sadp papaya report_111109
TRANSCRIPT
WORKING PAPER
DEPARTMENT OF AGRICULTURE AND
JAPAN INTERNATIONAL COOPERATION AGENCY
Formulation Team on the Drafting of the
Strategic Agribusiness Development Plan
COMMODITY SITUATION REPORT: PAPAYA
Prepared by
JOSE ULYSSES J. LUSTRIA, ALDRIN NACIONAL, AND
ACQUILYN E. MORILLO
November 2009
____________________
Mr. Lustria is OIC-Chief, Public Investment Program Division (PIPD), Planning Service,
Department of Agriculture. Mr. Nacional and Ms. Morillo are Technical Assistants at the
PIPD.
ii
TABLE OF CONTENTS
I. OVERVIEW…………………………………………………..……….……………….. 1
A. Background………………………….…………………...……….………….…. 1
B. Contribution to the Economy………………………….……………….…..….... 1
II. SITUATIONAL ANALYSIS………………………….…………………….…..…..….... 2
A. Production………………………….……………………………….…..….….... 2
1 . World Production………………………….…………………..…..…..….…. 2
a. Major Producing Countries………………..………………….………... 2
b. Productivity and Competitiveness…………………….…..…………….. 3
2 . Domestic Production……………………………………………….………... 4
a. Major Producing Provinces………………..……………….…..…...….. 4
b. Volume, Area planted and Productivity…………………….…..…...….. 5
c. Value of Production………………………………...…….…..…………. 5
B. Supply and demand……………………………………………….…..…..…….. 7
1 . Supply ……………………………………………..………….…..….….…... 7
2 . Demand………………………….…………………………………...…....…. 8
a. World Demand(Exports) ………………………….……...……...…..…. 8
b. Domestic Demand………………………….……..………….…..…..…. 9
C. Value-Chain System………………………….……………………..….....…..… 12
1 . Input Supply Subsystem ………………………….…………………………..
12
a. Seeds and Seedlings, etc………………….…………………………….. 12
b. Fertilizer and Pesticide………………….……………………………... 12
c. Agricultural Machinery………………….……………………………... 13
d. Labor………………….……………………………………………….. 13
2 . Farm Production Subsystem……………………….………………………… 13
3 . Postharvest Subsystem.……………………………..…….…..……………… 14
4 . Processing Subsystem……….…………………………….…..…...………… 14
5 . Marketing Subsystem…….…………………………….…..…...……………. 14
D. Prices……………………………………………………………………..…...… 18
1 . World Prices………………………………………………………......…..…. 18
2 . Domestic Prices…………………………………………………....….…..…. 18
3 . Price Formation / Differentiation…………………………………….…..…. 20
E. SWOT Analysis………………………………………………………………..… 22
F. Problem Tree Analysis………………………………………………………….. 23
III. SUMMARY, ISSUES AND
RECOMMENDATIONS…………………………………………………....……....…. 24
IV. REFERENCES…………….…..….………………………………………………..…... 26
V. ANNEXES………………………….…………………………………………………… 27
iii
LIST OF FIGURES
Figure Page
1 Percentage Share of Papaya to Total Value of Agricultural Crops and Gross Value
Output, 1998-2008.……………………………….........................................................
2
2
Papaya Top Producing Provinces (MT), 2008……………………………...................
4
3
Production (MT), Area (Ha) and Yield (MT/Ha) of Papaya,
Philippines 1998 – 2008………………………………….............................................
6
4
Value of Production (in Million Pesos) of Papaya,
at Constant prices, 1998-2008.……………………………………………..................
7
5
Philippine Share of Papaya to World Export Quantity (MT),
1998-2007…………...……............................................................................................
9
6
Philippine Share of Papaya to World Export Value (in ‘000 $),
1998-2007…………………………………………………………………...................
10
7
Philippines’ Top Export Markets of Fresh Papaya (MT),
1998-2008………………………………………………...............................................
10
8
Philippines’ Top Export Markets of Dried Papaya (MT),
1998-2006……………………………………………………………………………...
11
9
Papaya Agribusiness System………………………………………………….…….....
12
10
On-farm Cost of Papaya Production (in Percent),
1998-2008………………………..……………………………………………..……...
13
11
Geographic Flow and Marketing Channels of Papaya in
Misamis Oriental, 2001………………………………………………...……………..
15
12
Geographic Flow and Marketing Channels of Papaya
in Cavite, 2001………………………………………………………………....……...
16
13
Geographic Flow and Marketing Channels of Papaya
in Aklan, 2001………………………………...…………………………….....……...
17
14
Prices of Hawaiian Papaya, 1998-2008…………………………………….......……..
