terms of use marketing costs structure: garlic (native) is a publication of the bureau of...
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Department of Agriculture BUREAU OF AGRICULTURAL STATISTICS
ISSN-2012-0389
DECEMBER 2007
TERMS OF USE Marketing Costs Structure: Garlic (Native) is a publication of the Bureau of Agricultural Statistics (BAS), Department of Agriculture. The BAS reserves exclusive right to reproduce this publication in whatever form. Should any portion of this publication be included in a report/article, the title of the publication and the BAS should be cited as the source of data. The BAS will not be responsible for any information derived from the processing of data contained in this publication.
ISSN-2012-0389
Please direct technical inquiries to the Office of the Director Bureau of Agricultural Statistics Ben-Lor Building, 1184 Quezon Avenue Quezon City 1100 Philippines.
Email: [email protected] Website: www.bas.gov.ph
MARKETING COSTS STRUCTURE:
G A R L I C
FOREWORD
This report presents the result of the study on Marketing Costs Structure for Garlic. This serves to update the previous study conducted by the Bureau of Agricultural Statistics in 2002. The 2007 study covered the provinces of Ilocos Norte, Ilocos Sur and Nueva Ecija. It was aimed at providing information on the cost of marketing garlic.
The results of the study can hopefully address the need for information on the marketing flow of native garlic in the country, specifically, in the leading supply and demand areas. As this also contains information on marketing functions/services and the corresponding costs incurred by various marketing participants in moving garlic from the farmers to the consumers, this could serve as guide for native garlic farmers and policy makers in increasing the efficiency of native garlic marketing system.
The BAS continues to find ways of improving the delivery of its statistical
outputs. Thus, the readers are encouraged to share their views, comments and suggestions regarding this report.
ROMEO S. RECIDE Director
Quezon City, Philippines
December 2007
56 i
Table 19. Problems on marketing commonly encountered by respondents, 2006
Problem Number of respondents Percent
A. FARMER 59 100
1. Strong competition with imported variety 13 22
2. Few buyers and usually they dictate bying price 9 15
3. Commodity were sold at lower price due to financial needs 8 14
4. Buyers always ask for additional bulbs free to what they 4 7
have bought
5. No response 25 42
B. TRADER 66 100
1. Few buyers particularly at retail makets where stalls are 7 11
located with few passers-by
2. High shipping cost 7 11
3. Many dues/fees imposed by the municipal/city government 7 11
4. Weight lose of commodity 4 5
5. No response
41
62
TOTAL
125
MARKETING COSTS STRUCTURE:
G A R L I C
TABLE OF CONTENTS
FOREWORD i Highlights 1 I. Introduction 2
II. Objectives 2 III. Methodology 2
Research site 2 Sample selection 3
IV. Discussion of Results 3 A. Number and Profile of Respondents 3
1. Number of Respondents 3 2. Profile of Respondents 4
2.1 Tenurial Status 4 2.2 Business Ownership 4 2.3 Source of Capital 5 2.4 Years in Farming 5 2.5 Years in Trading 6
B. Geographical Flow 6 C. Marketing Channels 8 D. Marketing Practices and Functions 10
1. Procurement 10 2. Distribution 11
E. Marketing Costs and Margins 12 a. Labor Cost 12 b. Transportation Cost 13 c. Cost of Supplies and Materials 14 d. Other Operating Cost 15
e. Imputed Cost 15 f. Average Marketing Cost 16
F. Marketing Margins 19 G. Problems Encountered by Respondents 21
V. Definition of Terms 22 VI. Annexes 25
54 iii
Table 17j. GARLIC (Native): Imputed costs of marketing participants, by item, Cagayan de Oro City, 2006
Table 17k. GARLIC (Native): Imputed costs of marketing participants, by item, Davao City, 2006
a/ less than .001
Item RETAILER
(peso per kilogram)
DEPRECIATION Supplies & Equipment
Weighing scale 0.022 Calculator 0.095
UNPAID LABOR 2.547
TOTAL
2.664
Item IRA-LD BA-SD RETAILER
(peso per kilogram)
DEPRECIATION Supplies & Equipment
Weighing scale a/ a/ a/ Calculator a/ a/ a/ Cellphone 0.001 Push cart 0.002 Blower 0.001 Table a/ Money detector 0.001
Transportation Equipment
Truck 0.060 Elf 0.010
UNPAID LABOR 0.150 2.400 2.250
TOTAL
0.224 2.441 2.250
MARKETING COSTS STRUCTURE:
G A R L I C
STATISTICAL TABLES Table No. Page
1. GARLIC: Labor costs by marketing activity/practice, selected supply provinces, Philippines, 2006 12 2. GARLIC: Labor costs by marketing activity/ practice, selected demand areas, Philippines, 2006 13 3. GARLIC: Transportation costs incurred in marketing, selected supply provinces, Philippines, 2006 13 4. GARLIC: Transportation costs incurred in marketing, selected demand areas, Philippines, 2006 13 5. GARLIC: Cost of Materials, selected supply provinces, Philippines, 2006 14 6. GARLIC: Cost of Materials, selected demand areas, Philippines, 2006 14 7. GARLIC: Other operating costs, selected supply provinces, Philippines, 2006 15 8. GARLIC: Other operating costs, selected demand areas, Philippines, 2006 15 9. GARLIC: Imputed costs, by item selected supply provinces, Philippines, 2006 15 10. GARLIC: Imputed costs, by item, selected demand areas, Philippines, 2006 16 11. GARLIC: Average marketing costs by major components, selected supply provinces, Philippines, 2006 16 12. GARLIC: Average marketing costs by major components, selected demand areas, Philippines, 2006 17 13. GARLIC: Cost of Production, selected supply provinces, Philippines, 2006 19 14. GARLIC: Marketing Cost and Margins of Maketing Participants, Ilocos Norte, 2006 19 15. GARLIC: Marketing Cost and Margins of Marketing Participants, Ilocos Sur, 2006 20 16. GARLIC: Marketing Cost and Margins of Marketing Participants, Nueva Ecija, 2006 20
iv 53
Table 17h. GARLIC (Native): Imputed costs of marketing participants, by item, Naga City, 2006
Table 17i. GARLIC (Native): Imputed costs of marketing participants, by item, Cebu City, 2006
Item RETAILER
(peso per kilogram)
UNPAID LABOR 0.549
TOTAL
0.549
Item IRA-SD RETAILER
(peso per kilogram)
DEPRECIATION Supplies & Equipment
Weighing scale 0.004 0.054 Calculator 0.006 0.026 Cellphone 0.008 Electric fan 0.033
UNPAID LABOR 1.198 1.096
TOTAL 1.216 1.209
MARKETING COSTS STRUCTURE:
G A R L I C
LISTS OF FIGURES Figure No. Page
1. Percent distribution of respondents by type, selected provinces, Philippines, 2006 4 2. Percent distribution of farmer respondents by tenurial status, selected provinces, Philippines, 2006 4 3. Percent distribution of trader respondents, by type of business ownership, selected areas, Philippines, 2006 4 4. Percent distribution of trader respondents by source of capital, selected provinces, Philippines, 5 5. Percent distribution of farmer respondents, by years in farming, selected areas, Philippines, 2006 5 6. Percent distribution of farmer-respondents, by years in farming, selected provinces, Philppines, 2006 5 7. Percent distribution of trader-respondents, by years in trading, selected areas, Philppines, 6 8. Geographic Flow of GARLIC, Ilocos Norte, 2006 6 9. Geographic Flow of GARLIC, Ilocos Sur, 2006 7 10. Geographic Flow of GARLIC, Nueva Ecija 2006 7 11. Marketing Channels of NATIVE GARLIC, Ilocos Norte 2006 8 12. Marketing Channels of NATIVE GARLIC, Ilocos Sur, 2006 9 13. Marketing Channels of NATIVE GARLIC, Nueva Ecija, 2006 10 14. Percent distribution of trader-respondents, by mode of buying, selected areas, Philippines, 2006 10 15. Percent distribution of trader-respondents, by terms of payment in buying, selected areas, Philippines, 2006 11 16. Percent distribution of trader respondents, by mode of selling, selected areas, Philippines, 2006 11 17. Percent distribution of trader respondents, by terms of payment in selling, selected areas, Philippines, 2006 12 18. Percent distribution of marketing cost, by component, Ilocos Norte, 2006 17 19. Percent distribution of marketing cost, by component, Ilocos Sur, 2006 17
52 v
Table 17f. GARLIC (Native): Imputed costs of marketing participants, by item, Metro Manila, 2006
Table 17g. GARLIC (Native): Imputed costs of marketing participants, by item, Legaspi City, 2006
Item IRA-LD RETAILER
(peso per kilogram)
DEPRECIATION Supplies & Equipment
Weighing scale 0.001 0.020 Calculator 0.000 0.006 Cellphone 0.001 Winnow 0.008
UNPAID LABOR 0.092 7.629
TOTAL
0.094 7.663
Item RETAILER
(peso per kilogram)
DEPRECIATION
Supplies & Equipment
Weighing scale 0.107
Tarpaulin 0.031
Table 0.007
Transportation Equipment
Forward 0.250
UNPAID LABOR
Distribution 0.458
TOTAL
0.853
MARKETING COSTS STRUCTURE:
G A R L I C
LISTS OF FIGURES Figure No. Page
20. Percent distribution of marketing cost, by component, Nueva Ecija , 2006 18 21. Percent distribution of marketing cost, by component, Metro Manila, 2006 18 22. Percent distribution of marketing cost, by component, Legaspi City, 2006 18 23. Percent distribution of marketing cost, by component, Naga City, 2006 18 24. Percent distribution of marketing cost, by component, Cebu City, 2006 18 25. Percent distribution of marketing cost, by component, Cagayan de Oro City, 2006 19 26. Percent distribution of marketing cost, by component, Davao City, 2006 19
vi 51
Table 17e. GARLIC (Native): Imputed costs of marketing participants, by item, Nueva Ecija, 2006
MARKETING COSTS STRUCTURE:
G A R L I C
Item FARMER RETAILER
(peso per kilogram)
DEPRECIATION Facilities
Bodega 0.110
Equipment Calculator 0.003 0.002 Cellphone 0.040 0.010 Weighing scale 0.050 0.010 Winnow 0.003 Scissor 0.001
Transportation Equipment
Tractor 0.320 Trailer 0.030 Tricycle 0.810 0.060
UNPAID LABOR 0.700
TOTAL
2.063 0.086
HIGHLIGHTS
1) The three identified marketing participants in this particular study were: farmers, assemblers distributors and retailers. Majority of farmer respondents were land owners while most traders, run their businesses under single-proprietorship. As for the source of capital, majority of the marketing participants have used their own finances and only few have borrowed their capital from relatives.
2) Garlic in Ilocos Norte were sold in large volume in the cities of Baguio,
Urdaneta (Pangasinan), Davao and Divisoria (Metro Manila). In Ilocos Sur, aside from its municipalities, other demand areas were Cagayan, Pangasinan, Metro Manila, Laguna, cities of Baguio, Cebu, Cagayan de Oro and Davao. In Nueva Ecija, native garlic were distributed within the province and some were retailed by transient buyers from Bulacan and Metro Manila.
3) Metro Manila is the major destination of garlic as a consumption area as
well as transshipment point in bringing garlic to demand provinces in Visayas and in Mindanao.
4) In both procurement and disposition of garlic, traders usually pick up their
garlic supplies on cash basis. 5) The average marketing costs in the supply areas were estimated at almost
the same level at P8.00 per kilogram. In the demand areas, Metro Manila was noted with the highest cost per kilogram (P13.17), followed by Cebu City (P11.97) and the lowest average cost was in Naga City (P5.65).
6) Transportation cost was P3.34 per kilogram in Nueva Ecija and P5.45 in
Davao City with the use of rented vehicle. The lowest cost item was depreciation of facilities and equipment used in marketing garlic by traders in Metro Manila (P0.02).
7) Net margins, was highest for retailers in Nueva Ecija at P41.90 per
kilogram. Such was due to direct buying of commodity from farmers. The lowest was recorded for assemblers-distributors in Ilocos Norte at P2.22 per kilogram.
50 1
Table 17d. GARLIC (Native): Imputed costs of marketing participants, by item, Ilocos Sur, 2006
a/ less than .001
MARKETING COSTS STRUCTURE:
G A R L I C
Item FARMER RA-LD PA-LD PA-SD BA-SD RETAILER
(peso per kilogram)
DEPRECIATION
Facilities
Storage/bodega 0.640 0.004 0.001
Supplies & Equipment
Weighing scale 0.170 0.002 a/ 0.004 0.001 0.005
Calculator 0.030 a/
Cellphone 0.500 0.001 a/ a/
Transportation Equipment
Elf 0.010 0.004 0.050
Jeep 0.010
Tricycle 1.300 0.002
Car (kotse) 0.990
UNPAID LABOR 2.260 1.140
TOTAL
5.890 0.029 0.005 0.054 0.001 1.145
I. INTRODUCTION
The Bureau of Agricultural Statistics (BAS) recognizes the need for marketing information and thus the effort to incorporate the generation of market and marketing-related statistics in its data systems. While price have been regularly- generated, other marketing statistics are collected occasionally and these are limited to selected types of crop, livestock and fishery commodities.
This particular study intends to provide updated information on marketing costs structure of native garlic – the flow, participants and the margins at current levels. II. OBJECTIVES
Generally, the study was to conducted to determine the marketing costs structure of native garlic. Specifically it aimed to:
a) identify and characterize the marketing participants involved; b) determine the flow and channels of distribution of garlic; c) determine the practices in marketing of garlic among participants; and d) determine the components of marketing costs of garlic by type of
marketing participants. III. METHODOLOGY Research Site
The study covered three (3) native garlic supply provinces and six (6) demand
areas. For supply areas, the provinces covered were Ilocos Norte, Ilocos Sur and Nueva Ecija while demand areas included Metro Manila and the cities of Legaspi, Naga, Cebu, Cagayan de Oro and Davao. Supply provinces were chosen based on their significant contribution to the total native garlic production in the country. On the average, these provinces accounted for 77 percent of the country’s native garlic production during the last five years. Demand areas, however, were identified as the distribution and consumption areas of native garlic produced from the supply provinces. These areas were identified during the interview phase in the supply provinces.
2 49
Table 17c. GARLIC (Native): Imputed costs of marketing participants, by item, Ilocos Norte, 2006
a/ less than .001
Item FARMER MA-MD PA-MD PA-LD RETAILER
(peso per kilogram)
DEPRECIATION
Facilities
Bodega 0.054 0.020
Supplies & Equipment
Weighing Scale 0.039 0.001 0.001 0.001
Calculator 0.014 a/ 0.001 0.001
Cellphone 0.044 0.011 0.001 0.003 0.016
Transportation Equipment
Elf 0.373 0.055
Jeep 0.203
Tractor 0.289
L-300 0.068
Tricycle 0.072 0.001 a/
UNPAID LABOR
Procurement 3.945 0.100 0.300 0.014
Distribution 0.181 0.100 0.350 0.017 2.000
TOTAL
4.786 0.706 0.652 0.111 2.017
MARKETING COSTS STRUCTURE:
G A R L I C
Sample Selection
The study utilized information from both farmers and traders. The farmers were interviewed to gather information on pre-marketing activities while traders were the sources of information on actual marketing practices. Selection of samples for the two types of respondents was done differently. a) Farmers
From the list of garlic farmers covered by the Costs and Returns Survey
(CRS) of the BAS, the research team purposively selected 20 sample farmers who have undertaken pre-marketing activities. The 20 sample farmers were distributed proportionately among the top producing municipalities, wherein, the most number of samples were chosen from the largest producing area.
b) Traders
In selecting sample traders, a snowball sampling technique was adopted.
It is a non-probability sampling method which is used when participants with specific characteristics are required and when there is difficulty in locating respondents with the characteristics of interest. This approach accumulated the data gathered from one trader-respondent to another at different levels of the commodity marketing system.
In the study a minimum of three (3) and maximum of five (5) respondents per type of marketing participants were interviewed at each trading site. For additional information, key players of the commodity marketing system were also interviewed. These included the market masters, barangay chairmen, “kargador”, drivers, etc.
IV. DISCUSSION OF RESULTS
A. Number and Profile of Respondents 1. Number of Respondents
The survey covered 125 respondents in both supply and demand areas. Of the total number of respondents, 47 percent were farmers from the three (3) supply provinces. Fifty-three percent (53%) were traders from both supply and demand areas/provinces. Trader respondents were further classified into different types based on their sphere of influence in performing marketing
48 3
Table 17b. GARLIC (Native): Imputed costs by item, selected demand areas, Philippines, 2006
a/ less than .001
MARKETING COSTS STRUCTURE:
G A R L I C
Item Metro Manila
Legaspi City
Naga City
Cebu City
Cagayan de Oro
Davao City
(peso per kilogram)
DEPRECIATION .022 .395 .086 .117 .115
Supplies & Equipment .022 .145 .086 .117 .105
Weighing Scale 0.010 0.107 0.029 0.022 a/
Calculator 0.003 0.016 0.095 a/
Cell phone 0.001 0.008 0.001
Winnow 0.008
Tarpaulin 0.031
Table 0.007 a/
Electric fan/Blower 0.033 0.001
Push cart 0.002
Money detector 0.001
Transportation Equipment .250 .070
Elf 0.010
Forward 0.250
Truck 0.060
UNPAID LABOR 3.861 .458 .549 1.147 2.547 1.600
Procurement 0.526 2.499
Distribution 3.335 0.458 0.549 1.147 0.048 1.600
TOTAL
3.884 0.853 0.549 1.233 2.660 1.715
and demand areas/provinces. Trader respondents were further classified into different types based on their sphere of influence in performing marketing functions. The study has identified four (4) types of traders. These are assemblers, distributors, assembler-distributors and retailers. The first three (3) types were further classified by their volume of transaction, number of their buyers and suppliers, geographical source and market destination. 2. Profile of Respondents 2.1 Tenurial Status. About 67 percent of the farmer-respondents owned and managed their garlic farms. Fourteen of them or 24 percent were tenants while 5 percent were operating under lease contract. One respondent was a holder of Certificate of Land Transfer (CLT) and the other one cultivated a rent-free land. 2.2 Business Ownership. Almost all (97%) trader-respondents were single proprietors. The other three percent were into partnership arrangements.
4 47
Figure 2. Percent distribution of farmer-respondents, by tenurial status, selected
provinces, Philippines 2006
Source: Annex Table 3
Leasee5%
CLT-holder
2%
RentFree2%
Single Proprie-torship67%
Tenant24%
Table 17a. GARLIC (Native): Imputed costs by item, selected supply provinces, Philippines, 2006
Source: Annex Table 1
Figure 3. Percent distribution of trader-respondents by type of business ownership,
selected areas, Philippines, 2006
Source: Annex Table 4
Partnership 3%
Single proprietorship
97%
Figure 1. Percent distribution of respondents by type, selected
areas, Philippines, 2006
Trader53%
Farmer 47%
MARKETING COSTS STRUCTURE:
G A R L I C
Item Ilocos Norte Ilocos Sur Nueva Ecija
(peso per kilogram)
DEPRECIATION 0.865 2.053 0.957
Facilities
Bodega 0.037 0.210 0.110
Supplies & Equipment .030 .171 .062
Weighing Scale 0.011 0.030 0.030
Calculator 0.004 0.015 0.003
Cell phone 0.015 0.126 0.025
Winnow 0.003
Scissor 0.001
Transportation Equipment .798 1.672 0.785-
Elf 0.214 0.021
Jeep 0.203 0.010
Car 0.990
Tractor (Kuliglig) 0.289
L-300 0.068
Tricycle 0.024 0.651 0.435
Tractor 0.320
Trailer 0.030
UNPAID LABOR 1.619 1.700 .700
Procurement 1.089
Distribution 0.530 1.700 0.700
TOTAL
2.480 3.750 1.657
2.3 Source of Capital a. Farmers
Seventy-seven percent (77%) of the farmers used personal funds to finance their garlic production and marketing operations. The remaining 23 percent made use of borrowed capital.
b. Traders
About 87 % of the trader-respondents were financing their business using their own capital. Others (13%) raised their capital through borrowings from various sources.
