000 44.51

China, 4,000,000 450,000 4,350,000 455,000 4,400,000 460,000 8.90


mainland
Kenya 593,499 47,051 636,585 59,260 2,781,706 57,021 1.10

Thailand 2,550,595 311,048 2,600,000 317,000 2,650,000 318,000 6.15

Indonesia 1,287,287 131,674 2,131,139 208,280 2,376,339 233,000 4.51

Pakistan 1,845,528 173,731 1,888,449 172,008 1,950,000 174,000 3.37

Mexico 1,632,649 174,970 1,827,314 196,930 1,760,588 195,674 3.79

Brazil 1,189,651 75,179 1,249,521 76,383 1,175,735 73,310 1.42

Bangladesh 1,047,849 129,000 889,176 111,100 945,059 124,000 2.40

Nigeria 850,000 130,000 850,000 130,000 860,000 132,000 2.55

Egypt 505,741 63,793 598,084 71,009 786,528 77,003 1.49

Philippines 843,508 197,816 800,551 195,401 783,225 197,048 3.81

Source: FAOSTAT

World export of mango took off from2010 to 2013at an average annual growth rate of 8.51%. The
highest increase was noted in 2011 by 17.36%, from 1.433 million metric tons to 1.682 million MT. In
2013, world export volume reached to approximately 1.822 million metric tons. Mexico which
ranked 5th in production is the world’s largest mango exporter of fresh and dried Mangoes (Note:
Export volume as shown in Figure 2.1 to 2.4 for Mangosteen and Guava are negligible13). It recorded
export volume of about 338,169 MT with a value of 302.5million US Dollars. It accounts for 17% of
its production while India, the top producing country exported only around 1.3 % of its mango
produced.

Export volumes of top 10 exporters have been growing over the years, except for Brazil with an
insignificant decrease of 0.56%. Among the top exporters, Nicaragua, Vietnam and Thailand
recorded the highest increase with 520%, 315 % and 21.03 % respective average annual growth rate.
The Philippines that ranked 12th in 2013 had a volume share of 1.43% to the world total export
volume. It recorded a 4.16 % annual average growth rate from 2010 to 2013.

13
Food and Agriculture Organization of the United Nations Statistics Division

14
Figure 2.1 Top 10 Mango Exporters by Volume
(In MT, fresh or dried including Mangosteen and Guavas)

Chart Title

1,600,000

1,400,000

1,200,000

1,000,000
Axis Title

800,000

600,000

400,000

200,000

2010
2011
2012
2013

2010 2011 2012 2013


Philippines 24,322 32,149 27,826 26,086
Yemen 23,469 35,727 43,467 35,251
Ecuador 39,978 49,066 60,141 61,309
Nicaragua 4,263 5,510 91,033 72,292
Netherlands 85,926 109,197 90,382 96,894
Pakistan 82,914 105,130 101,174 98,926
Brazil 124,380 126,568 127,132 122,178
Peru 97,000 123,863 99,790 126,815
Thailand 144,566 152,285 196,441 252,904
India 182,974 229,192 214,640 263,918
Mexico 275,366 287,771 297,295 338,169

Source: UN COMTRADE

Based on the figure 2.2, the same positive trending emerges for export value of mango. However,
ranking by export value differs from that of the ranking by volume. Such as in the case of Philippines
who ranked 12th in volume exported, ranked 7th in value of mango exported, and so as in the case of
Netherland, and the European Union, which based on the figures had the highest value of the said
commodities.

15
Figure 2.2 Top 10 Mango Exporters by Value
(fresh or dried including Mangosteen and Guavas, in USD)

2,000,000,000

1,800,000,000

1,600,000,000

1,400,000,000

1,200,000,000

1,000,000,000

800,000,000

600,000,000

400,000,000

200,000,000

2010
2011
2012
2013

2010 2011 2012 2013


Other Countries 367,746,352 407,218,749 473,794,011 468,807,781
EU-27 36,435,855 40,578,780 46,973,088 52,056,711
Viet Nam 816,023 3,803,418 9,740,998 53,708,855
Pakistan 28,401,741 44,731,872 44,301,651 57,200,164
Philippines 43,816,847 96,191,076 70,897,160 69,626,803
Peru 89,418,718 115,333,320 119,951,090 133,067,410
Brazil 119,645,385 141,210,391 137,924,898 147,992,687
Thailand 80,366,080 96,344,567 128,138,959 180,342,489
Netherlands 132,212,291 179,495,914 165,393,180 199,148,314
India 228,717,182 200,957,907 166,858,465 203,418,583
Mexico 163,478,722 205,653,007 254,007,251 302,509,149

The biggest buyer of mango on the other hand is the United States of America followed almost by
half of the volume of EU-27, and by another half of China. Other major importers are Netherlands,
Hongkong, Canada, Saudi Arabia, United Kingdom, Germany and France as showed in Figure 2.3. All
major importers have shown an increasing demand of mango for 2010 to 2013 except only for
Hongkong. The United States of America and European Union-27 accounted to 40 % of the total
import volume in 2013.

16
Figure 2.3 Top 10 Mango Importers by Volume
(fresh or dried including Mangosteen and Guavas, in MT)

1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0
2010 2011 2012 2013
France 32,130 37,691 38,104 35,527
Germany 48,451 57,565 47,782 54,602
United Kingdom 47,579 50,165 49,445 56,228
Saudi Arabia 58,250 63,497 70,390 57,858
Canada 46,649 56,375 54,291 60,290
China, Hong Kong SAR 124,205 89,810 101,077 95,394
Netherlands 120,310 137,703 128,542 130,733
China 115,136 111,878 129,180 138,433
EU-27 225,001 252,778 232,482 260,897
USA 332,108 379,798 377,412 436,085

17
Figure 2.4 Top Mango Importers by Value
(fresh or dried including Mangosteen and Guavas, in USD)

2,500,000,000

2,000,000,000

1,500,000,000

1,000,000,000

500,000,000

0
2010 2011 2012 2013
Viet Nam 20,642,740 15,413,806 30,574,807 74,181,598
China, Hong Kong SAR 93,257,479 75,786,695 76,975,782 75,986,655
France 60,295,926 72,285,951 75,683,900 80,604,070
Canada 62,874,523 69,623,797 82,698,168 92,486,034
United Kingdom 74,634,587 89,730,507 96,772,411 106,157,17
Germany 88,035,659 119,724,00 102,044,71 127,894,54
Netherlands 159,269,92 171,635,19 186,076,50 216,599,87
China 154,585,33 154,827,72 206,888,25 245,045,75
EU-27 351,933,88 400,416,85 406,688,88 483,195,26
USA 345,355,13 401,976,36 424,961,61 501,254,02

18
2. Philippine Production

Of the 816,199.13 MT mango produced in the Philippines in 2013, the largest production came from
Luzon with almost 55% share. Mindanao is second to Luzon with 30.4% share and Visayas with 14.75
% share. (Figure 2.5)

Figure 2.5 Philippine Mango Production for CY 2013

CARAGA
Davao Region SOCCSKSARGEN 2% ARMM
4% 7% 1%

Northern Mindana
5%

Zamboanga
Peninsula
11%

Visayas Luzon
15% 55%

Production trend of mango in the Philippines seemed to be erratic. In 2011 a 4.55 % decrease was
noted, a decrease by 2.52% in 2012 and a big leap by 6.24 % increase in 2013 posting an average
growth of 1.55 % in five years (2009-2013). Mindanao recorded the highest growth rate which is by
3.82 %, Luzon and Visayas increase are 0.25% and 2.38% respectively. Among the regions in
Mindanao, the Zamboanga Peninsula Region registered a 12.86 % average increase, the highest
increased in mango production, followed by Cagayan Valley Region with 11.60 % increase.

In Mindanao, Northern Mindanao, showed an increase of 5.96%, 0.75% only for SOCCSKSARGEN and
1.56 in CARAGA. The Davao and ARMM Region showed however a decrease, with the latter as the
highest average decrease in the whole Philippines of negative 14.07 % and Davao Region average
decrease on production is 3.17%. These figures are shown in table 2.5.

19
Table 2.5 Philippines Mango Production by Region for CY 2009-2013
In metric tons
Island and Region 2009 2010 2011 2012 2013 Average
Share in %
Luzon 446,221.05 473,858.73 460,470.14 429,547.91 448,214.14 56.90%
CAR 3,737.66 3,721.16 3,709.07 3,317.63 3,421.81 0.45%
Ilocos Region 293,992.66 290,974.95 276,661.11 265,162.89 260,524.22 34.98%
Cagayan Valley 37,910.26 58,781.20 46,438.53 34,744.83 47,782.39 5.66%
Central Luzon 58,453.04 64,400.82 64,052.85 59,828.34 70,500.44 7.99%
Calabarzon 42,385.22 44,913.89 58,627.81 55,215.19 54,291.28 6.44%
Mimaropa 8,332.67 9,551.19 9,582.30 9,805.12 10,161.65 1.19%
Bicol Region 1,409.54 1,515.52 1,398.47 1,473.91 1,532.35 0.18%
Visayas 110,684.00 122,370.26 111,229.82 114,406.32 120,379.64 14.58%
Western Visayas 44,486.74 50,446.50 45,343.94 45,868.50 47,948.54 5.90%
Central Visayas 65,293.00 71,021.32 65,001.16 67,655.09 71,583.58 8.58%
Eastern Visayas 904.26 902.44 884.72 882.73 847.52 0.11%
Mindanao 214,536.39 229,447.07 216,373.60 224,280.26 247,605.35 28.52%
Zamboanga Peninsula 57,809.36 74,024.63 78,410.58 80,865.66 92,445.04 9.65%
Northern Mindanao 35,869.17 37,592.67 35,520.63 38,169.19 44,694.58 4.83%
Davao Region 37,047.55 33,907.90 29,730.05 31,802.74 32,171.54 4.15%
SOCCSKSARGEN 53,654.90 56,263.54 52,329.83 53,404.63 55,051.89 6.82%
CARAGA 15,403.60 15,520.49 12,156.18 12,606.56 15,562.10 1.79%
ARMM 14,751.81 12,137.84 8,226.33 7,431.48 7,680.20 1.27%
Philippines 771,441.43 825,676.07 788,073.56 768,234.48 816,199.13 100 %
Source: BAS
As for the regional performance, Ilocos region produced more than a quarter of the country’s total
output, of which 80% was produced by Pangasinan Province. Zamboanga Peninsula and
SOCCSKSARGEN Regions were also among the top five producing regions in the country.

Table 2.6 Top Mango Producers by Region and Province


Region Volume % to RP Province Volume % to RP
(in MT) Production (in MT) Production
Ilocos Region 260,524.22 31.92% Pangasinan 205,415.71 25.17%
Zamboanga 92,445.04 11.33% Zamboanga 59,896.86 7.34%
Peninsula del Norte
Central Visayas 71,583.58 8.77% Cebu 43,646.68 5.35%
Central Luzon 70,500.44 8.64% Ilocos Norte 34,093.04 4.18%
SOCCSKSARGEN 55,051.89 6.74% Batangas 36,755.00 4.50%
Source:BAS Source: BAS

20
In 2013, total land area planted to mango was 187,837.68 ha, 40.48 % of which was in Mindanao.
Central Luzon had the largest area planted to mango at 34,359.80 ha followed by Ilocos Region at
2,118 ha and by Davao and SOCCSKSARGEN Region at around 17,840 and 16,920 ha respectively.

Between the years 2009 and 2013, total area planted to Mango in the Philippines decreased by
0.04% but the production volume grew by 1.55%. This increase in volume of production implies an
increase in yield, which was recorded at 1.58 %. In Mindanao, land area planted to mango decreased
by 0.21% due to conversion to palm oil, rubbers and other crops and trees, while volume of
production increased by 3.82%.

National average yield in 2013 was at 4.22 MT per hectare while in Mindanao, it was at 3.26 MT as
shown in table 2.11. Farm management and farm density also play very critical role in terms of yield.

In terms of yield at the regional level, Ilocos which is also the top mango producing region, had the
highest yield of 14.95 MT in 2013 followed by Central Visayas at 5.69 MT, then by three regions in
Mindanao which are the CARAGA Region at 5.91 MT, Zamboanga Peninsula at 5.48 MT, Northern
Mindanao at 5.12 MT and SOCCKSARGEN at 3.20 MT. Davao Region and ARMM Region has a far
distant yield at 1.84 MT and 0.59 MT respectively. Both recorded the lowest yield next to Bicol
Region at 0.54 MT and Eastern Visayas at 0.93 MT only.

At the provincial level, Pangasinan which contributes 25 % of the country’s production had the
highest yield of 14.95 MT. Misamis Occidental and Misamis Oriental from Northern Mindanao,
Agusan del Norte from CARAGA and Zamboanga Del Sur from Zamboanga Peninsula were also
among the provinces with the highest yields. These four provinces in Mindanao contributed about
14 % to the national volume production.

Table 2.7 Top 10 Provinces by Volume and Yield, 2013

Province Volume Ave Yield Province Ave Yield Area Planted


(in MT) (MT/ha) (MT/ha) (ha)
Pangasinan 205,415.71 14.95 Pangasinan 14.95 13,737.00
Zamboanga 59,896.86 5.12 Quezon 13.95 739.00
del Norte
Cebu 43,646.68 7.74 Misamis Occidental 8.62 2,215.00
Ilocos Norte 34,093.04 7.17 Misamis Oriental 8.56 2,005.00
Batangas 36,755.00 3.25 Agusan del Norte 8.54 1,697.00
North Cotabato 28,155.53 3.86 Benguet 8.45 238.00
Iloilo 24,643.60 6.44 Zamboanga del Sur 8.24 1,402.00
Davao del Sur 21,426.57 1.65 Cebu 7.74 5,636.00
Misamis Occidental 19,086.06 8.62 Ilocos Norte 7.17 4,754.00
Tarlac 19,061.29 5.52 Iloilo 6.44 3,825.00
Source: BAS

21
In 2013, mango bearing trees in the country are estimated at 8,789,346 trees. 53.53% of the total
number of trees can be found in Luzon, 12 % in Visayas and 34% in Mindanao. As shown in table 2.8,
population of bearing trees increased by 1.06% from 2001-2013. Caraga Region had the highest
expansion at 44.78% growth rate from 2011-2013. Based on the data also, national population
density in 2013 of mango trees is at 47 trees per hectare. Luzon which has the most number of trees
has an average of 53 bearing trees planted per hectare while Visayas had an average of 43 trees and
40 trees for Mindanao.

Table 2.8 Population of Mango Bearing Trees

Region Area Ave. Mango Bearing Trees Ave. No of Ave.


Planted in yield Bearing Growth
2011 2012 2013
HA in 2013 Trees/ha rate in %
PHILIPPINES 187,837.68 4.35 8,606,710 8,791,065 8,789,346 47 1.06
LUZON 88,429.65 5.07 4,627,895 4,746,850 4,704,579 53 0.84
CAR 779.00 4.39 35,351 34,186 35,378 45 0.10
ILOCOS REGION 22,118.48 11.78 784,621 785,745 786,454 36 0.12
CAGAYAN VALLEY 10,308.00 4.64 961,794 956,690 956,751 93 -0.26
CENTRAL LUZON 34,359.80 2.05 1,679,048 1,828,166 1,854,813 54 5.17
CALABARZON 14,184.67 3.83 890,733 865,603 793,123 56 -5.60
MIMAROPA 3,828.70 2.65 212,306 212,147 212,107 55 -0.05
BICOL REGION 2,851.00 0.54 64,042 64,313 65,953 23 1.49
VISAYAS 23,364.74 5.15 1,073,682 1,075,836 1,014,921 43 -2.73
WESTERN 9,869.00 4.86 478,669 478,112 416,735 42 -6.48
VISAYAS
CENTRAL VISAYAS 12,586.00 5.69 572,501 574,825 575,164 46 0.23
EASTERN VISAYAS 909.74 0.93 22,512 22,899 23,022 25 1.13
MINDANAO 76,043.30 3.26 2,905,133 2,968,379 3,069,846 40 2.80
ZAMBOANGA 16,862.00 5.48 915,190 919,289 922,934 55 0.42
PENINSULA
N.MINDANAO 8,722.00 5.12 425,655 436,751 439,882 50 1.66
DAVAO REGION 17,439.00 1.84 314,637 311,318 294,050 17 -3.30
SOCCSKSARGEN 17,422.50 3.16 920,845 938,744 973,527 56 2.82
CARAGA 2,633.00 5.91 97,640 131,111 203,588 77 44.78
ARMM 12,964.80 0.59 231,166 231,166 235,865.00 18 1.02
Source: Bureau of Statistics

The “Carabao”, also known as “Manila Super Mango”, is the country’s prime export variety. It
accounted for more than 82% of the total volume produced in 2009-2013. (Table 2.9).It has been
listed in the 1995 Guinness Book of Records as the sweetest in the world. Other predominant
cultivars are Pico and Pahutan.

Majority of the variety produced in Mindanao are also of Carabao Variety except for ARMM region
which reported that this variety composes only 28.08% of its production. ARMM region specifically

22
in the province of Sulu produces the Indian mango or Katchamita, which is one of the less-exported
varieties.14

Table 2.9 Carabao Mango Production

Region CARABAO PRODUCTION IN METRIC TONS % Share of


Carabao
2009 2010 2011 2012 2013 Variety to
total
Prod'n
PHILIPPINES 621,279.49 669,519.81 638,953.58 630,530.44 671,861.93 82.32%

CAR 3,635.04 3,615.64 3,594.95 3,204.38 3,283.32 95.95%

ILOCOS REGION 254,565.43 252,693.85 238,221.84 226,937.6 221,046.87 84.85%

CAGAYAN VALLEY 28,592.03 42,591.4 32,500.79 26,395.9 36,998.97 77.43%

CENTRAL LUZON 44,538.2 49,576.36 49,781.08 46,762.66 56,565.55 80.23%

CALABARZON 24,656.83 26,758.43 39,107.7 37,206.72 36,265.57 66.80%

MIMAROPA 5,121 6,025.33 6,103.11 6,285.87 6,552.73 64.48%

BICOL REGION 260.33 285.3 237.58 260.8 263.53 17.20%

WESTERN VISAYAS 41,084.72 46,937.27 41,551.02 42,020.83 43,994.22 91.75%

CENTRAL VISAYAS 59,657.4 65,276.12 59,895.32 62,245.5 65,635.06 91.69%

EASTERN VISAYAS 456.97 460.25 448.95 447.65 437.73 51.65%

ZAMBOANGA 40,632.62 55,911.57 60,609.61 62,955.67 74,043.31 80.09%


PENINSULA
NORTHERN 32,974.97 34,613.02 32,661.65 35,273.8 41,756.39 93.43%
MINDANAO
DAVAO 30,223.66 27,200.86 23,952.73 26,459.65 26,920.61 83.68%
REGION
SOCCSKSARGEN 42,229.16 44,413.44 41,047.68 42,316.86 43,896.34 79.74%
CARAGA 10,308.71 10,939.5 9,040.27 9,485.08 12,044.86 77.40%

ARMM 2,342.43 2,221.46 199.29 2,271.48 2,156.86 28.08%


Source: BAS

14
Development Study on Local Industry Promotion in ARMM-Final Report, Japan International Cooperation
Agency,November 2011

23
3. Mindanao Production

Mindanao mango production with aggregate volume of 247,605 metric tons in year 2013
contributed almost 30 % share of the country’s total production. Mindanao growth rate as to
production volume has increased by more than 15% since 2009, the highest increase among the
three major groups of islands. Visayas recorded 9% increase and only 0.45% for Luzon, which
resulted to an aggregate increase of 6% for the whole Philippines. However production area for
Mindanao has slightly decreased by 0.16 % because of conversion to other crops/trees such as
rubber, palm oil, falcata, cassava and others15.