19
15
Farmgate Price of Other varieties of Papaya, 1998-2008……………………....…….
19
16
Price Ratios of Hawaiian Papaya (in Percent), 1998-2008………………….....……..
20
17
Problem Tree Analysis…………………..……………………………………………..
23
iv
LIST OF TABLES
Table Page
1 World Production of Papaya (MT) by Top Producing
Countries, 1998-2007………………………………………………………..
3
2
Yield of Papaya by Top Producing Countries (Hg/Ha), 2007………………
3
3
Volume of Papaya Production (MT), by Top Producing Provinces,
1998-2008…………………………………………………………………..
5
4
Supply and Utilization of Papaya (in MT), 1998-2008……………………...
8
5
Producers’ Price of Papaya of Top Producing Countries (US$/MT),
1998-2006……………………………………………………………………
18
6
Issues/Gaps and Recommendations for Input Supply and Farm Production
Subsystem of Papaya Industry……………………………………………….
24
7
Issues/Gaps and Recommendations for Postharvest, Processing Subsystem,
Marketing, and Support Subsystem of Papaya Indusry……………………..
25
v
LIST OF ANNEXES
Table Page
1 Value of Production in Agriculture by Type of Valuation,
Sub-sector, 1998 – 2008……………………………………………………..
27
2
Updated average production costs and returns of papaya
(in pesos per hectare), Philippines 1998-2008……………………………...
28
1
I. OVERVIEW
A. Background
Papaya (Carica papaya) is one of the very popular tropical fruits belonging to the
cactus group of plants. It is a large tree-like plant, the single stem growing from 5 to 10
meters tall, with spirally arranged leaves confined to the top of the trunk. The lower trunk is
conspicuously scarred where leaves and fruit were borne. The leaves are large, 50-70 cm
diameter, deeply palmately lobed with seven lobes. The fruit is cylindrically long, pear
shaped or round, it is orange-to-orange-red, sweet and juicy when ripe (BPI, 2009).
Grown almost throughout the country, papaya serves as a backyard and a plantation
crop. It is also grown under the multiple cropping system, usually with coffee, coconut, and
pineapple. Several varieties of papaya are grown in the country. These are Solo, Cavite
special, Legaspi special, Morado, and the Sinta hybrid. The varieties of papaya are
distinguished through their contrasting characteristics such as short (dwarf) versus tall stature,
green versus purple petiole, yellow versus red flesh, and small versus large
fruits (PCARRD, 1984) .
Papaya has wide variety of uses. Ripe papaya is eaten fresh as breakfast and dessert
fruit. It is made into fruit salad or juice and can be processed as jelly, marmalade, candies,
and crystallized fruits. Green fruits are pickled or cooked as vegetable. Flowers and young
leaves may also be eaten. Papain extracted from green mature fruits has industrial uses (for
beer industry, as meat tenderizer, for certain drug preparations, silk degumming, and
softening wool). Seeds may be used to expel intestinal worms and to induce
abortion (Rivera, 2005).
B. Contribution to the Economy
Generally, papaya‟s economic contribution is gradually increasing. Its shares to the
total value of agricultural crop and agricultural output are increasing at an average of 2
percent (Figure 1). This shows the papaya‟s potential of becoming a major fruit like mango,
banana, and pineapple.
2
Figure 1. Percentage share of papaya to total value of agricultural crops and agricultural
output, 1998-2008.
(Source: BAS, 2009)
II. SITUATIONAL ANALYSIS
A. Production
1. World Production
a) Major producing countries. In 2007, the Philippines is the 10th
major
producer of papaya in the world, contributing 1.78 percent (164,234 MT) to the world‟s total
production. While the country is 10th
producer of papaya in 2007, historical data revealed that
the country‟s average production is much higher than Guatemala during 1998-2006 (Table 1).
An impressive increase in Guatemala‟s production in 2007 has put the country one notch
behind it.
3
Table 1. World production of papaya (MT) by top producing countries, 1998-2007.
(Source: FAO, 2009)
b) Productivity and competitiveness. The country‟s yield has shown a strong
edge among the other top producing countries such as Nigeria, India, and the Democratic
Republic of Congo. In 2007, the Philippines is seventh among the major producing countries
with the highest yield or average land productivity. However, it should be noted that the
country‟s productivity could be further improved.
According to the Philippine Agriculture 2020 report (NAST, 2008), papaya is also price
competitive under export trade scenario because export parity price ratio is greater than 1. It is
also cost competitive because resource cost ratio for export is less than 1.
Table 2. Yield of papaya by top producing countries (Hg/Ha), 2007.