2.4 Years in Farming. Most farmer-respondents have long years of farming experience and most of them were based in Ilocos provinces, Metro Manila and Nueva Ecija. Thirty-four percent (34%) have been engaged in farming for more than 20 years while 25% were into 16-20 years. There were 24% had farmed for 5-10 years and 7% had 11-15 years of farming experience. The rest had less than five years.
46 5
Table 16k. GARLIC (Native): Other Operating Costs incurred by marketing participants, by item, Davao city, 2006
a/ less than 0.001 * Weighing scale ** include garbage fee, health certification, sign board, zoning fee & shrinkage
Self- financed
77%
Borrowed 23%
Figure 4. Percent distribution of farmers, by source of capital, selected provinces,
Philippines, 2006
Source: Annex Table 5
Source: Annex Table 6
Figure 6. Percent distribution of farmer-respondents by years in farming, selected
provinces, Philippines, 2006
11 - 15 7%
21 & above 34%
less than 5 10%
5 - 10 24%
16 - 20 25%
Figure 5. Percent distribution of trader- respondents, by source of capital, selected
areas, Philippines, 2006
Source: Annex Table 5
Item IRA-LD BA-SD RETAILER
(peso per kilogram)
Electricity 0.040 0.010 0.020 Water a/ Business permit 0.002 0.005 0.001 Mayor's permit 0.001 0.002 0.002 Sanitary permit a/ 0.001 a/ Stall rental 0.140 0.040 0.060 Cell card 0.010 0.030 Meals/Snacks 0.010 0.400 0.221 WS Calibration fee * a/ a/ 0.001 Others* 0.400 0.012 0.018
TOTAL
0.593 0.480 0.353
Self- financed
87%
Loan/ Borrowed
13%
MARKETING COSTS STRUCTURE:
G A R L I C
2.5 Years in Trading. Among the trader-respondents, 44 percent have been engaged in garlic trading for 5-10 years, mostly based in Ilocos provinces, Metro Manila and Nueva Ecija. However, 21% who were into this business for 11 to 15 years. About 12% have 20 years experience. The other 15 percent were relatively new in this business with less than 5 years of experience. B. Geographic Flow 1. Ilocos Norte
Major suppliers of native garlic in Ilocos Norte were the municipalities of Bacarra, Badoc, Pasuquin, Sarrat, San Nicolas and Vintar. Supplies coming from these areas were brought to the public markets of said municipalities and in Laoag City. Buyers from Baguio and Urdaneta cities, Cagayan province, Divisoria and Bicol region as well as local traders converged in said markets to procure garlic for distribution to their respective buyers/destinations.
There were buyers from areas
outside Ilocos Norte (BOP) who procured native garlic directly from the local supply areas particularly during lean months. According to some farmers, there were traders coming from Davao who negotiated with the farmers for an assurance of garlic supply.
6 45
5 - 1044%
21 & above12%
less than 515%
11 -1521%
16 - 208%
Source: Annex Table 7
Figure 7. Percent distribution of trader-respondents, by years in trading, selected
areas, Philippines, 2006
Ilocos Sur, Baguio, Cagayan, Urdaneta (Pangasinan),, Divisoria
(MM), Bicol & Davao Within the province
Public Markets: -Laoag City -Bacarra -Badoc -Pasuquin
Bacarra, Badoc, Pasuquin, Sarrat,
Sn Nicolas & Vintar
Ilocos Sur
Figure 8 .Geographic Flow of Native Garlic, Ilocos Norte, 2006
Table 16i. GARLIC (Native): Other operating costs incurred by marketing participants, by item, Cebu City, 2006
Table 16j. GARLIC (Native): Other operating costs incurred by marketing participants, by item, Cagayan de Oro City, 2006
a/ less than 0.001 * Weighing scale
Item IRA-SD RETAILER
peso per kilogram
Electricity 0.500 1.700 Business permit 0.249 0.572 Stall rental 0.104 0.975 Cell card/Tel. bill 0.154 Meals /Snacks 0.560 0.600 WS calibration fee * a/ Market fee 0.048 0.198
TOTAL 1.615 4.05
Item RETAILER
peso per kilogram
Business permit 0.146 Stall rental 0.300 Cell card/Tel. bill 0.299 Meals/Snacks 1.000
TOTAL 1.745
MARKETING COSTS STRUCTURE:
G A R L I C
2. Ilocos Sur
The identified supply areas in Ilocos Sur were the municipalities of Magsingal, Cabugao and Sto. Domingo. Some garlic produced in Badoc, a municipality of Ilocos Norte, were brought to Sinait Bagsakan Area. From there, garlic were transported by buyers from Metro Manila, provinces of Cagayan, Pangasinan and Laguna, and the cities of Baguio, Cebu, Davao and Cagayan de Oro for distribution to buyers in their respective provinces/areas. 3. Nueva Ecija
Garlic farmers from the supply municipalities of Bongabon, Munoz, Rizal and the cities of Cabanatuan and San Jose brought their produce to the public markets of Munoz, Gapan and San Jose cities. From there, garlic were disposed and consumed locally within the province and only small part of the supplies was bought by transient buyers from Bulacan and Metro Manila.
44 7
Baguio City, Cagayan, Pangasinan, Laguna, Cebu,
Cagayan de Oro, Davao
Within the Province
Metro Manila
Magsingal, Cabugao, Sto
Domingo
Ilocos Norte
Sinait Bagsakan Area
Figure 9. Geographic Flow of Native Garlic, Ilocos Sur, 2006
Within the Province
Public Market: -Gapan -Munoz -Sn. Jose
Bongabon, Cabanatuan City, Munoz, Rizal, Sn. Jose
Bulacan & Metro Manila
Figure 10. Geographic Flow of Native Garlic, Nueva Ecija, 2006
Table 16g. GARLIC (Native): Other operating costs incurred by marketing participants, by item, Legaspi City, 2006
Table 16h. GARLIC (Native): Other operating costs incurred by marketing participants, by item, Naga City, 2006
Item RETAILER
peso per kilogram
Business permit 0.011 Stall rental 0.654 Meals /Snacks 1.130 Market fee 0.252 Parking fee 0.002
TOTAL
2.050
Item RETAILER
peso per kilogram
Electricity .060 Business permit 0.240 Stall rental 0.115 Land rental 0.120 WS calibration fee 0.004
TOTAL 0.539
MARKETING COSTS STRUCTURE:
G A R L I C
C. Marketing Channels 1. Ilocos Norte
Native garlic trading in Ilocos Norte was characterized by the following linkages :
a) Farmer to Provincial Assembler-Large Distributor to Buyer Outside Province/Retailer
b) Farmer to Municipal Assembler-Medium Distributor to Buyer Outside Province/Retailer
c) Farmer to Provincial Assembler-Medium Distributor to Buyer Outside Province/Retailer
d) Farmer to Municipal Assembler-Municipal Distributor/Provincial Assembler-Large Distributor/Provincial Assembler-Medium Distributor to Retailer
e) Farmer to Retailer Garlic farmers brought their commodity to the public markets near them where assemblers-distributors of different levels (MA-MD, PA-LD, PA-MD), BOP and retailers procured garlic at varied quantities. The dominant traders among them, were the PA-LD in terms of volume procured with about 51 percent of the total bulk sold by the total sample producers. Of the volume procured by PA-LD, larger portion was sold to buyers outside Ilocos Norte (BOP) particularly Metro Manila. The remaining portion was handed to retailers to augment the supply which the retailers have bought directly from farmers within Ilocos Norte and from Ilocos Sur.
8 43
BOP RETAILER
MA-MD PA-LD PA-MD
FARMER
SOP
Figure 11. Marketing Channel of Native Garlic, Ilocos Norte, 2006
Table 16e. GARLIC (Native): Other operating costs incurred by marketing participants, by item, Nueva Ecija, 2006
Table 16f. GARLIC (Native): Other operating costs incurred by marketing participants, by item, Metro Manila, 2006
* include ash ticket, inspection and regulatory fee & sign board
*Weighing scale *include Philipine Ports Authority fee, Arrastre
Item FARMER RETAILER
(peso per kilogram)
Business permit 0.002 Sanitary permit 0.004 Stall rental 0.070 Cell card 0.01 Meals / Snacks 0.21 0.220 WS Calibration fee * 0.002 Parking fee 0.08 Others* 0.13 0.204
TOTAL
0.43 0.50
Item IRA-LD RETAILER
(peso per kilogram)
Electricity 0.78 Water 0.006 Business permit 0.15 0.539 Stall rental 0.033 0.976 Meals /Snacks 0.15 0.150 WS calibration fee * 0.004
Toll fee 0.247 Entrance fee 0.01
Others** 0.146
TOTAL
0.586 1.13
MARKETING COSTS STRUCTURE:
G A R L I C
2. Ilocos Sur The identified channels of garlic in the province were as follows:
a) Farmer to Provincial Assembler-Small Distributor to Retailer b) Farmer to Barangay Assembler-Small Distributor to Retailer c) Farmer to Provincial Assembler-Large Distributor to Buyer Outside
Province/Retailer d) Farmer to Regional Assembler-Large Distributor to Buyer outside
Province/Retailer e) Supplier Outside Province to Provincial Assembler-Large Distributor to
BuyerOutside Province/Retailer f) Supplier Outside Province to Regional Assembler-Large Distributor to
Buyer Outside Province/retailer Farmers in the province disposed their produce directly to different types of assemblers - distributors (barangay assembler-small distributor, provincial assembler-small/large distributor and regional assembler-large distributor). Of the total garlic which were locally produced and brought in by suppliers from outside the province, 50% of it was procured by the regional distributors who were noted as the main buyers during the survey period. From them, the commodity was moved and sold mainly to buyers from provinces outside Ilocos Sur (BOP). Only minimal volume was sold to retailers within the province.
52 9
BOP RETAILER
PA-SD PA-LD RA-LD
FARMER
BA-SD
SOP
Figure 12. Marketing Channel of Native Garlic Ilocos Sur, 2006
Table 16c. GARLIC (Native): Other operating costs incurred by marketing participants, by item, Ilocos Norte, 2006
Table 16d. GARLIC (Native): Other operating costs incurred by marketing participants, by item, Ilocos Sur, 2006
*Weighing scale ** include ticket and tong
Item FARMER PA-LD PA-MD MA-MD RETAILER
(peso per kilogram)
Business Permit 0.010 0.659
Stall Rental 0.045 0.406
Market fee 0.059 0.066 0.050
Cell card 0.004
Meals / Snacks 0.324
WS Calibration fee * 0.500 a/ 0.012 0.002
Entrance fee 0.100 0.013
TOTAL
0.987 0.121 0.063 0.012 1.067
Item FARMER RA-LD PA-LD PA-SD RETAILER
(peso per kilogram)
Business permit 0.010 0.008 0.030 Barangay permit 0.010 Stall Fee 0.080 Cell card 0.003 0.010 0.005 Meal / Snacks 0.600 0.040 0.010 0.060 0.410 Parking fee 0.008 0.001 WS Calibration* 0.001 0.002 Toll Fee .002 0.020 Entrance Fee 0.004 0.330 Others** 0.132 0.158 0.120 0.008
TOTAL
0.600 0.204 0.213 0.185 0.858
MARKETING COSTS STRUCTURE:
G A R L I C
3. Nueva Ecija
Garlic produced in Nueva Ecija was relatively small in volume compared to those of the Ilocos provinces. It was noted that farmers handed their produce directly to retailers eliminating the various channels found in other provinces. These were retailed to few visitors coming from Bulacan and Metro Manila. D. Marketing Practices and Functions
Farmers and traders performed marketing activities and services in moving their products from one point to another. As they performed them, costs were being incurred which added monetary value to the product. The marketing practices, functions and corresponding costs incurred are described below. 1. Procurement
a. Mode of Buying
Sixty percent of the trader-
respondents picked up their garlic supply from the farm or at the trading centers/bagsakan areas. This mode was commonly practiced by traders in Ilocos Sur. Thirty eight percent (38%) of the respondents had their supply delivered to their place by farmers or distributors. Most of them were traders located in Metro Manila and Nueva Ecija. The other two percent (2%) employed both pick-up and delivery modes.
10 51
CONSUMER
RETAILER
FARMER
Figure 13. Marketing Channel of Native Garlic Nueva Ecija, 2006
Source: Annex Table 8
picked-up60%
delivered38%
both2%
Figure 14. Percent distribution of trader-respondents by mode of buying selected
areas, Philippines, 2006
Table 16a. GARLIC (Native): Other operating costs by item, selected supply provinces, Philippines, 2006
Table 16b. GARLIC (Native): Other operating costs by item, selected demand areas, Philippines, 2006
*Weighing scale ** include sign board, weight & measure, shrinkage, ticket, tong, regulatory fee & inspection fee
a/ less than 0.001 *Weighing scale ** include sign board, weight & measure, shrinkage, ticket, tong, regulatory fee & inspection fee,PPA,arrastre
MARKETING COSTS STRUCTURE:
G A R L I C
Item Ilocos Norte Ilocos Sur Nueva Ecija
(peso per kilogram) Business permit .334 .016 0.002 Barangay permit 0.010 Sanitary permit 0.004 Stall rental 0.225 0.080 0.070 Cell card/Telephone bills 0.004 0.006 0.010 Meals /Snacks 0.324 0.224 0.215 Market fee 0.058 Parking fee 0.004 0.080 WS calibration fee * 0.129 0.001 .002 Toll fee 0.011 Entrance fee 0.055 0.167 Others ** 0.104 .167
TOTAL
1.130 0.632 0.550
Item Metro Manila
Legaspi City Naga City Cebu City Cagayan de
Oro City Davao City
Electricity 0.780 0.060 1.100 0.023 Water 0.006 a/ Business permit 0.340 0.011 0.240 0.410 0.146 0.004 Stall rental 0.504 0.654 0.115 0.539 0.300 0.080 Land rental 0.120 Cell card/Tel. bill 0.154 0.299 0.020 Meals /Snacks 0.150 1.130 0.580 1.000 0.210 Market fee 0.252 0.123 Entrance fee 0.010 0.002 WS calibration fee * 0.004 0.004 a/ a/ Toll fee .247 Others ** .146 0.143
TOTAL
2.19 2.049 0.539 2.906 1.745 0.480
b. Terms of Payment
Eighty-one percent (81%)
of the trader-respondents paid their suppliers in cash. Eleven percent (11%) agreed to pay in the next transaction or in a number of days after their transaction. The other eight percent (8%) of traders paid a portion of the procured supply in cash and the other portion in credit or deferred payment.
2. Distribution
a. Mode of Selling
Majority (76%) of farmers and traders had their buyers picked up the commodity from the farm/stall/bodega. According to them, this practice was advantageous to the buyers in a way that they (buyers) could choose the size and quality of the commodity they prefer. On the other hand, twenty-two percent (22%) of them used delivery mode as this was mostly observed in Ilocos Norte. The rest of the respondents practiced both pick up and delivery of garlic to their buyers (2%).
picked - up 76%
both 2% delivered
22%
Source: Annex Table 10
50 11
Figure 15. Percent disrribution of trader-respondents by terms of payment in buying,
selected areas, Philippines, 2006
cash81%
credit11%
cash & credit8%
Figure 15. Percent distribution of trader-respondents by terms of payment in buying,
selected areas, Philippines, 2006
Source: Annex Table 9
Table 15h. GARLIC (Native): Cost of material, incurred by marketing participants, by item, Naga City, 2006
Table 15i. GARLIC (Native): Cost of material, incurred by marketing participants, by item, Cebu City, 2006
Table 15j. GARLIC (Native): Cost of material, incurred by marketing participants, by item, Cagayan de Oro City, 2006
Item RETAILER
(peso per kilogram)
Plastic bag (small) 0.545 Carton 0.656 Stapler 0.241 Staple wire 0.119
TOTAL
1.561
Item IRA-SD RETAILER
(peso per kilogram)
Plastic bag (small) 0.632 1.770 Kaing 1.000
TOTAL 0.632 2.770
Item RETAILER
(peso per kilogram)
Plastic bag (small) 0.500
TOTAL
0.500
Figure 16. Percent distribution of respondents by mode of selling, selected areas,
Philippines, 2006
MARKETING COSTS STRUCTURE:
G A R L I C
b. Terms of Payment
Almost all (92%) respondents were paid in cash upon selling native garlic while 6 percent received payments on the next transaction. This was practiced in Metro Manila and Legaspi City. Two percent (2%) of the respondents settled their transactions both in cash and credit.
E. Marketing Costs and Margins
1. Marketing Costs
In this particular study, cash cost included hired labor, transport, cost of materials used in marketing and other cost for trading operations.
a. Labor Costs
Labor costs are costs borne from the activities and services performed in
marketing the commodity. These include hauling, loading, unloading, cleaning, sorting, drying, weighing, packing and braiding performed during procurement and distribution of native garlic.
Traders in Nueva Ecija
spent the highest amount for labor at P3.04 per kilogram. A large portion of it was attributed to handling/ storage of garlic done by the traders before distribution. In Ilocos Sur and Ilocos Norte, average costs of labor among traders were P2.61 and P2.14 per kilogram, respectively.
12 49
Activity/Practice Ilocos Norte Ilocos Sur Nueva Ecija
Procurement 1.15 0.16 0.52 Distribution 0.87 2.30 1.73 Salary/Wages 0.12 0.15 0.79
TOTAL 2.14 2.61 3.04
Table 1. Labor cost, by marketing activity, selected supply provinces, Philippines, 2006
(peso per kilogram)
Source: Annex Table 13
Figure 17. Percent distribution of respondents by terms of payment in selling, selected areas,
Philippines, 2006
Source: Annex Table 11
cash 92%
cash & credit2%
credit6%
Table 15e. GARLIC (Native): Cost of materials incurred by marketing participants, by item, Nueva Ecija, 2006
Table 15f. GARLIC (Native): Cost of materials incurred by marketing participants, by item, Metro Manila, 2006
* include stapler, staple wire & carton
Table 15g. GARLIC (Native): Cost of material, by marketing participants, by item, Legaspi City, 2006
ITEM FARMER RETAILER
(peso per kilogram)
Ordinary sack 0.020 Straw twine 0.001 Plastic Bag (small) 0.020 Chemical (powder) 0.010
TOTAL 0.031 0.020
ITEM IRA-LD RETAILER
(peso per kilogram)
Red bag 0.400 Plastic bag (small) 1.34 Others * 0.35
TOTAL 0.400 1.690
ITEM RETAILER
(peso per kilogram)
Plastic bag (small) 0.743
TOTAL
0.743
MARKETING COSTS STRUCTURE:
G A R L I C
In the demand areas,
the average labor cost ranged from P0.33 in Davao City to P4.63 in Cebu City. Traders in Cebu City expended much on salary/wages of workers at P1.39 and for weighing, cleaning and packaging of garlic before distribution at P3.16 per kilogram. Labor costs in Legaspi and Cagayan de Oro cities were less than one peso per kilogram.
b. Transportation Costs
Farmers and traders in Ilocos Sur spent relatively lesser in moving garlic from supply areas due to their proximity to Sinait Bagsakan area. The cost of transport was P0.40 if vehicle used was rented and P0.29 if the vehicle used was privately -owned. In Ilocos Norte, vehicle rentals amounted to P1.27 while expenses for gas and oil for private vehicle was P0.15 per kilogram. In Nueva Ecija, transportation cost in garlic maketing was P3.27 for rentals or P0.07 for gasoline for every kilogram of garlic.