As illustrated in the Figure 2.6, actual production of mango in the years 2011, 2012, and 2013 fell
short the target by 9%, 11% and 5% respectively. The actual annual growth rate for Mindanao
production likewise, which is 3.83%, is lower than the national target which is set at 5% annual
increase. However, if production increases by 10.40% annually, as experienced in 2013, projected
volume production in 2016 of 333, 171 mt will be reached. With the 5% target increase in mango
production, target production in 2016 is expected at 301,874 mt. Assuming the 3.83% annual growth
rate is maintained until 2016, projected production will reach to 277,132. Hence, in order to achieve
the target production volume in 2016, Mindanao stakeholders will need to increase its production by
at least 6.83% annually.

Figure 2.6 Actual, Target and Projections of Mango Production in Mindanao

Target was estimated using figures presented during the 15th and 16thNational Mango Congress
AGR=Average Growth Rate

15
Focus Group Discussion and Key Informant Interview conducted

24
Zamboanga Peninsula

In 2013, Western Mindanao or Zamboanga Peninsula is the Philippines’ second biggest producer
with 92,445.04 MT volume produced which accounted for 11,33% share in the national production;
it is second to Ilocos Region with 260,524.22 MT volume produced equivalent to31.92% of the
country’s production. Among the provinces in the region, Zamboanga del Norte accounts for 65% of
the region's mango production and 24% of the total Mindanao production of 248,096,19 MT.
Zamboanga del Sur is the region's next biggest producer with 11,325.53 MT or 12% of the regional
total.

The average growth rate of the mango production in the region in 2009 to 2013 was recorded at
12.86 % which is the highest growth rate in the country. As shown in Figure 2.7, growth rate of area
planted and yield are also increasing by 0.32 % of the former and 12.52% by the latter. It is the
highest increase as to productivity in the country.

Figure 2.7 Zamboanga Peninsula Area Planted and Yield

Zamboanga Peninsula Area Planted and Yield


16.95 6.00
16.90
5.00
16.85
16.80 4.00
16.75
3.00
16.70
16.65 2.00
16.60
1.00
16.55
16.50 0.00
2009 2010 2011 2012 2013

Area Planted(in '000 ha) Yield (mt/ha)

On provincial performance, Zamboanga Del Norte recorded the highest growth rate of productivity.
From 2MT in 2009, it almost tripled in 2013 at 5.10 MT. Among the provinces in the region,
Zamboanga del Sur recorded the highest yield with 8.24 in 2013, however this already went down by
21.33% from 2009 figure.

Over 90 % of the mangos produced in the region are sold in fresh form. One of the biggest
plantations in the region is located in the city with 400 hectares planted to Mango. There is also the
presence of organized mango growers group with 35 members.

The City of Zamboanga considers mango and fruit juices as one of its priority sectors for investment
promotion. Just like other regions, mango marketing Channels are multi-layered. There are buying
stations which are supplied by agents, which are also in turn supplied by sub agents. Generally it

25
passes through as many as six major participants who are the growers and sprayers or contractors,
traders, exporters, processors and consumer.16

Usual contract sharing as practiced by the players in the region ranges from 20%-80% to 30%-70%
where the latter goes to the contractor.17 Aside from the age of trees, rate for sharing usually
depends on the proximity of the farms to market roads.

The months from May to July are said to be the peak season for mango production in the region, and
lean season during the months from January-April and August to December.¹⁶ Major destinations of
mangoes from Zamboanga are Cebu, Manila and Malaysia. ¹⁶

Table 2.10 Production Performance: Zamboanga Peninsula, 2009-2013

Province 2009 2010 2011 2012 2013 Annual


Growth
Rate (%)
ZAMBOANGA PENINSULA
Volume (MT)Mango 57,809.36 74,024.63 78,410.58 80,865.66 92,445.04 12.86%
Area Planted(Has) 16,648.00 16,679.00 16,800.00 16,914.00 16,862.00 0.32%
Average Yield 3.47 4.44 4.67 4.78 5.48 12.52%
Zamboanga del Norte
Volume( MT)Mango 23,431.40 39,940.23 45,322.13 48,654.47 59,896.86 28.60%
Area Planted(Has) 11,715.00 11,720.00 11,727.00 11,740.00 11,741.00 0.06%
Average Yield 2.00 3.41 3.86 4.14 5.10 28.53%
Zamboanga del Sur
Volume( MT)Mango 14,108.03 14,050.56 12,819.63 11,325.53 11,551.24 -4.71%
Area Planted(Has) 1,347.00 1,374.00 1,397.00 1,396.00 1,402.00 1.01%
Average Yield 10.47 10.23 9.18 8.11 8.24 -5.67%
Zamboanga Sibugay
Volume( MT)Mango 3,347.69 3,183.74 2,901.81 3,355.74 3,321.02 0.21%
Area Planted(Has) 505.00 505.00 601.00 590.00 580.00 3.87%
Average Yield 6.63 6.30 4.83 5.69 5.73 -2.46%
Zamboanga City
Volume (MT) Mango 4,383.00 4,589.00 3,752.00 3,449.50 3,298.30 -6.50%
Area Planted(Has) 3,081.00 3,080.00 3,075.00 3,188.00 3,139.00 0.49%
Average Yield 1.42 1.49 1.22 1.08 1.05 -6.90%
Source: BAS

16
Zamboanga.net/Investment Mango
17
Focus Group Discussion and Key Informant Interview conducted

26
Northern Mindanao

Northern Mindanao contributes 5.48 % of mango produced in the Philippines or 18 % of Mindanao


volume production. Despite the decrease on area planted from 2009 to 2013 as shown in Figure 2.8,
mango production still increased by an average of 5.96% per year. The increase was due also to the
increase on yield by 8.34%. All provinces except Bukidnon registered an increase in production
during the same period. One of the reasons identified for the increase of yield is the lowering of the
density of planting, where farmers cut several mango trees to reduce the population density of
mango to 100 trees per hectare18.

Figure 2.8 Northern Mindanao Area Planted and Yield

Northern Mindanao Area Planted and Yield


9.80 6.00
9.60 5.00
9.40
9.20 4.00
9.00 3.00
8.80 2.00
8.60
8.40 1.00
8.20 0.00
2009 2010 2011 2012 2013

Area Planted(in '000 ha) Yield (mt/ha)

Among the provinces in the region, Misamis Occidental showed the highest yield per hectare at 8.62
MT per hectare, 68 % higher than the region’s average yield in 2013. Misamis Occidental contributed
almost 43% of the region’s production, Misamis Oriental 38%, Lanao del Norte 11%, Bukidnon 7%,
and Camiguin Island of almost 1%.

Mangoes produced are sold to exporters and processors in Cebu City through consolidators⁵.
Because of its proximity to Cebu, consolidators in these regions buy mango for a higher price than in
any other region in Mindanao. As also reported by the Bureau of Statistics, farmgate price of Mango
in this region is the highest in Mindanao at Php26.33 per kilo in 2013, next to Western Visayas,
Central Visayas and Ilocos Region with respective farmgate prices of Php41.13, Php28.64 and 27.46
per kilo.

18
Focus Group Discussion and Key Informant Interview conducted

27
Table 2.11 Production Performance: Northern Mindanao, 2009-2013

Area 2009 2010 2011 2012 2013 Annual


Growth
Rate(%)
NORTHERN MINDANAO
Volume( MT)Mango 35,869.17 37,592.67 35,520.63 38,169.19 44,694.58 5.96%
Area Planted(Has) 9,598.00 9,597.00 8,751.00 8,742.00 8,722.00 -2.29%
Average Yield 3.74 3.92 4.06 4.37 5.12 8.34%
Bukidnon
Volume( MT)Mango 4,383.00 4,589.00 3,752.00 3,449.50 3,298.30 -6.50%
Area Planted(Has) 2,346.00 2,345.00 2,345.00 2,345.00 2,345.00 -0.01%
Average Yield 1.87 1.96 1.60 1.47 1.41 -6.49%
Camiguin
Volume( MT)Mango 213.94 220.75 226.56 222.76 280.06 7.47%
Area Planted(Has) 123.00 123.00 123.00 122.00 122.00 -0.20%
Average Yield 1.74 1.79 1.84 1.83 2.30 7.67%
Lanao del Norte
Volume( MT)Mango 3,496.00 3,834.00 4,032.00 4,599.00 4,873.00 8.71%
Area Planted(Has) 2,063.00 2,063.00 2,063.00 2,055.00 2,035.00 -0.34%
Average Yield 1.69 1.86 1.95 2.24 2.39 9.08%
Misamis Occidental
Volume( MT)Mango 17,668.70 18,421.89 19,068.06 19,196.91 19,086.06 1.97%
Area Planted(Has) 3,061.00 3,061.00 2,215.00 2,215.00 2,215.00 -6.91%
Average Yield 5.77 6.02 8.61 8.67 8.62 11.85%
Misamis Oriental
Volume( MT)Mango 10,107.53 10,527.03 8,442.01 10,701.02 17,157.16 17.86%
Area Planted(Has) 2,005.00 2,005.00 2,005.00 2,005.00 2,005.00 0.00%
Average Yield 5.04 5.25 4.21 5.34 2,005.00 0.00%
Source: BAS

28
Davao Region

Davao production of 32,171 MT in 2013 contributed 4 % to the total country’s production or 13 % in


Mindanao share. From 2009 to 2013, mango production in Davao Region decreased annually by
3.17%. The lowest yield of its production was seen in 2011 at 1.67 MT yield then went up in 2012 to
1.76 MT and up to 1.84 MT in 2013. Davao is among the region that possesses brilliant opportunities
for mango industry, having one of the biggest area planted in the country at 17,839.6 hectares in
2013. Although, its yields are generally low based on BAS statistics at an average of 1.85 MT only in
2009 to2013, majority of the stakeholders from all provinces in the region interviewed in the KIIs
and conferences said that their recent yields in range from 8mt to 12 mt.

Figure 2.9 Davao Region Area Planted and Yield

Davao Region Area Planted and Yield


20.00 2.50

2.00

1.50
15.00
17.97 17.98 17.76 18.04 17.44 1.00

0.50

10.00 0.00
2009 2010 2011 2012 2013

Area Planted(in '000 ha) Yield (mt/ha)

In 2013, Davao Del Sur tops the provinces by production volume with 21,426.57 MT. However
productivity is still generally low at 1.59 mt/ha. Davao City is a far second at a total of 6,064.26 MT.

As to date, there are around four large processors and exporters in Davao region, 3 are located in
Davao City and the other in Panabo Davao Del Norte. These processors play an important role in the
value chain, it provides a wider market and higher value for the mango produced by growers and
processors. Most of these key players buy majority of its mangoes from the Island of Samal, Mati
City, Davao City and some other parts in Davao Del Norte, Davao del Sur, Davao Oriental, South
Cotabato and Sarangani19

19
Focus Group Discussion and Key Informant Interview conducted

29
Table 2.12 Production Performance: Davao Region, 2009-2013
2009 2010 2011 2012 2013 Annual
Growth
Rate(%)
DAVAO REGION
Volume( MT)Mango 37,047.55 33,907.90 29,730.05 31,802.74 32,171.54 -3.17%
Area Planted(Has) 17,973.00 17,982.00 17,761.00 18,043.00 17,439.00 -0.73%
Average Yield 2.06 1.89 1.67 1.76 1.84 -2.45%
Davao del Norte
Volume( MT)Mango 2,569.38 2,651.47 2,666.09 2,707.99 2,717.03 1.41%
Area Planted(Has) 1,538.00 1,543.00 1,545.00 1,545.00 1,542.00 0.07%
Average Yield 1.67 1.72 1.73 1.75 1.76 1.35%
Davao del Sur
Volume( MT)Mango 23,518.04 20,335.68 17,970.32 20,608.00 21,426.57 -1.63%
Area Planted(Has) 12,992.00 12,998.00 12,998.00 12,998.00 12,998.00 0.01%
Average Yield 1.81 1.56 1.38 1.59 1.65 -1.64%
Davao Oriental
Volume( MT)Mango 1,302.51 1,338.44 1,410.29 1,667.84 1,688.89 6.91%
Area Planted(Has) 728.00 726.00 740.00 1,080.00 1,151.00 13.54%
Average Yield 1.79 1.84 1.91 1.54 1.47 -4.38%
Compostela Valley
Volume( MT)Mango 1,332.61 1,534.50 803.98 612.85 274.79 -27.85%
Area Planted(Has) 1,269.00 1,269.00 1,254.00 1,203.00 533.00 -15.24%
Average Yield 1.05 1.21 0.64 0.51 0.52 -12.79%
Davao City
Volume( MT)Mango 8,325.01 8,047.81 6,879.37 6,206.06 6,064.26 -7.48%
Area Planted(Has) 1,446.00 1,446.00 1,224.00 1,217.00 1,215.00 -4.02%
Average Yield 5.76 5.57 5.62 5.10 4.99 -3.43%
Source: BAS

SOCCSKSARGEN

SOCCSKARGEN is the 5th among the top producing regions in the Philippines. In 2013 its production
volume registered at 55,051.89 MT or almost 7 % of the country’s production. North Cotabato
accounts for 51% of the region’s share. In 2013, average yield per hectare of the region is at 3.16
MT20. In 2013, area planted to mangoes is 16,919.60 hectares. This is a 4% increase or total of 687
hectares additional land planted to mangos recorded from 2009 to 2013 inspite of the cutting of
mango trees in North Cotabato, South Cotabato and Sultan Kudarat. The increase was due to the
expansion in Sarangani Province from 2009-2013. North Cotabato accounts for the largest average
area of 7,445 hectares or about 44 percent of the regional share followed by South Cotabato
(25.22%), Sarangani (20.36%) and Sultan Kudarat (10.42%).

20
Bureau of Agricultural Statistics

30
Yield per hectare as shown in figure 2.10 have slightly decreased to 3.16 mt/ha in 2013.

Figure 2.10 SOCCSKSARGEN Area Planted and Yield

SOCCSKSARGEN Region Area Planted and Yield


17.60 3.60
17.40 3.40
17.20 3.20
3.00
17.00
2.80
16.80
2.60
16.60 2.40
16.40 2.20
16.20 2.00
2009 2010 2011 2012 2013

Area Planted(in '000 ha) Yield (mt/ha)

One of the strengths identified in the region is the strong association of the stakeholders in the
region through Region XII Mango Industry Development Council, Inc. (RMIDCI). The association has
members from Cotabato Province, South Cotabato, Cotabato City, General Santos City, Sarangani,
and Sultan Kudarat. It is actively initiating projects and activities that will strengthen and improve
the production, quality and marketing of the commodity. It had been a recipient also of several
programs and projects of the Department of Agriculture.

Recently, the South Cotabato Chapter has already acquired a SEC registration for the association.
Among the targets the association has set are 1) To strengthen the mango organization from
barangay to regional level; 2)To increase production from 4MT to 10MT per hectare; 3) To penetrate
domestic and foreign markets, and lastly, 4) To improve the quality of mango to meet international
standards.21

One of the challenges that the region is facing however is the absence of exporters for fresh mango.
At present, there are two processors of dried fruits in the region, and they buy mangoes at almost
50% lower than for the prevailing export price. Per FGD conducted, DOLE Philippines buy mangoes at
P35.00/kilo while Truly Natural Fruit Corporation (TNFC) buys it at P33.00. There are a few growers
and consolidators that sell their mangoes to buyers from Cebu who are into exporting business for
the Hongkong Market. The most current buying price for these buyers is at P60.00 per kilo. There
are also buying stations from Digos located in General Santos City.

Average farmgate price of mango in the region is Php24.45 per kilo, 1.03 pesos lower than the
national farmgate price at25.48in 2013.

21
Focus Group Discussion and Key Informant Interview conducted

31
Table 2.13 Production Performance: SOCCSKSARGEN, 2009-2013

AREA 2009 2010 2011 2012 2013 Annual %


Growth
Rate
SOCCSKSARGEN
Volume( MT)Mango 53,654.90 56,263.54 52,329.83 53,404.63 55,051.89 0.75%
Area Planted(Has) 16,736.00 16,727.00 16,897.50 16,815.00 17,422.50 1.02%
Average Yield 3.21 3.36 3.10 3.18 3.16 -0.24%
North Cotabato
Volume( MT)Mango 29,456.71 30,153.45 28,524.16 28,022.30 28,155.53 -1.08%
Area Planted(Has) 7,480.00 7,480.00 7,515.00 7,450.00 7,300.00 -0.60%
Average Yield 3.94 4.03 3.80 3.76 3.86 -0.46%
Sarangani
Volume( MT)Mango 4,148.49 4,610.67 4,917.03 5,998.65 7,134.58 14.68%
Area Planted(Has) 3,165.00 3,162.00 3,366.50 3,368.50 4,160.00 7.48%
Average Yield 1.31 1.46 1.46 1.78 1.72 7.41%
South Cotabato
Volume( MT)Mango 17,707.44 19,089.35 16,619.93 17,026.94 17,279.69 -0.30%
Area Planted(Has) 4,294.00 4,288.00 4,274.00 4,255.00 4,221.00 -0.43%
Average Yield 4.12 4.45 3.89 4.00 4.09 0.13%
Sultan Kudarat
Volume( MT)Mango 2,342.26 2,410.07 2,268.71 2,356.74 2,482.09 1.56%
Area Planted(Has) 1,797.00 1,797.00 1,742.00 1,741.50 1,741.50 -0.77%
Average Yield 1.30 1.34 1.30 1.35 1.43 2.31%
Source: BAS

32
CARAGA

CARAGA exhibited a 23.44% increase of mango production from 2012 to 2013 , the highest increase
for 2013 in Mindanao and second in the Philippines. Its production trend just like other regions is
fluctuating and the lowest production was recorded in 2011. The region’s performance on mango
production is at its highest in 2013 with an average yield of 5.91 metric tons, as shown in Figure 2.11

Figure 2.11 CARAGA Region Area Planted and Yield

CARAGA Region Area Planted and Yield


4.00 8.00

3.00 6.00

2.00 4.00

1.00 2.00

0.00 0.00
2009 2010 2011 2012 2013

Area Planted(in '000 ha) Yield (mt/ha)

CARAGA Region contributed almost 2 % of the country’s production of mango in 2013, 93% of which
coming from Agusan Del Norte with a total production of 14,497 MT, Surigao del Sur (581 MT),
Agusan del Sur (270 MT) and Surigao del Norte (212 MT).

Area planted was decreasing, from around 3,382 hectares in 2009 to 2,633 hectares in 2013. Agusan
Del Norte with the biggest area planted to mangoes at 1,697 accounts the biggest reduction at an
annual rate of 10.80% which equivalent to 1,233 ha in just 5 years. Conversion to Falcata is said to be
the major reason. Surigao del Sur follows with 340 ha, Agusan del Sur with 300 hectares and Surigao
del Norte with 296 ha in 2013.

In terms of yield, Agusan Del Norte showed a very good average yield with 8.54 metric tons per
hectare in 2013, a significant increase from 4.10 MT in 2012. In the interview with the major players
in the region, this increase can be attributed to adjustments done by growers on the tree density
from 5x10 to 10x10.

Other provinces of the region produced however a very low yield, such as Agusan Del Sur with 900
kilograms, Surigao del Norte 720 kilograms and Surigao del Sur at 1710 kilograms.