Country 2007
1. Indonesia 887,891
2. Guatemala 527,228
3. Brazil 520,871
4. Mexico 438,950
5. Colombia 378,463
6. Ethiopia 208,000
7. Philippines 179,982
8. Congo, Democratic Republic of 169,107
9. India 87,500
10. Nigeria 82,702
(Source: FAO, 2009)
4
2. Domestic Production
a) Major Producing Provinces. Papaya Hawaiian or solo papaya is the major
variety produced in the country. In 2008, 2 percent (48,792 MT) of papaya‟s national
production is produced in South Cotabato, the major producer in the country. This is 7
percent higher than the production of the next major producer, Misamis
Oriental (35,727 MT). In the same year, other major producing provinces such as Davao del
Sur, North Cotabato, and Quezon has contributed 7.6 percent, 4.5 percent, and 3.2 percent,
respectively, to the country‟s papaya production.
Figure 2. Papaya top producing provinces (MT), 2008.
(Source: DA-BAS, 2009)
It is interesting to note that South Cotabato‟s production has shown a remarkable
growth from 1998 to 2008. In the previous years, its production was relatively lower that of
Misamis Oriental (1998-2005). However, from 2005 to 2008, South Cotabato‟s production
has shown tremendous growth that toppled the latter province from being the number one
producer of papaya in the country.
While North Cotabato has recorded an increasing production trend (1998-2008),
Quezon province has experienced a sudden decline in its production (2006-2008). On the
other hand, the years 2004-2006 had shown a gradual cut in Davao del Sur‟s production.
However, the province was able to bounce back in 2007 and 2008.
5
Table 3. Volume of papaya production (MT), by top producing provinces, 1998-2008.
(Source: BAS, 2009)
b) Volume, area planted and productivity. The gradual increase in area planted
to papaya is accompanied by a significant growth in its production and yield (Figure 3). A
closer look on the average growth rate of production and yield (6 percent and 4 percent,
respectively) vis-à-vis the average growth rate of area (2 percent), exhibits a greater value
and opportunity to improve the sector‟s level of productivity and competitiveness, especially
through area expansion.
c) Value of production. As discussed earlier, papaya industry shows very
promising potentials. Increasing area, production volume, and yield has also equated to an
upward behavior of production value. From 1998 to 2008, it is increasing at an average of 6
percent.
6
Figure 3. Production (MT), area (Ha) and yield (MT/Ha) of papaya, Philippines 1998 – 2008.
(Source: DA-BAS, 2009)
7
Figure 4. Value of production (in Million Pesos) of papaya, at constant prices, 1998-2008.
(Source: BAS, 2009)
B. Supply and Demand
1. Supply
The total production of papaya makes up the gross supply, which is available for
exports, feeds and waste, and food consumption. As noted earlier, production is increasing at
an average of 6 percent (Table 4). It is also noticeable that the country has no imports of
papaya from 1998 to 2008. This implies that total production is more than enough to meet the
domestic demand. In fact, the country is also supplying fresh papaya to other countries.
8
Table 4. Supply and utilization of papaya (in MT), 1998-2008.
Note: SU- Supply Utilization UT – Utilization
(Source: BAS, 2009)
1. Demand
a) World demand (Exports). From 1998 to 2008, an average of 2 percent of
gross supply is exported. While papaya production is consistently increasing (except in
2002), papaya export has shown a fluctuating trend. Nonetheless, export sector of fresh
papaya has still posted an average growth of 17 percent (Table 4).
The country‟s shares in world export quantity and value showed an impressive trend
during 1998-2001. However, in 2002, the Philippines shares to world export quantity and
value was cut by 0.07 percent and 1 percent, respectively (Figure 5 and 6). Shares in 2003
decreased dramatically when papaya ringspot (PRS) hit Mindanao region, where major
producers are highly concentrated. The PRS was observed in South Cotabato and some parts
of General Santos City, Davao del Sur, and Davao del Norte. (Herradura, 2003). However,
the country was able to augment its shares in 2004-2007 at an average of 2 percent (export
quantity) and 3 percent (export value). This might have been the results of the efforts in
coming up with management strategies before the disease completely spoiled the papaya
industry in the country.
Japan is the largest export market of the country‟s fresh papaya. In fact, in 2008, 72
percent (2,060 MT) of the total exported fresh papaya is shipped to Japan. In addition, Japan
is the only country where the Philippines has uninterrupted exports from 1998 to 2007. In the
same period, the country is also exporting fresh papaya to New Zealand (with interrupted
supply in 1998 and 2002), South Korea (1999-2007), Singapore (2003-2007), and Taiwan
(2003-2007).