In the demand areas, traders in Legaspi City recorded the highest cost for vehicle rental at P4.00 followed by Davao City at P3.64 and Metro Manila at P3.31 per kilogram. Other areas incurred lower costs at P2 00 (Naga City);
48 13
Item Ilocos Norte
Ilocos Sur Nueva Ecija
Vehicle rental 1.27 0.40 3.27
Owned Vehicle 0.15 0.29 0.07
Table 3. Transportation cost, selected supply provinces, Philippines, 2006 (peso per kilogram)
Source: Annex Table 14
Table 4. Transportation cost, selected demand areas, Philippines, 2006 (peso per kilogram)
Item Metro Manila
Legaspi City
Naga City
Cebu City
Cagayan de Oro
City
Davao City
Vehicle rental 3.31 4.00 2.00 1.09 0.81 3.64
Owned vehicle - - - - - 0.001 Source: Annex Table 14
Table 15c. GARLIC (Native): Cost of materials incurred by marketing participants, by item, Ilocos Norte, 2006
Table 15d. GARLIC (Native): Cost of materials incurred by marketing participants, by item, Ilocos Sur, 2006
ITEM FARMER RA-LD PA-LD PA-SD BA-SD RETAILER
(peso per kilogram)
Bamboo strip 0.060 0.140 0.020 0.020 Ordinary sack 0.010 0.500 Red bag 0.500 Straw twine 0.030 0.006 Plastic bag (small) 0.170
Winow (bilao) 0.100
TOTAL
0.060 0.040 1.146 0.020 0.020 0.270
ITEM FARMER RETAILER
(peso per kilogram)
Bamboo strip 0.192 Bamboo pole 0.163
Ordinary sack 0.088 Red bag 0.066
Straw twine 0.130 Plastic bag (small) 0.590
TOTAL
0.639 0.590
MARKETING COSTS STRUCTURE:
G A R L I C
Activity/ Practice
Metro Manila
Legaspi City
Naga City
Cebu City
Cagayan de Oro
City Davao City
Procurement 0.61 0.27 1.00 0.08 0.00 0.08
Distribution 0.90 3.16 0.73
Salary/Wages 0.19 0.28 1.39 0.02 0.25 TOTAL 1.70 0.55 1.00 4.63 0.75 0.33 Source: Annex Table 13
Table 2. Labor costs by marketing activity, selected demand areas, Philippines 2006
(peso per kilogram)
P2.00 (Naga City); P1.00 Cebu City and P0.81(Cagayan de Oro City).
c. Cost of Supplies and Materials Trading of garlic required only few materials such as bamboo strips, red
bags, straw twine, plastic bags, winow (bilao), chemical powder, stapler and kaing. Bamboo pole was used for drying garlic.
The average cost of packaging materials ranged from P0.04 to P0.92 per kilogram of garlic. The costs of other supplies and materials required in garlic marketing ranged from P0.01 to P0.49 per kilogram. Ilocos Norte posted the highest average cost at P1.23 while Nueva Ecija registered the least cost at P0.05 per kilogram.
On the other hand, traders in Cebu City incurred the highest cost of materials at P2.20 followed by Metro Manila at P2.09 per kilogram. Traders from the cities of Legaspi and Cagayan de Oro incurred the lowest cost for materials used at less than a peso per kilogram of garlic. Most of them were retailers who spent for small items like plastic bags and chemical powder used in storing garlic for longer shelf-life.
14 47
Item Ilocos Norte
Ilocos Sur Nueva Ecija
Packaging materials 0.74 0.92 0.04
Supplies & other materials 0.49 0.18 0.01
TOTAL 1.23 1.10 0.05
Table 5. Cost of materials, by item, selected supply provinces, Philippines, 2006
(peso per kilogram)
Source: Annex Table 15
ITEM Metro Manila
Legaspi City
Naga City
Cebu City
Cagayan de Oro City
Packaging materials 1.74 0.74 1.20 2.20 0.50
Supplies & other materials 0.35 - 0.36 - -
TOTAL 2.09 0.74 1.56 2.20 0.50
Table 6. Cost of materials, by item, selected demand areas, Philippines, 2006
(peso per kilogram)
Source: Annex Table 15
Table 15a. GARLIC (Native): Cost of materials, by item, selected supply provinces, Philippines, 2006
Table 15b. GARLIC (Native): Cost of materials, by item, selected demand areas, Philippines, 2006
MARKETING COSTS STRUCTURE:
G A R L I C
ITEM Ilocos Norte Ilocos Sur Nueva Ecija
(peso per kilogram)
Bamboo strip 0.192 0.060
Bamboo pole 0.163
Ordinary sack 0.088 0.255 0.020
Red bag 0.066 0.500
Straw twine 0.130 0.018 0.001
Plastic bag (small) 0.590 0.170 0.020
Winow (bilao) 0.100
Chemical (powder) 0.010
TOTAL
1.229 1.103 0.051
ITEM Metro Manila Legaspi City Naga City Cebu City Cagayan de
Oro City
(peso per kilogram)
Red bag 0.400
Plastic bag (small) 1.340 0.743 0.545 1.20 0.500
Kaing 1.00
Carton (box) 0.347 0.656
Stapler 0 .241 Staple wire 0.119
TOTAL
2.09 0.743 1.56 2.20 0.500
d. Other Operating Costs
The amount spent for permits, stall rental, weighing scale calibration, bills for
utilities such as telephone, water and electricity comprised other operating costs incurred in the marketing of garlic. Value of shrinkage and expenses for meals/snacks while transporting or performing activities related to trading garlic were also considered.
Ilocos Norte posted the highest other operating cost at an average of P1.13 per kilogram. Meanwhile, in Ilocos Sur and Nueva Ecija, other operating costs amounted to P0.70 and P0.55 per kilogram of garlic, respectively.
At the demand areas, Cebu City posted the highest amount for other operating costs at an average of P2.91 of which 43 percent were attributed to utilities. Traders in Legaspi City and Metro Manila incurred high costs on utilities. In Davao City, however, traders spent an average of P0.48 for utilities.
e. Imputed Costs In this study
imputed costs consisted of depreciation of facilities/equipment and unpaid family labor. The highest imputed cost of P3.75 per kilogram was noted in Ilocos Sur. Of this, average depreciation cost of P2.05 per kilogram accounted for more than one-half of the total imputed costs. In Ilocos Norte, unpaid labor had the higher share at P1.62 per kilogram or 65% of that of the total imputed cost In Nueva Ecija depreciation comprised 58 percent of the
46 15
Ilocos Norte Ilocos Sur Nueva Ecija
1.13 0.70 0.55
Table 7. Other operating costs, selected supply provinces, Philippines, 2006
(peso per kilogram)
Source: Annex Table 16
Source: Annex Table 16
Metro Manila
Legaspi City
Naga City
Cebu city
Cagayan de Oro
city Davao City
2.19 2.05 0.54 2.91 1.75 0.48
Table 8. Other operating costs, selected demand areas, Philippines, 2006
(peso per kilogram)
Item Ilocos Norte Ilocos Sur Nueva Ecija
Depreciation 0.86 2.05 0.96
Unpaid Labor 1.62 1.70 0.70
TOTAL 2.48 3.75 1.66
Table 9. Imputed cost, by item, selected supply provinces,Philippines, 2006
(peso per kilogram)
Source: Annex Table 17
Table 14i. GARLIC (Native): Transportation costs incurred by marketing participants, by item, Cebu City, 2006
Table 14j. GARLIC (Native): Transportation costs incurred by marketing participants, by item, Cagayan de Oro City, 2006
Table 14k. GARLIC (Native): Transportation costs incurred by marketing participants, by item, DavaoCity, 2006
Activity/Practice IRA-SD RETAILER
(peso per kilogram)
Vehicle rental Procurement 0.034 0.150 Distribution 0.908
TOTAL
0.942 0.150
Activity/practice RETAILER
(peso per kilogram)
Vehicle rental
Procurement 0.813
TOTAL 0.813
Activity/Practice IRA-LD BA-SD
(peso per kilogram)
Vehicle rental Procurement 5.450 1.830
Owned Vehicle
Gas & Oil 0.001
TOTAL
5.451 1.830
MARKETING COSTS STRUCTURE:
G A R L I C
total imputed cost. In Nueva Ecija depreciation comprised 58 percent of the imputed cost.
In the demand areas, the average imputed cost was highest in Metro Manila at P3.88 per kilogram of garlic. In Cagayan de Oro City it was P2.67. In both areas, costs were contributed by unpaid labor. In other areas, the costs of depreciation and unpaid labor, were relatively lower i.e., P0.55 in Naga City, P0.85 in Legaspi City, P1.23 in Cebu City and P1.71 in Davao City.
f. Average Marketing Costs In the supply supply areas, the average cost of marketing ranged from P8.40
per kilogram in Nueva Ecija to P8.79 per kilogram of garlic in Ilocos Norte.
Average cash cost was highest in Nueva Ecija at P6.98 and lowest in Ilocos Sur at P5.04 per kilogram of garlic. On the other hand, imputed cost was highest in Ilocos Sur at P3.75 per kilogram of garlic while lowest in Nueva Ecija at P1.66 per kilogram of garlic.
Among the demand areas, traders in Metro Manila and Cebu City posted high average marketing costs at P13.49 and P13.31 per kilogram of garlic, respectively. The lowest costs were incurred by those operating in Naga City, at P5.65 and Cagayan de Oro City at P6.47 per kilogram of garlic.
16 45
Item Metro Manila
Legaspi City
Naga City
Cebu City
Cagayan de Oro City
Davao City
Depreciation 0.02 0.39 0.08 0.12 0.11
Unpaid Labor 3.86 0.46 0.55 1.15 2.55 1.6
TOTAL 3.88 0.85 0.55 1.23 2.67 1.71
Table 10. Imputed cost, by item, selected demand areas, Philippines, 2006
(peso per kilogram)
Source: Annex Table 17
Item Ilocos Norte Ilocos Sur Nueva Ecija
Cash Cost 5.92 5.04 6.98 Imputed Cost 2.48 3.75 1.66
TOTAL 8.40 8.79 8.64
Table 11. GARLIC: Average marketing cost by major components, selected supply provinces, Philiippines, 2006
(peso per kilogram)
Table 14g. GARLIC (Native): Transportation costs incurred by marketing participants, by item, Legaspi City, 2006
Table 14h. GARLIC (Native): Transportation costs incurred by marketing participants, by item, Naga City, 2006
Activity/Practice RETAILER
(peso per kilogram)
Vehicle rental Procurement 2.000
Distribution 2.000
TOTAL
4.000
Activity/Practice RETAILER
(peso per kilogram)
Vehicle rental Procurement 2.000
TOTAL
2.000
MARKETING COSTS STRUCTURE:
G A R L I C
Average cash costs in garlic marketing were P12.08 per kilogram in Cebu City
and P9.29 per kilogram in Metro Manila. Traders in Cagayan de Oro City incurred an average of P3.81 for every kilogram of native garlic. This was the lowest cash cost of marketing garlic in the demand areas.
In the case of imputed costs of marketing garlic, traders in Metro Manila
registered the highest cost at P3.88 per kilogram followed by Cagayan de Oro City at P2.66. However, in the cities of Naga and Legaspi, average imputed costs were estimated at P0.55 and P0.85 per kilogram, respectively.
Figures 18-26 show the percentage share of each cost component to the total marketing cost by province/area.
1) Supply Areas
44 17
Figure 19. Percent distribution of marketing cost, by component, Ilocos Sur, 2006
Figure 18. Percentage distribution of marketing cost, by component,
Ilocos Norte, 2006
Imputed Cost42%
Other Operating
Cost7%
Labor30%
Transportation
8% Cost of
Materials13%
Imputed Cost 42%
Other Operating cost 7%
Labor 30%
Cost of Materials 13%
Transportation cost 8%
Table 14e. GARLIC (Native): Transportation costs incurred by marketing participants, by item, Nueva Ecija, 2006
Table 14f. GARLIC (Native): Transportation costs incurred by marketing participants, by item, Metro Manila, 2006
Activity/Practice IRA-LD RETAILER
(peso per kilogram)
Vehicle rental Procurement 0.363 0.257 Distribution 3.000
TOTAL
3.363 0.257
Activity/Practice FARMER RETAILER
(peso per kilogram)
Vehicle rental Procurement 1.670 Distribution 0.900 1.100
Owned Vehicle
Gas & Oil 0.070
TOTAL
0.900 2.840
Item Metro Manila Legaspi City Naga City Cebu City Cagayan de
Oro City Davao City
Cash Cost 9.29 7.34 5.10 12.08 3.81 7.01
Imputed Cost 3.88 0.85 0.55 1.23 2.66 1.71
TOTAL 13.49 8.19 5.65 13.31 6.47 8.72
Table 12. GARLIC (Native): Average marketing cost by major components, selected demand areas, Philippines, 2006
(peso per kilogram)
MARKETING COSTS STRUCTURE:
G A R L I C
2) Demand Areas
18 43
Figure 20. Percentage distribution of marketing cost, by component,
Nueva Ecija, 2006
Figure 21. Percent dis tribution of m arketing cost, by com ponent, M etro
Manila, 2006
Labor13%
Materials used 16%
Imputed Cost29%
Other Operating
cost17%
Transport-ation cost
25%
Labor 35%
Cost of Materials
1%
Other Operating
cost 6%
Imputed Cost19%
Transportationcost39%
Figure 22. Percent distribution of marketing cost, by component, Legaspi City,
2006
Transport- ation cost
49%
Materials used 9%
Other Operating
cost25%
Imputed Cost10%
Labor7%
Figure 24. Percent distribution of marketing cost, by component, Cebu City, 2006
Labor 40%
Transporta-tion cost
8%
Materials used 18%
Other Operating
cost24%
Imputed Cost10%
Figure 23. Percent distribution of marketing cost, by component, Naga City, 2006
Labor 18%
Other Operating expenses
10%
Imputed Cost 10%
Materials used 28%
Transportationexpenses
34%
Activity/Practice
FARMER PA-MD PA-LD RETAILER
peso per kilogram
Vehicle Rental
Procurement 0.250 0.500 0.800
Distribution 0.753 0.250 0.666
Owned Vehicle
Gas/oil 0.153
TOTAL
0.906 0.500 1.166 0.800
Table 14c. GARLIC (Native): Transportation costs, by marketing participants, by item, Ilocos Norte, 2006
Table 14d. GARLIC (Native): Transportation costs incurred by marketing participants, by item, Ilocos Sur, 2006
Activity/Practice FARMER RA-LD PA-LD PA-SD BA-SD RETAILER
(peso per kilogram)
Vehicle rental
Procurement 0.250 0.060 0.080 0.200
Distribution 0.500 0.030 0.150 0.260 0.580
Owned Vehicle
Gas & Oil 0.160 0.250 0.300 0.430
TOTAL
0.660 0.250 0.580 0.640 0.340 0.780
MARKETING COSTS STRUCTURE:
G A R L I C
2. Marketing Margins A marketing margin is the difference between the price of a product at one
stage and the price of the same product at another stage in the marketing process. This margin includes the amount paid for marketing services applied to the product at the particular stage. This information is useful in assessing the performance of the food marketing system.
a. Ilocos Norte
With an average farm price of P57.00 per kilogram, farmers realized a net margin of P9.18 per kilogram after deducting the production cost of P35.77 and the marketing cost of P12.05. Among the marketing participants, retailer had the highest net margin at P6.65 per kilogram. The three types of assembler-distributors realized almost the same amount of net margins at more than P2.00 per kilogram.
42 19
Table 14a. GARLIC (Native): Transportation costs, by item, selected supply provinces, Philippines, 2006
Table 14b. GARLIC (Native): Transportation costs, by item, selected demand areas, Philippines, 2006
Figure 25. Percent distribution of marketing cost, by component, Cagayan
de Oro City, 2006
Imputed Cost40%
Transporta-tion cost
13%
Other Operating
27%
Materials used 8%
Labor12%
Figure 26. Percent distribution of marketing cost, by component, Davao City,
2006 Labor
5%
Transpor- tation cost
59% Materials
used 0%
Other Operating
cost 8%
Imputed Cost 28%
Table 13. Cost of Production of Garlic (native), selected supply provinces, Philipines, 2006
(peso per kilogram)
Source: BAS’ Costs & Returns Survey (CRS)
Ilocos Norte Ilocos Sur Nueva Ecija 35.77 44.26
30.03
Table 14. Marketing Cost and Margins of Marketing Participants, Ilocos Norte, 2006
(peso per kilogram)
Marketing Participant
Price Total
Marketing Cost
Margins Buying Selling Gross Net FARMER 57.00 12.05 9.18
MA-MD 60.00 65.00 2.77 5.00 2.23 PA-MD 59.00 63.00 1.45 4.00 2.55 PA-LD 65.00 69.00 1.78 4.00 2.22 RETAILER 70.00 82.00 5.35 12.00 6.65
MARKETING COSTS STRUCTURE:
G A R L I C
Activity/Practice Ilocos Norte Ilocos Sur Nueva Ecija
peso per kilogram
Vehicle rental
Procurement 0.516 0.147 1.670
Distribution 0.756 0.255 1.600
Owned Vehicle Gas & Oil 0.153 0.285 0.070
TOTAL
1.425 0.687 3.340
Activity/Practice Metro Manila Legaspi
City Naga City Cebu City Cagayan de Oro City
Davao City
(peso per kilogram)
Vehicle rental
Procurement .310 4.000 2.000 0.092 0.813 3.64
Distribution 3.00 0.908
Owned vehicle Gas & Oil 0.001
TOTAL
3.310 4.000 2.000 1.000 0.813 3.641
b. Ilocos Sur
Garlic farmers had a net margin of P5.25 per kilogram generated from the selling price of P60.00 per kilogram. Among the traders, BA-SD and the retailers had the largest margin per kilogram at P7.48 and P7.94, respectively. PA-SD realized a margin of P5.91 per kilogram while PA-LD netted P4.65 per kilogram. On the other hand, RA-LD recorded the lowest margin at P2.42 per kilogram.
c. Nueva Ecija
Of the three supply provinces, farmers and retailers in Nueva Ecija registered the highest net margin. Given a production cost of P30.03 and marketing cost of P3.55, farmers got a net margin of P16.42 per kilogram of garlic. Retailers, on the other hand, netted P41.90 after deducting the marketing cost of P8.10 and buying price of P50.00 per kilogram of garlic.