33
Table 2.14 Production Performance: CARAGA Region, 2009-2013

2009 2010 2011 2012 2013 Annual


Growth
Rate (%)
CARAGA
Volume( MT)Mango 15,403.60 15,520.49 12,156.18 12,606.56 15,562.10 1.56%
Area Planted(Has) 3,382.00 3,383.00 3,257.00 3,454.00 2,633.00 -5.35%
Average Yield 4.55 4.59 3.73 3.65 5.91 10.45%
Agusan del Norte
Volume( MT)Mango 14,181.60 14,440.69 11,186.66 11,687.05 14,497.86 1.95%
Area Planted(Has) 2,930.00 2,931.00 2,850.00 2,849.00 1,697.00 -10.80%
Average Yield 4.84 4.93 3.93 4.10 8.54 23.56%
Agusan del Sur
Volume( MT)Mango 276.71 242.07 212.35 252.46 270.66 0.33%
Area Planted(Has) 125.00 125.00 124.00 147.00 300.00 30.46%
Average Yield 2.21 1.94 1.71 1.72 0.90 -17.82%
Surigao del Norte
Volume( MT)Mango 423.75 350.32 288.01 154.00 212.57 -10.90%
Area Planted(Has) 142.00 142.00 98.00 118.00 296.00 35.07%
Average Yield 2.98 2.47 2.94 1.31 0.72 -24.69%
Surigao del Sur
Volume( MT)Mango 521.54 487.41 469.16 513.05 581.01 3.08%
Area Planted(Has) 185.00 185.00 185.00 340.00 340.00 20.95%
Average Yield 2.82 2.63 2.54 1.51 1.71 -9.39%
Source: BAS

ARMM
During the last 5 years, ARMM mango production registered a decreasing trend at an average rate of
14.07 % per year. In 2013, it produced 7,680.20 MT of mangoes or almost 1 % of the national
production. Average yield of the region is also decreasing at an average of 15.10 % which resulted to
0.59 MT yield in 2013.

Figure 2.12 ARMM Area Planted and Yield

ARMM Area Planted and Yield


14.00 1.50
1.00
12.00
0.50
10.00 0.00
2009 2010 2011 2012 2013

Area Planted(in '000 ha) Yield (mt/ha)

34
The mango variety of Sulu is Indian mango or Katchamita, one of the less-exported varieties in the
Philippines. Sulu used to be the top producing province in the region but has recently been dropping
in terms of production, recording a 30.36 % average annual decrease from 2009 to 2013. In terms of
productivity, it also recorded the highest average decrease at 30.07%.

Maguindanao on the other hand showed a remarkable trend of 20.52 % growth rate per year.
Maguindanao produces Carabao or manila super mango. Though productivity has been increasing at
an average of 17.92 %, it is still one of the lowest in the Philippines at 0.38 MT mt/ha. High density of
tree population is among the common reasons pointed out for the low yield of mango production.22
In some areas in ARMM Region, mango trees are being cut for palm oil and rubber plantations.²¹

Farmgate price in the region at P12.00 is the lowest in the country. It is a distant far from the
country’s farmgate price by 112%.During peak season, buying price for as low as P3.00/kg. The
absence of processing plant and buying stations, and accessibility to these are the major constraints
the industry in the region has.
Table 2.15 Production Performance: ARMM, 2009-2013
2009 2010 2011 2012 2013 Growth
Rate (%)
ARMM
Volume( MT)Mango 14,751.81 12,137.84 8,226.33 7,431.48 7,680.20 -14.07%
Area Planted(Has) 12,362.00 12,510.00 12,512.50 12,961.70 12,964.80 1.21%
Average Yield 1.19 0.97 0.66 0.57 0.59 -15.10%
Basilan
Volume( MT)Mango 218.43 227.15 218.94 210.44 201.04 -1.99%
Area Planted(Has) 93.00 93.00 93.00 100.00 100.00 1.88%
Average Yield 2.35 2.44 2.35 2.10 2.01 -3.67%
Lanao Del Sur
Volume( MT)Mango 117.07 116.51 115.66 114.12 107.29 -2.13%
Area Planted(Has) 42.00 42.00 42.00 43.00 42.00 0.01%
Average Yield 2.79 2.77 2.75 2.65 2.55 -2.15%
Maguindanao
Volume( MT)Mango 4,308.29 4,319.23 2,080.54 4,688.93 5,077.22 20.52%
Area Planted(Has) 10,501.00 10,671.00 10,671.00 11,103.70 11,106.00 1.42%
Average Yield 0.41 0.40 0.19 0.42 0.46 17.92%
Sulu
Volume( MT)Mango 9,616.40 6,969.50 5,333.00 1,933.40 1,803.90 -30.36%
Area Planted(Has) 1,355.00 1,330.00 1,330.00 1,337.00 1,337.00 -0.33%
Average Yield 7.10 5.24 4.01 1.45 1.35 -30.07%
Tawi-tawi
Volume( MT)Mango 371.00 374.00 376.50 378.00 379.80 0.59%
Area Planted(Has) 371.00 374.00 376.50 378.00 379.80 0.59%
Average Yield 1.33 1.35 1.27 1.28 1.29 -0.58%
Source: BAS

22
Focus Group Discussion and Key Informant Interview conducted

35
Section 3: NATURE AND STRUCTURE OF THE INDUSTRY

A. VALUE CHAIN MAPPING

Mango, considered as one of the most important tropical fruit has been the third most important
fruit in terms of area and total production over the years, with bananas and pineapples as number
one and number two respectively. As presented in Table2.5, the trend for Mango production in
Mindanao has generally increased by an average annual growth rate of 3.83% from 2009-2013.2010
production recorded an increasing movement of 6.95% and a decrease by 5.70 in 2011, while 2012
and 2013 showed a positive growth of 3.65 % and 10.40 %.

In Mindanao, market flows of fresh mango chain are noted in various options. The most common
option of producers specially the small farmers is to sell its mango produced to contract buyers or
consolidators, where about 10% of the latter’s contracted volume are sold to exporters then the
remaining to processors, wholesalers and retailers. The contract growers on the other hand sell their
harvest directly to exporters, processors , wholesaler or retailers. Because of the volume of their
harvest from the contracted farms, contract growers can take advantage with the efficiency of its
logistics and transportation to sell their produced to either of the channels.

In the case of Zamboanga Peninsula, 70 to 80 percent of mango farms are managed by contract
growers from a 25:75 to 35:65 sharing, in favor of the contract grower, the farther the farm the
bigger the share of the contract grower to cover the transportation cost. Since there are no
processors in the area, fresh mangoes in Zamboanga are sold to buyers from Cebu, Manila and
exporters to Malaysia. Per Key Informant Interviews and stakeholders consultation conducted, there
are buyers in the region who shipped significant volumes to Malaysia through the “backdoor”, these
activities do not pass through mandated regulating bodies and documents.

In Northern Mindanao, mostly of the growers sell their harvest directly to the local market, either
through wholesaler and retailer, or to buyers from Cebu City where mango processors and exporters
in the Philippines are mostly located.

Among the regions in Mindanao, Davao region has the most advantage in terms of market channel
because of the existence of exporters and processors in the region. About five (5) of seven (7)
exporters of fresh and frozen mangoes and processors are located in Davao Region. Contractors and
consolidators has varied buying channels, first option among the channels are exporters who buy
Class A mangoes for Php 55.00 to Php 60.00 per kilo. Of the volume delivered, about 10% are usually
classified by SPPFC and Pro-Foods Southern Phillippines as Class “A” or exportable quality. The
Nakashin Davao International Inc from Panacan Davao on the other hand buys Class C mango at
Php33.00 to Php35.00 per kilo, while processors of dried mangoes and mango purees and
concentrates such as Martson and Pro-Foods buy fresh mango in a much cheaper price.

Consolidators from CARAGA and SocSKSarGen also sell their fresh mango in Davao Region. However,
aside to consolidators, growers in SocSKSargen sell their produced at an all-in price to tropical fruit
processors and exporters in the region such as in Trully Natural Food Corporation and DOLE

36
Philippines at Php20.00 to Php25.00 per kilo. Transporting the mango to Davao region would entail
the farmers a higher transportation cost without any guarantee if the mango harvested and
delivered will qualify as exportable quality, thus a high-risk for the farmers to gamble. Presence of a
buyer from Cebu who is into mango exporting was also reported existing in General Santos City, buys
mango at Php 60.00 per kilo.

The most common type of contracts in Mindanao, which are written or verbal are:23

1. Contract Growing – where the owner agrees to lease mango plantation to a producer, who
undertakes the production from spraying, harvesting up to marketing. Typically it’s a 2-5 year
contract term at rate ranges from 20:80 to 30:70 in favor of the contractor. This kind of contract is
the most common practice in all regions in Mindanao. The farmers opt to favor this contract because
of the minimum risk they have to bear. In the case of the grower, advantages include cheaper cost of
production due to the availability of equipment and input materials of the contractor who usually
contracts at least 3 to 4 mango plantations; higher buying price due to its linkage to buyers and its
consolidated volume. On the other hand, risk and disadvantages identified include abuses of
contractor to mango trees by over-spraying during the contract term. This impact to the mango
trees is solely burden by the owner. Other risk also is that contractors can keep the actual sale from
the owners, since the latter have no direct linkage to buyers.

2. Output sharing – it’s a kind of contract where the farmer agrees to share output with a
contractor, where the latter provides inputs from spraying to harvesting. Farmers commonly enter
into this kind of contract with processor, consolidators or with input providers. There are however
cases of pole vaulting reported, where growers as complained by processors are

3. Contract buying – It is where the contractor is simply involve in purchasing of mango. In most
cases, this kind of contract includes harvesting and sorting. Due to lack of financing, logistics, facility
and equipment for harvest to post harvest and distribution, growers opt to sell mangoes to what
they call the all-in purchasing.

23
Focus Group Discussion and Key Informant Interview conducted

37
Figure 3.1 Marketing Channel for Fresh Mango Value Chain in Mindanao

Growers
(Farmers/Contractors)

Processors Contract Buyer Exporters


/Consolidators

Wholesaler/Re
tailers

Institutional
Buyers

Consumer

B. KEY PLAYERS AND FUNCTIONS

The value chain analysis for fresh mango in Mindanao cover the following function areas: input
provision, primary production, transformation, trading and final sale of fresh mango, see Annex A for
the list

38
Figure 3.2 Fresh Mango Value Chain Map

Input Primary Transformation


Provision Assembly Distribution Final Sale
Production / Processing

F  Planting  Mango  Sorting and  Receiving/  Transporting Selling of Fresh


U materials Propagation Packaging  Weighing / Distribution Mango for export
N  Chemicals,  Pre-conditioning  Transporting  Sorting/ market and local
C Fertilizer- (Land preparation, Cleaning market (Processors,
T organic/ fertilization)  Fruit Ripening, retailers,
I synthetic  Care and Mgmt HWT, VHT restaurants, hotels,
O  Financing (Flower induction, Treatment Households and
N assistance Pest & Diseases  Waxing other institutional
S  Technologies Control, bagging)  Packing buyers)
 Harvesting and (Sorting, QC,
O  Chemicals, hauling
 Farmers  Farmers Labelling,
 Processors  Processors
 Growers
P Fertilizer-organic/  Contract Growers  Workers Sealing,  Consolidators
Loading  Consolidators
E synthetic  Sorters  Processors
R manufacturers/  Contract  Exporters
A producers and Growers
 Retailers
T suppliers  Contract
O  Nursery Traders
R operators  Consolidators
S  Lending
institutions and
 Credit coops
MLGU/LGU,  MLGU/LGU,  Department of Science and  DA Processors/
E
PLGU PLGU Technology  DTI Exporters
N
 Bureau of Plant  Financial  Associations and Cooperatives  MLGU/LGU,
A
B
Industry Institutions  MLGU/LGU, PLGU PL
L  Growers
-Department of Agriculture  DOST, BAFS, DTI GU Mango
E Associations and Exporters of the
R Cooperatives Philippines
S

1. Input Provision
Mangoes are propagated sexually and asexually. Sexual propagations are done through growing of
rootstocks by nursery operators; while sexual propagation can be done through grafting, budding,
inarching etc. Asexual propagation is the most preferred method since seed growing takes longer
time. Nurseries are usually operated by private nursery operators, government agencies or the
farmers themselves.

The Bureau of Plant Industry (BPI) under the Department of Agriculture mandated to support the
Philippine plant industry sector including mango. To ensure the integrity of mango being planted it
has accredited 31 mango nursery operators in the country as of December 31, 2013, Five (5) of
which can be found in Mindanao as shown in table below. Aside from these accredited nursery
operators, farmers also get their seedling from several LGU municipalities or cities.

39
Table 3.1 BPI Accredited Mango Nursery Operators in Mindanao

REGISTERED BUSINESS NAME LOCATION AREA SQ.M.

La Suerta's Fruit Tree Nursery Don Carlos, Bukidnon NDA


Binahon Agro Forestry Farms (BAFF) Lantapan, Bukidnon 80,000
Dayot Plant Nursery Talomo Dist. Davao City 3,400
Kylle's Nursery and Garden Balindog, Kidapawan City NDA
Cayona-Talento Nursery & Agri. Supply Paco 116, Kidapawan City 30,000
(Source: bpi.da.gov.ph)

About 73% of the total area planted to mangoes is owned by small farmers with areas less than 3 ha
while 24% operate farm sizes between 3 to 9.99ha. Those operating 10 hectares and above
constitute only about 3%.

Fertilizers and pesticides are readily available in the locality. However, insufficient financial resources
of growers lead them to enter into contract with input providers.

2. Primary Production

Mangoes are best planted in tropical countries like Philippines. The volume and the quality of mango
produced varies widely in the tasks under this stage which covers land preparation, flower induction,
care and management including pest and disease control management and bagging, and lastly the
harvesting and hauling.

The tasks under this function are often undertaken by contractors based on management contract
with the farmers. The contractors who provide the input requirement and who do the spraying are
the traders at the same time in most cases. These contractors are called “enhancer” in some areas.
The usual practice of profit sharing in most areas ranges from 25:75 to 30:70 sharing where the
latter percentage goes to the contractors. The services contracted include nutrient, water, pest
management and others until its harvest.

40
Table 3.2 Average Production Cost per kg, 2011-2013
Inputs Cost Per Kg in Pesos Share
2011 2012 2013 in Total As shown in table 3.2, total cost for
Total Cost 15.52 16.86 15.95 100% mango production is at Php15.95 in
year 2013. Farm inputs which have
Cash Cost 9.73 10.56 9.78 62%
the highest share on the cost include
Farm inputs 5.75 6.22 5.60 36% fertilizers, pesticides and interest
Workers 2.60 2.86 2.76 17% payments on crop loan. Non- Cash
cost includes hired labor and rentals
Fuel, utilities 0.48 0.52 0.50 3% paid in kind, and landlord and
Other fees 0.90 0.96 0.92 6% harvester’s paid in kind, this consist
7 % of the total cost. Depreciation,
Non-cash costs 1.04 1.09 1.03 7%
interest on operating capital, rental
Imputed costs 4.76 5.20 5.15 31% value of land and operator and
Family labor 1.23 1.23 1.23 8% family labor consist the imputed cost
at 31 %
others 3.92 3.92 3.92 24%
Source: Philippine Statistics Authority, BAS

The following are the key operations and typical practices of farmers in Mindanao as described by
Mango, Techno-Guide for Mango in the Philippines (ReferenceHVCC. 2001.)

Land Preparation

Ideally mangoes are best grown on areas with an


elevation lower than 400 meters above sea level, with
a minimum of 2-3 months dry period at fruiting until
harvest. .

Pruning

Ideally, the farmer should begin pruning and thinning


when the crown or foliage of the trees starts to meet.
Pruning is the removal of undesirable vegetative parts
of the tree, to allow sunlight to penetrate in the
crown and free air circulation, thereby reducing
incidence of insect pests and diseases. Ideally the best
time to prune is after harvest. When done during
summer, the wounded parts dry and heal faster.

In General Santos City, labor cost for pruning a one hectare plantation is around Php1,200.00 to Php
1,500.00 at a day rate of Php200-P250 per day

41
Nutrient Management
In the first five years, the trees need high rate of nitrogen fertilizers. To promote faster vegetative
growth, organic fertilizer application is also recommended. As the trees reach bearing age, more
emphasis should be given on phosphorous and potassium. Phosphorous fertilizer promotes root and
flower development while potassium is for fruiting and ripening. Apply fertilizer containing 4-5%
phosphoric acid and 8-15% potash.

Flower Induction
Applying flower inducer to mango trees can bear fruit at any month. Ideally, mango production
should be once a year rather than per cycle to give enough time for the tree to rejuvenate nutrients
and maximize productivity. However, there are several contractors in Mindanao who would rather
maximize the production cycle rather than the productivity during the term of contract.

In ARMM region, the farmer makes a contract with a group of mango sprayer, locally called an
“enhancer”24 The group takes charge of the spraying and cost of chemical and spray to promote
flowering and fruiting. It also carries out the management of the production cycle until the harvest.
In other regions in Mindanao, they are also called the contract growers.

Fruit Protection
Wrapping or bagging of fruits is practiced in many areas in Mindanao to minimize incidence of fruit
flies and other insects, minimize disease and fungal infection and reduce incidence of mechanical
damage. In general, bagging is recommended to protect fruits from pests and to reduce spraying of
insecticides. This practice is done when fruits are about chicken’s egg size (55 to 60 days after flower
induction).

Harvest Management
Harvesting by hand is the most effective way in order to avoid bruises or damage of the fruits. The
best time to harvest is between 9:00 am and 3:00 pm since the tree and fruits are dry and the latex
flow is minimal. Proper handling is very relevant during harvest.

Aside from this technology guide prescribed for mango production there have also been other
already proven technologies that the Department of Science and Technology have been introducing
based on the previous Research and Development the agency has conducted. However, most of the
growers still do not adopt the said technologies. As presented by the DOST, (Figure 3.3 )very low
percentage of the growers are adopt the fertilization, pruning, irrigation and bagging. These
interventions plays significant role in the productivity base on yield and quality.

24
Development Study on Local Industry Promotion inARMM,

42
Figure 3.3 Mango Growers Adoption of Improved S & T-based Technologies

100 100 87
90
80
70
Percent (%)

60 45 38
50 35
40
30
20
8
10
0

Cultural Practices

3. Assembly

After harvest, assembly comes next, where sorting, packaging and transporting takes place.
Generally this function is being done by group of sorters in the area. However, most of these sorters
which were commissioned by the growers, consolidators or contractors do not have formal training
on sorting and proper handling. Hence, this is one of the common causes identified for post-harvest
damages.

4. Transformation

This function includes washing or cleaning of fruits, and hot water treatment, Vapor Heat Treatment
(VHT), waxing, sorting, quality control, and packing of mango for export market. These are done by
exporters with VHT facilities.

Hot water treatment usually entails heating dipping of freshly harvested fruit for 5 to 10 minutes in
heated water (52-55°C). This is being done by mango exporters in response to the quality
requirements set by importing countries. It is a disease control technology particularly for
anthracnose and stem-end rot, mango diseases which show up only after the mango is harvested.

Exporters to Japan such as in the case of Nakashin Davao International Inc and Southern Philippine
Fresh Fruit Corporation subject mangoes to VHT after HWT as required by Japanese consignees.

Processors with VHT and HWT are located only in Davao Region. Clearly, if technology or
infrastructure such as these were present in strategic positions along specific regions in Mindanao, it
would mean higher production of export-quality mango. The inadequacy of export quality supply for
fresh mango is the main constraint that this function of the value chain is facing. (Refer to Section 7
for detailed discussion on constraints).

43
5. Distribution

This function of the value chain is mostly carried out by consolidators and processors. Consolidators
usually buy mangoes from growers and deliver it to processors or local markets and domestic
market either for local consumption or further processing. Domestic buyers of consolidators include
those coming from Davao City, Cebu City and Manila. The processors on the other hand, have
contracts with their major export markets in Japan, Hongkong, Korea and Europe.

Figure 3.4 shows Mindanao map on mango production and fruit suitability for fresh mango market
based on buyers preferred supply areas as surveyed by the GEM Agribusiness Team. Zamboanga
provinces however were not included in the survey. The survey covered 4 major buyers from Cebu
and 8 significant traders of fresh mangoes from all over Mindanao. Table 3.3 shows the summary of
preferred supply areas based on the study.