9
Meanwhile, data of the export market for dried papaya in 2007 and 2008 is not
available. Figure 8 shows the top export market for dried papaya from 1998 to 2006. In 2006,
53 percent of the total exported dried papaya was shipped to Hongkong. It is also notable
that the country has uninterrupted exports of dried papaya in Australia during 1998-2006.
b) Domestic demand. As mentioned earlier, total production is more than
enough to meet the domestic demand. Based on the supply and utilization account (Table 4),
an average of 92 percent of the gross supply (1998-2008) is available for food consumption.
In addition, per capita consumption is increasing at an average of 4 percent. This implies an
increasing demand for papaya due to the shift of people to a more modern yet healthy
lifestyle.
Figure 5. Philippine share of papaya to world export quantity (MT), 1998-2007.
(Source: FAO, 2009)
10
Figure 6. Philippine share of papaya to world export value (in „000 $), 1998-2007.
(Source: FAO, 2009)
Figure 7. Philippines‟ top export markets of fresh papaya (MT), 1998-2008.
(Source: BAS, 2009)
11
Figure 8. Philippines‟ top export markets of dried papaya (MT), 1998-2006.
(Source: DA-BAS, 2009)
12
C. Value-Chain System
The papaya industry involves many players. A brief overview of its value chain
system is shown in Figure 9.
Figure 9. Papaya agribusiness system.
(Source: Papaya Strategic Action Plan, March 2002)
1. Input Supply Subsystem
a) Seeds and Seedlings, etc. Small-scale growers usually produce their own
seeds or buy planting materials from local nurseries. Some companies enter into contract-
growing arrangements with selected individual producers using their preferred cultivars. For
instance, Del Monte Philippines has contract-growing arrangements with papaya farmers in
Misamis Oriental and Bukidnon. They also produce their own seed stocks and supply
contract growers with planting materials. In some cases, they supply all the required inputs
while producers complement with land, labor, and management.
b) Fertilizer and Pesticide. From 1998 to 2008, an average of 22 percent of
all production costs is accounted to inorganic fertilizer, one of the major cost drivers. Note
that its cost of share is also increasing at an average of 6 percent. The soaring prices of
inorganic fertilizer have greatly influence such increase. On the other hand, pesticide has an
average share of 6 percent of all costs.
13
c) Agricultural Machinery. Machine, tools, and equipment rentals have
minimal share (an average of 1 percent) to all production costs. Further, from 1998 to 2008,
its share is gradually decreasing at an average of 5 percent (Annex 2).
d) Labor. Hired labor and operator/family labor are also major cost drivers.
Their average shares to the production cost are 24 percent and 6 percent, respectively. Even
so, their shares are also gradually cut at an average of 0.6 (hired labor) and 0.2
(operator/family labor) percentages (Figure 10).
2. Farm Production Subsystem
The Philippine papaya production, except for the export variety Solo, is widely
dispersed and mostly run on a backyard scale. The cultural requirements include land
preparation, planting, water management, weed control, fertilization, and pest and disease
management (PCARRD, 1984).
Figure 10. On-farm cost of papaya production (in percentage), 1998-2008.
(Source: BAS, 2009)
14
3. Postharvest Subsystem
Papaya generally starts to flower after 5 months from seedling and the first harvest is
obtained 4 to 5 months later. The productive lifespan of papaya gradually ends on the 3rd
or
4th
year. As the tree matures, production also slackens. The yield of well-managed papaya
plantation is 35 to 40 tons per hectare (BPI, __).
a) Packing. A good method of packing is to place the fruits in single layer in
a rectangular wood container lined with dried banana leaves or shredded newsprint to protect
the fruit against the normal hazards of transport and handling.
b) Storing. Ripe papayas may be stored at 8.3C and partially ripe ones at
11.9C. At these temperatures, the fruit can be kept for 3 weeks. To avoid chilling injury,
which is manifested by impaired ripening, do not store less mature fruit below 7.1C.
4. Processing Subsystem. The major forms of processed papaya in the
Philippines are dried papaya and canned tropical mixed fruit cocktail containing papaya
cubes, pineapple, nata de coco and palm, among others. There are three major companies
engaged in canned fruit cocktails- Dole Philippines Inc., Del Monte Philippines, Inc., and
T‟Boli Agro Industrial, Inc. (TADI). These companies enter in contract growing or marketing
arrangements of papaya with selected producers using preferred cultivars of the companies.
Dried papaya is also processed and marketed by large and medium size companies including
T‟Boli Agro and Orient Food Inc., among others.
When exporting to Japan, South Korea, and New Zealand markets, companies follow
established quarantine protocol for fresh papaya, which requires a phytosanitary certificate
and a vapor heat treatment (VHT). In the Philippines, one of the VHT plants is located in
Panabo, Davao del Norte. It is being operated by Dole Philippines, Inc. to facilitate fresh
papaya and mango exports. For other markets such as Hongkong and the Middle East,
exporters accomplish phytosanitary certificate only (PCARRD, 2004).