20 41
Table 16. Marketing Cost and Margins of Marketing Participants, Nueva Ecija, 2006
(peso per kilogram)
Price Margins Marketing Participant Buying Selling
Total Marketing
Cost Gross Net
FARMER 50.00 3.55 16.42
RETAILER 50.00 100.00 8.10 50.00 41.90
Table 13k. GARLIC (Native): Labor costs incurred by marketing participants, by activity/item, Davao City, 2006
Activity/Practice
IRA-LD BA-SD RETAILER
(peso per kilogram)
Procurement
Hauling 0 .050 0.100
Distribution
Loading a/
Hauling a/
Cleaning a/
Weighing a/
Packing a/
Salaries & Wages 0.250
TOTAL
0.250 0.050 0.100
Table 15. Marketing Cost and Margins of Marketing Participants, Ilocos Sur, 2006
(peso per kilogram)
Marketing Participant
Price Margins
Buying Selling
Total Marketing
Cost
Gross Net FARMER 60.00 10.49 5.25 RA-LD 62.00 65.00 0.58 3 2.42 PA-LD 63.00 70.00 0.35 7.00 4.65 PA-SD 65.00 72.00 1.09 7.00 5.91 BA-SD 62.00 70.00 0.52 8.00 7.48 RETAILER 74.00 85.00 3.06 11.00 7.94
MARKETING COSTS STRUCTURE:
G A R L I C
F. Problems Encountered by Respondents
a. Farmer Strong competition with imported variety was the problem cited by about
22 % of the farmer-respondents from Ilocos Norte and Ilocos Sur. According to them, some garlic farmers have shifted to producing crops like onion (multiplier) and palay due to low prices of native garlic. This was due to the presence of large volume of imported variety.
Another problem was the lower selling price for garlic due to urgent financial needs of the farmers. This was revealed by about 14 percent of farmer-respondents in Ilocos Norte who have sold their commodity according to the price asked for by the buyer.
According to four farmers (7%) interviewed, there were buyers who always asked for pieces of garlic free in addition to what they have bought. This translated to a loss on the part of the farmers.
b. Trader The problem of retailers was the presence of few buyers particularly among those with stalls located with few passers-
by which would mean low sale of native garlic.
40 21
Table 13i. GARLIC (Native): Labor costs incurred by marketing participants, by activity/item, Cebu City, 2006
Table 13j. GARLIC (Native): Labor costs incurred by marketing participants, by activity/item, Cagayan de Oro City, 2006
Activity/Practice
IRA-SD RETAILER
(peso per kilogram) Procurement
Hauling 0.05
Unloading 0.03
Distribution
Cleaning 0.243 2.09
Sor ting 0.09
Weighing 0.56 2.09
Handling .021
Packing 0.56
Salaries & Wages 0.12 2.652
TOTAL
1.594 6.912
MARKETING COSTS STRUCTURE:
G A R L I C
Activity/Practice RETAILER
(peso per kilogram)
Procurement
Hauling 0.002
Distribution
Sorting 0.730
Salaries & Wages 0.020
TOTAL
0.752
DEFINITION OF TERMS
Borrowed Capital – capital used was borrowed from persons, banks and other
sources for the purpose of garlic marketing operations. Bundling – grouping and tieing garlic with bamboo strip at specific number of
kilograms. Business ownership – refers to the ownership of producers and traders as to
single proprietorship, partnership, corporation or cooperative.
Cash – immediate payment in cash basis for the commodity procured or sold. Corporation – type of business ownership wherein the business is created by
operation of law having right of succession and the power attributes and properties expressly authorized by law to its existence.
Credit – deferred payment for the commodity procured or sold; due date and
interests rates depend on the agreement between buyer and seller. Delivery – mode of procurement and distribution wherein the supplier go to the
buyer to sell the commodity. Demand areas – provinces/areas where most of the garlic produced in the supply
areas were sold or brought. Garlic Assembler – procures from farmers and traders in the supply
areas/‘bagsakan” areas or at the markets. Garlic assembler could be classified into:
a) Barangay Garlic Assembler – procures within the barangay. b) Municipal Garlic Assembler – procures from two or more barangays
within the municipality. c) Provincial Garlic Assembler – procures from two or more
municipalities within the province d) Regional Garlic Assembler – procures from two or more provinces
within the region. e) Interregional Garlic Assembler – procures from two or more regions.
22 39
Table 13g. GARLIC (Native): Labor costs incurred by marketing participants, by activity/item, Legaspi City, 2006
Table 13h. GARLIC (Native): Labor costs incurred by marketing participants, by activity/item, Naga City, 2006
Act ivity/Practice
RETAILER
(peso per kilogram)
Procurement
Loading 0.053
Hauling 0.166
Unloading 0.053
Salaries & Wages 0.280
TOTAL
0.552
Activity/Practice
RETAILER
(peso per kilogram)
Procurement
Hauling 1.000
TOTAL
1 .000
MARKETING COSTS STRUCTURE:
G A R L I C
Garlic Assembler – Distributor – assumes the activities, services and resources of
an assembler and distributor. Garlic Distributor – spends most of his time selling garlic or looking for buyers;
acquires ownership of garlic he/she sells at wholesale basis. It could be further classified into:
a) Small native garlic distributor – delivers or sells in only one market b) Medium native garlic distributor – delivers or sells in two or more
garlic markets in a province. c) Large distributor – transports to buyers outside the province; may or
may not sell to buyers within the province or he/she may not base in the market.
Garlic retailer – sells to consumer Handling – carrying packed-containers of garlic from one place to another, which
composed of loading and unloading Hauling – bringing the harvest from the farm to the first point of sale or moving the
commodity from the farm to the trading or bagsakan area Imputed costs – expenses which include the annual depreciation costs of
materials, tools, equipment and facilities used in business operations; and unpaid labor rendered by operators, traders and members of their family.
Loading – carrying different bundled/packed garlic inside the vehicle. Marketing channels – refer to the inter-organizational system composed of
interdependent participants involved in the task of moving products from the point of production to the point of consumption. It may vary according to location, time and type of the products sold.
Marketing Costs - costs incurred by marketing participants in moving their
products from one place to another. Cost components include labor cost, transportation cost, cost of materials, other operating cost and imputed cost.
38 23
Table 13e. GARLIC (Native): Labor costs incurred by marketing participants, by activity/item, Nueva Ecija, 2006
Table 13f. GARLIC (Native): Labor costs incurred by marketing participants, by activity/item, Metro Manila, 2006
Activity/Practice
FARMER RETAILER
(peso per kilogram) Procurement
Braiding 0.52
Distribution Hanging 0.130 Handling 0.660
Hauling 0.160 Cleaning 0.140 Drying 0.210 Sorting 0.140 Cutting “pongos” 0.300 Braiding 0.120
Salaries & Wages 0.790
TOTAL
1.170 1.970
Activity/Practice
IRA-LD RETAILER
(peso per kilogram) Procurement
Loading 0.053Hauling 0.015Unloading 0.015Weighing 0.015 0.571Sorting 0.015 0.455
Distribution Hauling 0.015 0.323Sorting 0.015 0.359Weighing 0.015 0.359Cleaning 0.015 0.323 Packing 0.015 0.359
Salaries & Wages 0.015 0.359
TOTAL
0.150 3.161
MARKETING COSTS STRUCTURE:
G A R L I C
Market Margin – difference between the value of a product at one stage and the
value of the same product at another stage. Packing – putting garlic in the sack
Partnership – type of business ownership where capital is shared and managed by
two to five persons with the intention of sharing profit. Picked-up – mode of procurement and distribution wherein the buyer goes to the
supplier to buy the commodity.
Self-financed – the operator or trader uses his own fund to finance garlic marketing operations.
Single proprietorship – business is owned solely by the farmer or trader. Sorting - classifying or arranging garlic according to size, quality and freshness Supply areas – top three garlic producing provinces in the country in terms of
quantity produced. Unloading – carrying the sacked or bundled garlic outside the vehicle. Years in garlic farming/trading business - refers to the number of years spent by
farmers in garlic farming and years spent by traders in garlic trading.
24 37
Table 13d. GARLIC (Native): Labor costs incurred by marketing participants, by activity/item, Ilocos Sur, 2006
Activity/Practice
FARMER RA-LD PA-LD PA-SD BA-SD
(peso per kilogram)
Procurement
Loading 0.010 0.010 0.010 0.020
Hauling 0.030 0.010 0.020
Cleaning 0.080 0.010 0.020
Sorting 0.080 0.010 0.020
Weighing 0.009 0.020 0.010 0.020
Braiding 0.080 0.010 0.020
Distribution
Loading 0.010 0.020 0.020 0.010
Hauling 0.540 0.009 0.020 0.020 0.010
Unloading 0.050
Drying/Hanging 0.280
Cleaning 0.660
Sorting 0.440
Weighing 0.540 0.010 0.010 0.020 0.010
Braiding 0.580
Packing 0.010 0.020 0.010
Salaries & Wages 0.240 0.060
TOTAL
3.280 0.058 0.410 0.190 0.160
MARKETING COSTS STRUCTURE:
G A R L I C
36 25
ANNEXES
Table 13c. GARLIC (Native): Labor costs incurred by marketing participants, by activity/item, Ilocos Norte, 2006
Activity/Practice
FARMER MA-MD PA-MD PA-LD RETAILER
(peso per kilogram)
Procurement
Loading .028
Hauling 0.300 0.013
Unloading 0.024
Sorting/Cleaning 0.900 .030 .0.006
Weighing 0.150 .005 0.006
Packing 0.034
Distribution
Loading 0.021 0.013
Hauling 0.038 0.033
Drying 0.230
Cleaning 0.193 0.450 0.100 0.022 0.249
Sorting 0.154
Weighing 0.073 0.100 0.095 0.099
Braiding 0.076
Bundling 0.380 0.312
Packing 0.189 0.105
Bamboo stripping 0.106
Salaries & Wages 0.265 0.005 .105
TOTAL
1.725 1.800 0.240 0.274 0.870
MARKETING COSTS STRUCTURE:
G A R L I C
26 35
a/ less than 0.001
Table 13b. GARLIC (Native): Labor costs by marketing activity/item, selected demand areas, Philippines, 2006
MARKETING COSTS STRUCTURE:
G A R L I C
Activity/Practice Metro Manila
Legaspi City Naga City Cebu City Cagayan de
Oro City Davao City
Procurement
Loading 0.053 0.053
Hauling 0.015 0.166 1.000 0.050 0.002 0.075
Unloading 0.015 0.053 0.030
Sorting/Classifying 0.235
Weighing 0.293
Distribution
Loading a/
Hauling 0.169 a/
Unloading
Sorting 0.187 0.090 0.730
Weighing 0.187 1.325 a/
Cleaning 0.169 1.166 a/
Handling .021
Packing 0.187 0.560 a/
Salaries & Wages 0.187 0.280 1.386 0.020 0.250
TOTAL 1.697 0.552 1.000 4.628 0.752 0.325
34 27
Table 1. GARLIC (Native): Number of respondents, selected areas, Philippines, 2006
Table 2. GARLIC (Native): Number of respondents by type of marketing participants, selected areas, Philippines, 2006
Table 13a. GARLIC (Native): Labor costs by marketing activity/item, selected supply provinces, Philippines, 2006
AREA FARMER IRA-SD/ PA-SD/ MA-SD/ BA-SD
PA-MD/ MA-MD
IRA-LD/ PA-LD/ MA-LD/ BA-LD
RETAILER TOTAL
SUPPLY AREAS ILOCOS NORTE 19 3 4 5 31 ILOCOS SUR 20 4 8 4 36 NUEVA ECIJA 20 9 29
DEMAND AREAS
METRO MANILA - 1 7 8 LEGASPI CITY - 2 2 NAGA CITY - 2 2 CEBU CITY - 3 4 7 CAGAYAN DE ORO CITY - 2 2 DAVAO CITY - 2 3 3 8
TOTAL
59 9 3 16 38 125
AREA FARMER TRADER TOTAL
SUPPLY AREAS ILOCOS NORTE 19 12 31 ILOCOS SUR 20 16 36 NUEVA ECIJA 20 9 29
DEMAND AREAS
METRO MANILA 8 8 LEGASPI CITY 2 2 NAGA CITY 2 2 CEBU CITY 7 7 CAGAYAN DE ORO CITY 2 2 DAVAO CITY 8 8
TOTAL
59 66 125
MARKETING COSTS STRUCTURE:
G A R L I C
Activity/Practice Ilocos Norte Ilocos Sur Nueva Ecija
Procurement
Loading 0.030 0.013
Hauling 0.156 0.020
Unloading 0.024
Cleaning 0.037 Sorting 0..312 0.037
Weighing 0.053 0.015
Packing 0.034
Braiding 0.037 0.52
Distribution Loading 0.017 0.015 Hauling 0.035 0.150 .160
Unloading 0.050
Drying / Hanging 0.230 0.280 0.210 Cleaning 0.202 0.660 0.140
Sorting 0.154 0.440 0.140
Weighing 0.091 0.118
Braiding 0.076 0.580 0.120
Handling / Storage 0.660 Bundling 0.346
Packing 0.147 0.013 Bamboo stripping 0.106 Cutting “pongos” 0.300
Salary / Wages 0.125 0.150 0.790
TOTAL
2.138 2.613 3.040
28 33
Table 3. GARLIC (Native): Number of farmer-respondents by tenurial status, selected provinces, Philippines, 2006
Table 4. GARLIC (Native): Number of trader-respondents by type of business ownership, selected areas, Philippines, 2006
AREA LAND OWNER TENANT RENT
FREE LEASE CLT TOTAL
SUPPLY AREAS ILOCOS NORTE ILOCOS SUR NUEVA ECIJA
7 20 13
12 2
1
3
1
19 20 20
TOTAL
40 14 1 3 1 59
AREA SINGLE PROPRIETORSHIP PARTNERSHIP TOTAL
SUPPLY AREAS ILOCOS NORTE
ILOCOS SUR NUEVA ECIJA DEMAND AREAS METRO MANILA LEGASPI CITY NAGA CITY CEBU CITY CAGAYAN DE ORO CITY DAVAO CITY
10 16 9
8 2 2 7 2 8
2
12 16 9 8 2 2 7 2 8
TOTAL
64 2 66
Table 12b. GARLIC (Native): Major sources and destinations, selected demand areas, Philippines, 2006
SOURCES DESTINATIONS AREA WITHIN THE
PROVINCE OUTSIDE THE
PROVINCE WITHIN THE PROVINCE
OUTSIDE THE PROVINCE
DEMAND AREAS
METRO MANILA Balintawak, Divisoria & Farmers Market
Mindoro, Pangasinan, Ilocos Norte & Ilocos Sur
Pasig, Cubao, Taguig, Marikina, Mandaluyong, Kalentong, Laguna & Batangas
NAGA CITY Nueva Ecija & Divisoria Daraga LEGASPI CITY Nueva Ecija, Divisoria
& Pangasinan Legaspi
CEBU CITY Carbon Market,
Carbon & Talisay Ilocos Sur & Divisoria Cebu City &
Lapu-lapu City Bohol & Leyte
CAGAYAN DE ORO CITY
Agora Market Divisoria & Mindoro Cagayan de Oro City
DAVAO CITY
Binondo & Divisoria Bangoy, Toril,
Bangkerohan & Calinan
North Cotabato, South Cotabato & Tagum
MARKETING COSTS STRUCTURE:
G A R L I C
32 29
Table 5. GARLIC (Native): Number of respondents by source of capital, selected areas, Philippines, 2006
Table 6. GARLIC (Native): Number of farmer-respondents by years in farming, selected provinces, Philippines, 2006
AREA SELF-FINANCED LOAN/ BORROWED TOTAL
SUPPLY AREAS
ILOCOS NORTE 23 8 31 ILOCOS SUR 35 1 36 NUEVA ECIJA 24 5 29
DEMAND AREAS
METRO MANILA 8 8 LEGASPI CITY 2 2 NAGA CITY 2 2 CEBU CITY 7 7 CAGAYAN DE ORO CITY 2 2 DAVAO CITY 8 8
TOTAL
111 17 125
YEAR IN FARMINGILOCOS NORTE
ILOCOS SURNUEVA ECIJA
TOTAL
less than 5 2 3 1 6
5 - 10 3 7 4 14
11 - 15 2 2 4
16 - 20 8 4 3 15
21 & above 6 4 10 20
TOTAL 19 20 20 59
Table 11. GARLIC (Native): Number of respondents by terms of payment in distribution, selected areas, Philippines, 2006
Table 12a. GARLIC (Native): Major sources and destinations, selected supply provinces, Philippines, 2006
AREA CASH CREDIT CASH & CREDIT TOTAL
SUPPY AREAS ILOCOS NORTE 30 1 31 ILOCOS SUR 36 36 NUEVA ECIJA 29 29
DEMAND AREAS
METRO MANILA 1 7 8 LEGASPI 1 1 2 NAGA CITY 2 2 CEBU CITY 5 2 7 CAGAYAN DE ORO CITY 2 2 DAVAO CITY 8 8
TOTAL
114 8 3 125
AREA SOURCES DESTINATIONS
WITHIN THE PROVINCE
OUTSIDE THE PROVINCE
WITHIN THE PROVINCE
OUTSIDE THE PROVINCE
SUPPY AREAS
ILOCOS NORTE Bacarra, Sn Nicolas, Badoc, Vintar, Pasuquin & Sarrat
Sinai t, Ilocos Sur Laoag City, Bacarra, Badoc & Pasuquin
Baguio, Ilocos Sur, Cagayan, Pangasinan, Metro Manila, Bico l & Davao
ILOCOS SUR Narvacan, Magsingal,
Sto. Domingo & Cabugao
Badoc, Ilocos Norte Sinait & Vigan Baguio, Cagayan Val ley, Pangasinan, Metro Mani la, Laguna, Cebu, Cagayan de Oro & Davao
NUEVA ECIJA Bongabon,
Cabanatuan City, Munoz, Sn Jose City & Rizal
Cabanatuan City, Munoz, Sn Jose City, Rizal, Gapan & Talavera
Bulacan & Metro Manila
MARKETING COSTS STRUCTURE:
G A R L I C
30 31
Table 7. GARLIC (Native): Number of trader-respondents by years in trading, selected areas, Philippines, 2006
Table 8. GARLIC (Native): Number of trader-respondents by mode of procurement, selected areas, Philippines, 2006
YEARS IN TRADING
ILOCOS NORTE
ILOCOS SUR
NUEVA ECIJA
METRO MANILA
LEGASPI CITY
NAGA CITY
CEBU CITY
CAGAYAN DE ORO
CITY DAVAO
CITY TOTAL
less than 5 3 4 1 1 1 10