44
Figure 3.4 Buyers Preferred Supply Areas in Mindanao

45
Table 3.3 Buyers Preferred Supply Areas
Region Province Municipalities Peak supply
months
Zamboanga Peninsula Zamboanga Del Sur Dimataling, TabinaLapuyan
Northern Mindanao Misamis Occidental Opol, Puerto and Balingasag April to June
Lanao Del Norte Lugalt, Libertad, Linamon, Kauswagan, June to December
Bacolod, Maigo and Iligan
Davao Region Davao Oriental Mati, San Isidro March to May
Davao Del Sur Digos, Malalag, Bansalan
SOCCSKSARGEN Sultan Kudarat Tacurong, Isulan March to May
South Cotabato General Santos City, Tantangan and April to June
Koronadal
North Cotabato Mlang, Pikit, Midsayap April to May
CARAGA Region Agusan Del Norte Nasipit, Buenavista, Butuan and Carmen October-December
Source: GEM Agribusiness Team

6. Final Sale

Fresh Mangoes are finally sold to domestic and foreign market. Domestic market includes
institutional buyers such as department stores, hotels, restaurants and public markets. This route of
selling is usually done by wholesalers. Other domestic market includes processors of dried fruits,
juices, jams, and purees either for local or export market. Usually, from grower it only passes either
through contractor, wholesalers, or retailer and or all of the mentioned actors before the finale sale
to processors.The major cities such as Manila, Cebu and Davao are the major local markets for
mangoes.

For export market, marketing channel is longer than that of domestic selling. Because of the
required volume of quality grade supply by processors, contractors and or consolidators come in
before the final sale.

For the past five years (2009-2013), statistics utilization of mango for export has been notably
decreasing. From 20.3 MT in 2009, it went up to 21 MT in 2011, and decreased by almost 13 % in
2012 totaling to 18,440 MT and 5,076 MT only in 2013.

46
C. NATURE OF INTERIM RELATIONSHIPS

I. Horizontal Relationship

The horizontal relationship across the value chain of mango production plays a very important role
in empowering the small scale farmers. Economies of scale, when existing, ensure sustainable
business as consistent quality and quality of supply is ensured. The bigger the volume of mango
produced, the bigger the chance to sell it at a higher price, and the cheaper the cost of transporting
and other logistics. This is also true with processors and exporters: the bigger the firm, the greater its
unit revenue25since bigger plantations have better access to buyers for export markets.
Accordingly26, international buyers require not only exportable quality but also a stable supply of
mango of acceptable quality.

Collaboration between players also allow for better access to inputs and services. This is where in
the value chain, that associations and cooperatives play significant roles. Farmers who are not
members of any cooperative or association have difficulty to maximize their productivity due to
limited access to inputs, services and technologies. Sharing of good farming practices, knowledge
and skills enables the farmers to upgrade their farm practices and adapt to new technologies.
Cooperation among the players should ideally extend to production (i.e. schedule for spraying,
flower induction, etc.) and most importantly, up to trading. Per focus group discussion, associations
and cooperatives have yet to engage in trading.

It is also more efficient for government agencies to download support programs and projects to
organizations rather than to individual farmers. In areas where organization and associations are not
yet organized, interventions from local government units are needed by initiating efforts that would
lead to their organizing. Sharing of association success stories such as access to government
assistance and expanded income opportunities are needed to be shared to attract membership of
farmers and sustain membership of existing.

Also, scale is crucial in getting relevant private and public standards including reducing the cost in
such and endeavor.

Based on the study, formal organization of mango producers in the different regions are mostly at
the conception stage. At best, sharing of information among the farmers, or among the contractors
themselves, happen during conferences initiated by the government or in small group meetings
called for by input suppliers. This is true for players at production (i.e. farmers-farmers, contractors-
contractors), transformation/processing (i.e. traders-traders, local sellers-local-sellers, processors-
processors) and even logistics (i.e. contractors-contractors, traders-traders). Hence, maximization of
economies of scale especially at the production stage is non-existent.

Driven by the high cost of inputs and the uncertainty of production that is highly dependent on a
rather unpredictable weather, farmers enter into contract with contract growers. Instead of these
factors driving the farmers to cohere and ideally establish cooperatives and the like, farmers resort

25
Case of Philippine Mango Industry, R. Briones et al, Food and Agriculture Organization of the United Nations
26
Focus Group Discussion and Key Informant Interview conducted

47
to contracting production. Most farmers are now just owners of the farms and initial growers of the
crops, comfortably receiving 25 to 30% of the 25/30-75/70% profit sharing. Refer to Section 8
identifying the constraints that hinder or discourage the organization of farmers.

There are however a few areas that have organized industry players. One promising association is
the Region XII Mango Industry Development Council (RMIDCI) that aims to strengthen the mango
organization from the regional level down to the Barangay level. The association is now working
together to expand membership by helping its sub-councils in the provincial level. Its vision is to be a
vibrant and dynamic organization who works for the interest of its members, and for Region 12 to
become the top mango producer and exporter in the country.

II. Vertical Relationships and Supply Chain Governance

The most common relationship that connects the commodity to the different levels of value chain is
by contracting relationship. Inputs suppliers, contractors, processors and exporters operate vertically
in addition to its original function.

Some farmers who have ample knowledge, skills, resources and networks through years of
experience also play the function/s of contract growers and/or of consolidators and traders. The
processors and exporters on the other hand, enter into this kind of contracting relationship as a
mechanism to address its major constraint of elevating product quality to export grade.

In most cases in Mindanao, output sharing for contract growing between farmers and contractors
ranges from 20:80 to 30:70 in favor of contractors.

The
Outgrower
Scheme

The
Cooperative
Scheme
The Cooperative and Outgrower Scheme

48
The Cooperative Scheme The Outgrower Scheme:
 self-governed group  managed by the buyer.
 levels of sophistication: simple association of  emerges when the producers do not self-organize.
producers whose only involvement is to sell their  Often called contract farming, this scheme refers
produce together in order to achieve sufficient to groups of producers that are brought together
economies of scale to interest a buyer, to a and organized by a buyer.
sophisticated organization that offers its members  Producers must sign a contract to sell
access to credit and technical assistance and their harvest directly to the buyer, often in exchange for
exports directly to international markets. some combination of inputs, technical assistance and credit.
 no guaranteed access to market, but is at liberty to  The producer benefits from lower risk due to
seek out multiple buyers and use its economies of guaranteed access to market for their crop, as well
scale to negotiate higher prices (Berrios, 2012). as the provision of essential resources to ensure
 has greater opportunities for producers to upgrade the production of a high quality crop.
and to capture the value of participation in national  Participating in these outgrower schemes has been
and global chains positively correlated with higher incomes, shorter
 provides producers with access to product lean periods, better resource management and
payments and dividend payments and when the technology adoption, and increased overall crop
cooperative adds value to the product by productivity (Bellemare, Forthcoming; Minten et
processing, this increases overall income of al., 2009; Miyata et al., 2009).
producers (Martin & Choy Paz, 2012). However, being part of an outgrower scheme does not
 sophisticated cooperative provides its small generally foster opportunities for upgrading. Source:Inclusion of
producers with access to important resources such Small and Medium-sized high value agro-food value chains, Karina Stark, et
al, Dec, 2012
as credit, inputs and requires significant
managerial, administrative and coordination skills
in order to sustain its position in the value chain.
 Less sophisticated cooperatives may depend on
exporter intermediaries to provide important
resources such as credit and training, and may be
contracted to sell their product directly to the
exporter. In these cases, these cooperatives
become part of larger outgrower schemes.

In the case of some processors, a tripartite agreement between growers, local government and
processor is entered into wherein the processor provides financial assistance and growers, in return
sell about 70% of mango produced to processor. Aside from the financial assistance extended,
capacity building activities to increase export quality produced are also provided by processors. The
traders/assemblers on the other hand typically practice the “all-in” procurement of mango at price
lower than prevailing buying price of processors and exporters.

Transactions between farmers and their buyers are primarily conducted on a “cash and carry basis”.
Farmers are generally price-takers because of the susceptibility to pests and diseases of mango
especially after harvest. A week before harvest time, farmers usually look for contract buyers to
close the sale with, but would end up at a price mostly imposed by buyers.

D. PRICE AND COST STRUCTURE

1. Income and Profit

Mango production requires intensive input requirement. Input cost for fertilizers and pesticides
account to 54% of the cash cost, while labor, accounts 25%of the cash cost. The volume and quality
produced are highly dependent on farm management and weather condition. With good farm
management and sufficient input provision, the growers can expect a very profitable earning.

49
Production cost and returns vary for every plantation area because of many factors affecting the
production such as the weather condition, location of the farms, type of the soil, age of the trees
and others. Considering the basic fixed and variable cost, production cost and profit can be
estimated (table 3.4 illustrates the average cost and profit of mango production in 2011 to 2013).
This figure can be used in analyzing the potential cost and returns.

Table 3.4 Mango’s Average Production Cost and Returns per hectare in the Philippines,
2011-2013
Particular Year
2011 2012 2013
Fertilizer 15,766.00 16,734.00 15,705.00
Pesticides 7,319.00 7,349.00 7,263.00
Hired Labor 9,793.00 10,441.00 10,756.00
Land Tax 791.00 799.00 807.00
Rentals 1,706.00 1,773.00 1,795.00
Water/Electric Bills 281.00 299.00 304.00
Fuel and Oil 1,726.00 1,836.00 1,867.00
Interest Payment on Crop Loan 1,133.00 1,246.00 1,371.00
Food Expense 1,168.00 1,194.00 1,227.00
Repairs 1,292.00 1,344.00 1,388.00
CASH COSTS 40,975.00 43,015.00 42,483.00
Hired Labor Paid in Kind 615.00 656.00 676.00
Rentals Paid in Kind 114.00 122.00 126.00
Landlord's Share Paid in Kind 3,041.00 3,059.00 3,024.00
Harvester's Share 624.00 607.00 640.00
NON-CASH COSTS 4,394.00 4,444.00 4,466.00
Operator and Family Labor 5,014.00 5,323.00 5,355.00
Depreciation 10,676.00 11,744.00 12,918.00
Interest on Operating Capital 2,180.00 1,951.00 1,943.00
Rental Value of Owned Land 2,164.00 2,177.00 2,152.00
IMPUTED COSTS 20,034.00 21,195.00 22,368.00
TOTAL COSTS 65,403.00 68,654.00 69,317.00
GROSS RETURNS 107,979.00 105,002.00 110,711.00
RETURNS ABOVE CASH COSTS 68,445.00 67,004.00 61,987.00
RETURNS ABOVE CASH & NON- 64,177.00 62,610.00 57,543.00
CASH COSTS
NET RETURNS 42,576.00 36,348.00 41,394.00
NET PROFIT- COST RATIO 0.65 0.53 0.60
Cost Per Kilogram in Pesos 15.52 16.86 15.95
Yield Per Hectare in Kilograms 4,213.00 4,073.00 4,345.00
National Average of Farmgate 25.63 25.78 25.48
Price in Pesos Per Kilogram
Source: Bureau of Statistics

50
Considering the nature of Mango trees where productive stage starts at its 4th to 5th year, a grower
should not expect profit in the first seven years of production. A 10-15 year old tree will yield
approximately 500 kilos27. Thus a hectare planted to 50 10-15 years old trees given all appropriate
inputs, proper farm management and favorable weather condition is expected to produce around 15
to 25mt.

During the establishment of a one hectare mango orchard total cost is estimated at approximately
P35,220.00 as shown in Table 3.5 Estimated cost for the maintenance of a non-bearing farm is at
P16,885.00 as shown in Table 3.6.

Table 3.5 Cost of Mango Orchard Establishment


Unit Quantity Unit Cost Total Cost
Supplies and Materials
Grafted mango seedling pcs 55 30.00 1,650.00
Complete Fertilizer bag 1 1,600.00 1,600.00
Urea bag 1 1,350.00 1,350.00
Chicken Dung bags 20 60.00 1,200.00
Insecticides
Bullet litters 2 360.00 720.00
Fungicides kgs 4 950.00 3,800.00
Miscellaneous lot 1,000.00
Sub-Total Supplies and 11,320.00
Materials
Labor
Land Cleaning md 30 150.00 4,500.00
Lay-outing md 3 200.00 600.00
Staking/digging md 15 150.00 2,250.00
Planting/basal fertilization md 6 150.00 900.00
Watering md 48 150.00 7,200.00
Spraying md 6 150.00 900.00
Other Fees 5,000.00
Sub-Total Labor 21,350.00
Grand Total 32,670.00
Source: KII, FGD and Mango Investment Guide for Central Visayas

27
http://nafc.da.gov.ph

51
Table 3.6 Cost and Maintenance Per Year of Non-Bearing Trees (2-5 years old)

Unit Quantity Unit Cost Total


Cost
Supplies and Materials
Urea bag 1 1,485.00 1,485.00
Complete Fertilizer bag 1 1,760.00 1,760.00
Bullet litters 2 360.00 720.00
Sevin kg 2 850.00 1,700.00
Dithane M45 kg 4 380.00 1,520.00
Others 1,000.00
Sub-Total Supplies and Materials 8,185.00
Labor
Weeding/Underbrushing (4x) md 10 150 6,000.00
Spraying (4x) md 2 150 1,200.00
Watering (10x) md 1 150 1,500.00
Sub-Total Labor 8,700.00
Grand Total 16,885.00
Source: KII, FGD and Mango Investment Guide for Central Visayas

The Bureau of Statistics computed the net returns using the average yield per hectare of 4,345
kilograms per hectare at P41, 394.00. However, average yield per hectare as estimated by BAS is
very conservative compare to the experienced by growers. Farmers following the required farm
inputs and prescribe farming procedure consistently can produce volume ranges from 8MT to 25MT
per hectare, depending on age of trees with an annual cost of around Php85,000-Php150,000 per
hectare28.

28
Focus Group Discussion and Key Informant Interview conducted

52
2. Relative Financial Position of Players in the Value Chain of Mango

Farmgate price of mango differs depending on the variety of mango. As shown in table 3.7, carabao
mango’s farmgate price is more than 200% higher than the Indian and 43% higher than Pico.

Table 3.7 Farmgate Price of Different Mango Varieties Per Region

Region Average Carabao Indian Pico Price difference


farmgate from Carabao
price Mango
Farmgate Prod’n Farmgate Farmgate Indian Pico
Price Share Price Price (in %) (in %)
Philippines 25.48 28.64 82.32% 8.25 17.77 209% 43%

Zamboanga 23.83 27.23 80.09% * * * *


Peninsula
Northern 26.33 27.50 93.43% * * * *
Mindanao
Davao Region 22.2 24.18 83.68% * * * *

SOCCSARGEN 24.45 27.25 79.74% * 17.4 * 41%

CARAGA 24.75 29.65 77.40% * * * *

ARMM 12.00 20.58 28.08% 7.98 17.9 50% -33%

Source: Bureau of Statistics


 No data available

Moreover, buying price of fresh mango vary also depending on the nature of business of mango
buyers. As shown in table 3.8, Davao Region possesses the most advantage buying price for Class A&
B which are the export quality with the presence of fresh mango exporters in the region such as
SPPFC, Nakashin and Pro Foods. Per FGD conducted, there are also several traders and consolidators
from CARAGA and SOCCSKSARGEN Region who sell mangoes to exporters in Davao, which
constitutes around 10%-30% of its volume, then delivers the remaining to processors. This however
entails additional transportation cost and there are no guarantees as to the volume of acceptable
export classified mangoes. Thus, others would not rather aim for the highest buying price with the
risk and additional cost it entails.

There is also one or two from SOCCSKSARGEN and Northern Mindanao that trade mangoes to
consolidators/exporters for Hongkong from Cebu at Php60.00 buying price.29

29
Focus Group Discussion and Key Informant Interview conducted

53
Table 3.8 Comparative Buyers Mango Price

Region 2013 Buying Price By Value Chain Segment/Actors (KII)


Average Consolidators/ all Retailers Wholesalers Processors Exporters
Farmgate in price (Class C) (Class A &
Price Peak lean B)

Philippines *25.48 *66.53 *41.81

Zamboanga *23.83 **5.00 **40.00 *58.20


Peninsula
Northern *26.33 *56.26 *41.95 **60.00
Mindanao
Davao Region *22.40 **5.00 **40.00 *56.70 **28.00- **60.00
36.00
SOCCSKSARGEN *24.45 **5.00 **40.00 *59.18 **33.00- **60.00
35.00
CARAGA *24.75 *57.27

ARMM *12.00 *94.63

Source of data:
* BAS data
** KII and FGDs

Farmers following the required farm inputs and standard mango farming maintenance can
produce to as much as 10 metric tons per hectare with a production cost of around P160,000.00 per
hectare. He may opt for classified pricing wherein mangoes are sorted whether for local buyers or
exporters. Buying price at this level ranges from P20.00 to P60.00, other alternative is to sell all-in,
in which no sorting is done at P28.00-36.00 buying price. Given the assumptions below, the grower
can earn as much as P9.53 per kiloor equivalent to a profit margin of 37.40 percent. And the
consolidators can earn around P23.76 per kilo or equivalent to a profit margin of 39.60 percent.

Table 3.9 illustrates the relative financial position of players in the value chain of Mango, with the
following assumptions:

Farm gate price per kilo : 25.48


Cost per kilo of fresh mango : 15.95
Exporters buying price : Php 60.00
Exporters selling price : $4.00 at Php44.48/$

54
Table 3.9 Relative Financial Position of Players in the Value Chain of Fresh Mango in
Mindanao
Primary Production Assembly Exporters/
Processors

Selling Price
25.48 60.00 177.94
PhP
Cost of Material 15.95 25.48 60.00
Other inputs 10.76 Not available
Profit 9.53 23.76

Profit Margin 37.40 % 39.60%


Source: BAS, KII, FGD

Table 3.10 shows the price sensitivity of mango using the average yield per hectare provided by BAS
and cost per kg at 15.95. As illustrated, net profit of producers are very much dependent with the
buying price of mango. Average break-even price for all variety is pegged at Php15.95 in 2013, for
Carabao variety it cost around P20.00 per kilogram. Thus, selling price below the break-even cost
would bear losses to producers. This incident happened in July of 2014, when there was a huge
surplus of mango produced due to natural flowering that happened. Because of the excessive
supply, Farmgate price fell down up to P5.00 per kilo.

Table 3.10 Income/Profit Analysis

Particulars Buying Price


Average All-in price- All-in price- Processors Exporters Break-even
FGP Peak Lean (Current (Current price
(Minimum) (Maximum) Price-Class price-Class
C A & B)
Volume produced 4,345 4,345 4,345 4,345 4,345 4,345
Buying price 25.48 5.00 40.00 36.00 60.00 15.95
Gross Sales 110,710.60 21,725.00 173,800.00 156,420.00 260,700.00 69,302.75
Less: Cost 69,302.75 69,302.75 69,302.75 69,302.75 69,302.75 69,302.75
Net Income/loss 41,407.85 (47,577.75) 104,497.25 87,117.25 191,397.25

55
Section 4: MARKETS AND MARKET OPPORTUNITIES

A. MARKETS AND MARKET TRENDS

The markets for mango are well established within the country and internationally both for fresh
fruit and processed products. Based on BAS data, approximately 92% of mango products produced
are consumed or processed locally while almost 6% accounts for feeds and waste and the rest which
is almost 2% are exported.

1. Export Markets

Mango as one of the most important tropical foods, has about 150 cultivars all over the world. The
Philippine mango industry is known for its Manila Super Mango also known as the Carabao variety,
considered as one of the best varieties in the world.

The Philippines is exporting mango to 48 countries all over the world. Major export markets are
Japan and Hongkong with 52.9 % and 35.7% respective shares in terms of value.30 Other export
destinations are Singapore, Korea, United States of America, Australia, New Zealand, Canada, United
Kingdom and Switzerland.