5. Marketing Subsystem. Markets of papaya are domestic, export and processing
plants. There are fruit traders and consolidators who buy from farmers and transport them to
the cities for retailers. Some big fruit processors and exporters enter into growers marketing
contract. Other growers have their own market outlets or suki.
While papaya has a big export demand, only a few exporting companies have access
to these markets because of the stringent requirements and big capital outlay. Government
agencies like D.A. and DTI with their commercial and agricultural attaches assigned abroad
can greatly help develop export market for papaya and other fruit commodities produced in
the Philippines.
15
Figure 11, 12 and 13 show the geographical flow and market channels for papaya in
Misamis Oriental, Cavite, and Aklan.
Supplies of papaya in Misamis Oriental came mainly from the municipality of
Tagoloan and barangays Talusan, Poblacion, Lubia, Claveria, Linggangao and San Isidro of
Balingasag. Major outlets were Balingasag, Agora and Carmen markets in Cagayan de Oro
City. Papayas were sold to Bugo and Tagoloan in Cagayan de Oro City. Other outlets
included Iloilo, Cebu, Bacolod and Metro Manila cities
The outlets of papaya farmers in Misamis Oriental were interregional assembler-large
distributors, processors and other farmers. The fruits were distributed further by large
distributors to processors, buyers outside the province and to retailers.
Figure 11. Geographic flow and marketing channels of papaya in Misamis Oriental, 2001.
(Source: BAS, June 2003)
The municipalities of Amadeo, Silang, Alfonso, Mendez, Indang and Tagaytay City
were the sources of papaya in Cavite. There were no supplies of papaya coming from outside
the province. From the farms, papayas were brought mostly to the markets located in the
supply municipalities. Papayas from Cavite were distributed to demand areas in Manila,
Quezon City, Laguna, Pampanga, Bulacan and Baguio City.
16
The farmers sold papaya to the agent and/or buyers outside the province (BOP) at the
supply area and to the assembler-distributors in the trading centers. The agent distributed the
collected/procured fruits to assembler-distributors, institutional buyers and BOP. Traders‟
outlets were processors, BOP and co-traders. Retailers sourced their products from small
distributors.
Figure 12. Geographic flow and marketing channels of papaya in Cavite, 2001.
(Source: BAS, June 2003)
Papayas in Aklan were sourced from Capiz, Banga, Malinao and Numancia. Sources
outside the province were Capiz, Romblon and Iloilo. There were also shipments of papaya
from Manila for the demand of the famous beaches in the province. The bulk of supply went
to the markets within the identified source municipalities. From the market, papayas were
distributed to consumers from the same municipality while others were sold to other towns
particularly in Kalibo and Ibajay, Aklan.
The flow is relatively simple wherein the traders procured papaya from the farmers.
The retailers sourced their fruits from traders or from suppliers outside Aklan. They
distributed the same directly to consumers.
17
Figure 13. Geographic flow and marketing channels of papaya in Aklan, 2001.
(Source: BAS, June 2003)
18
D. Prices
1. World Prices
The Philippines is one of the top producing countries with low producer price. From
1998-2006, the average producer‟s price was US$132.72. This is lower than the top 3
producing countries such as Brazil, Mexico and Nigeria. If the production will continuously
increase, the lower producer price could be one of the advantages of the country to expand its
export market.
Table 5. Producers‟ price of papaya of top producing countries (US$/MT), 1998-2006.
(Source: FAO, 2009)
2. Domestic Prices
Figure 14 shows that the retail price and wholesale price of Papaya Hawaiian is
increasing at the average rate of 2 percent and 1 percent, respectively. Papaya Hawaiian‟s
farmgate price, however, is decreasing at an average rate of 7 percent. Other varieties of
papaya such as native, sinta and solo exhibit a positive average growth on their farmgate
prices; 2.14 percent, 17.23 percent, 2.6 percent, respectively (Figure 15).
19
Figure 14. Prices of hawaiian papaya, 1998-2008.
(Source: BAS, 2009)
Figure 15. Farmgate Price of other varieties of papaya, 1998-2008.
(Source: BAS, 2009)
20
As depicted in Papaya Hawaiian price ratios (Figure 16), wholesalers have greater
advantage over the farmers and retailers.
Figure 16. Price ratios of hawaiian papaya (in percent), 1998-2008.
(Source: BAS, 2009)
3. Price Formation/Differentiation
Below is a brief description of papaya‟s price formation from the supply area to the
wholesale and retail markets (BAS, ___).