5 - 10 6 7 4 5 2 1 2 2 29
11 - 15 1 5 2 1 5 14
16 - 20 1 2 2 5
21 & above 2 3 2 1 8
TOTAL
12 16 9 8 2 2 7 2 8 66
AREA PICKED-UP DELIVERED BOTH TOTAL
SUPPLY AREAS
ILOCOS NORTE 9 3 12 ILOCOS SUR 13 2 1 16
NUEVA ECIJA 3 6 9
DEMAND AREAS METRO MANILA 1 7 8 LEGASPI CITY 1 1 2
NAGA CITY 1 1 2 CEBU CITY 5 2 7
CAGAYAN DE ORO CITY 2 2 DAVAO CITY 5 3 8
TOTAL
40 25 1 66
Table 9. GARLIC (Native): Number of respondents by terms of payment in procurement, selected areas, Philippines, 2006
Table 10. GARLIC (Native): Number of respondents by mode of distribution, selected areas, Philippines, 2006
AREA CASH CREDIT CASH & CREDIT TOTAL
SUPPLY AREAS
ILOCOS NORTE 8 3 1 12 ILOCOS SUR 16 16 NUEVA ECIJA 9 9
DEMAND AREAS
METRO MANILA 8 8 LEGASPI CITY 1 1 2 NAGA CITY 1 1 2 CEBU CITY 2 2 3 7
CAGAYAN DE ORO CITY 2 2 DAVAO CITY 8 8
TOTAL
54 7 5 66
AREA PICKED-UP DELIVERED BOTH TOTAL
SUPPLY AREAS ILOCOS NORTE 21 10 31 ILOCOS SUR 31 4 1 36 NUEVA ECIJA 19 8 2 29
DEMAND AREAS
METRO MANILA 7 1 8 LEGASPI CITY 1 1 2 NAGA CITY 2 2 CEBU CITY 6 1 7 CAGAYAN DE ORO CITY 2 2 DAVAO CITY 5 3 8
TOTAL
94 28 3 125
MARKETING COSTS STRUCTURE:
G A R L I C
30 31
Table 7. GARLIC (Native): Number of trader-respondents by years in trading, selected areas, Philippines, 2006
Table 8. GARLIC (Native): Number of trader-respondents by mode of procurement, selected areas, Philippines, 2006
YEARS IN TRADING
ILOCOS NORTE
ILOCOS SUR
NUEVA ECIJA
METRO MANILA
LEGASPI CITY
NAGA CITY
CEBU CITY
CAGAYAN DE ORO
CITY DAVAO
CITY TOTAL
less than 5 3 4 1 1 1 10
5 - 10 6 7 4 5 2 1 2 2 29
11 - 15 1 5 2 1 5 14
16 - 20 1 2 2 5
21 & above 2 3 2 1 8
TOTAL
12 16 9 8 2 2 7 2 8 66
AREA PICKED-UP DELIVERED BOTH TOTAL
SUPPLY AREAS
ILOCOS NORTE 9 3 12 ILOCOS SUR 13 2 1 16
NUEVA ECIJA 3 6 9
DEMAND AREAS METRO MANILA 1 7 8 LEGASPI CITY 1 1 2
NAGA CITY 1 1 2 CEBU CITY 5 2 7
CAGAYAN DE ORO CITY 2 2 DAVAO CITY 5 3 8
TOTAL
40 25 1 66
Table 9. GARLIC (Native): Number of respondents by terms of payment in procurement, selected areas, Philippines, 2006
Table 10. GARLIC (Native): Number of respondents by mode of distribution, selected areas, Philippines, 2006
AREA CASH CREDIT CASH & CREDIT TOTAL
SUPPLY AREAS
ILOCOS NORTE 8 3 1 12 ILOCOS SUR 16 16 NUEVA ECIJA 9 9
DEMAND AREAS
METRO MANILA 8 8 LEGASPI CITY 1 1 2 NAGA CITY 1 1 2 CEBU CITY 2 2 3 7
CAGAYAN DE ORO CITY 2 2 DAVAO CITY 8 8
TOTAL
54 7 5 66
AREA PICKED-UP DELIVERED BOTH TOTAL
SUPPLY AREAS ILOCOS NORTE 21 10 31 ILOCOS SUR 31 4 1 36 NUEVA ECIJA 19 8 2 29
DEMAND AREAS
METRO MANILA 7 1 8 LEGASPI CITY 1 1 2 NAGA CITY 2 2 CEBU CITY 6 1 7 CAGAYAN DE ORO CITY 2 2 DAVAO CITY 5 3 8
TOTAL
94 28 3 125
MARKETING COSTS STRUCTURE:
G A R L I C
32 29
Table 5. GARLIC (Native): Number of respondents by source of capital, selected areas, Philippines, 2006
Table 6. GARLIC (Native): Number of farmer-respondents by years in farming, selected provinces, Philippines, 2006
AREA SELF-FINANCED LOAN/ BORROWED TOTAL
SUPPLY AREAS
ILOCOS NORTE 23 8 31 ILOCOS SUR 35 1 36 NUEVA ECIJA 24 5 29
DEMAND AREAS
METRO MANILA 8 8 LEGASPI CITY 2 2 NAGA CITY 2 2 CEBU CITY 7 7 CAGAYAN DE ORO CITY 2 2 DAVAO CITY 8 8
TOTAL
111 17 125
YEAR IN FARMINGILOCOS NORTE
ILOCOS SURNUEVA ECIJA
TOTAL
less than 5 2 3 1 6
5 - 10 3 7 4 14
11 - 15 2 2 4
16 - 20 8 4 3 15
21 & above 6 4 10 20
TOTAL 19 20 20 59
Table 11. GARLIC (Native): Number of respondents by terms of payment in distribution, selected areas, Philippines, 2006
Table 12a. GARLIC (Native): Major sources and destinations, selected supply provinces, Philippines, 2006
AREA CASH CREDIT CASH & CREDIT TOTAL
SUPPY AREAS ILOCOS NORTE 30 1 31 ILOCOS SUR 36 36 NUEVA ECIJA 29 29
DEMAND AREAS
METRO MANILA 1 7 8 LEGASPI 1 1 2 NAGA CITY 2 2 CEBU CITY 5 2 7 CAGAYAN DE ORO CITY 2 2 DAVAO CITY 8 8
TOTAL
114 8 3 125
AREA SOURCES DESTINATIONS
WITHIN THE PROVINCE
OUTSIDE THE PROVINCE
WITHIN THE PROVINCE
OUTSIDE THE PROVINCE
SUPPY AREAS
ILOCOS NORTE Bacarra, Sn Nicolas, Badoc, Vintar, Pasuquin & Sarrat
Sinai t, Ilocos Sur Laoag City, Bacarra, Badoc & Pasuquin
Baguio, Ilocos Sur, Cagayan, Pangasinan, Metro Manila, Bico l & Davao
ILOCOS SUR Narvacan, Magsingal,
Sto. Domingo & Cabugao
Badoc, Ilocos Norte Sinait & Vigan Baguio, Cagayan Val ley, Pangasinan, Metro Mani la, Laguna, Cebu, Cagayan de Oro & Davao
NUEVA ECIJA Bongabon,
Cabanatuan City, Munoz, Sn Jose City & Rizal
Cabanatuan City, Munoz, Sn Jose City, Rizal, Gapan & Talavera
Bulacan & Metro Manila
MARKETING COSTS STRUCTURE:
G A R L I C
28 33
Table 3. GARLIC (Native): Number of farmer-respondents by tenurial status, selected provinces, Philippines, 2006
Table 4. GARLIC (Native): Number of trader-respondents by type of business ownership, selected areas, Philippines, 2006
AREA LAND OWNER TENANT RENT
FREE LEASE CLT TOTAL
SUPPLY AREAS ILOCOS NORTE ILOCOS SUR NUEVA ECIJA
7 20 13
12 2
1
3
1
19 20 20
TOTAL
40 14 1 3 1 59
AREA SINGLE PROPRIETORSHIP PARTNERSHIP TOTAL
SUPPLY AREAS ILOCOS NORTE
ILOCOS SUR NUEVA ECIJA DEMAND AREAS METRO MANILA LEGASPI CITY NAGA CITY CEBU CITY CAGAYAN DE ORO CITY DAVAO CITY
10 16 9
8 2 2 7 2 8
2
12 16 9 8 2 2 7 2 8
TOTAL
64 2 66
Table 12b. GARLIC (Native): Major sources and destinations, selected demand areas, Philippines, 2006
SOURCES DESTINATIONS AREA WITHIN THE
PROVINCE OUTSIDE THE
PROVINCE WITHIN THE PROVINCE
OUTSIDE THE PROVINCE
DEMAND AREAS
METRO MANILA Balintawak, Divisoria & Farmers Market
Mindoro, Pangasinan, Ilocos Norte & Ilocos Sur
Pasig, Cubao, Taguig, Marikina, Mandaluyong, Kalentong, Laguna & Batangas
NAGA CITY Nueva Ecija & Divisoria Daraga LEGASPI CITY Nueva Ecija, Divisoria
& Pangasinan Legaspi
CEBU CITY Carbon Market,
Carbon & Talisay Ilocos Sur & Divisoria Cebu City &
Lapu-lapu City Bohol & Leyte
CAGAYAN DE ORO CITY
Agora Market Divisoria & Mindoro Cagayan de Oro City
DAVAO CITY
Binondo & Divisoria Bangoy, Toril,
Bangkerohan & Calinan
North Cotabato, South Cotabato & Tagum
MARKETING COSTS STRUCTURE:
G A R L I C
34 27
Table 1. GARLIC (Native): Number of respondents, selected areas, Philippines, 2006
Table 2. GARLIC (Native): Number of respondents by type of marketing participants, selected areas, Philippines, 2006
Table 13a. GARLIC (Native): Labor costs by marketing activity/item, selected supply provinces, Philippines, 2006
AREA FARMER IRA-SD/ PA-SD/ MA-SD/ BA-SD
PA-MD/ MA-MD
IRA-LD/ PA-LD/ MA-LD/ BA-LD
RETAILER TOTAL
SUPPLY AREAS ILOCOS NORTE 19 3 4 5 31 ILOCOS SUR 20 4 8 4 36 NUEVA ECIJA 20 9 29
DEMAND AREAS
METRO MANILA - 1 7 8 LEGASPI CITY - 2 2 NAGA CITY - 2 2 CEBU CITY - 3 4 7 CAGAYAN DE ORO CITY - 2 2 DAVAO CITY - 2 3 3 8
TOTAL
59 9 3 16 38 125
AREA FARMER TRADER TOTAL
SUPPLY AREAS ILOCOS NORTE 19 12 31 ILOCOS SUR 20 16 36 NUEVA ECIJA 20 9 29
DEMAND AREAS
METRO MANILA 8 8 LEGASPI CITY 2 2 NAGA CITY 2 2 CEBU CITY 7 7 CAGAYAN DE ORO CITY 2 2 DAVAO CITY 8 8
TOTAL
59 66 125
MARKETING COSTS STRUCTURE:
G A R L I C
Activity/Practice Ilocos Norte Ilocos Sur Nueva Ecija
Procurement
Loading 0.030 0.013
Hauling 0.156 0.020
Unloading 0.024
Cleaning 0.037 Sorting 0..312 0.037
Weighing 0.053 0.015
Packing 0.034
Braiding 0.037 0.52
Distribution Loading 0.017 0.015 Hauling 0.035 0.150 .160
Unloading 0.050
Drying / Hanging 0.230 0.280 0.210 Cleaning 0.202 0.660 0.140
Sorting 0.154 0.440 0.140
Weighing 0.091 0.118
Braiding 0.076 0.580 0.120
Handling / Storage 0.660 Bundling 0.346
Packing 0.147 0.013 Bamboo stripping 0.106 Cutting “pongos” 0.300
Salary / Wages 0.125 0.150 0.790
TOTAL
2.138 2.613 3.040
26 35
a/ less than 0.001
Table 13b. GARLIC (Native): Labor costs by marketing activity/item, selected demand areas, Philippines, 2006
MARKETING COSTS STRUCTURE:
G A R L I C
Activity/Practice Metro Manila
Legaspi City Naga City Cebu City Cagayan de
Oro City Davao City
Procurement
Loading 0.053 0.053
Hauling 0.015 0.166 1.000 0.050 0.002 0.075
Unloading 0.015 0.053 0.030
Sorting/Classifying 0.235
Weighing 0.293
Distribution
Loading a/
Hauling 0.169 a/
Unloading
Sorting 0.187 0.090 0.730
Weighing 0.187 1.325 a/
Cleaning 0.169 1.166 a/
Handling .021
Packing 0.187 0.560 a/
Salaries & Wages 0.187 0.280 1.386 0.020 0.250
TOTAL 1.697 0.552 1.000 4.628 0.752 0.325
36 25
ANNEXES
Table 13c. GARLIC (Native): Labor costs incurred by marketing participants, by activity/item, Ilocos Norte, 2006
Activity/Practice
FARMER MA-MD PA-MD PA-LD RETAILER
(peso per kilogram)
Procurement
Loading .028
Hauling 0.300 0.013
Unloading 0.024
Sorting/Cleaning 0.900 .030 .0.006
Weighing 0.150 .005 0.006
Packing 0.034
Distribution
Loading 0.021 0.013
Hauling 0.038 0.033
Drying 0.230
Cleaning 0.193 0.450 0.100 0.022 0.249
Sorting 0.154
Weighing 0.073 0.100 0.095 0.099
Braiding 0.076
Bundling 0.380 0.312
Packing 0.189 0.105
Bamboo stripping 0.106
Salaries & Wages 0.265 0.005 .105
TOTAL
1.725 1.800 0.240 0.274 0.870
MARKETING COSTS STRUCTURE:
G A R L I C
Market Margin – difference between the value of a product at one stage and the
value of the same product at another stage. Packing – putting garlic in the sack
Partnership – type of business ownership where capital is shared and managed by
two to five persons with the intention of sharing profit. Picked-up – mode of procurement and distribution wherein the buyer goes to the
supplier to buy the commodity.
Self-financed – the operator or trader uses his own fund to finance garlic marketing operations.
Single proprietorship – business is owned solely by the farmer or trader. Sorting - classifying or arranging garlic according to size, quality and freshness Supply areas – top three garlic producing provinces in the country in terms of
quantity produced. Unloading – carrying the sacked or bundled garlic outside the vehicle. Years in garlic farming/trading business - refers to the number of years spent by
farmers in garlic farming and years spent by traders in garlic trading.
24 37
Table 13d. GARLIC (Native): Labor costs incurred by marketing participants, by activity/item, Ilocos Sur, 2006
Activity/Practice
FARMER RA-LD PA-LD PA-SD BA-SD
(peso per kilogram)
Procurement
Loading 0.010 0.010 0.010 0.020
Hauling 0.030 0.010 0.020
Cleaning 0.080 0.010 0.020
Sorting 0.080 0.010 0.020
Weighing 0.009 0.020 0.010 0.020
Braiding 0.080 0.010 0.020
Distribution
Loading 0.010 0.020 0.020 0.010
Hauling 0.540 0.009 0.020 0.020 0.010
Unloading 0.050
Drying/Hanging 0.280
Cleaning 0.660
Sorting 0.440
Weighing 0.540 0.010 0.010 0.020 0.010
Braiding 0.580
Packing 0.010 0.020 0.010
Salaries & Wages 0.240 0.060
TOTAL
3.280 0.058 0.410 0.190 0.160
MARKETING COSTS STRUCTURE:
G A R L I C
Garlic Assembler – Distributor – assumes the activities, services and resources of
an assembler and distributor. Garlic Distributor – spends most of his time selling garlic or looking for buyers;
acquires ownership of garlic he/she sells at wholesale basis. It could be further classified into:
a) Small native garlic distributor – delivers or sells in only one market b) Medium native garlic distributor – delivers or sells in two or more
garlic markets in a province. c) Large distributor – transports to buyers outside the province; may or
may not sell to buyers within the province or he/she may not base in the market.
Garlic retailer – sells to consumer Handling – carrying packed-containers of garlic from one place to another, which
composed of loading and unloading Hauling – bringing the harvest from the farm to the first point of sale or moving the
commodity from the farm to the trading or bagsakan area Imputed costs – expenses which include the annual depreciation costs of
materials, tools, equipment and facilities used in business operations; and unpaid labor rendered by operators, traders and members of their family.
Loading – carrying different bundled/packed garlic inside the vehicle. Marketing channels – refer to the inter-organizational system composed of
interdependent participants involved in the task of moving products from the point of production to the point of consumption. It may vary according to location, time and type of the products sold.
Marketing Costs - costs incurred by marketing participants in moving their
products from one place to another. Cost components include labor cost, transportation cost, cost of materials, other operating cost and imputed cost.
38 23
Table 13e. GARLIC (Native): Labor costs incurred by marketing participants, by activity/item, Nueva Ecija, 2006
Table 13f. GARLIC (Native): Labor costs incurred by marketing participants, by activity/item, Metro Manila, 2006
Activity/Practice
FARMER RETAILER
(peso per kilogram) Procurement
Braiding 0.52
Distribution Hanging 0.130 Handling 0.660
Hauling 0.160 Cleaning 0.140 Drying 0.210 Sorting 0.140 Cutting “pongos” 0.300 Braiding 0.120
Salaries & Wages 0.790
TOTAL
1.170 1.970
Activity/Practice
IRA-LD RETAILER
(peso per kilogram) Procurement
Loading 0.053Hauling 0.015Unloading 0.015Weighing 0.015 0.571Sorting 0.015 0.455
Distribution Hauling 0.015 0.323Sorting 0.015 0.359Weighing 0.015 0.359Cleaning 0.015 0.323 Packing 0.015 0.359
Salaries & Wages 0.015 0.359
TOTAL
0.150 3.161
MARKETING COSTS STRUCTURE:
G A R L I C
DEFINITION OF TERMS
Borrowed Capital – capital used was borrowed from persons, banks and other
sources for the purpose of garlic marketing operations. Bundling – grouping and tieing garlic with bamboo strip at specific number of
kilograms. Business ownership – refers to the ownership of producers and traders as to
single proprietorship, partnership, corporation or cooperative.
Cash – immediate payment in cash basis for the commodity procured or sold. Corporation – type of business ownership wherein the business is created by
operation of law having right of succession and the power attributes and properties expressly authorized by law to its existence.
Credit – deferred payment for the commodity procured or sold; due date and
interests rates depend on the agreement between buyer and seller. Delivery – mode of procurement and distribution wherein the supplier go to the
buyer to sell the commodity. Demand areas – provinces/areas where most of the garlic produced in the supply
areas were sold or brought. Garlic Assembler – procures from farmers and traders in the supply
areas/‘bagsakan” areas or at the markets. Garlic assembler could be classified into:
a) Barangay Garlic Assembler – procures within the barangay. b) Municipal Garlic Assembler – procures from two or more barangays
within the municipality. c) Provincial Garlic Assembler – procures from two or more
municipalities within the province d) Regional Garlic Assembler – procures from two or more provinces
within the region. e) Interregional Garlic Assembler – procures from two or more regions.
22 39
Table 13g. GARLIC (Native): Labor costs incurred by marketing participants, by activity/item, Legaspi City, 2006
Table 13h. GARLIC (Native): Labor costs incurred by marketing participants, by activity/item, Naga City, 2006
Act ivity/Practice
RETAILER
(peso per kilogram)
Procurement
Loading 0.053
Hauling 0.166
Unloading 0.053
Salaries & Wages 0.280
TOTAL
0.552
Activity/Practice
RETAILER
(peso per kilogram)
Procurement
Hauling 1.000
TOTAL
1 .000
MARKETING COSTS STRUCTURE:
G A R L I C
F. Problems Encountered by Respondents
a. Farmer Strong competition with imported variety was the problem cited by about
22 % of the farmer-respondents from Ilocos Norte and Ilocos Sur. According to them, some garlic farmers have shifted to producing crops
like onion (multiplier) and palay due to low prices of native garlic. This was due to the presence of large volume of imported variety.