Demand for Philippine mango both fresh and processed had been consistently increasing. However,
as shown in table 4.1 export performances recorded a 4% average annual decrease of mango export
value from 2009 to 2013, thus the decrease also in percentage share to the total country export
value from .042% to 0.26%.

Table 4.1 Philippine Export of Fresh Mango in Value, 2009-2013

2009 2010 2011 2012 2013


Total Export 38,435,806,160 51,431,703,405 48,304,928,134 52,099,520,662 52,099,520,662
Value
Mango
Value in $ 16,058,335 15,187,758 16,721,387 15,239,937 13,296,869
% Share 0.042% 0.030% 0.035% 0.029% 0.026%
Growth -5% 10% -9% -13 %
rate in %
Source: BAS

Per Focus group discussions and key informant interviews conducted, including the NICCEP report on
The Mango Industry, the decrease on export value can be attributed to the difficulty in meeting the
quality and regulatory requirements set by importing countries. One of these is maximum residue
limit of certain chemicals (MRL) that differ per country. MRL is the highest acceptable level of a
residue in food set by importing countries to ensure that Good Agricultural Practice is used in the

30
Niecep.dti.gov.ph

56
production. Other significant reasons identified was the low production of mango that meets the
standard of importing countries and the lack of processing plants with VHT and WHT facilities.

Product requirements of importing countries are as follows:


Japan and Korea

Japan and Korea Markets are considered as the most lucrative market for mango industry
considering its buying price and its proximity to Philippines. However the biggest setback of
exporters in these countries is the restrictions being imposed specifically on MRL of certain
chemicals. MRL for chlorphyrifoscypermethrin and profenofos is set not to exceed 0.05 ppm.
Exporters are requires to have a Vapor Heat Treatment.

Hongkong

One motivation to export to Hongkong is the absence of tariff or taxes. Another is that its regulatory
imposition is modest, requiring only certification of fitness for human consumption from the
Department of Health. Hongkong market is a consignment market where prices are determine by
the exporter and consignee before the shipment31.The main challenge is the risk imposed by the
consignment scheme, in which the Filipino exporter absorbs loss from output not sold in the
destination market.
Fresh mango exporters to Hongkong are mostly located in Cebu and Manila.

China

Mangoes imported in this country are subject to use of Extended Hot Water Treatment (EHWT). The
EHWT is an alternative quarantine/disinfestations

USA

With the USDA ruling, mangoes from the Philippines can now be exported to the United States of
America after undergoing vapour-heat treatment at 150gy, pre-clearance procedures and other
phytosanitary requirement effective October 1, 2014.

31
FAO Commodity and Trade Policy. Market Structure and Distribution of Benefits from Agricultural Exports:
The Case of the Philippine Mango Industry, Briones R. et al

57
Table 4.2 Size Standard Classification for fresh Mango

Category Philippine CODEX Japan Grade Hongkong USA


National Standard Grade
Standard
Weight Weight Weight Weight Diameter
(mm)
Super Small 160-199 150-202 120–199
Small 200–249 A) 200-350 205-237 200–249 <6.35
Medium 250–299 B) 351-550 238-277 250–299 6.35-7.62
Large 300–349 C) 551-800 278-370 300–349 >7.62
Extra Large >350 >371 >350

World Exports

World export of mango both by volume and value had been consistently increasing from 2009-2013
at an average annual growth rate of 6.09 %. Mexico which is the principal supplier of the American
market given its geographical advantage, ranks first in volume and in value of exports, Annual
growth rate of top exporting countries are increasing as well, both in value and volume. Among the
top exporting countries, Nicaragua had the highest growth rate in terms of volume(Table 4.3) and
Philippines (Table 4.4) in terms of value.

Table 4.3 Export Volume of Top Exporting Countries, 2009-2013


Including Guava and Mangosteen, in mt

Rank Country 2009 2010 2011 2012 2013 Annual


growth rate
World 1,450,415 1,433,518 1,682,381 1,753,030 1,822,754 6.09%
1 Mexico 232,643 275,366 287,771 297,295 338,169 9.98%
2 India 267,617 182,974 229,192 214,640 263,918 2.56%
3 Thailand 144,079 144,566 152,285 196,441 252,904 15.85%
4 Peru 69,191 97,000 123,863 99,790 126,815 18.88%
5 Brazil 110,355 124,380 126,568 127,132 122,178 2.75%
6 Pakistan 81,450 82,914 105,130 101,174 98,926 5.65%
7 Netherlands 80,548 85,926 109,197 90,382 96,894 5.93%
8 Nicaragua 5,650 4,263 5,510 91,033 72,292 384.06%
9 Ecuador 48,994 39,978 49,066 60,141 61,309 7.21%
10 Yemen 18,948 23,469 35,727 43,467 35,251 19.71%
11 USA 11,383 14,396 19,582 21,478 27,967 25.60%
12 Philippines 21,637 24,322 32,149 27,826 26,086 6.22%
Source: www.trademap.org The quantities shown in light green are estimated by UNSD
Annual growth rate: processed by the
author

58
Table 4.4 Export Value of Top Importing Countries
Including guavas and mangosteen, in ‘000 USD
Rank Country 2009 2010 2011 2012 2013 Annual growth
rate
World 1,134,142 1,268,748 1,523,859 1,602,191 1,790,347 12.21%
1 Mexico 136,942 163,479 205,653 254,007 302,509 21.95%
2 India 205,436 228,717 200,958 166,858 203,419 1.03%
3 Netherlands 100,809 132,212 179,496 165,393 199,148 19.87%
4 Thailand 71,410 80,366 96,345 128,139 180,342 26.54%
5 Brazil 97,686 119,645 141,210 137,925 147,993 11.37%
6 Peru 70,930 89,419 115,333 119,951 133,067 17.50%
7 Philippines 24,897 43,817 96,191 70,897 69,627 41.86%
8 Pakistan 33,179 28,402 44,732 44,302 57,200 17.81%
9 Spain 18,050 21,599 31,445 41,842 43,992 25.86%
10 USA 14,926 19,370 24,411 29,753 39,416 27.54%
11 Belgium 29,387 22,435 25,346 37,921 39,060 10.48%
12 Ecuador 22,622 18,100 23,728 35,836 38,120 17.13%
Source: www.trademap.org
Annual growth rate: processed by
the author

As shown in Figure 4.1, Philippine export volume of mango, guavas and mangosteen had been
unstable over the years, with peak export performance of the Philippines seen in year 2011.A
decrease by13 % and 6% for year 2012 and 2013 were noted however.

Despite its wobbly trend, the mango industry has so many opportunities to take advantage to since
the Philippine is already established as one of the finest and sweetest mangos in the world. To
prove its enduring position in the mango industry, there is an increasing demand from Japan
specifically targeting exporters in Mindanao. It is good to note also that Japan Market offers
premium buying prices of Mangoes, one of the highest in the whole world.

Of the 51 export destination of the Philippines, Hongkong accounts for almost 49%share in 2013;
this is followed by Japan, United States of America and Republic of Korea with respective shares of
13%, 12 % and 11%.In terms of value, the United States of America tops the highest share at 27%,
followed by Japan, Hongkong and the Republic of Korea at 15%, 15% and 12 %, as illustrated in
figure 4.2.

59
Figure 4.1 Philippine Export Volume by Destination
Including Guavas and Mangosteen
35000
United States Minor Outlying Islands
30000
Australia

25000 Malaysia

Canada
20000
Singapore
15000
China

10000 Korea, Republic of

United States of America


5000
Japan
0 Hong Kong, China
2009 2010 2011 2012 2013

Source: UN COMTRADE

Figure 4.2 Philippine Export in Value by Destination


(includes guava and mangosteen)

Source: UN COMTRADE

Table 4.5 shows the top ten importing countries of guavas, mangoes and mangosteen for both fresh
and dried. Among these countries, the United States of America tops the importing countries at
377,412 metric tons, a slight decrease of .063% from 2011. The declaration of the US Department of
Agriculture (USDA) for the whole Philippines except Palawan Province as weevil free for mango pulp
and mango seed is a good development for the mango industry. . Mango pulp weevil (MPW) and
mango seed weevil (MSW) are pests that attack the pulp and seed of the mango fruit, respectively

60
rendering it inedible.32This latest development poses opportunities not only in Mindanao but for
other mango producing provinces. Because of the USDA ruling, other importing countries can look at
the Philippines as a possible supplier of mango, and it will also attract producers and investors to
expand.

Another opportunity also awaits the mango industry as a result of the signing of Special Commodity
of Understanding (SCU) for the Importation to Australia of fresh mango fruit last July 9, 2013. With
this Commodity of Understanding Mangoes from areas other than Guimaras can now be exported in
Australia. Initially, mangoes from Davao Del Sur, Guimaras and Samal Islands have been exported
Melbourne and Adelaida last on June 8-July 10m 2013. Six shipments have been exported with a
total volume of 4.76 metric tons (MT) with a total value of 14,587 USD.˟The SCU is a result of the
regular bilateral talks with the Australian Government.

Table 4.5 Major Importing Countries of Mangoes, fresh/dried


Including guava and mangosteen

Country 2011 2012 Change in %


Qty Value Qty Value Qty Value
USA 379,798 402,000,000 377,412 425,000,000 -0.63% 5.72%
China 111,878 155,000,000 129,180 207,000,000 15.47% 33.55%
Netherlands 137,703 172,000,000 128,542 186,000,000 -6.65% 8.14%
Germany 57,565 120,000,000 47,782 102,000,000 -16.99% -15.00%
United Kingdom 50,154 90,000,000 49,445 97,000,000 -1.41% 7.78%
Canada 56,375 70,000,000 54,291 83,000,000 -3.70% 18.57%
China, Hong Kong SAR 89,810 76,000,000 101,077 77,000,000 12.55% 1.32%
France 37,691 72,000,000 38,104 76,000,000 1.10% 5.56%
Saudi Arabia 63,497 51,000,000 70,390 56,000,000 10.86% 9.80%
Japan 10,235 48,000,000 9,915 49,000,000 -3.13% 2.08%
Source: UN COMTRADE

With the realization of ASEAN Economic Blueprint in 2015 with the nine ASEAN members (Brunei,
Indonesia, Malaysia, Vietnam, Myanmar, Laos, Thailand, Cambodia and Singapore) vast opportunity
awaits the mango industry. Aside from the Philippines, Thailand also exports Mango. Figure 4.3
shows the export volume of Thailand and Philippines. It can be noted that while Philippines export of
mango had been decreasing, Thailand’s performance has been tremendously increasing from 2006
onwards.

Other countries such as Singapore and Malaysia are also importing a considerable volume of
mangoes, as shown in table 4.6. Around 2% to 3% of the volume is imported from the Philippines.

32
Agriculture and Fisheries Market Information System, Export Prospect bright for banana and mango, June 16,
2014

61
Figure 4.3 Thailand and Philippines Export Volume Trend, 2000-2009

160,000
140,000
120,000
Thailand
100,000
Philippines
80,000
60,000
40,000
20,000
0

Table 4.6 Import from other countries of other ASEAN Countries

Country Qty, in mt Value, in USD


Singapore 22,716 29,000,000
Malaysia 60,532 16,000,000
Cambodia 5,734.00 2000,000
Indonesia 1,093.00 1000,000
Brunei Darussalam 658 1000,000

2. Domestic Market

As illustrated below, around 93% of mango produced accounts for food utilization. An increase of
6.24% from 2012 to 2013 was noted for said utilization. In 2013, feeds and waste account about 6
% share of the total production. These are culls and mango peels.

The export volume on the other hand totaled to 5,076 MT or 1 % only in 2013. For 2009-2013,
2013 recorded the lowest export volume of mango, a 72 % decrease recorded from the previous
year total export of 18, 440 MT, as shown in Table 4.7.

62
Figure 4.4 2013 Supply utilization Report for Fresh Mango

2013 Supply Utilization Report: Fresh


Mango
Foods
733,631.00
93%

Feeds and Exports


Waste, 48,667 11,758.00
.00, 1%
Unit: In metric tons 6%
Source: BAS

Table 4.7 Mango Supply Utilization


In Metric Tons 2012 2013 Change
(2012 over 2013)
Production (In MT) 768,234 816,199 6.24%
Trade-Export 18,440 5,076 72.4%
Food (Domestic) 704,806 762,456 8.18%
Feed and Waste 44,988 48,667 8.18%

63
More than 30 % of households in Northern Mindanao buy mango for consumption on a weekly
basis. Almost 63% only buy as the need arises while a quarter of households in Northern Mindanao,
Davao Region and ARMM buy on a weekly basis. CARAGA Region recorded the highest buying
frequency of mangoes, with only 38 % as the need arises as shown in table 4.8.

Table 4.8 Percentage Distribution of Household by Buying Frequency of Mango, by Region

Region Daily Weekly Twice/Thrice Monthly As Need


A Month Arises
Philippines 2.17 30.73 5.84 3.20 58.06
NCR 1.75 36.83 0.46 0.25 60.71
CAR 0.26 12.79 4.24 0.56 82.15
Ilocos Region 14.65 17.05 0.17 68.12
Cagayan Valley 6.87 2.72 1.53 88.88
Central Luzon 6.66 46.40 8.36 3.02 35.56
Calabarzon 0.98 27.08 12.72 14.01 45.21
Mimaropa 9.04 1.45 89.51
Bicol Region 4.06 25.44 4.95 4.38 61.17
Western Visayas 0.13 13.71 0.27 1.75 84.14
Central Visayas 29.89 9.71 60.40
Eastern Visayas 0.71 13.43 1.89 83.97
Zamboanga Peninsula 26.86 3.35 69.79
Northern Mindanao 30.74 1.80 5.17 62.30
Davao Region 25.38 2.51 72.11
SOCCSKSARGEN 3.19 8.14 9.58 0.40 78.69
CARAGA 3.61 42.29 7.98 7.87 38.25
ARMM 4.99 26.52 17.59 0.85 50.05
Source: Bureau of Agricultural Statistics. (August 2013). Consumption of Selected Agricultural
Commodities in the Philippines

CARAGA region recorded the highest mango consumption at an average of 4.8 kgs per person, other
regions in Mindanao also recorded a higher than the national per capita consumption except for
ARMM and Zamboanga Peninsula.

64
Table 4.9 Annual Per Capita Consumption, by Region

Region Per Capita Consumption Population Total Consumption


Philippines 3.490 95,880,024 334,621,284.95

NCR 3.952 12,281,804 48,537,690.03

CAR 3.566 1,672,308 5,963,449.45

Ilocos Region 3.031 4,865,900 14,748,543.91

Cagayan Valley 3.122 3,319,558 10,363,658.95

Central Luzon 4.518 10,576,275 47,783,609.64

Calabarzon 3.468 13,137,252 45,559,990.00

Mimaropa 3.275 2,843,810 9,313,476.58

Bicol Region 2.494 5,579,842 13,916,126.99

Western Visayas 2.541 7,295,498 18,537,861.04

Central Visayas 3.601 7,043,037 25,361,975.52

Eastern Visayas 1.387 4,206,988 5,835,092.08

Zamboanga Peninsula 3.073 3,535,980 10,866,065.06

Northern Mindanao 4.238 4,476,196 18,970,120.00

Davao Region 3.872 4,646,359 17,990,700.45

SOCCSKSARGEN 4.258 4,314,249 18,370,071.57

CARAGA 4.805 3,355,218 16,121,821.82

ARMM 2.944 2,502,154 7,366,341.93

Total Domestic Consumption 670,227,879.95

Source: BAS

65
B. PRICE TRENDS

1. Export Market

Average Price of mango varies in importing countries which ranges from $1.00 to almost $5.00 as
demonstrated in table 4.10. Among the mango buyers in the world, the Republic of Korea and Japan
bid the highest buying price.

Table 4.10 Average Buying Price of Importing Countries

Country Price Per Kg Change in %


2011 2012
Rep. of Korea 4.85 4.60 -5%
Japan 4.69 4.94 5%
Switzerland 2.88 2.93 2%
Austria 2.57 2.71 6%
Italy 2.32 2.60 12%
Germany 2.08 2.13 2%
Belgium 2.07 1.89 -9%
France 1.91 1.99 4%
Portugal 1.87 1.48 -21%
Russian Federation 1.87 1.98 6%
United Kingdom 1.79 1.96 9%
Spain 1.64 1.69 3%
China 1.39 1.60 16%
Singapore 1.29 1.28 -1%
Netherlands 1.25 1.45 16%
Canada 1.24 1.53 23%
USA 1.06 1.13 6%
China, Hong Kong SAR 0.85 0.76 -10%
Saudi Arabia 0.80 0.80 -1%
Malaysia 0.24 0.26 12%
Source: based on figures provided from COMTRADE, United Nation on volume and value of
importing countries

The average world price for Philippine Mango in the export market in 2013 is about $ 2.67. Table
4.11 shows that value for Philippine Mango has been historically increasing at an average rate of
28.14%. This is an affirmative indicator that the country is shifting to a higher value of such
commodities. In the same table also shows a higher buying price of the United Kingdom and United
States of America for Philippine Mango, with the USDA clearance of to export Mango in the US
mainland export value is expected to grow in the coming years. United Kingdom accounts less than
1% of the country’s export volume.

66
Table 4.11 Average Price of Philippine Mango by Export Destination
Including Guava and Mangosteen, in USD/kg
Export Destination 2009 2010 2011 2012 2013 Change Rate
in %
World 1.15 1.80 2.99 2.55 2.67 28.14%
United Kingdom 10.35 10.16 8.86 9.40 10.82 1.63%
United States of America 7.26 6.40 7.11 8.07 6.18 -2.66%
Japan 2.06 2.69 3.51 3.16 3.28 13.69%
Hong Kong, China 0.46 0.62 0.90 0.73 0.85 18.91%
Korea, Republic of 1.30 2.27 2.75 2.75 2.93 25.75%
China 0.55 2.20 6.70 7.22 6.14 124.18%
Canada 7.28 7.24 7.64 7.79 7.63 1.20%
Singapore 2.15 3.93 4.95 4.27 2.85 15.44%
United States Minor Outlying Islands 5.67 5.47 5.68 6.22 6.58 3.92%
Australia 6.33 7.26 7.27 7.89 4.41 -5.21%
Taipei, Chinese 5.91 7.44 6.81 6.90 7.70 7.61%
Malaysia 5.89 5.95 7.33 2.48 1.60 -19.35%
Netherlands 6.69 7.42 4.61 6.42 3.83 -7.01%
New Zealand 5.45 6.87 7.63 5.20 6.36 6.89%
Source: based on figures provided from COMTRADE, United Nation on volume and value of Philippine Mango
by export destination

2. Domestic Market

Domestic price trend for farmgate price of carabao mango from 2004 to 2013 exhibits a fluctuating
trend, as shown in figure 4.5 Year 2008 recorded the highest farmgate price placed at P29.46/kg.
Average farmgate price from 2011-2013 (Table4.12) is P28.94 per kilograms of mango, with a
negligible negative growth rate of 1.01 %. Farmgate price for 2013 is pegged at P28.64, a six-peso
increase from 2004.