Supply Area
Prices for ripe, overripe, and three-to-five-day-old papayas are generally lower than
green-mature and half-ripe form because they have shorter storage life and more susceptible
to transport damage.
Metro Manila traders (assemblers) usually go to provinces to source their commodity.
As such, wholesale buying price is formed in the trading center or in the farm, where these
traders (assemblers) do the transaction.
Prior to visiting the supply area or the provinces, it is customary for the traders to
canvass the prevailing price in the wholesale market where they are based (i.e. Divisoria,
Balintawak, Pasig, etc.). Generally, the quoted wholesale price is estimated based on the
21
prevailing price plus mark-up, and all other costs such as transportation, food, etc. Depending
on the supply levels of the producing provinces, where trading occurs, the quoted price may
vary. On the day of the trader‟s procurement of stocks, this price will be the benchmark of the
buying prices in the provincial trading center or farm.
Note however, that wholesale buying price of papaya may tend to lower due to the
availability of substitute of competitor fruits. Metro Manila traders, who also go to the trading
center or production area, sell some of these substitutes.
Wholesale Market
Provincial assembler. Price of papaya in wholesale market tends to have minimal
variation. In fact, medium distributors, medium to small distributors, and traders from
provinces, who are sourcing their commodity from the same trading center or production
area, tend to have similar wholesale selling prices. In addition, traders who are based in the
same market may have procured papaya stocks together since they are relatives of friends
(kumpadre).
Although sizes of sorted papaya vary, traders who are transacting with their regular
buyers (suki) may tend to give discounts other than the prevailing price.
Retail Market
Retail price covers the transport cost and overhead expense. It is also dependent on
the buying price. Most often than not, viajeros offered lower selling price that can be taken
advantage by retailers who are buying in bulk. To avoid spoilage losses and to dispose the
old stocks, retailers quote lower price for overripe papaya.
22
E. SWOT Analysis
SWOT identified for the papaya industry is as follows (NAFC-DA, 2002):
Strengths
• Suitable agro-climatic conditions for production
• Fast growing crop and year round production
• Versatile crop with varied uses
• Advantageous geographical position of the Philippines relative to export markets like
Japan, Korea, Taiwan, Hong Kong and China. The transit time for fresh papaya to reach
these markets is shirt, hence, facilitating its distribution at the shorttes possible tinme in
its fresh state.
Weaknesses
• Diseases and pest, especially the ringspot virus (RSVP) that limit the productivity of
papaya plants
• Poor adoption of technologies that would otherwise enhance the productivity of plants
and quality of fruits
• Inefficiency of distribution system brought about by poor infrastructure, inefficient
information system and lack of postharvest facilties
Opportunities
• High demand for fresh and processed products in domestic and foreign markets
• Expanding product lines (processed nutriceuticals, papain, functional food)
• Biotechnology tools available to improve quality and shelf-life of papaya
• Establishment of Phytosanitary procedures to meet requirements of major importing
countries like Japan, South Korea and New Zealand
Threats
• Fruit importation and substitution which limits the local demand for papaya
• Sanitary and Phytosanitary barriers to trade
• Typhoons
23
F. Problem Tree Analysis
Figure 17. Problem tree analysis of papaya industry.
24
III. SUMMARY, ISSUES AND RECOMMENDATIONS
The industry trends have shown that papaya production is increasing both in quantity
(6%) and area (2%) from 1998 to 2008. It is interesting to note that a gradual increase in the
area is accompanied by a significant growth in yield (4%). Aside from the strong edge of the
industry‟s productivity, it has also been one of the top producing countries with a low
producer price. This gives a greater opportunity for the industry to expand its potential
markets abroad.
Summary of constraints and required actions for each subsystem of papaya industry
are presented in the following tables.
Table 6. Issues/gaps and recommendations for input supply and farm production subsystem
of papaya industry.
Input Supply
Issues/Gaps Recommendation
Certified Seeds and seedlings are not readily
accessible to growers due to limited availability and
high price
Prospective growers do not have adequate
knowledge in raising seedlings
Intensify seed production. Train
farmers on how to do it properly
Conduct training on seedling
production
LGU to operate model nurseries to
meet seedling requirement of
every municipality
Dissemination of recommended technologies is not
effective
Limited adoption of production technologies due to
high cost of inputs and lack of financial resources
Establishment and operation of
model papaya orchards in strategic
areas
Conduct farmers training on
improved production technologies
Farm Production
Existing varieties are susceptible to Papaya Ringspot
Virus
“Sinta” and Taiwan-bred varieties are moderately
tolerant to PRSV but grown primarily for domestic
market and are not allowed in PRSV-free provinces
in Mindanao and Visayas
Existence of pests and diseases other than PRSV are
also threat to papaya industry
Research and development on
varietal improvement
Breeding for PRSV-resistant
variety
Strict quarantine regulation to
prevent spread of PRSV. AN
intensified information campaign
about the threat of disease
R, D and extension program aimed
at developing an effective and
efficient Integrated Pest
Management (IPM) Strategies
Lack of information on optimum fertilizer and water
requirement
Efficient irrigation method has not been thoroughly
evaluated
R, D and extension Program on the
development of an effective and
efficient fertilization and irrigation
technologies of papaya
(Source: NAFC-DA, 2002)
25
Table 7. Issues/gaps and recommendations for post harvest, processing subsystem of papaya
industry, marketing, and support subsystem.