Another problem was the lower selling price for garlic due to urgent financial needs of the farmers. This was revealed by about 14 percent of farmer-respondents in Ilocos Norte who have sold their commodity according to the price asked for by the buyer.
According to four farmers (7%) interviewed, there were buyers who always asked for pieces of garlic free in addition to what they have bought. This translated to a loss on the part of the farmers.
b. Trader The problem of retailers was the presence of few buyers particularly among those with stalls located with few passers-
by which would mean low sale of native garlic.
40 21
Table 13i. GARLIC (Native): Labor costs incurred by marketing participants, by activity/item, Cebu City, 2006
Table 13j. GARLIC (Native): Labor costs incurred by marketing participants, by activity/item, Cagayan de Oro City, 2006
Activity/Practice
IRA-SD RETAILER
(peso per kilogram) Procurement
Hauling 0.05
Unloading 0.03
Distribution
Cleaning 0.243 2.09
Sor ting 0.09
Weighing 0.56 2.09
Handling .021
Packing 0.56
Salaries & Wages 0.12 2.652
TOTAL
1.594 6.912
MARKETING COSTS STRUCTURE:
G A R L I C
Activity/Practice RETAILER
(peso per kilogram)
Procurement
Hauling 0.002
Distribution
Sorting 0.730
Salaries & Wages 0.020
TOTAL
0.752
b. Ilocos Sur
Garlic farmers had a net margin of P5.25 per kilogram generated from the selling price of P60.00 per kilogram. Among the traders, BA-SD and the retailers had the largest margin per kilogram at P7.48 and P7.94, respectively. PA-SD realized a margin of P5.91 per kilogram while PA-LD netted P4.65 per kilogram. On the other hand, RA-LD recorded the lowest margin at P2.42 per kilogram.
c. Nueva Ecija
Of the three supply provinces, farmers and retailers in Nueva Ecija registered the highest net margin. Given a production cost of P30.03 and marketing cost of P3.55, farmers got a net margin of P16.42 per kilogram of garlic. Retailers, on the other hand, netted P41.90 after deducting the marketing cost of P8.10 and buying price of P50.00 per kilogram of garlic.
20 41
Table 16. Marketing Cost and Margins of Marketing Participants, Nueva Ecija, 2006
(peso per kilogram)
Price Margins Marketing Participant Buying Selling
Total Marketing
Cost Gross Net
FARMER 50.00 3.55 16.42
RETAILER 50.00 100.00 8.10 50.00 41.90
Table 13k. GARLIC (Native): Labor costs incurred by marketing participants, by activity/item, Davao City, 2006
Activity/Practice
IRA-LD BA-SD RETAILER
(peso per kilogram)
Procurement
Hauling 0 .050 0.100
Distribution
Loading a/
Hauling a/
Cleaning a/
Weighing a/
Packing a/
Salaries & Wages 0.250
TOTAL
0.250 0.050 0.100
Table 15. Marketing Cost and Margins of Marketing Participants, Ilocos Sur, 2006
(peso per kilogram)
Marketing Participant
Price Margins
Buying Selling
Total Marketing
Cost
Gross Net FARMER 60.00 10.49 5.25 RA-LD 62.00 65.00 0.58 3 2.42 PA-LD 63.00 70.00 0.35 7.00 4.65 PA-SD 65.00 72.00 1.09 7.00 5.91 BA-SD 62.00 70.00 0.52 8.00 7.48 RETAILER 74.00 85.00 3.06 11.00 7.94
MARKETING COSTS STRUCTURE:
G A R L I C
2. Marketing Margins A marketing margin is the difference between the price of a product at one
stage and the price of the same product at another stage in the marketing process. This margin includes the amount paid for marketing services applied to the product at the particular stage. This information is useful in assessing the performance of the food marketing system.
a. Ilocos Norte
With an average farm price of P57.00 per kilogram, farmers realized a net margin of P9.18 per kilogram after deducting the production cost of P35.77 and the marketing cost of P12.05. Among the marketing participants, retailer had the highest net margin at P6.65 per kilogram. The three types of assembler-distributors realized almost the same amount of net margins at more than P2.00 per kilogram.
42 19
Table 14a. GARLIC (Native): Transportation costs, by item, selected supply provinces, Philippines, 2006
Table 14b. GARLIC (Native): Transportation costs, by item, selected demand areas, Philippines, 2006
Figure 25. Percent distribution of marketing cost, by component, Cagayan
de Oro City, 2006
Imputed Cost40%
Transporta-tion cost
13%
Other Operating
27%
Materials used 8%
Labor12%
Figure 26. Percent distribution of marketing cost, by component, Davao City,
2006 Labor
5%
Transpor- tation cost
59% Materials
used 0%
Other Operating
cost 8%
Imputed Cost 28%
Table 13. Cost of Production of Garlic (native), selected supply provinces, Philipines, 2006
(peso per kilogram)
Source: BAS’ Costs & Returns Survey (CRS)
Ilocos Norte Ilocos Sur Nueva Ecija 35.77 44.26
30.03
Table 14. Marketing Cost and Margins of Marketing Participants, Ilocos Norte, 2006
(peso per kilogram)
Marketing Participant
Price Total
Marketing Cost
Margins Buying Selling Gross Net FARMER 57.00 12.05 9.18
MA-MD 60.00 65.00 2.77 5.00 2.23 PA-MD 59.00 63.00 1.45 4.00 2.55 PA-LD 65.00 69.00 1.78 4.00 2.22 RETAILER 70.00 82.00 5.35 12.00 6.65
MARKETING COSTS STRUCTURE:
G A R L I C
Activity/Practice Ilocos Norte Ilocos Sur Nueva Ecija
peso per kilogram
Vehicle rental
Procurement 0.516 0.147 1.670
Distribution 0.756 0.255 1.600
Owned Vehicle Gas & Oil 0.153 0.285 0.070
TOTAL
1.425 0.687 3.340
Activity/Practice Metro Manila Legaspi
City Naga City Cebu City Cagayan de Oro City
Davao City
(peso per kilogram)
Vehicle rental
Procurement .310 4.000 2.000 0.092 0.813 3.64
Distribution 3.00 0.908
Owned vehicle Gas & Oil 0.001
TOTAL
3.310 4.000 2.000 1.000 0.813 3.641
2) Demand Areas
18 43
Figure 20. Percentage distribution of marketing cost, by component,
Nueva Ecija, 2006
Figure 21. Percent dis tribution of m arketing cost, by com ponent, M etro
Manila, 2006
Labor13%
Materials used 16%
Imputed Cost29%
Other Operating
cost17%
Transport-ation cost
25%
Labor 35%
Cost of Materials
1%
Other Operating
cost 6%
Imputed Cost19%
Transportationcost39%
Figure 22. Percent distribution of marketing cost, by component, Legaspi City,
2006
Transport- ation cost
49%
Materials used 9%
Other Operating
cost25%
Imputed Cost10%
Labor7%
Figure 24. Percent distribution of marketing cost, by component, Cebu City, 2006
Labor 40%
Transporta-tion cost
8%
Materials used 18%
Other Operating
cost24%
Imputed Cost10%
Figure 23. Percent distribution of marketing cost, by component, Naga City, 2006
Labor 18%
Other Operating expenses
10%
Imputed Cost 10%
Materials used 28%
Transportationexpenses
34%
Activity/Practice
FARMER PA-MD PA-LD RETAILER
peso per kilogram
Vehicle Rental
Procurement 0.250 0.500 0.800
Distribution 0.753 0.250 0.666
Owned Vehicle
Gas/oil 0.153
TOTAL
0.906 0.500 1.166 0.800
Table 14c. GARLIC (Native): Transportation costs, by marketing participants, by item, Ilocos Norte, 2006
Table 14d. GARLIC (Native): Transportation costs incurred by marketing participants, by item, Ilocos Sur, 2006
Activity/Practice FARMER RA-LD PA-LD PA-SD BA-SD RETAILER
(peso per kilogram)
Vehicle rental
Procurement 0.250 0.060 0.080 0.200
Distribution 0.500 0.030 0.150 0.260 0.580
Owned Vehicle
Gas & Oil 0.160 0.250 0.300 0.430
TOTAL
0.660 0.250 0.580 0.640 0.340 0.780
MARKETING COSTS STRUCTURE:
G A R L I C
Average cash costs in garlic marketing were P12.08 per kilogram in Cebu City
and P9.29 per kilogram in Metro Manila. Traders in Cagayan de Oro City incurred an average of P3.81 for every kilogram of native garlic. This was the lowest cash cost of marketing garlic in the demand areas.
In the case of imputed costs of marketing garlic, traders in Metro Manila
registered the highest cost at P3.88 per kilogram followed by Cagayan de Oro City at P2.66. However, in the cities of Naga and Legaspi, average imputed costs were estimated at P0.55 and P0.85 per kilogram, respectively.
Figures 18-26 show the percentage share of each cost component to the total marketing cost by province/area.
1) Supply Areas
44 17
Figure 19. Percent distribution of marketing cost, by component, Ilocos Sur, 2006
Figure 18. Percentage distribution of marketing cost, by component,
Ilocos Norte, 2006
Imputed Cost42%
Other Operating
Cost7%
Labor30%
Transportation
8% Cost of
Materials13%
Imputed Cost 42%
Other Operating cost 7%
Labor 30%
Cost of Materials 13%
Transportation cost 8%
Table 14e. GARLIC (Native): Transportation costs incurred by marketing participants, by item, Nueva Ecija, 2006
Table 14f. GARLIC (Native): Transportation costs incurred by marketing participants, by item, Metro Manila, 2006
Activity/Practice IRA-LD RETAILER
(peso per kilogram)
Vehicle rental Procurement 0.363 0.257 Distribution 3.000
TOTAL
3.363 0.257
Activity/Practice FARMER RETAILER
(peso per kilogram)
Vehicle rental Procurement 1.670 Distribution 0.900 1.100
Owned Vehicle
Gas & Oil 0.070
TOTAL
0.900 2.840
Item Metro Manila Legaspi City Naga City Cebu City Cagayan de
Oro City Davao City
Cash Cost 9.29 7.34 5.10 12.08 3.81 7.01
Imputed Cost 3.88 0.85 0.55 1.23 2.66 1.71
TOTAL 13.49 8.19 5.65 13.31 6.47 8.72
Table 12. GARLIC (Native): Average marketing cost by major components, selected demand areas, Philippines, 2006
(peso per kilogram)
MARKETING COSTS STRUCTURE:
G A R L I C
total imputed cost. In Nueva Ecija depreciation comprised 58 percent of the imputed cost.
In the demand areas, the average imputed cost was highest in Metro Manila at P3.88 per kilogram of garlic. In Cagayan de Oro City it was P2.67. In both areas, costs were contributed by unpaid labor. In other areas, the costs of depreciation and unpaid labor, were relatively lower i.e., P0.55 in Naga City, P0.85 in Legaspi City, P1.23 in Cebu City and P1.71 in Davao City.
f. Average Marketing Costs In the supply supply areas, the average cost of marketing ranged from P8.40
per kilogram in Nueva Ecija to P8.79 per kilogram of garlic in Ilocos Norte.
Average cash cost was highest in Nueva Ecija at P6.98 and lowest in Ilocos Sur at P5.04 per kilogram of garlic. On the other hand, imputed cost was highest in Ilocos Sur at P3.75 per kilogram of garlic while lowest in Nueva Ecija at P1.66 per kilogram of garlic.
Among the demand areas, traders in Metro Manila and Cebu City posted high average marketing costs at P13.49 and P13.31 per kilogram of garlic, respectively. The lowest costs were incurred by those operating in Naga City, at P5.65 and Cagayan de Oro City at P6.47 per kilogram of garlic.
16 45
Item Metro Manila
Legaspi City
Naga City
Cebu City
Cagayan de Oro City
Davao City
Depreciation 0.02 0.39 0.08 0.12 0.11
Unpaid Labor 3.86 0.46 0.55 1.15 2.55 1.6
TOTAL 3.88 0.85 0.55 1.23 2.67 1.71
Table 10. Imputed cost, by item, selected demand areas, Philippines, 2006
(peso per kilogram)
Source: Annex Table 17
Item Ilocos Norte Ilocos Sur Nueva Ecija
Cash Cost 5.92 5.04 6.98 Imputed Cost 2.48 3.75 1.66
TOTAL 8.40 8.79 8.64
Table 11. GARLIC: Average marketing cost by major components, selected supply provinces, Philiippines, 2006
(peso per kilogram)
Table 14g. GARLIC (Native): Transportation costs incurred by marketing participants, by item, Legaspi City, 2006
Table 14h. GARLIC (Native): Transportation costs incurred by marketing participants, by item, Naga City, 2006
Activity/Practice RETAILER
(peso per kilogram)
Vehicle rental Procurement 2.000
Distribution 2.000
TOTAL
4.000
Activity/Practice RETAILER
(peso per kilogram)
Vehicle rental Procurement 2.000
TOTAL
2.000
MARKETING COSTS STRUCTURE:
G A R L I C
d. Other Operating Costs
The amount spent for permits, stall rental, weighing scale calibration, bills for
utilities such as telephone, water and electricity comprised other operating costs incurred in the marketing of garlic. Value of shrinkage and expenses for meals/snacks while transporting or performing activities related to trading garlic were also considered.
Ilocos Norte posted the highest other operating cost at an average of P1.13 per kilogram. Meanwhile, in Ilocos Sur and Nueva Ecija, other operating costs amounted to P0.70 and P0.55 per kilogram of garlic, respectively.
At the demand areas, Cebu City posted the highest amount for other operating costs at an average of P2.91 of which 43 percent were attributed to utilities. Traders in Legaspi City and Metro Manila incurred high costs on utilities. In Davao City, however, traders spent an average of P0.48 for utilities.
e. Imputed Costs In this study
imputed costs consisted of depreciation of facilities/equipment and unpaid family labor. The highest imputed cost of P3.75 per kilogram was noted in Ilocos Sur. Of this, average depreciation cost of P2.05 per kilogram accounted for more than one-half of the total imputed costs. In Ilocos Norte, unpaid labor had the higher share at P1.62 per kilogram or 65% of that of the total imputed cost In Nueva Ecija depreciation comprised 58 percent of the
46 15
Ilocos Norte Ilocos Sur Nueva Ecija
1.13 0.70 0.55
Table 7. Other operating costs, selected supply provinces, Philippines, 2006
(peso per kilogram)
Source: Annex Table 16
Source: Annex Table 16
Metro Manila
Legaspi City
Naga City
Cebu city
Cagayan de Oro
city Davao City
2.19 2.05 0.54 2.91 1.75 0.48
Table 8. Other operating costs, selected demand areas, Philippines, 2006
(peso per kilogram)
Item Ilocos Norte Ilocos Sur Nueva Ecija
Depreciation 0.86 2.05 0.96
Unpaid Labor 1.62 1.70 0.70
TOTAL 2.48 3.75 1.66
Table 9. Imputed cost, by item, selected supply provinces,Philippines, 2006
(peso per kilogram)
Source: Annex Table 17
Table 14i. GARLIC (Native): Transportation costs incurred by marketing participants, by item, Cebu City, 2006
Table 14j. GARLIC (Native): Transportation costs incurred by marketing participants, by item, Cagayan de Oro City, 2006
Table 14k. GARLIC (Native): Transportation costs incurred by marketing participants, by item, DavaoCity, 2006
Activity/Practice IRA-SD RETAILER
(peso per kilogram)
Vehicle rental Procurement 0.034 0.150 Distribution 0.908
TOTAL
0.942 0.150
Activity/practice RETAILER
(peso per kilogram)
Vehicle rental
Procurement 0.813
TOTAL 0.813
Activity/Practice IRA-LD BA-SD
(peso per kilogram)
Vehicle rental Procurement 5.450 1.830
Owned Vehicle
Gas & Oil 0.001
TOTAL
5.451 1.830
MARKETING COSTS STRUCTURE:
G A R L I C
P2.00 (Naga City); P1.00 Cebu City and P0.81(Cagayan de Oro City).
c. Cost of Supplies and Materials Trading of garlic required only few materials such as bamboo strips, red
bags, straw twine, plastic bags, winow (bilao), chemical powder, stapler and kaing. Bamboo pole was used for drying garlic.
The average cost of packaging materials ranged from P0.04 to P0.92 per kilogram of garlic. The costs of other supplies and materials required in garlic marketing ranged from P0.01 to P0.49 per kilogram. Ilocos Norte posted the highest average cost at P1.23 while Nueva Ecija registered the least cost at P0.05 per kilogram.
On the other hand, traders in Cebu City incurred the highest cost of materials at P2.20 followed by Metro Manila at P2.09 per kilogram. Traders from the cities of Legaspi and Cagayan de Oro incurred the lowest cost for materials used at less than a peso per kilogram of garlic. Most of them were retailers who spent for small items like plastic bags and chemical powder used in storing garlic for longer shelf-life.
14 47
Item Ilocos Norte
Ilocos Sur Nueva Ecija
Packaging materials 0.74 0.92 0.04
Supplies & other materials 0.49 0.18 0.01
TOTAL 1.23 1.10 0.05
Table 5. Cost of materials, by item, selected supply provinces, Philippines, 2006
(peso per kilogram)
Source: Annex Table 15
ITEM Metro Manila
Legaspi City
Naga City
Cebu City
Cagayan de Oro City
Packaging materials 1.74 0.74 1.20 2.20 0.50
Supplies & other materials 0.35 - 0.36 - -
TOTAL 2.09 0.74 1.56 2.20 0.50
Table 6. Cost of materials, by item, selected demand areas, Philippines, 2006
(peso per kilogram)
Source: Annex Table 15
Table 15a. GARLIC (Native): Cost of materials, by item, selected supply provinces, Philippines, 2006
Table 15b. GARLIC (Native): Cost of materials, by item, selected demand areas, Philippines, 2006
MARKETING COSTS STRUCTURE:
G A R L I C
ITEM Ilocos Norte Ilocos Sur Nueva Ecija
(peso per kilogram)
Bamboo strip 0.192 0.060
Bamboo pole 0.163
Ordinary sack 0.088 0.255 0.020
Red bag 0.066 0.500
Straw twine 0.130 0.018 0.001
Plastic bag (small) 0.590 0.170 0.020
Winow (bilao) 0.100
Chemical (powder) 0.010
TOTAL
1.229 1.103 0.051
ITEM Metro Manila Legaspi City Naga City Cebu City Cagayan de
Oro City
(peso per kilogram)
Red bag 0.400
Plastic bag (small) 1.340 0.743 0.545 1.20 0.500
Kaing 1.00
Carton (box) 0.347 0.656
Stapler 0 .241 Staple wire 0.119
TOTAL
2.09 0.743 1.56 2.20 0.500
In the demand areas,
the average labor cost ranged from P0.33 in Davao City to P4.63 in Cebu City. Traders in Cebu City expended much on salary/wages of workers at P1.39 and for weighing, cleaning and packaging of garlic before distribution at P3.16 per kilogram. Labor costs in Legaspi and Cagayan de Oro cities were less than one peso per kilogram.
b. Transportation Costs
Farmers and traders in Ilocos Sur spent relatively lesser in moving garlic from supply areas due to their proximity to Sinait Bagsakan area. The cost of transport was P0.40 if vehicle used was rented and P0.29 if the vehicle used was privately -owned. In Ilocos Norte, vehicle rentals amounted to P1.27 while expenses for gas and oil for private vehicle was P0.15 per kilogram. In Nueva Ecija, transportation cost in garlic maketing was P3.27 for rentals or P0.07 for gasoline for every kilogram of garlic.