Figure 4.5 Philippine’s Annual Farmgate Price for Carabao Mango

35
30
25
20
PHILIPPINES
15
10
5
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
PHILIPPINES 22.6 23.8 24.7 25.2 29.4 29.1 28.2 29.2 28.9 28.6

67
Table 4.12 Farmgate Price Per Region of Common Variety

Region Year 2011-2013


Mango Variety 2011 2012 2013 Average growth rate
price
PHILIPPINES All Varieties 25.63 25.78 25.48 25.63 -0.29%
Carabao 29.23 28.94 28.64 28.94 -1.01%
Indian 7.3 8.31 8.25 7.95 6.56%
Piko 17.75 19.31 17.77 18.28 0.41%
ZAMBOANGA PENINSULA All Varieties 25.81 23.3 23.83 24.31 -3.73%
Carabao 30.51 26.88 27.23 28.21 -5.30%
Indian Data not available
Piko Data not available
NORTHERN MINDANAO All Varieties 27.57 27.03 26.33 26.98 -2.27%
Carabao 29.18 28.42 27.5 28.37 -2.92%
Indian Data not available
Piko Data not available
DAVAO REGION All Varieties 20.35 22.13 22.2 21.56 4.53%
Carabao 22.54 24.03 24.18 23.58 3.62%
Indian Data not available
Piko Data not available
SOCCSKSARGEN All Varieties 21.58 21.59 24.45 22.54 6.65%
Carabao 24.17 23.83 27.25 25.08 6.47%
Indian Data not available
Piko 15.81 16.66 17.4 16.62 4.91%
CARAGA All Varieties 17.59 23.16 24.75 21.83 19.27%
Carabao 28.64 30.16 29.65 29.48 1.81%
Indian Data not available
Piko Data not available
ARMM All Varieties 8.02 12.74 12.00 10.92 26.52%
Carabao 32.4 22.37 20.58 25.12 -19.48%
Indian 7.14 7.16 7.98 7.43 5.87%
Piko 26.85 21.95 17.9 22.23 -18.35%

The national average wholesale price on the other hand is placed at P41.81/kg in 2013 (Table 4.13),
with P25.02 price difference for retail price amounting to P66.53. Northern Mindanao wholesale
price is placed at P41.95 per kilo and retail price at P56.26; Zamboanga Peninsula, Davao Region,
SOCCSKSARGEN, CARAGA and ARMM respective retail price for carabao mango is at P58.20, P56.70,
P59.18, P57.27 and P94.63. As shown below, buying price for class A and class B by exporters differ
by more than half to the all in price and processors price.

68
Section 5: SUPPORT SERVICES

A. FINANCIAL SERVICES
Mango production is input intensive. Primary inputs account one-third of the total
production cost, another third for labor and utilities and the remaining third for rental fees,
depreciation cost and taxes. The following are some of the financial services programs
available for High Value Crops, including mango, and other agricultural commodities:

1. Agricultural Credit Policy Council’s Agro-Industry Modernization Credit and Financing


Program- serves as the umbrella financing for agriculture and fisheries of the
Department of Agriculture to enhance the credit access of the rural poor through the
implementation of a comprehensive agriculture, fisheries and agrarian reform credit
and financing system that would benefit farmers and SMEs engaged in the said
industries

Eligible Borrowers: through a Fund Retailer which is either a private banks, duly
registered cooperatives or a Non-Government Organization and Peoples Organizations
with juridical personality, small farmers and fisherfolk, rural women engaged in
production, processing and/or trading of agricultural products, Agri/fishery based SMEs
can be eligible end borrowers of the program33

2. DBP High Value Commercial Crops Financing Program - Development Bank of the
Philippine’s program aim to provide credit for high value commercial crops production
projects that will support agricultural production and distribution, and enhance
competitiveness of agricultural products34

Eligible Borrowers: Individuals, partnership, corporation or cooperative duly registered


with DTI/ Securities and Exchange Commission or Cooperative Development Authority
who own titled land or with tenurial arrangement on land suitable for planting to high
value commercial crops

3. Landbank Agrarian Credit Program (APCP) – Developed pursuant to the CARPER Law in
partnership with the Department of Agriculture (DA) and Department of Agrarian
Reform (DAR) purposely to finance farm inputs of growing crops, working capital for
agri-enterprise and livelihood projects, to purchase tools, equipment and machineries35

33
Acpc.da.gov.ph
34
Dbpmsmehub.com
35
Landbank.com/APCP

69
Eligible Borrowers: Cooperatives, Farmers Organizations and Rural Banks

Loan Ceiling for Landbank’s Credit Facilities based on the aged of Mango Trees are as
follows:

10 to 20 years old P3,000.00/tree P170,000.00/hectare


20 to 25 years old P3,500.00/tree P245,000.00/hectare
Above 25 years old P5,000.00/tree P350,000.00/hectare

4. The National Livelihood Development Corporation (NLDC)Livelihood Credit Assistance


Program (LCAP) intended to augment the income of poor farmers and beneficiaries of
the Land Reform Program (RA 6657).36

Eligible borrowers: Small farmer beneficiaries and/or their wives and dependents in the
agrarian reform communities (ARCs); Non-farmer and marginalized households,
including rural workers, youth, and micro entrepreneurs, in the ARCs and KALAHI zone;
other prospective clients

5. High-Value Commercial Crop (HVCC) Insurance37 – an insurance program of the


Philippine Crop Insurance Corporation (PCIC) that provided insurance coverage for
mango fruits and other HVCC stakeholders/producers/contract growers and the
Philippine Mango Industrial Association, and that will protect the mango industry from
catastrophic losses. The PCIC is a government corporation created through P.D. 1467
and amended through P.D. 1733 and R.A. 8175 to provide insurance protection to the
country’s agricultural producers, particularly the subsistence farmers, against crop
losses arising from natural calamities such as typhoons floods, drought, earthquakes
and volcanic eruptions as well as plant diseases and pest infestation and non-crop
agricultural asset losses due to perils for which the asset has been insured against.

Eligible producers are backyard/semi commercial growers with a minimum of twenty-


five (25) bearing trees, plantation owners and corporate farms. The insurable varieties
are “Carabao” or Manila Super Mango and Pico.

Although Mindanao has a vibrant formal financial sector with special lending programs
available for the Mango Industry being one of the Priority High Value Commercial Crop in
the Philippines, the vast majority of funding in the mango supply chain still comes from the
actors themselves. Per focus group discussions conducted, the first source of financing for
mango production usually comes from the farmers’ own pocket, second is through Farm
Contracting where the owner enters into a contract with a grower, and the latter takes
charge of the inputs and management of the farm from fertilization up to harvesting and
selling of mangoes. In most cases, these growers play as the consolidators also. These
growers usually have several contracts of orchard management which ranges from two to
three years Most of these contractors are farmers themselves, some are input providers.

36
nldc.gov.ph
37 th
PICC presentation during the 16 Mango Congress

70
The usual practice of sharing in this scheme is from 25-75 to 30-70 sharing ratio, where the
former rate goes to the owner. There are farmers also who enter into verbal or non-verbal
contract with buyers, traders, consolidators, where the buyers or consolidators finance the
input requirements, and in return, farmers agree to sell their harvest to them.

Per KII conducted, Nakashin Davao International Inc and Southern Philippine Fresh Fruit
Corporation are extending this kind of financial service to the farmers. In the case of
Nakashin, the mango growers, Nakashin and the Provincial Local Government of Davao Del
Norte entered into a tripartite agreement where Nakashin supports farm inputs and in
return the farmer guarantees to sell 70 % of their harvest.

B. NON-FINANCIAL SERVICES
Business development and logistic services in the mango value chain is provided in the following
ways:

1. Informal
Technologies, knowledge, skills on good farming practices and as well as in marketing
of the commodity are available to farmers and other VCA players through informal
gatherings and of industry players. These information include sharing of best practices
and technologies, buying prices, cost of inputs and available markets. Other successful
growers, who at the same time are contractors, are doing research through internet
regarding technologies and good agricultural practices.

2. Embedded
Entrenched services for the industry included support services provided by processors
and input providers to producers on good agricultural practices and recent
technologies, new pest and diseases including anti-pest remedies.

3. Fee-based services
These are certain services offered for a certain fees such as soil analysis,

4. Stand-alone free services


These services include trainings, technology transfer and other extension services
provided by national government agencies and LGUs such as the following:

 DOST- PCAARRD ISPS- a national Science and Technology program for “Carabao
Mango of the Department of Science and Technology, this program covers 10 projects
with Php 58 million investments to address the major concerns of the industry.
Researchable areas identified as an offshoot to previous R & D Program are as follows:

S & T Anchor Program for Mango Phase I


 Pre-& postharvest disease management systems
 CA and flower induction protocols

71
 Techno-based packinghouses

S & T Anchor Program for Mango Phase II


 Improved disease management systems
 Commercial and stationary trials
 Bio-ecology and control of MTB
 Fertilizer & water management system
 New processed products
 Socio-economic and supply chain

S & T-Based Farms in Mango
 Improved disease management systems
 Commercial and stationary trials
 Bio-ecology and control of MTB

ACIAR-PCARRD Mango Program


 ICM technology verification and refinement

 Department of Agriculture-Bureau of Agricultural Research policy research and


advocacy among others includes the following:

− Improvement of fruit set and retention/NMRDC


− Biology and control of scab-like infection/NMRDC
− Management system for mango scab/NMRDC
− Behavioral and field control of pulp weevil/STIARC/BPIPQS/
− Improvement of certification/accreditation schemes for nursery
operators/NMRDC
− Fertilization and water management/UPLB

 University of the Philippines Los Banos- conducts at least 90% of agricultural


research in the Philippines since 1960.

− Pathogenicity studies on mango anthracnose in relation to latent infection


− Physico-chemical treatments to alleviate chilling injury during extended storage and
transport
− Pruning and training management in high density planting –IPB
− Gene banking/IPB
− Genetic improvement for longer shelf peel color enhancement, and resistance to
anthracnose

 National Seed Industry Council – responsible in the approval and registration of


crop varieties, the Director of the Bureau of Plant and Industry directly supervises its
activities

72
 Bureau of Plant Industry – an agency under the Agriculture responsible for serving
and supporting the Philippine plant industry sector in the areas of plant quarantine,
seed quality control, crop production and protection, technology development,
agricultural mechanization and laboratory analytical services

 National Industry Cluster Capacity Enhancement Project (NICCEP)- a joint project of


the Department of Trade and Industry and JICA to enhance the capacity of selected
industry clusters throughout the country. The priority industries chosen in Mindanao
are Mango, Banana, Coconut, Seaweeds, Wood Mining, Tourism, ICT, Rubber, Poultry,
Tuna and Oil Palm38

38
Niccep.dti.gov.ph

73
Section 6: ENABLING ENVIRONMENT

A. FORMAL RULES, REGULATIONS, AND POLICIES

 High Value Crops Development Program (RA 7900), otherwise known as the “High-
Value Crops Development Act of 1995”- created to help address food security, poverty
alleviation and sustainable growth. It helps to promote the production, processing,
marketing and distribution of high value crops. Strategically, HVCDP helps to increase
income, create livelihood opportunity and contribute to national agricultural
development of the Philippines.

 Republic Act 10000- otherwise known as Agri-Agra Reform Credit Act of 2009 Law in
1970s requiring all banking institutions, whether government of private to have at
least 25% of loan portfolio devoted to agriculture and fisheries.

 City Ordinance No. 2010-168 – otherwise known as the Samal Island Mango Industry
Code of 2010, an Ordinance Providing for the Development, Management and
Regulation of Mango Industry in the Island of Garden City of Samal officially declaring
mango as its official commodity for “One Town One Product (OTOP)”.

B. INFORMAL RULES AND SOCIO-CULTURAL NORMS

Mango production is input intensive, and it is very susceptible to climate condition especially
during flowering and fruiting stage. Thus despite the government and private stakeholders’
efforts in promoting good agricultural practices and the use of science and technologies there
are still a lot of farmers in the industry who are reluctant to adopt such. Aside from the lack of
capital, factors affecting poor adoption of new technology identified include the farmers feeling
of: “Tagam mu-invest because of previous losses” “hadlok mu risk kay basin ma failure”. Some
of the farmers are more confident using old cultivation practices embedded in them for long
period rather than to try new things. These are some reasons why most of the farmers would
prefer to enter into contract with contractors rather than doing the production.

74
Section 7: CONSTRAINTS AND OPPORTUNITIES

Table 7.1 shows the constraints and opportunities identified by the stakeholders during the regional
stakeholders’ forum in addition to key findings.

Table 7.1 Constraints and Opportunities

Constraints Opportunities Areas


Input Provisions
Limited access and supplies of Bureau of Plant and Industry Zamboanga Peninsula:
good quality planting materials accreditation for private and All provinces
-BPI accredited nursery government plant nursery operators
operators are present in 3 with good quality planting materials. At Northern Mindanao:
provinces only which includes present, Five (5) nursery operators in Camiguin
Davao, Northern Mindanao and Mindanao are accredited by BPI; 2 in Lanao Del Norte
South Cotabato, others do not Bukidnon, 1 in Davao City, 2 in Misamis Occidental
have BPI accredited nursery thus Kidapawan City Misamis Oriental
quality of planting materials
cannot be guaranteed. Some of BPI’s production and distribution of Davao
the growers has to conduct planting materials. BPI’s commitment Davao Del Norte
variety check to ensure the to ensure plant quarantine, seed quality Davao Del Sur
variety of mango are the control, and crop production and Davao Oriental
supposed variety. protection among others Compostela Valley

Local Government Units and DA SOCCSKSARGEN


Regional Offices establishment of Sarangani
nurseries South Cotabato
Sultan Kudarat
Assistance of Private sectors to the LGU
for the nurseries CARAGA
All provinces

ARMM
All provinces

75
Lack of Financial capacity to Financing services that may be accessed All provinces in
finance input materials. from various banks and government Mindanao
agencies by farmers associations,
Mango production entails high cooperatives and individuals.
investment cost. It takes 4-5
years, before a farmer earns Issuance of BSP Circular No 217, Series
profit. Productivity of bearing 1999 prescribing the Implementing
trees as well is very much Guidelines for the Setting of Variable
dependent on input provision Grace period for Long-Gestating
such as fertilizers, pesticides and Agriculture and Fisheries Projects, such as
maintenance. for mango, having a long gestational
maximum grace period of seven years.
Producers access borrowing
from informal borrowers(e.g. Availability of finance and technical
“Bombay”, “5:6”) with very high services extended by processors and
interest rate from 15-20 % since exporters to farmers
government financing services
are mostly available to Presence of mango contractors who are
cooperatives only and/or needs willing to finance input materials in an
a stringent process.39 agreed contract

Primary Production

Unpredictable weather PAGASA, DOST, UPLP and other All provinces in


conditions; Mango trees institutions’ continued research and Mindanao
productivity is at its best if investment on weather forecasting. on
climate is dry during flowering Adaptation of climate-smart agriculture
and fruit development period, technologies to mitigate and reduce
since continuous raining and impact of climate changes
exposure to moisture develops
fungal diseases that causes Presence of various agencies such as BPI-
flower and fruit drop.³⁷ National Mango Research and
Development Council

Pest and diseases incidences Research and development activities on All provinces in
Mango are very susceptible to evolving pests and diseases are given Mindanao
pest and diseases priority by various government agencies
such as BPI-National and Satellite
Pesticide Analytical Laboratories (CDO
and Davao PAL Satellite)

High Density Farming DA-HVCDP provides technical assistance All provinces in

39
Focus Group Discussion and Key Informant Interview conducted

76
Although existing farms with to farmers on sustainable farming and/or Mindanao
high density farming weren’t good agricultural practices.
identified during the study, but,
this have been identified by
several growers-per
experience- as one of the major
causes of low yield.40 From
almost zero yield to around 10
mt yield per hectare by
improving farm density from
5x10 to 10x10
Poor farm management and Availability of trainings and manuals for All provinces in
adoption of mango growers to Good Agricultural Practices Mindanao
good agricultural practices due
to the following reasons: DA-HVCDP provides technical assistance
on sustainable farming and/or good
1. Limited knowledge on agricultural practices
available technologies
and other good PCAARRD and DOST Mango Industry
agricultural practices Strategic S & T Plan (ISP) to address gaps
through Science and Technology
2. Lack of financing to interventions from production,
practice good agricultural postharvest, processing, trade to
practices marketing aspect on the export cultivar
“Carabao”
Contractors’ tendency to
maximize contract term by Presence of financial institutions such as
doing two production cycles in DBP, Landbank and Rural banks who
one year. After the contract, offers low interest financing scheme for
the farmers bear the impact to mango growers.
mango trees which is low
productivity Willingness of some exporters and
processors to extend financial support
through an agreed agreement

Lack of water supply in upland I-Build Infrastructure Development Agusan Del Norte-
areas Component of the PRDP include but not Tulang, Cahayagan
limited to Farm to Market Road, bridges, Carmen
Communal irrigation System, and Potable Olympog, General
Water Supply System programs Santos City
Assembly
Inadequate knowledge of Presence of mango associations in All provinces in
sorters and harvesters on several areas where technologies for Mindanao

40
Focus Group Discussion and Key Informant Interview conducted

77
proper handling is one of the modern harvesting practices can be
most common causes of post transferred.
harvest damages.
Support of the Department of
Agriculture, DTI, DOST and LGU to mango
industry

Programs extended by mango companies


to growers including trainings and
transfers of modern technologies

Ineffective harvesting method


and equipment
Pole vaulting by farmers. It LGUs active involvement in tripartite Davao Region
happens when grower enters agreement between growers and
into an agreement with processors.
processors or contract buyers,
where the said party finances
the production inputs with an
agreement that the growers
will sell their mango produced
to the contracting party/ies.
During harvest however,
growers sells their harvest to
other buyers or contractors.

Transformation

No Vapor Heat Treatment Establishment of Vapor Heat Treatment Zamboanga Peninsula


(HVT), Hot Water Treatment and laboratory Facilities in the Island of All provinces
(HWT) Facilities and other Post Samal as provided in the City Ordinance
Harvest Facilities in most areas 2010-168 Northern Mindanao
All provinces
Existing VHT and HWT in private
plantation in Mindanao such as in Davao Region
Nakashin, SPPFC, Dole and Lapanday All provinces except
Agro-Industrial Development Corporation Davao City

SOCCSKSARGEN
All provinces

CARAGA
All provinces

78
ARMM
All provinces
Distribution
Poor farm to market roads in PRDP’s I-Build and other national All provinces in
some areas government agencies programs include Mindanao
Farm to Market Road (FMR)
High transportation cost interventions.
Limited and inefficient
transport services Ro-RO Connectivity for Bitung, Gensan
and Davao will increase accessibility of
the commodity to existing and potential
markets from ASEAN countries

Final Sale
Inadequate supply of export Extended support service programs of
quality which compels exporters to capacitate growers on All provinces in
processors to turn down permissible size range, acceptable MRL Mindanao
purchase orders from foreign and other product specifications of
buyers (sizes, maturity, MRL importing countries
restrictions)
Creation of Codex Standard for Mango as
guide on standards of commodity export.

DAs program to promote Good


Agricultural Practices. The agency also
formulated a code of practices entitled
The Good Agricultural Practices for Fruits
and vegetable Farming (GAP-VF) which
was formulated based on concept of
Hazard Analysis of Critical Control Points
(HACCP).

I-Reap/Enterprise Development program


includes infra on production and
marketing
Disaggregate sector and multi Increasing demand for local and foreign Zamboanga Peninsula
layered marketing channel. market, specifically for Japan and Korea All provinces
“Too many “middlemen”
Declaration of the US Department of Northern Mindanao
Agriculture (USDA) for the whole All provinces
Philippines except Palawan Province as
weevil free, this will open expanding Davao Region
market for Philippine Mango Davao Del Norte
Davao Del Sur

79
Unstable market price - Sweet taste of Philippine Mango Varieties Davao Oriental
Mango’s market prices are very Compostable Valley
unstable. The profitability of Presence of organizations and
mango production is very associations to improve marketing of SOCCSKSARGEN
dependent to current buying mango All provinces
price during the time of
harvest CARAGA
All provinces
Low buying Price
ARMM
All provinces

The

80
Section 8: COMPETITIVENESS DIRECTIONS

A. COMPETITIVENESS VISION

Production of mango in the Philippines has been plummeting over the years, from being ranked 8th
among major mango producing countries in the world in 2008 it went down to 12 th in 2012. This
poses a major challenge to the industry considering that mango is the third most important fruit
crops in the country based on export volume and value, and tag as the national fruit.