Post harvest
Issues/Gaps Recommendation
Poor access and adoption of improved, advanced
packages of postharvest technologies
Low awareness on proper postharvest handling
Conduct massive training on
postharvest handling technologies
Establish post harvest clinic to
address postharvest-related
concerns in the area
Conduct capability building
Processing
Poor quality of planting material due to anthracnose
and stem end rot infestation causing reduced
recovery rate
High cost of sugar compared to other countries
High cost of fuel/electricity incurred during
syruping
High cost of packaging materials
Lack of awareness of importing country standards
Limited access to product testing and quality/safety
system certification services
Conduct extensive IPM training
Tariff reduction to levels
comparable with other Asian
countries
Compilation/Updating of
importing country standards and
dissemination of these information
to processors
Supplement FDC testing services
available only in Manila. Upgrade
DOST regional testing
laboratories to conform with the
Codex guidelines for the
assessment of the competencies of
food testing laboratories
Marketing
Issues/Gaps Recommendation
High percentage of unmarketable fruits due to
bruises, misshapen, unripe etc
Development and implementation
good agricultural practice (GAP)
plan to reduce percentage of
misshapen, extremely small and
insect-infested fruits
High air and sea shipment cost Government intervention to reduce
cost of distribtuion
Support
Lack of fincancing Provision of more accessible low
–interest production loan
(Source: NAFC-DA, 2002)
26
IV. REFERENCES
Bureau of Agricultural Statistics, Department of Agriculture (1992). Marketing and
Information Needs Assessment for Davao City. Technical Report. Bureau of Agricultural Statistics, Department of Agriculture (2003). Marketing Costs
Structure for Papaya. Series No. 4. Bureau of Agricultural Statistics, Department of Agriculture ( ). Bureau of Plant Industry, Department of Agriculture. Production Guide on Papaya.
Retrieved on August 2009 from www.bpi.da.gov.ph. Ginintuang Masaganang Ani-High Value Commercial Crops (GMA-HVCC), Department of
Agriculture. A Guide to Papaya growing and Marketing. Retrieved on September 2009 from www.hvcc.da,gov.ph.
Herradura, L.E. Management of papaya ringspot virus (PRSV) in Southern Mindanao. Bago-
Oshiro, Davao City: Department of Agriculture-Bureau of Plant Industry/Davao
NationalCrops R&D Center, 2003. – (PCARRD-funded; completed). National Agriculture and Fishery Council, Department of Agriculture (2002). Strategic
Action Planning: Other Fruits – Papaya. National Academy of Science and Technology, Department of Science and Technology. (2008).
Philippine Agriculture 2020: A Strategy for Poverty Reduction, Food Security,
Competitiveness, Sustainability, Justice and Peace. Main report. January 2008.
Philippine Council for Agriculture, Forestry and Natural Resources Research and
Development. (1984). The Philippines Recommends for Papaya. PCARRD Technical
Bulletin Series 27-A.
Philippine Council for Agriculture, Forestry and Natural Resources Research and
Development. (2004). R & D Status and Directions (2000 and Beyond): Papaya.
Food and Agriculture Organization of the United Nations (2009). Retrieved on October 2009 from
www.faostat.fao.org.
27
V. ANNEXES
Annex 1. Value of Production in Agriculture by Type of Valuation, Sub-sector, 1998 – 2008.
Value of production 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Average
Papaya 144 151 163 171 171 175 179 196 211 220 245 184
Agricultural crops 110,733 129,268 120,249 124,047 126,035 129,250 136,181 137,305 143,699 151,560 157,543 133,261
Total agricultural ouput 224,172 245,874 242,318 253,131 262,788 272,011 286,245 292,581 304,000 318,068 330,396 275,599
28
Annex 2. Updated average production costs and returns of papaya (in pesos per hectare), Philippines 1998-2008.