In the demand areas, traders in Legaspi City recorded the highest cost for vehicle rental at P4.00 followed by Davao City at P3.64 and Metro Manila at P3.31 per kilogram. Other areas incurred lower costs at P2 00 (Naga City);
48 13
Item Ilocos Norte
Ilocos Sur Nueva Ecija
Vehicle rental 1.27 0.40 3.27
Owned Vehicle 0.15 0.29 0.07
Table 3. Transportation cost, selected supply provinces, Philippines, 2006 (peso per kilogram)
Source: Annex Table 14
Table 4. Transportation cost, selected demand areas, Philippines, 2006 (peso per kilogram)
Item Metro Manila
Legaspi City
Naga City
Cebu City
Cagayan de Oro
City
Davao City
Vehicle rental 3.31 4.00 2.00 1.09 0.81 3.64
Owned vehicle - - - - - 0.001 Source: Annex Table 14
Table 15c. GARLIC (Native): Cost of materials incurred by marketing participants, by item, Ilocos Norte, 2006
Table 15d. GARLIC (Native): Cost of materials incurred by marketing participants, by item, Ilocos Sur, 2006
ITEM FARMER RA-LD PA-LD PA-SD BA-SD RETAILER
(peso per kilogram)
Bamboo strip 0.060 0.140 0.020 0.020 Ordinary sack 0.010 0.500 Red bag 0.500 Straw twine 0.030 0.006 Plastic bag (small) 0.170
Winow (bilao) 0.100
TOTAL
0.060 0.040 1.146 0.020 0.020 0.270
ITEM FARMER RETAILER
(peso per kilogram)
Bamboo strip 0.192 Bamboo pole 0.163
Ordinary sack 0.088 Red bag 0.066
Straw twine 0.130 Plastic bag (small) 0.590
TOTAL
0.639 0.590
MARKETING COSTS STRUCTURE:
G A R L I C
Activity/ Practice
Metro Manila
Legaspi City
Naga City
Cebu City
Cagayan de Oro
City Davao City
Procurement 0.61 0.27 1.00 0.08 0.00 0.08
Distribution 0.90 3.16 0.73
Salary/Wages 0.19 0.28 1.39 0.02 0.25 TOTAL 1.70 0.55 1.00 4.63 0.75 0.33 Source: Annex Table 13
Table 2. Labor costs by marketing activity, selected demand areas, Philippines 2006
(peso per kilogram)
b. Terms of Payment
Almost all (92%) respondents were paid in cash upon selling native garlic while 6 percent received payments on the next transaction. This was practiced in Metro Manila and Legaspi City. Two percent (2%) of the respondents settled their transactions both in cash and credit.
E. Marketing Costs and Margins
1. Marketing Costs
In this particular study, cash cost included hired labor, transport, cost of materials used in marketing and other cost for trading operations.
a. Labor Costs
Labor costs are costs borne from the activities and services performed in
marketing the commodity. These include hauling, loading, unloading, cleaning, sorting, drying, weighing, packing and braiding performed during procurement and distribution of native garlic.
Traders in Nueva Ecija
spent the highest amount for labor at P3.04 per kilogram. A large portion of it was attributed to handling/ storage of garlic done by the traders before distribution. In Ilocos Sur and Ilocos Norte, average costs of labor among traders were P2.61 and P2.14 per kilogram, respectively.
12 49
Activity/Practice Ilocos Norte Ilocos Sur Nueva Ecija
Procurement 1.15 0.16 0.52 Distribution 0.87 2.30 1.73 Salary/Wages 0.12 0.15 0.79
TOTAL 2.14 2.61 3.04
Table 1. Labor cost, by marketing activity, selected supply provinces, Philippines, 2006
(peso per kilogram)
Source: Annex Table 13
Figure 17. Percent distribution of respondents by terms of payment in selling, selected areas,
Philippines, 2006
Source: Annex Table 11
cash 92%
cash & credit2%
credit6%
Table 15e. GARLIC (Native): Cost of materials incurred by marketing participants, by item, Nueva Ecija, 2006
Table 15f. GARLIC (Native): Cost of materials incurred by marketing participants, by item, Metro Manila, 2006
* include stapler, staple wire & carton
Table 15g. GARLIC (Native): Cost of material, by marketing participants, by item, Legaspi City, 2006
ITEM FARMER RETAILER
(peso per kilogram)
Ordinary sack 0.020 Straw twine 0.001 Plastic Bag (small) 0.020 Chemical (powder) 0.010
TOTAL 0.031 0.020
ITEM IRA-LD RETAILER
(peso per kilogram)
Red bag 0.400 Plastic bag (small) 1.34 Others * 0.35
TOTAL 0.400 1.690
ITEM RETAILER
(peso per kilogram)
Plastic bag (small) 0.743
TOTAL
0.743
MARKETING COSTS STRUCTURE:
G A R L I C
b. Terms of Payment
Eighty-one percent (81%)
of the trader-respondents paid their suppliers in cash. Eleven percent (11%) agreed to pay in the next transaction or in a number of days after their transaction. The other eight percent (8%) of traders paid a portion of the procured supply in cash and the other portion in credit or deferred payment.
2. Distribution
a. Mode of Selling
Majority (76%) of farmers and traders had their buyers picked up the commodity from the farm/stall/bodega. According to them, this practice was advantageous to the buyers in a way that they (buyers) could choose the size and quality of the commodity they prefer. On the other hand, twenty-two percent (22%) of them used delivery mode as this was mostly observed in Ilocos Norte. The rest of the respondents practiced both pick up and delivery of garlic to their buyers (2%).
picked - up 76%
both 2% delivered
22%
Source: Annex Table 10
50 11
Figure 15. Percent disrribution of trader-respondents by terms of payment in buying,
selected areas, Philippines, 2006
cash81%
credit11%
cash & credit8%
Figure 15. Percent distribution of trader-respondents by terms of payment in buying,
selected areas, Philippines, 2006
Source: Annex Table 9
Table 15h. GARLIC (Native): Cost of material, incurred by marketing participants, by item, Naga City, 2006
Table 15i. GARLIC (Native): Cost of material, incurred by marketing participants, by item, Cebu City, 2006
Table 15j. GARLIC (Native): Cost of material, incurred by marketing participants, by item, Cagayan de Oro City, 2006
Item RETAILER
(peso per kilogram)
Plastic bag (small) 0.545 Carton 0.656 Stapler 0.241 Staple wire 0.119
TOTAL
1.561
Item IRA-SD RETAILER
(peso per kilogram)
Plastic bag (small) 0.632 1.770 Kaing 1.000
TOTAL 0.632 2.770
Item RETAILER
(peso per kilogram)
Plastic bag (small) 0.500
TOTAL
0.500
Figure 16. Percent distribution of respondents by mode of selling, selected areas,
Philippines, 2006
MARKETING COSTS STRUCTURE:
G A R L I C
3. Nueva Ecija
Garlic produced in Nueva Ecija was relatively small in volume compared to those of the Ilocos provinces. It was noted that farmers handed their produce directly to retailers eliminating the various channels found in other provinces. These were retailed to few visitors coming from Bulacan and Metro Manila. D. Marketing Practices and Functions
Farmers and traders performed marketing activities and services in moving their products from one point to another. As they performed them, costs were being incurred which added monetary value to the product. The marketing practices, functions and corresponding costs incurred are described below. 1. Procurement
a. Mode of Buying
Sixty percent of the trader-
respondents picked up their garlic supply from the farm or at the trading centers/bagsakan areas. This mode was commonly practiced by traders in Ilocos Sur. Thirty eight percent (38%) of the respondents had their supply delivered to their place by farmers or distributors. Most of them were traders located in Metro Manila and Nueva Ecija. The other two percent (2%) employed both pick-up and delivery modes.
10 51
CONSUMER
RETAILER
FARMER
Figure 13. Marketing Channel of Native Garlic Nueva Ecija, 2006
Source: Annex Table 8
picked-up60%
delivered38%
both2%
Figure 14. Percent distribution of trader-respondents by mode of buying selected
areas, Philippines, 2006
Table 16a. GARLIC (Native): Other operating costs by item, selected supply provinces, Philippines, 2006
Table 16b. GARLIC (Native): Other operating costs by item, selected demand areas, Philippines, 2006
*Weighing scale ** include sign board, weight & measure, shrinkage, ticket, tong, regulatory fee & inspection fee
a/ less than 0.001 *Weighing scale ** include sign board, weight & measure, shrinkage, ticket, tong, regulatory fee & inspection fee,PPA,arrastre
MARKETING COSTS STRUCTURE:
G A R L I C
Item Ilocos Norte Ilocos Sur Nueva Ecija
(peso per kilogram) Business permit .334 .016 0.002 Barangay permit 0.010 Sanitary permit 0.004 Stall rental 0.225 0.080 0.070 Cell card/Telephone bills 0.004 0.006 0.010 Meals /Snacks 0.324 0.224 0.215 Market fee 0.058 Parking fee 0.004 0.080 WS calibration fee * 0.129 0.001 .002 Toll fee 0.011 Entrance fee 0.055 0.167 Others ** 0.104 .167
TOTAL
1.130 0.632 0.550
Item Metro Manila
Legaspi City Naga City Cebu City Cagayan de
Oro City Davao City
Electricity 0.780 0.060 1.100 0.023 Water 0.006 a/ Business permit 0.340 0.011 0.240 0.410 0.146 0.004 Stall rental 0.504 0.654 0.115 0.539 0.300 0.080 Land rental 0.120 Cell card/Tel. bill 0.154 0.299 0.020 Meals /Snacks 0.150 1.130 0.580 1.000 0.210 Market fee 0.252 0.123 Entrance fee 0.010 0.002 WS calibration fee * 0.004 0.004 a/ a/ Toll fee .247 Others ** .146 0.143
TOTAL
2.19 2.049 0.539 2.906 1.745 0.480
2. Ilocos Sur The identified channels of garlic in the province were as follows:
a) Farmer to Provincial Assembler-Small Distributor to Retailer b) Farmer to Barangay Assembler-Small Distributor to Retailer c) Farmer to Provincial Assembler-Large Distributor to Buyer Outside
Province/Retailer d) Farmer to Regional Assembler-Large Distributor to Buyer outside
Province/Retailer e) Supplier Outside Province to Provincial Assembler-Large Distributor to
BuyerOutside Province/Retailer f) Supplier Outside Province to Regional Assembler-Large Distributor to
Buyer Outside Province/retailer Farmers in the province disposed their produce directly to different types of assemblers - distributors (barangay assembler-small distributor, provincial assembler-small/large distributor and regional assembler-large distributor). Of the total garlic which were locally produced and brought in by suppliers from outside the province, 50% of it was procured by the regional distributors who were noted as the main buyers during the survey period. From them, the commodity was moved and sold mainly to buyers from provinces outside Ilocos Sur (BOP). Only minimal volume was sold to retailers within the province.
52 9
BOP RETAILER
PA-SD PA-LD RA-LD
FARMER
BA-SD
SOP
Figure 12. Marketing Channel of Native Garlic Ilocos Sur, 2006
Table 16c. GARLIC (Native): Other operating costs incurred by marketing participants, by item, Ilocos Norte, 2006
Table 16d. GARLIC (Native): Other operating costs incurred by marketing participants, by item, Ilocos Sur, 2006
*Weighing scale ** include ticket and tong
Item FARMER PA-LD PA-MD MA-MD RETAILER
(peso per kilogram)
Business Permit 0.010 0.659
Stall Rental 0.045 0.406
Market fee 0.059 0.066 0.050
Cell card 0.004
Meals / Snacks 0.324
WS Calibration fee * 0.500 a/ 0.012 0.002
Entrance fee 0.100 0.013
TOTAL
0.987 0.121 0.063 0.012 1.067
Item FARMER RA-LD PA-LD PA-SD RETAILER
(peso per kilogram)
Business permit 0.010 0.008 0.030 Barangay permit 0.010 Stall Fee 0.080 Cell card 0.003 0.010 0.005 Meal / Snacks 0.600 0.040 0.010 0.060 0.410 Parking fee 0.008 0.001 WS Calibration* 0.001 0.002 Toll Fee .002 0.020 Entrance Fee 0.004 0.330 Others** 0.132 0.158 0.120 0.008
TOTAL
0.600 0.204 0.213 0.185 0.858
MARKETING COSTS STRUCTURE:
G A R L I C
C. Marketing Channels 1. Ilocos Norte
Native garlic trading in Ilocos Norte was characterized by the following linkages :
a) Farmer to Provincial Assembler-Large Distributor to Buyer Outside Province/Retailer
b) Farmer to Municipal Assembler-Medium Distributor to Buyer Outside Province/Retailer
c) Farmer to Provincial Assembler-Medium Distributor to Buyer Outside Province/Retailer
d) Farmer to Municipal Assembler-Municipal Distributor/Provincial Assembler-Large Distributor/Provincial Assembler-Medium Distributor to Retailer
e) Farmer to Retailer Garlic farmers brought their commodity to the public markets near them where assemblers-distributors of different levels (MA-MD, PA-LD, PA-MD), BOP and retailers procured garlic at varied quantities. The dominant traders among them, were the PA-LD in terms of volume procured with about 51 percent of the total bulk sold by the total sample producers. Of the volume procured by PA-LD, larger portion was sold to buyers outside Ilocos Norte (BOP) particularly Metro Manila. The remaining portion was handed to retailers to augment the supply which the retailers have bought directly from farmers within Ilocos Norte and from Ilocos Sur.
8 43
BOP RETAILER
MA-MD PA-LD PA-MD
FARMER
SOP
Figure 11. Marketing Channel of Native Garlic, Ilocos Norte, 2006
Table 16e. GARLIC (Native): Other operating costs incurred by marketing participants, by item, Nueva Ecija, 2006
Table 16f. GARLIC (Native): Other operating costs incurred by marketing participants, by item, Metro Manila, 2006
* include ash ticket, inspection and regulatory fee & sign board
*Weighing scale *include Philipine Ports Authority fee, Arrastre
Item FARMER RETAILER
(peso per kilogram)
Business permit 0.002 Sanitary permit 0.004 Stall rental 0.070 Cell card 0.01 Meals / Snacks 0.21 0.220 WS Calibration fee * 0.002 Parking fee 0.08 Others* 0.13 0.204
TOTAL
0.43 0.50
Item IRA-LD RETAILER
(peso per kilogram)
Electricity 0.78 Water 0.006 Business permit 0.15 0.539 Stall rental 0.033 0.976 Meals /Snacks 0.15 0.150 WS calibration fee * 0.004
Toll fee 0.247 Entrance fee 0.01
Others** 0.146
TOTAL
0.586 1.13
MARKETING COSTS STRUCTURE:
G A R L I C
2. Ilocos Sur
The identified supply areas in Ilocos Sur were the municipalities of Magsingal, Cabugao and Sto. Domingo. Some garlic produced in Badoc, a municipality of Ilocos Norte, were brought to Sinait Bagsakan Area. From there, garlic were transported by buyers from Metro Manila, provinces of Cagayan, Pangasinan and Laguna, and the cities of Baguio, Cebu, Davao and Cagayan de Oro for distribution to buyers in their respective provinces/areas. 3. Nueva Ecija
Garlic farmers from the supply municipalities of Bongabon, Munoz, Rizal and the cities of Cabanatuan and San Jose brought their produce to the public markets of Munoz, Gapan and San Jose cities. From there, garlic were disposed and consumed locally within the province and only small part of the supplies was bought by transient buyers from Bulacan and Metro Manila.
44 7
Baguio City, Cagayan, Pangasinan, Laguna, Cebu,
Cagayan de Oro, Davao
Within the Province
Metro Manila
Magsingal, Cabugao, Sto
Domingo
Ilocos Norte
Sinait Bagsakan Area
Figure 9. Geographic Flow of Native Garlic, Ilocos Sur, 2006
Within the Province
Public Market: -Gapan -Munoz -Sn. Jose
Bongabon, Cabanatuan City, Munoz, Rizal, Sn. Jose
Bulacan & Metro Manila
Figure 10. Geographic Flow of Native Garlic, Nueva Ecija, 2006
Table 16g. GARLIC (Native): Other operating costs incurred by marketing participants, by item, Legaspi City, 2006
Table 16h. GARLIC (Native): Other operating costs incurred by marketing participants, by item, Naga City, 2006
Item RETAILER
peso per kilogram
Business permit 0.011 Stall rental 0.654 Meals /Snacks 1.130 Market fee 0.252 Parking fee 0.002
TOTAL
2.050
Item RETAILER
peso per kilogram
Electricity .060 Business permit 0.240 Stall rental 0.115 Land rental 0.120 WS calibration fee 0.004
TOTAL 0.539
MARKETING COSTS STRUCTURE:
G A R L I C
2.5 Years in Trading. Among the trader-respondents, 44 percent have been engaged in garlic trading for 5-10 years, mostly based in Ilocos provinces, Metro Manila and Nueva Ecija. However, 21% who were into this business for 11 to 15 years. About 12% have 20 years experience. The other 15 percent were relatively new in this business with less than 5 years of experience. B. Geographic Flow 1. Ilocos Norte
Major suppliers of native garlic in Ilocos Norte were the municipalities of Bacarra, Badoc, Pasuquin, Sarrat, San Nicolas and Vintar. Supplies coming from these areas were brought to the public markets of said municipalities and in Laoag City. Buyers from Baguio and Urdaneta cities, Cagayan province, Divisoria and Bicol region as well as local traders converged in said markets to procure garlic for distribution to their respective buyers/destinations.
There were buyers from areas
outside Ilocos Norte (BOP) who procured native garlic directly from the local supply areas particularly during lean months. According to some farmers, there were traders coming from Davao who negotiated with the farmers for an assurance of garlic supply.
6 45
5 - 1044%
21 & above12%
less than 515%
11 -1521%
16 - 208%
Source: Annex Table 7
Figure 7. Percent distribution of trader-respondents, by years in trading, selected
areas, Philippines, 2006
Ilocos Sur, Baguio, Cagayan, Urdaneta (Pangasinan),, Divisoria
(MM), Bicol & Davao Within the province
Public Markets: -Laoag City -Bacarra -Badoc -Pasuquin
Bacarra, Badoc, Pasuquin, Sarrat,
Sn Nicolas & Vintar
Ilocos Sur
Figure 8 .Geographic Flow of Native Garlic, Ilocos Norte, 2006
Table 16i. GARLIC (Native): Other operating costs incurred by marketing participants, by item, Cebu City, 2006
Table 16j. GARLIC (Native): Other operating costs incurred by marketing participants, by item, Cagayan de Oro City, 2006
a/ less than 0.001 * Weighing scale
Item IRA-SD RETAILER
peso per kilogram
Electricity 0.500 1.700 Business permit 0.249 0.572 Stall rental 0.104 0.975 Cell card/Tel. bill 0.154 Meals /Snacks 0.560 0.600 WS calibration fee * a/ Market fee 0.048 0.198
TOTAL 1.615 4.05
Item RETAILER
peso per kilogram
Business permit 0.146 Stall rental 0.300 Cell card/Tel. bill 0.299 Meals/Snacks 1.000
TOTAL 1.745
MARKETING COSTS STRUCTURE:
G A R L I C
2.3 Source of Capital a. Farmers
Seventy-seven percent (77%) of the farmers used personal funds to finance their garlic production and marketing operations. The remaining 23 percent made use of borrowed capital.
b. Traders
About 87 % of the trader-respondents were financing their business using their own capital. Others (13%) raised their capital through borrowings from various sources.