But, there are so many opportunities for the industry, both for fresh and processed specifically for
“Carabao” variety. The Carabao Mango, considered as one of the finest and sweetest variety in the
world has already established its domestic and foreign markets.

To facilitate access to world market through and global competitiveness of Philippine mango,
participants in the stakeholders’ conference and key informant interviews identified the following
areas as priority for interventions:

1. Increase productivity and production of farmers by improving the affordability and accessibility
to input materials, provisions of capacity buildings trainings on effective farming practices and
technologies, massive campaign for the adoption to good agricultural practices and conduct of
research and development on pest and diseases

2. Reduction of post-harvest losses through provisions of tools, equipment, HWT and other post-
harvest facilities and provisions of trainings on proper handling to farmers, sorters and
harvesters

3. Improve access of producers to market in order to increase net profit-cost ratio by


strengthening of associations and cooperatives for better access to market and other support
services, and encourage entrepreneurship among them; promotion of investments on VHT and
HWT facilities and provisions of farm to market road

4. Availability of stable export quality grade mango produced through investments on R & D,
technical assistance and technology transfer

81
B. PRIORITY CONSTRAINTS, OPPORTUNITIES AND INTERVENTIONS

Table 8.1 Priority Constraints, Opportunities and Interventions


Constraints/ Intervention Strategy and Priority Areas Who Can Do It?
Opportunities Approach Public Private

Input Provisions
Key Constraint Priority No. 1
Lack of Financial capacity LGUs to come up with a Davao Del Sur LGUs Exporters and
to finance input program to initially support General Santos -financing processors-
materials. producers and capacitate City programs extended
them to be in-time self- Zamboanga del -free input financial
Mango production entails sustaining through the Norte materials services
high investment cost. It following: Zamboanga del Assistance in
takes 4-5 years, before a Sur cooperative Financial
farmer earns profit. 1. Provision of free fertilizers Misamis development Institutions
Productivity of bearing and pesticides to small Occidental -financing
trees as well is very much farmers (less than 3 Misamis DA services
dependent on input hectares). Oriental -technical
provision such as North Cotabato assistance
fertilizers, pesticides and 2. Establishment/ South Cotabato -trainings
maintenance. Strengthening of Agusan del -assistance in
sustainable financing Norte accessing
Producers access programs for cooperatives financing
borrowing from informal and individual farmers. Priority No.2 service
borrowers(e.g. “Bombay”, Zamboanga
“5:6”) with very high 3. Strengthen collaboration Sibugay DOST
interest rate from 15-20 % with exporters and Zamboanga City -inducer
since government processors in coming up Bukidnon
financing services are with the same projects. Lanao del Norte
mostly available to Davao City
cooperatives only and/or 4. Setting up and Davao del Norte
needs a stringent process. strengthening of mango Davao Oriental
producers cooperative. At Sarangani
Opportunities the same time, provide Sultan Kudarat
Financing services that assistance in accessing Maguindanao
may be accessed from financing services by Sulu
various banks and inviting resource persons
government agencies by to talk about procedures Priority No. 3
farmers associations, and requirements during Camiguin
cooperatives and forums/meetings of Compostela
individuals. stakeholders and by Valley
assistance in complying Agusan Del Sur
Issuance of BSP Circular requirements. Agusan Del
No 217, Series 1999 Norte
prescribing the Surigao del Sur
Implementing Guidelines Basilan
for the Setting of Variable Lanao del Norte DA

82
Grace period for Long- Include in the PCIP Tawi-tawi
Gestating Agriculture and capacity building activities
Fisheries Projects, such as such as conduct of
for mango, having a long trainings to develop
gestational maximum entrepreneurship among
grace period of seven farmers, book keeping,
years. financial statement
preparation, production
Availability of finance and planning etc.
technical services
extended by processors
and exporters to farmers

Presence of mango
contractors who are
willing to finance input
materials in an agreed
contract
Key Constraint Priority No. 1
Limited access and Include initiatives to improve Z. Norte DA-BPI Private
supplies of good quality quality and availability of good Sarangani -Accreditation companies
planting materials planting materials through: Maguindanao of nurseries -Planting
-Technical materials
Presence of impure a) Collaboration with DA-BPI, Priority No. 2 assistance
planting materials LGUs and private sector Zamboanga
strengthen DA-HVCD City DA-HVCD
Opportunities program in the Davao Del Sur -Establishment
At present, there are Five establishment, Z. Del Norte of nurseries
(5) BPI accredited rehabilitation and Davao Oriental -Technical
nurseries located in maintenance of assistance
Mindanao; 2 in Bukidnon, production facilities such Priority 3
1 in Davao City, 2 in as nurseries and Agusan del Sur LGUs
Kidapawan City Foundation Scion Grove Zamboanga -planting
Sibugay materials
Local Government Units b) Partnership with DA-BPI Davao del -assistance in
and DA Regional Offices and LGUS strengthen Norte accreditation
establishment of accreditation program by Surigao del
nurseries encouraging existing Norte DOST
private nurseries to be Surigao del Sur - Research and
Assistance of Private accredited by: development
sectors to the LGU for the (Prioritization is -dipstick kit
nurseries 1) providing assistance in based on
the accreditation production area
Private nurseries located process and growth
in the provinces 2) providing incentives to rate per
accredited nurseries province and
such as distribution of including
planting materials-free distance from
of charge/discounts, existing

83
trainings and other accredited
assistance nurseries)
3) Strengthen existing
partnership with private
sector in providing good
planting materials

c. Partnership with DOST and


LGUs, encourage the use
of new technologies such
as diagnostic kit or dipstick
to identify Carabao
Mango. For other varieties,
in partnership with DA-
HCVD, LGUs encourage
application of flower
inducer on the third year
of plantation for varietal
check purposes.

Primary Production
Key Constraint
Pest and diseases DA-HVCD, DA-BAR, DOST and Priority 1 DA-HVCD Association/
incidences UPLB to strengthen Research Zamboanga Del -technical Cooperatives/
and Development to improve Norte assistance; producers
Opportunities resistance of mango to pest Bukidnon monitoring; -information
Research and and diseases Davao Del Sur information dissemination;
development activities on North Cotabato dissemination monitoring
evolving pests and Strengthen HVCD regulatory Agusan Del and reporting
diseases are given service of monitoring and Norte DA-BAR of P & D
priority by various surveillance and management Maguindanao -R & D
government agencies and control of pest and
such as BPI-National and diseases by collaborating with Priority 2 DOST
Satellite Pesticide LGUs and associations in Zamboanga -R & D
Analytical Laboratories disseminating information City -technical
(CDO and Davao PAL Misamis assistance
Satellite) In partnership with LGU’s Occidental
Agriculture Office and DOST, Davao Del LGU
provide continuous training Norte -technical
and technical assistance on South Cotabato assistance
GAP, IPM, ICM and Organic
Farming Priority 3
Zamboanga Del
Sur
Lanao Del Norte
Misamis
Oriental
Davao Oriental
Davao City

84
Sarangani
Sultan Kudarat
Sulu

Priority 4
Zamboanga
Sibugay
Camiguin
Compostela
Valley
Agusan Del Sur
Surigao del
Norte
Surigao del Sur
Basilan
Lanao del Sur
Tawi-tawi

Key Constraint
Unpredictable weather DA-HVCD and DOST continues All provinces in DA-HVCD Stakeholders
conditions; Mango trees Research and Development to the region -technical -information
productivity is at its best if determines adaptive assistance and related to
climate is dry during mechanisms to climatic R&D mango
flowering and fruit vulnerability production
development period, since DOST-R & D
continuous raining and Agriculture’s Office in
exposure to moisture collaboration with DOST, PAG UPLB-R & D
develops fungal diseases ASA strengthen awareness and
that causes flower and adaptation of climate-smart PAG-ASA
fruit drop. agriculture technologies. -technical
assistance;
Opportunities DA in partnership with mango weather
PAGASA, DOST, UPLP and associations, Provincial and forecast
other institutions’ MLGU/PLGUs to create
continued research and website for mango industry in PRDP
investment on weather Mindanao which features -Create website
forecasting on Adaptation include localize weather
of climate-smart forecast LGU
agriculture technologies to -capacity
mitigate and reduce building
impact of climate changes

Key Constraint
Poor farm management Establish a program for an Priority 1 DA-HVCD Financial
and adoption of mango improved and sustainable Zamboanga del -technical Institutions
growers to good adoption to good agricultural Norte assistance -financing
agricultural practices due practices by: Misamis -capacity
to the following reasons: Oriental building Producers/

85
1. Information Davao Del Sur contractors
1. Limited knowledge dissemination through North DOST- -technical
on available orientations and North Cotabato Science and expertise,
technologies and production of leaflets on Sarangani technology resources
other good GAP and its benefits South Cotabato assistance
agricultural practices Agusan Del -capacity
2. Technical trainings on Norte building
2. Lack of financing to GAP to all the actors in Maguindanao
practice good the value chain LGU
agricultural practices Priority 2 -information
Zamboanga dissemination
Contractors’ tendency to City
maximize contract term Bukidnon
by doing two production Zamboanga del
cycles in one year. After Sur
the contract, the farmers Lanao Del Norte
bear the impact to Davao del Norte
mango trees which is low
productivity Priority 3
Zamboanga
Opportunities Sibugay
PCAARRD - DOST Mango Misamis
Industry Strategic S & T Occidental
Plan (ISP) to address gaps Davao City
through Science and Davao Oriental
Technology interventions Sultan Kudarat
from production, Agusan Del Sur
postharvest, processing, Agusan del
trade to marketing aspect Norte
on the export cultivar Sulu
“Carabao”
Priority 4
Presence of financial Camiguin
institutions such as DBP, Compostela
Landbank and Rural Valley
banks who offers low Surigao del Sur
interest financing scheme Tawi-tawi
for mango growers. Sulu
Lanao del Sur

Key Constraint
High Density Farming In partnership with mango Priority 1 PLGU Associations/
associations, PLGU to conduct Zamboanga del -facilitate cooperatives
Opportunities monthly/quarterly meetings Norte regular -sharing of
DA-HVCDP provides With producers to include North Cotabato meetings good practices
technical assistance to sharing of best practices in the Misamis
farmers on sustainable agenda. Oriental LGU
farming and/or good Agusan Del -information

86
agricultural practices. Encourage more farmers to Norte dissemination
actively participate in
accessing available technical Priority 2 DA-HVCDP
capacity building Zamboanga del – technical
Sur assistance
Bukidnon
Sarangani
Agusan del Sur
Surigao del
Norte

Prioritization is
based on
production area
and no of
bearing trees

Key Constraint
Lack of water supply in Establishment of water supply Tulang, DA Cooperatives/
upland areas system in upland areas with Cahayagan -Water Supply Proponent
significant production areas Carmen, System Group –
Opportunities Agusan Del equity,
I-Build Infrastructure Norte LGU proposals
Development Component Olympog, -equity
of the PRDP include but General -assistance
not limited to Farm to Santos City
Market Road, bridges,
Communal irrigation
System, and Water (As identified
Supply System programs during FGD)

Assembly
Key Constraint DA HVCD
Inadequate knowledge of Organize and train sorters and Priority 1 -trainings
sorters and harvesters on harvester on proper handling -R&D
proper handling Zamboanga Del
Norte DOST
Ineffective harvesting Continues development of Misamis -trainings
method and equipment efficient method and Occidental -Mechanical
Opportunities equipment. Davao del Sur fruit picker
Presence of mango North Cotabato -R and D
associations in several Promote usage of Mechanical Agusan del
areas where technologies Fruit picker newly developed Norte LGU
for modern harvesting by DOST Maguindanao -producers ID
practices can be and mapping

87
transferred. Priority 2
Zamboanga del
Support of the Sur
Department of Misamis
Agriculture, DTI, DOST Oriental
and LGU to mango Davao City
industry South Cotabato

Programs extended by Priority 3


mango companies to Zamboanga
growers including Sibugay
trainings and transfers of Zamboanga
modern technologies City
Bukidnon
Davao del
Norte
Sarangani
Sulu

Priority 4
Lanao del Norte
Camiguin
Davao Oriental
Compostela
Valley
Sultan Kudarat
Agusan del Sur
Surigao del
Norte
Surigao del Sur
Basilan
Lanao del Sur
Tawi-tawi

Key Constraint Priority 1 LGU- -Processors


Pole vaulting by farmers. Organize and establish Davao Region organization of -exporters
It happens when grower nurturing relationship among association and
enters into an agreement players in the value chain cooperatives
with processors or
contract buyers, where Strengthen partnership of key Facilitate MOUs
the said party finances players through MOUs and and MOAS
the production inputs MOAS
with an agreement that
the growers will sell their
mango produced to the
contracting party/ies.
During harvest however,
growers sells their
harvest to other buyers

88
or contractors.

Opportunities
LGUs active involvement
in tripartite agreement
between growers and
processors

Transformation
Key Constraint Priority 1
Low supply of export DA, in partnership with All provinces in DA HVCD- Exporters/
quality to process for exporters and processors to Davao region technical processors
export, for Davao Region encourage growers to produce Zamboanga del support -technical
and neighbouring export quality by: Norte assistance
provinces, this compels 1. Educating them standards Misamis DOST
processors to turn down and requirements buyers Occidental -R and D Farmers
purchase orders from from exporting countries North Cotabato -equity
foreign buyers (sizes, including MRL restriction South Cotabato DA- post
color, maturity, MRL ) 2. Potential increase on profit harvest facility
ratio if will produce and sell Priority 2
Opportunities export quality mangoes Zamboanga del LGU
Extended support service 3. Providing trainings on GAP Sur -equity
programs of exporters to and HACCP Misamis Oriental
capacitate growers on 4. Strengthening of existing Maguindanao
permissible size range, financial support services of
acceptable MRL and Nakashin and SPPFC Priority 3
other product Zamboanga
specifications of Sibugay
importing countries Provision of Post-harvest Zamboanga City
facilities Bukidnon
Creation of Codex Sarangani
Standard for Mango as
guide on standards of Priority 4
commodity export. Lanao del Norte
Camiguin
DAs program to promote Sultan Kudarat
Good Agricultural Surigao del Sur
Practices. The agency also Surigao del Norte
formulated a code of Agusan del Sur
practices entitled The Sulu
Good Agricultural Lanao del Sur
Practices for Fruits and Tawi-tawi
vegetable Farming (GAP-

89
VF) which was
formulated based on
concept of Hazard
Analysis of Critical
Control Points (HACCP).

I-Reap/Enterprise
Development program
includes infra on
production and
marketing

Key Constraint Enhance productivity of Priority 1


No Vapor Heat Treatment mango through provision of Zamboanga del DA -VHT, WHT Proponent
(HVT), Hot Water postharvest facilities including Norte and other Post Group
Treatment (HWT) Misamis harvest -proposals
Facilities and other Post  Sinkers and Hot Water Occidental facilities
Harvest Facilities in most Treatment facilities in North Cotabato Exporters/
areas major production areas for General Santos DOST processors
producers to classify City -technical -technical
Opportunities exportable and non- Agusan del support assistance
Establishment of Vapor exportable quality. Norte -R & D
Heat Treatment and  Continues Research and Maguindanao
laboratory Facilities in the Development for improved
Island of Samal as integrated postharvest Priority 2
provided in the City facility Zamboanga del
Ordinance 2010-168 Sur
Study the most ideal location Misamis
Existing VHT and HWT in for Post-harvest facilities Oriental
private plantation in Davao del Sur
Mindanao such as in South Cotabato
Nakashin, SPPFC, Dole,
and Lapanday Agro- Priority 3
Industrial Development Zamboanga
Corporation Sibugay
Zamboanga
City
Bukidnon
Sarangani

Priority 4
Camiguin
Davao Del
Norte
Davao City
Davao oriental
Compostela
Valley
Sultan Kudarat

90
Agusan del Sur
Surigao del
Norte
Surigao del Sur
Basilan
Lanao del Sur
Sulu
Tawi-tawi

Key Constraint Department of Trade and Priority No. 1


No manufacturer of Industry to consider study of Davao Region DTI Private Sector-
packaging materials for investment potentials from Cagayan De Oro LGU’s Investment
export products manufacturing of packaging General Santos investment
materials, and include City center/Planning
Opportunities investment potential for Zamboanga Office
DTI’s priority project in investment promotion City
Mindanao includes
mango industry

Presence of registered
PEZA zones in the region
as possible location

Distribution

Key Constraint DA-PRDP and LGU to identify Priority 1


Poor farm to market specific key areas within the Zamboanga Del DA -FMR
roads in some areas province for FMR Norte
implementation Misamis LGU
High transportation cost Occidental -Equity
Limited and inefficient LGUs to develop Barangay Davao del Sur
transport services access roads going to areas North Cotabato
with significant production. Agusan del
Opportunities Norte
PRDP’s I-Build and other Maguindanao
national government ON PCIP Plan, should include
agencies programs further study for threats and Priority 2
include Farm to Market opportunities of the Ro-Ro Zamboanga del
Road (FMR) connectivity, including impact Sur
interventions. to the mango industry of the Misamis
ASEAN integration Oriental
Ro-RO Connectivity for Davao City
Bitung, Gensan and South Cotabato
Davao will increase
accessibility of the Priority 3
commodity to existing Zamboanga
and potential markets Sibugay
from ASEAN countries Zamboanga

91
and marketing City
Bukidnon
Davao del
Norte
Sarangani
Sulu

Priority 4
Lanao del Norte
Camiguin
Davao Oriental
Compostela
Valley
Sultan Kudarat
Agusan del Sur
Surigao del
Norte
Surigao del Sur
Basilan
Lanao del Sur
Tawi-tawi

Final Sale

Key Constraint Priority 1


Disaggregate sector and LGUs in partnership with Davao Del Sur LGU- Existing
multi layered marketing existing mango associations to General Santos Organization of mango
channel. “Too many establish direct marketing City Cooperatives associations
“middlemen” linkage of farmers to Zamboanga Del /association
processors and exporters; Norte
Misamis
LGUs to assist organization and Occidental
strengthening of associations Davao del Sur
and cooperatives specifically North Cotabato
in areas where mango is Agusan del
identified as priority in the Norte
commodity investment plan Maguindanao

Priority 2
Zamboanga del
Sur
Misamis
Oriental
Davao City
South Cotabato

Priority 3
Zamboanga

92
Sibugay
Zamboanga
City
Bukidnon
Davao del
Norte
Sarangani
Sulu

Priority 4
Lanao del Norte
Camiguin
Davao Oriental
Compostela
Valley
Sultan Kudarat
Agusan del Sur
Surigao del
Norte
Surigao del Sur
Basilan
Lanao del Sur
Tawi-tawi

Priority 1:
Zamboanga
City
General Santos
City
Cotabato City
Cagayan De Oro

Key Constraint Encourage investments on Priority No. 1


Low buying price due to VHT, HWT and other General Santos LGU, DTI – Private Sector-
limited buyers treatment/processing facilities City Investment Investment
through: Zamboanga promotion
Opportunities City Cooperatives-
Increasing demand for 1. Collaboration with LGU’s, Cagayan De Oro LGU Investment
local and foreign market, Cooperatives and Mango -Investment Equity
specifically for Japan and associations who has the equity and
Korea capacity in terms of equity, assistance
operation and maintenance,
Declaration of the US marketing, and network and
Department of linkages to access I-REAP
Agriculture (USDA) for Program for investment on
the whole Philippines VHT, HWT and or any other
except Palawan Province processing facilities.
as weevil free, this will

93
open expanding market 2. LGUs in partnership with DTI
for Philippine Mango to promote investments on
HWT, VHT and other post-
Sweet taste of Philippine harvest facilities. Include in
Mango Varieties LGUS investment priority
areas, if the study said so
Registered PEZA Zones
and Infra support On PCIP, in collaboration with
facilities in identified LGUs’ agricultural and
priority areas (General investment office, DA, and DTI
Santos City, Zamboanga include industry mapping and
City, Cagayan de Oro) feasibility study on HWT, VHT
and post-harvest facilities as a
pre-requisite in determining
the potential and
sustainability of investment.