ITEM 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007R 2008P
CASH COST 41,846 50,948 53,406 57,295 57,951 64,016 73,797 84,335 86,124 89,416 103,537
Fertilizer
Organic 82 74 80 95 94 117 158 196 195 207 371
Inorganic 9,593 11,144 11,995 14,286 14,090 17,609 23,827 29,637 29,440 31,240 39,701
Foliar 1,521 1,365 1,468 1,748 1,725 2,155 2,917 3,627 3,604 3,824 6,862
Soil ameliorants 7 6 6 7 7 9 12 15 15 16 29
Pesticides 4,329 4,837 4,981 5,187 5,261 5,272 5,292 5,280 5,035 4,790 4,615
Solid 2,245 2,508 2,582 2,689 2,727 2,733 2,743 2,737 2,610 2,483 2,392
Liquid 2,084 2,329 2,399 2,498 2,534 2,539 2,549 2,543 2,425 2,307 2,223
Other material inputs 3 3 3 6 6 7 9 11 11 12 22
Hired labor 12,179 19,542 19,762 19,770 20,379 21,400 22,316 23,614 24,609 25,578 25,895
Land tax 261 264 267 270 273 276 279 282 285 288 291
Rentals:
Land 3,208 2,305 2,217 2,183 1,978 2,091 2,317 2,737 2,274 1,956 1,688
Machine, tools, equipment 679 729 736 736 760 787 821 869 906 942 954
Fuel and oil 3,081 3,347 3,910 4,297 4,301 4,731 5,360 6,302 6,857 7,083 8,289
Transport of inputs 2,105 2,247 2,580 2,879 2,908 3,009 3,391 4,013 4,523 4,546 5,031
Irrigation fee 78 56 54 53 48 51 57 67 56 48 41
Interest on crop loan 2,128 2,341 2,575 2,833 3,116 3,428 3,771 4,148 4,563 5,019 5,521
Food expenses 912 953 967 1,012 1,033 1,056 1,122 1,195 1,262 1,303 1,480
Repairs 731 745 774 819 831 837 900 968 1,020 1,053 1,138
Landlord's share 37 27 26 26 24 25 28 33 27 23 20
Wages for overseer 69 74 75 75 77 80 83 88 92 96 97
Electric bill 208 216 230 265 270 279 293 344 383 398 403
Others (straw twine, sacks, bamboo 635 673 700 748 770 797 844 909 967 994 1,089
poles, nylon strings)
29
ITEM 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007R 2008P
NON-CASH COST 199 167 165 165 152 160 176 205 183 167 155
Hired labor (paid in kind) 21 34 34 34 35 36 38 40 42 44 45
Landlord's share 136 98 94 93 84 89 99 117 97 83 72
Harvester's share 42 35 37 38 33 35 39 48 44 40 38
IMPUTED COST 13,641 16,922 17,523 18,392 18,978 20,676 22,955 25,522 26,250 27,508 30,154
Operator/family labor 3,177 5,274 5,324 5,326 5,499 5,775 6,022 6,373 6,641 6,903 6,988
Depreciation 3,673 4,040 4,444 4,888 5,377 5,915 6,507 7,158 7,874 8,661 9,527
Interest on operating capital 4,434 5,915 6,127 6,576 6,650 7,451 8,725 9,981 10,065 10,507 12,399
Rental value of owned land 2,357 1,693 1,628 1,602 1,452 1,535 1,701 2,010 1,670 1,437 1,240
ALL COSTS 55,686 68,037 71,094 75,852 77,081 84,852 96,928 110,062 112,557 117,091 133,846
GROSS RETURNS 97,481 82,265 90,262 93,769 81,614 87,267 97,921 120,133 109,036 99,709 95,289
RETURNS ABOVE CASH COSTS 55,635 31,317 36,856 36,474 23,663 23,251 24,124 35,798 22,912 10,293 (8,248)
RETURNS ABOVE CASH &
NON--CASH COSTS 55,436 31,150 36,691 36,309 23,511 23,091 23,948 35,593 22,729 10,126 (8,403)
NET RETURNS 41,795 14,228 19,168 17,917 4,533 2,415 993 10,071 (3,521) (17,382) (38,557)
NET PROFIT- COST RATIO 0.75 0.21 0.27 0.24 0.06 0.03 0.01 0.09 (0.03) (0.15) (0.29)
Cost per kilogram (P) 5.19 5.40 4.95 5.00 5.29 5.76 6.49 7.10 6.65 6.51 6.71
Yield per hectare(kg) 10,724 12,598 14,373 15,173 14,574 14,741 14,927 15,501 16,931 17,998 19,935
Farmgate price (peso/kg) 9.09 6.53 6.28 6.18 5.60 5.92 6.56 7.75 6.44 5.54 4.78
R-revised Estimates
P-Preliminary Estimates
(Source: BAS, 2009)