Key Constraint Encourage and capacitate


Unstable market price growers to plan and monitor All province DA in Mango
due to unstable supply the best time to produce partnership Cooperatives
and demand, and mango to manage the supply with LGU and
inability of producers to and demand. associations-
plan and monitor information
production Establish website for dissemination
Mindanao’s mango to members
Presence of organizations stakeholder where pricing and
and associations to planting season not only of
improve marketing of Mindanao but including Luzon
mango and Visayas specifically major
producers, and eventually Should be DA- Mango
international players can be accessible to all Establishment cooperatives
monitored. Website should be provinces in and and
interactive to provide technical Mindanao administration associations
assistance, and should also of website -regular
include information on reporting of
localized weather forecast, DTI,DOST, LGU, stakeholders
input price monitoring, HVCDP, performance
industry profile, relevant BPI,BAR and
statistics and other relevant other
information government
agencies-
provision of
information
and technical
assistance

94
Section 9: RECOMMENDATIONS AND CONCLUSIONS

Mango industry continues to lead in its socio-economic impacts


The mango industry continues to be among the top drivers of the Philippine economy: it contributes
an average of P14.5 Billion per year to agriculture GVA from 2001-2013, ranks 2nd as the most
important fruit in the country in terms of value and ranks 3rd in terms of volume of production and
area. It definitely plays a huge role in achieving the socio-economic targets of the country as it
directly supports about 2.5 million farmers all over the Philippines.

Meeting PDP Targets for the fresh mango industry requires concerted effort among
relevant stakeholders and establishing ownership of the plan.
While it may seem that the Philippines is maintaining its position in the global mango industry and
not lagging in its GVA in the recent years, total performance of the mango industry falls behind the
goals set forth in its PDP.
We see the need to set specific target set for the mango industry on a region and/or provincial level
as the foregoing targets are national targets based on wide-ranging average of averages. In the PCIP,
we recommend that the following be looked into:

National Subsector • Regional/Provicial Key Performance


Indicators
outcome •(set appropriate target)

•Productivity (ton/ha)
Productivity in
•production (ton/period)
agriculture and
•export volume and value
fisheries sector:
•percentage of post-harvest losses (%)

Forward linkage to •(indicator sas to smallholder's inclusion)


the industry and • e.g. number of farmers organized into associations
services sector •e.g. associations linked with local buyers
increased

•losses due to climate-related problems


Sector resilience to •new climate-smart technology (process or product)
climate change risk developed
increased • existing process/product technology (process or
product) improved

Inclusive growth: Minding the Smallholders


The value chain of the mango industry in Mindanao is generally dominated by the contractors,
owning under informal/non-existent contracts, the stages of production up to trading with the local
buyers/processors and/or exporters. Value added is concentrated at the production stage. Gleaning
at the results of the study, one can safely say that the farmers have withdrawn to just growing,
comfortably receiving 25 to 30% of the gains in the contractual relationship, and leaving the rest of
the 70% gain to the contractors who have the direct linkage to the market. Prevailing value chain
pricing and GVA per stage/operator as seen in Section 3 of this Study point to the same conclusion as
well.

95
primary Transformation/Proce
input provision assembly Distribution Final Sale
production ssing

Input
Any or all of the following market destinations:
providers

2% Processors/exporters for export market –


Farmers whole fresh mangoes
40%
Contractors Processors for export market – processed
mangoes
58%

Wholesalers/retailers local– whole fresh


Contractors mangoes

*% of total production
Processors for local market – processed
mangoes

Figure 9.1 Mango Activity Flow

Figure 9.1 Graph shows concentration of activities in the contractors. While this may not be a problem in itself, therewith lies the challenge. And
the challenge remains as to increasing not just the inclusion of the smallholders in the chain but quantifying how their plight is elevated vis-a-vis
the guiding development objective of “inclusive economic growth” or increased household incomes and decreased poverty levels. There is no
data available as to the improvement (or the lack of it) of the net revenue of the smallholders.

96
And while we see some attempt on the large exporters/processors (e.g. Nakashin, SPFFC) to link the
individual growers to them in order to better control the production process and provide necessary
technical assistance and capacity building trainings for consistent production of export-quality products,
contractors still control the game, leaving behind the farmers. At best, under this requirement, GAP is
being adopted. At the very least however, there is no real transfer of “culture” as to the use of GAP or
sustainable agriculture that produces the best quality because by the end of the contract, growers go
back to what they think would be the most profitable for them. And this, disregards the environmental
impacts or the quality they produce, relying only on the processors that accept the lower-quality
products or the local market that relatively does not impose quality standards.

Where there is a big processor present in the region (e.g. region XI), we recommend that the outgrower
scheme be merged with the cooperative model (see featured box below). This is to guarantee, among
others, a sure market, improved/market-compliant products (as to quality and quantity). This can also
be elucidated from the key constraints identified in section 8 (fragmented producers, lack of access to
market, low product quality) and the corresponding interventions recommended (enhancing the
organization of producers, providing linkage to market) (Also refer to inter-firm relationships under
Section 3)
Figures (9.2) Enhancing the horizontal relationship between the growers and the vertical linkage with
the big processors/exporter.

Figure 9.2 Horizontal and Vertical Relationship between Producers and Processors/Exporters

Grower 1
Grower/Trader 1
Grower 2

Grower 3
BIG
PROCESSOR/TRANS
Grower 4 COOPERATIVE A
NATIONAL
EXPORTER
Grower 5

Grower 6

Legend
Player
Supply/ goods flow
Information flow

97
The
Outgrower
Scheme

The
Cooperative
Scheme
Making the Mango Industry Stronger

In order to make the mango industry stronger, from “sunset to sunrise industry” as quoted from the
goal of Regional Mango Industry Development Council XII recommended interventions should not only
be focused on how to improve productivity but also how to stabilize buying price in the market. Thus,
aside from increasing the volume produced it is also very important to plan their production cycle by
monitoring production in other areas to take advantage of seasons when supply is low and demand is
high. Long term interventions to stabilize pricing require investment on processing or treatment
plantations.

The proposed interventions to increase mango productivity will generally benefit actors in the end part
of value chain, i.e. the buyers, while stabilizing the buying price will profit the producers. A diagram
summarizing the two desired outcomes as also expressed in the PDP, including the priority constraints
and proposed interventions are shown below in Figure 9.4 and 9.5: (Detailed constraints and
interventions are discussed in Chapter 8)

98
Figure 9.3 Major Constraints and Interventions to Increase Productivity

LGUs to DA-PRDP, DA-HVCD and LGU to


• Provide free input materials(fertilizers and  Include an integrated program in the CIP
pesticides) technical trainings on GAP, HACCP, GMP and
• Establish financing programs(resources and other standards
accessibility to financing institutions)for coop &  Strengthen information dissemination through
individual farmers, synergizing existing production of leaflets/brochures
programs from financing institutions and
private companies
• Provide accessibility of farming tools and
equipment through PRDP IREAP

¤Lack of financial ¤Poor adoption to


capacity to finance good farming
input materials practices due to
including farming Lack of knowledge
tools and on GAP, HACCP and
equipment GMP and latest
technologies

Increased
Productivity

Pest and diseases Unpredictable


incidence weather

 DA-HVCDP, DA-BAR, DOST and other research  DA-HVCDP and DOST continues Research and
agencies to strengthen Research and Development for adaptive mechanisms to
Development to improve resistance to pest and climatic vulnerability
diseases.  PRDP through IPLAN program to include
 Regular updating of information and development of website to with localize
technologies through orientation and website weather forecasting among other features
 Capacity-building producers to practice
monitoring and reporting incidences of pest and
diseases
 Through PRDP-IREAP-provision of mobile pest
and diseases facility per region

99
Figure 9.4 Interventions to Increase Profitability

Management of Supply and Demand


The LGU in partnership with PRDP to establish
Planning and Monitorig Program to avoid over
supply and below break-even buying price incidents

Increase production of
Increase linkage to export export quality
market
DA-HVCD in partnership with
LGU to assist Cooperatives exporters and processors
/associations possibility of technical trainings on
putting up processing/treatment standards and requirements of
facilities with VHT, WHT and for exporting countries;
Individually Quick Frozen Mango
(IQF) through I-REAP Program in
Increase information dissemination re
key city per region preferably in Profitability potential additional profit in
PEZA registered areas accessible producing export quality
to sea/airports.
LGU and DTI to promote Provisions of post-harvest
partnership to potential facilities through I-REAP
investors with technical and
financial capacity

Strengthen Mango producers


associations and cooperatives to
reduce "middle-men" and be able to
produced better volume with better
buying price by:
Encouraging relationship of members
from production to selling.
LGU in partnership with DTI, PRDP and
DA-HVCD to provide capacity building to
develop entrepreneurship skills of
producers

100
Among the interventions illustrated in the previous diagrams, the following proposed interventions are
highlighted to efficiently strengthen the fresh mango value chain through PRDP in Mindanao:

1. LGUs to strengthen and widen participation of all players in the value chain by going down to
Barangays to disseminate program information.

2. LGUs to conduct actual industry mapping and clustering to be able to identify priority areas for
development of FMR, water systems, bridges and other post-harvest facilities through I-BUILD
Program; and areas for expansion, improvement and support through I-REAP Program.

3. Development and administration of website for Mango Industry in Mindanao where relevant
information will be uploaded such as current buying price of mango and input materials,
production cycle outside and within Mindanao, localized weather forecast, industry profile, new
technologies and R & D findings, opportunities , directory of stakeholders, government
programs and other relevant information and statistics.

4. LGU to assist setting up of Cooperatives among stakeholders in order to access relevant


programs and projects of the government and private entities.

5. LGU to come up with financing program to initially support farmers, and capacitate them to be
in-time self-sustaining. This is because while Mango production is input intensive, farmers lack
financial resources and are generally wanting of entrepreneurship skills among the farmers.

Moving Forward

In sum, the challenges for the mango industry are the following: increasing local and international
demand and the market’s ever changing preferences as to the quality and safety of the mango.
However, challenges present themselves as opportunities in that while at the moment we are struggling
to produce the quantity against our country’s own target vis a vis export market demand, consumer
preferences are continually, if not drastically evolving. We cannot deny that the mango value chain has
long been in the global chain. And that is where we are next headed: establishing our position in the
global chain of producing fresh mango and not merely resting on our laurels being among the top
mango- producing country in the world. If we intend to thrive in this industry, further study must be
made to position the Philippine mango industry in the global chain.

101
Figure 9.5 Hierarchical Relationship Based on CBI Market Information Database

Product
Upgrading

Process
Upgrading

Functional
Upgrading

Among the prevalent barriers in effectively positioning in the global value chain are the varying
regulatory requirements per country (i.e. traceability and phytosanitary requirements, compliance to
Global Gap) as well as the unique requirements per niche market or specific end-buyer (i.e. organic
products only, ecological certificate). Information flow can be facilitated if the essential networks are
established (i.e. transnational processors communicating to the producers/contractors/farmers the
requirements to be complied with, thereby arranging the necessary work arrangements and process
changes; and identifying supports to be provided by relevant stakeholders). We would want this to
ensure that there is growth in technical and enterprise capacity amongst all players, especially the
smallholders.

It is indeed true that as espoused by the PDP Midterm Update in 2013, we do not want “business as
usual, where interdependent interventions are carried out as disparate parallel activities by several
national line agencies….” We want a holistic, progressive approach to achieving our nation’s goals..

102
Figure 9.6 Mango Global Value Chain
GLOBAL VALUE CHAIN
primary Transformation/Proc
input provision assembly Distribution Final Sale
production essing

Input Any or all of the following market


providers destinations:
PRODUCT,
Processors/exporters for export
PROCESS,
market – whole fresh mangoes
and Farmers IMPORTING INCLUSIVE
FUNCTIONA COUNTRIES/TRANS GROWTH
Contractors Processors for export market – NATIONAL SUSTAINABLE
L UPGRADE processed mangoes
COMPANIES DEVELOPME
NT
Wholesalers/retailers local– whole
Contractors fresh mangoes

LEGEND
Processors for local market –
processed mangoes

LOCAL VALUE CHAIN


FDI OUTFLOWS/INFLOWS

LEGEND

SUPPORT SERVICES, ENABLING LAWS,


Barriers
POLICIES, PROGRAMS
Information Flow

103
REFERENCES

National Economic Development Authority, 2014. Philippine Development Plan 2011-2016, Midterm
Update with Revalidated Result Matrices, Pasig City, Philippines

Dunn E., January 2014.Field Report No. 18, Smallholders and Inclusive Growth in Agricultural Value
Chains.

Bureau of Agricultural Statistics, August 2013. Consumption of Selected Agricultural Commodities in


the Philippines. Quezon City, Philippines.

Food and Agriculture Organization of the United Nations Statistics Division, 2015

Briones R. et al, 2013. Market Structure and Distribution of Benefits from Agricultural Exports: The
Case of the Philippine Mango Industry, FAO Commodity and Trade Policy Research Working Paper No.
42, FAO of the United Nations.

DA’s HVCDP presentation during the 16th Mango Congress

Terashima H.et al, 2011. Development Study on Local Industry Promotion in ARMM-Final Report,
Japan International Cooperation Agency

Department of Trade and Industry. Philippine National Standard, Fresh Fruit Specification.

Aveno J. and Orden H., 2004. Hot Water Treatment of Mango: A Study of Four Export Corporations in
the Philippines. King Mongkut Institute of Technology Ladkrabang

0
Annex A
List of Fresh Mango Value Chain Players

Name Address Contact Nos


Input Provider
La Suerta's Fruit Tree Nursery Don Carlos, Bukidnon Not Available
Binahon Agro Forestry Farms (BAFF) Lantapan, Bukidnon Not Available
Dayot Plant Nursery Talomo Dist. Davao City Not Available
Kylle's Nursery and Garden Kidapawan City, North Cotabato Not Available
Cayona-Talento Nursery & Agri. Supply Kidapawan City, North Cotabato Not Available
Mango Farmers and Contractors
Antonio Magsino Zamboanga City Not available
Mr. Miguel Alavar III Zamboanga City (062)992-5781
Juan Lamayo Sindangan, Zamboanga del Norte 09186950318
Mr. Arnulfo Bael Dipolog City, Zamboanga del Norte 09159777216
Mr. Ferdinand Gamorot Zamboanga City, Zamboanga del Sur (062)9850687
Tommy Villontano Pagadian City, Zamboanga del Sur Not available
Anita Gallebo Guipos, Zamboanga del Sur 09177533324
Paquita A. Kawano Tangub City, Misamis Occidental 09177953410
Genne Amay Laguindingan & Gitagum Misamis Oriental 09352179944
Antonio E. Asok Cagayan De Oro, Misamis Oriental 09282904862
Ester Lina Cagayan De Oro, Misamis Oriental Not Available
David Falconit Samal, IGACos, Davao Del Norte 0916-553-1683
Martin Combista Samal, IGACos, Davao Del Norte 09053302245
Alvin Ampon Davao City Not available
Buncio Chua Davao City Not available
Camarillo Cossid Davao City (082)2910041

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Modesto Engig Mati City, Davao Oriental Not Available
Richard Olores Kiblawan, Davao Del Sur 09193777107
Antonio Vega Maco, Compostela VAlley Not Available
Julio Diaz Banga, South Cotabato 09202748266
Emmanuel Bartocillo Koronadal City, South Cotabato 09308508459
Camar Paidumama General Santos City, South Cotabato 09205907381
Abdul Rahim Paidumama General Santos City, South Cotabato Not available
Juanito Cueva Tantangan, South Cotabato
Ernesto Ortiz Tantangan, South Cotabato 09217972900
Ponciano Ramacula Jr. Agusan del Norte 09293808457
Benjamin Dalaguan Talacogon, Agusan del Sur & Nasipit, Agusan del Norte Not Available
Ponciano Ramacula Jr. Buenavista, Agusan del Norte 09293808457
Lidefonso Ignacio Buenavista, Agusan del Norte Not Available
Martin Alaba Buenavista, Agusan del Norte Not Available
Sisenio Indac Buenavista, Agusan del Norte Not Available
Melecio Dumago Butuan City, Agusan del Norte Not Available
Oscar Olib Butuan City, Agusan del Norte Not Available
Rey Suson Butuan City, Agusan del Norte Not Available
Virgilio Talibong Butuan City, Agusan del Norte Not Available
Virginia Tuazon Butuan City, Agusan del Norte Not Available
Alex Amameo Butuan City, Agusan del Norte Not Available
Elfidio Montilla Butuan City, Agusan del Norte Not Available
Ernesto Misa Butuan City, Agusan del Norte Not Available
Gilmer Austria Butuan City, Agusan del Norte Not Available
GLT Tan Butuan City, Agusan del Norte Not Available
Marina Maisug Butuan City, Agusan del Norte (085)3412047
Cirila Autor Sanchez Cabadbaran, Agusan del Norte Not Available
Olegario Centino Jr. Carmen, Agusan del Norte 09085625932

1
Inenita Ayensa Carmen, Agusan del Norte Not Available
Processors and Exporters
Island Tropical Fruit Jam Cagayan De Oro, Misamis Oriental Not Available
(Mango processor)
Ester Lina Cagayan De Oro, Misamis Oriental Not Available
(Mango jam and purees)
Nakashin Davao International, Panacan, Davao City 09173088773
(Exporter-IQF Mango and purees)
Profood-Southern Philippines Toril, Davao City
(Exporter-IQF Mango, dried, puree and mango juices)
Southern Philippine Fresh Fruits Corporation Km 16, National Highway, Davao City 09228541135
(Fresh Mango Exporter)
Ursula Olais (Mango puree) Mati City, Davao Oriental Not Available
Amley Dried Mango Villanueva, Misamis Oriental (088)85719659
(Dried mango for domestic and export)
Fruitilicious Cagayan de Oro, Misamis Oriental
Trully Natural Food Corporation Brgy Glamang, South Cotabato (083)5521428
(Dried Mangoes and Purees)
ECJ Farms Roxas, Zamboanga del Norte 09175856928
Mango Cooperatives and Associations
Southern Mindanao Mango Industry Development Council, Inc. South Cotabato
Northern Mindanao Mango Industry Development Council Cagayan de Oro, Misamis Oriental
Malaybalay-Bukidnon Mango Growers Association Malaybalay, Bukidnon
Zamboanga City Mango Growers Association Zamboanga City (062)982-0216
Pagadian City Mango Growers Association Pagadian City Not Available
Caraga Federation of Mango Producers, Inc Caraga Region
South Cotabato Mango Growers Association Koronadal City, South Cotabato (083) 228-3735

2
Sarangani Federation of Fruit Industry Association, Inc. Alabel, Sarangani Province (083)508-2014
Regional Mango Industry Development Council Koronadal City, South Cotabato Not Available
(RMIDCI-12)Inc.
Mango Growers Association of Iligan City Iligan City, Lanao Del Norte Not Available
Federation of Mango Growers of DavSur Cooperative Davao del Sur Not Available
Zamboanga Sibugay Mango Growers Association Zamboanga Sibugay c/o (062)333-5434
Zambo Sur-Pagadian City Mango Growers Association Zamboanga del Sur Not Available
Mati City Mango Growers and Marketing Cooperative Mati City, Davao Oriental Not Available
Zamboanga del Norte Mango Growers Association Dipolog City 09062001470

Source: FGD, KII, Philippine Mango Industry Foundation Inc,afmis.da.gov.ph

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