2.4 Years in Farming. Most farmer-respondents have long years of farming experience and most of them were based in Ilocos provinces, Metro Manila and Nueva Ecija. Thirty-four percent (34%) have been engaged in farming for more than 20 years while 25% were into 16-20 years. There were 24% had farmed for 5-10 years and 7% had 11-15 years of farming experience. The rest had less than five years.
46 5
Table 16k. GARLIC (Native): Other Operating Costs incurred by marketing participants, by item, Davao city, 2006
a/ less than 0.001 * Weighing scale ** include garbage fee, health certification, sign board, zoning fee & shrinkage
Self- financed
77%
Borrowed 23%
Figure 4. Percent distribution of farmers, by source of capital, selected provinces,
Philippines, 2006
Source: Annex Table 5
Source: Annex Table 6
Figure 6. Percent distribution of farmer-respondents by years in farming, selected
provinces, Philippines, 2006
11 - 15 7%
21 & above 34%
less than 5 10%
5 - 10 24%
16 - 20 25%
Figure 5. Percent distribution of trader- respondents, by source of capital, selected
areas, Philippines, 2006
Source: Annex Table 5
Item IRA-LD BA-SD RETAILER
(peso per kilogram)
Electricity 0.040 0.010 0.020 Water a/ Business permit 0.002 0.005 0.001 Mayor's permit 0.001 0.002 0.002 Sanitary permit a/ 0.001 a/ Stall rental 0.140 0.040 0.060 Cell card 0.010 0.030 Meals/Snacks 0.010 0.400 0.221 WS Calibration fee * a/ a/ 0.001 Others* 0.400 0.012 0.018
TOTAL
0.593 0.480 0.353
Self- financed
87%
Loan/ Borrowed
13%
MARKETING COSTS STRUCTURE:
G A R L I C
and demand areas/provinces. Trader respondents were further classified into different types based on their sphere of influence in performing marketing functions. The study has identified four (4) types of traders. These are assemblers, distributors, assembler-distributors and retailers. The first three (3) types were further classified by their volume of transaction, number of their buyers and suppliers, geographical source and market destination. 2. Profile of Respondents 2.1 Tenurial Status. About 67 percent of the farmer-respondents owned and managed their garlic farms. Fourteen of them or 24 percent were tenants while 5 percent were operating under lease contract. One respondent was a holder of Certificate of Land Transfer (CLT) and the other one cultivated a rent-free land. 2.2 Business Ownership. Almost all (97%) trader-respondents were single proprietors. The other three percent were into partnership arrangements.
4 47
Figure 2. Percent distribution of farmer-respondents, by tenurial status, selected
provinces, Philippines 2006
Source: Annex Table 3
Leasee5%
CLT-holder
2%
RentFree2%
Single Proprie-torship67%
Tenant24%
Table 17a. GARLIC (Native): Imputed costs by item, selected supply provinces, Philippines, 2006
Source: Annex Table 1
Figure 3. Percent distribution of trader-respondents by type of business ownership,
selected areas, Philippines, 2006
Source: Annex Table 4
Partnership 3%
Single proprietorship
97%
Figure 1. Percent distribution of respondents by type, selected
areas, Philippines, 2006
Trader53%
Farmer 47%
MARKETING COSTS STRUCTURE:
G A R L I C
Item Ilocos Norte Ilocos Sur Nueva Ecija
(peso per kilogram)
DEPRECIATION 0.865 2.053 0.957
Facilities
Bodega 0.037 0.210 0.110
Supplies & Equipment .030 .171 .062
Weighing Scale 0.011 0.030 0.030
Calculator 0.004 0.015 0.003
Cell phone 0.015 0.126 0.025
Winnow 0.003
Scissor 0.001
Transportation Equipment .798 1.672 0.785-
Elf 0.214 0.021
Jeep 0.203 0.010
Car 0.990
Tractor (Kuliglig) 0.289
L-300 0.068
Tricycle 0.024 0.651 0.435
Tractor 0.320
Trailer 0.030
UNPAID LABOR 1.619 1.700 .700
Procurement 1.089
Distribution 0.530 1.700 0.700
TOTAL
2.480 3.750 1.657
Sample Selection
The study utilized information from both farmers and traders. The farmers were interviewed to gather information on pre-marketing activities while traders were the sources of information on actual marketing practices. Selection of samples for the two types of respondents was done differently. a) Farmers
From the list of garlic farmers covered by the Costs and Returns Survey
(CRS) of the BAS, the research team purposively selected 20 sample farmers who have undertaken pre-marketing activities. The 20 sample farmers were distributed proportionately among the top producing municipalities, wherein, the most number of samples were chosen from the largest producing area.
b) Traders
In selecting sample traders, a snowball sampling technique was adopted.
It is a non-probability sampling method which is used when participants with specific characteristics are required and when there is difficulty in locating respondents with the characteristics of interest. This approach accumulated the data gathered from one trader-respondent to another at different levels of the commodity marketing system.
In the study a minimum of three (3) and maximum of five (5) respondents per type of marketing participants were interviewed at each trading site. For additional information, key players of the commodity marketing system were also interviewed. These included the market masters, barangay chairmen, “kargador”, drivers, etc.
IV. DISCUSSION OF RESULTS
A. Number and Profile of Respondents 1. Number of Respondents
The survey covered 125 respondents in both supply and demand areas. Of the total number of respondents, 47 percent were farmers from the three (3) supply provinces. Fifty-three percent (53%) were traders from both supply and demand areas/provinces. Trader respondents were further classified into different types based on their sphere of influence in performing marketing
48 3
Table 17b. GARLIC (Native): Imputed costs by item, selected demand areas, Philippines, 2006
a/ less than .001
MARKETING COSTS STRUCTURE:
G A R L I C
Item Metro Manila
Legaspi City
Naga City
Cebu City
Cagayan de Oro
Davao City
(peso per kilogram)
DEPRECIATION .022 .395 .086 .117 .115
Supplies & Equipment .022 .145 .086 .117 .105
Weighing Scale 0.010 0.107 0.029 0.022 a/
Calculator 0.003 0.016 0.095 a/
Cell phone 0.001 0.008 0.001
Winnow 0.008
Tarpaulin 0.031
Table 0.007 a/
Electric fan/Blower 0.033 0.001
Push cart 0.002
Money detector 0.001
Transportation Equipment .250 .070
Elf 0.010
Forward 0.250
Truck 0.060
UNPAID LABOR 3.861 .458 .549 1.147 2.547 1.600
Procurement 0.526 2.499
Distribution 3.335 0.458 0.549 1.147 0.048 1.600
TOTAL
3.884 0.853 0.549 1.233 2.660 1.715
I. INTRODUCTION
The Bureau of Agricultural Statistics (BAS) recognizes the need for marketing information and thus the effort to incorporate the generation of market and marketing-related statistics in its data systems. While price have been regularly- generated, other marketing statistics are collected occasionally and these are limited to selected types of crop, livestock and fishery commodities.
This particular study intends to provide updated information on marketing costs structure of native garlic – the flow, participants and the margins at current levels. II. OBJECTIVES
Generally, the study was to conducted to determine the marketing costs structure of native garlic. Specifically it aimed to:
a) identify and characterize the marketing participants involved; b) determine the flow and channels of distribution of garlic; c) determine the practices in marketing of garlic among participants; and d) determine the components of marketing costs of garlic by type of
marketing participants. III. METHODOLOGY Research Site
The study covered three (3) native garlic supply provinces and six (6) demand
areas. For supply areas, the provinces covered were Ilocos Norte, Ilocos Sur and Nueva Ecija while demand areas included Metro Manila and the cities of Legaspi, Naga, Cebu, Cagayan de Oro and Davao. Supply provinces were chosen based on their significant contribution to the total native garlic production in the country. On the average, these provinces accounted for 77 percent of the country’s native garlic production during the last five years. Demand areas, however, were identified as the distribution and consumption areas of native garlic produced from the supply provinces. These areas were identified during the interview phase in the supply provinces.
2 49
Table 17c. GARLIC (Native): Imputed costs of marketing participants, by item, Ilocos Norte, 2006
a/ less than .001
Item FARMER MA-MD PA-MD PA-LD RETAILER
(peso per kilogram)
DEPRECIATION
Facilities
Bodega 0.054 0.020
Supplies & Equipment
Weighing Scale 0.039 0.001 0.001 0.001
Calculator 0.014 a/ 0.001 0.001
Cellphone 0.044 0.011 0.001 0.003 0.016
Transportation Equipment
Elf 0.373 0.055
Jeep 0.203
Tractor 0.289
L-300 0.068
Tricycle 0.072 0.001 a/
UNPAID LABOR
Procurement 3.945 0.100 0.300 0.014
Distribution 0.181 0.100 0.350 0.017 2.000
TOTAL
4.786 0.706 0.652 0.111 2.017
MARKETING COSTS STRUCTURE:
G A R L I C
HIGHLIGHTS
1) The three identified marketing participants in this particular study were: farmers, assemblers distributors and retailers. Majority of farmer respondents were land owners while most traders, run their businesses under single-proprietorship. As for the source of capital, majority of the marketing participants have used their own finances and only few have borrowed their capital from relatives.
2) Garlic in Ilocos Norte were sold in large volume in the cities of Baguio,
Urdaneta (Pangasinan), Davao and Divisoria (Metro Manila). In Ilocos Sur, aside from its municipalities, other demand areas were Cagayan, Pangasinan, Metro Manila, Laguna, cities of Baguio, Cebu, Cagayan de Oro and Davao. In Nueva Ecija, native garlic were distributed within the province and some were retailed by transient buyers from Bulacan and Metro Manila.
3) Metro Manila is the major destination of garlic as a consumption area as
well as transshipment point in bringing garlic to demand provinces in Visayas and in Mindanao.
4) In both procurement and disposition of garlic, traders usually pick up their
garlic supplies on cash basis. 5) The average marketing costs in the supply areas were estimated at almost
the same level at P8.00 per kilogram. In the demand areas, Metro Manila was noted with the highest cost per kilogram (P13.17), followed by Cebu City (P11.97) and the lowest average cost was in Naga City (P5.65).
6) Transportation cost was P3.34 per kilogram in Nueva Ecija and P5.45 in
Davao City with the use of rented vehicle. The lowest cost item was depreciation of facilities and equipment used in marketing garlic by traders in Metro Manila (P0.02).
7) Net margins, was highest for retailers in Nueva Ecija at P41.90 per
kilogram. Such was due to direct buying of commodity from farmers. The lowest was recorded for assemblers-distributors in Ilocos Norte at P2.22 per kilogram.
50 1
Table 17d. GARLIC (Native): Imputed costs of marketing participants, by item, Ilocos Sur, 2006
a/ less than .001
MARKETING COSTS STRUCTURE:
G A R L I C
Item FARMER RA-LD PA-LD PA-SD BA-SD RETAILER
(peso per kilogram)
DEPRECIATION
Facilities
Storage/bodega 0.640 0.004 0.001
Supplies & Equipment
Weighing scale 0.170 0.002 a/ 0.004 0.001 0.005
Calculator 0.030 a/
Cellphone 0.500 0.001 a/ a/
Transportation Equipment
Elf 0.010 0.004 0.050
Jeep 0.010
Tricycle 1.300 0.002
Car (kotse) 0.990
UNPAID LABOR 2.260 1.140
TOTAL
5.890 0.029 0.005 0.054 0.001 1.145
LISTS OF FIGURES Figure No. Page
20. Percent distribution of marketing cost, by component, Nueva Ecija , 2006 18 21. Percent distribution of marketing cost, by component, Metro Manila, 2006 18 22. Percent distribution of marketing cost, by component, Legaspi City, 2006 18 23. Percent distribution of marketing cost, by component, Naga City, 2006 18 24. Percent distribution of marketing cost, by component, Cebu City, 2006 18 25. Percent distribution of marketing cost, by component, Cagayan de Oro City, 2006 19 26. Percent distribution of marketing cost, by component, Davao City, 2006 19
vi 51
Table 17e. GARLIC (Native): Imputed costs of marketing participants, by item, Nueva Ecija, 2006
MARKETING COSTS STRUCTURE:
G A R L I C
Item FARMER RETAILER
(peso per kilogram)
DEPRECIATION Facilities
Bodega 0.110
Equipment Calculator 0.003 0.002 Cellphone 0.040 0.010 Weighing scale 0.050 0.010 Winnow 0.003 Scissor 0.001
Transportation Equipment
Tractor 0.320 Trailer 0.030 Tricycle 0.810 0.060
UNPAID LABOR 0.700
TOTAL
2.063 0.086
LISTS OF FIGURES Figure No. Page
1. Percent distribution of respondents by type, selected provinces, Philippines, 2006 4 2. Percent distribution of farmer respondents by tenurial status, selected provinces, Philippines, 2006 4 3. Percent distribution of trader respondents, by type of business ownership, selected areas, Philippines, 2006 4 4. Percent distribution of trader respondents by source of capital, selected provinces, Philippines, 5 5. Percent distribution of farmer respondents, by years in farming, selected areas, Philippines, 2006 5 6. Percent distribution of farmer-respondents, by years in farming, selected provinces, Philppines, 2006 5 7. Percent distribution of trader-respondents, by years in trading, selected areas, Philppines, 6 8. Geographic Flow of GARLIC, Ilocos Norte, 2006 6 9. Geographic Flow of GARLIC, Ilocos Sur, 2006 7 10. Geographic Flow of GARLIC, Nueva Ecija 2006 7 11. Marketing Channels of NATIVE GARLIC, Ilocos Norte 2006 8 12. Marketing Channels of NATIVE GARLIC, Ilocos Sur, 2006 9 13. Marketing Channels of NATIVE GARLIC, Nueva Ecija, 2006 10 14. Percent distribution of trader-respondents, by mode of buying, selected areas, Philippines, 2006 10 15. Percent distribution of trader-respondents, by terms of payment in buying, selected areas, Philippines, 2006 11 16. Percent distribution of trader respondents, by mode of selling, selected areas, Philippines, 2006 11 17. Percent distribution of trader respondents, by terms of payment in selling, selected areas, Philippines, 2006 12 18. Percent distribution of marketing cost, by component, Ilocos Norte, 2006 17 19. Percent distribution of marketing cost, by component, Ilocos Sur, 2006 17
52 v
Table 17f. GARLIC (Native): Imputed costs of marketing participants, by item, Metro Manila, 2006
Table 17g. GARLIC (Native): Imputed costs of marketing participants, by item, Legaspi City, 2006
Item IRA-LD RETAILER
(peso per kilogram)
DEPRECIATION Supplies & Equipment
Weighing scale 0.001 0.020 Calculator 0.000 0.006 Cellphone 0.001 Winnow 0.008
UNPAID LABOR 0.092 7.629
TOTAL
0.094 7.663
Item RETAILER
(peso per kilogram)
DEPRECIATION
Supplies & Equipment
Weighing scale 0.107
Tarpaulin 0.031
Table 0.007
Transportation Equipment
Forward 0.250
UNPAID LABOR
Distribution 0.458
TOTAL
0.853
MARKETING COSTS STRUCTURE:
G A R L I C
STATISTICAL TABLES Table No. Page
1. GARLIC: Labor costs by marketing activity/practice, selected supply provinces, Philippines, 2006 12 2. GARLIC: Labor costs by marketing activity/ practice, selected demand areas, Philippines, 2006 13 3. GARLIC: Transportation costs incurred in marketing, selected supply provinces, Philippines, 2006 13 4. GARLIC: Transportation costs incurred in marketing, selected demand areas, Philippines, 2006 13 5. GARLIC: Cost of Materials, selected supply provinces, Philippines, 2006 14 6. GARLIC: Cost of Materials, selected demand areas, Philippines, 2006 14 7. GARLIC: Other operating costs, selected supply provinces, Philippines, 2006 15 8. GARLIC: Other operating costs, selected demand areas, Philippines, 2006 15 9. GARLIC: Imputed costs, by item selected supply provinces, Philippines, 2006 15 10. GARLIC: Imputed costs, by item, selected demand areas, Philippines, 2006 16 11. GARLIC: Average marketing costs by major components, selected supply provinces, Philippines, 2006 16 12. GARLIC: Average marketing costs by major components, selected demand areas, Philippines, 2006 17 13. GARLIC: Cost of Production, selected supply provinces, Philippines, 2006 19 14. GARLIC: Marketing Cost and Margins of Maketing Participants, Ilocos Norte, 2006 19 15. GARLIC: Marketing Cost and Margins of Marketing Participants, Ilocos Sur, 2006 20 16. GARLIC: Marketing Cost and Margins of Marketing Participants, Nueva Ecija, 2006 20
iv 53
Table 17h. GARLIC (Native): Imputed costs of marketing participants, by item, Naga City, 2006
Table 17i. GARLIC (Native): Imputed costs of marketing participants, by item, Cebu City, 2006
Item RETAILER
(peso per kilogram)
UNPAID LABOR 0.549
TOTAL
0.549
Item IRA-SD RETAILER
(peso per kilogram)
DEPRECIATION Supplies & Equipment
Weighing scale 0.004 0.054 Calculator 0.006 0.026 Cellphone 0.008 Electric fan 0.033
UNPAID LABOR 1.198 1.096
TOTAL 1.216 1.209
MARKETING COSTS STRUCTURE:
G A R L I C
TABLE OF CONTENTS
FOREWORD i Highlights 1 I. Introduction 2
II. Objectives 2 III. Methodology 2
Research site 2 Sample selection 3
IV. Discussion of Results 3 A. Number and Profile of Respondents 3
1. Number of Respondents 3 2. Profile of Respondents 4
2.1 Tenurial Status 4 2.2 Business Ownership 4 2.3 Source of Capital 5 2.4 Years in Farming 5 2.5 Years in Trading 6
B. Geographical Flow 6 C. Marketing Channels 8 D. Marketing Practices and Functions 10
1. Procurement 10 2. Distribution 11
E. Marketing Costs and Margins 12 a. Labor Cost 12 b. Transportation Cost 13 c. Cost of Supplies and Materials 14 d. Other Operating Cost 15
e. Imputed Cost 15 f. Average Marketing Cost 16
F. Marketing Margins 19 G. Problems Encountered by Respondents 21
V. Definition of Terms 22 VI. Annexes 25
54 iii
Table 17j. GARLIC (Native): Imputed costs of marketing participants, by item, Cagayan de Oro City, 2006
Table 17k. GARLIC (Native): Imputed costs of marketing participants, by item, Davao City, 2006
a/ less than .001
Item RETAILER
(peso per kilogram)
DEPRECIATION Supplies & Equipment
Weighing scale 0.022 Calculator 0.095
UNPAID LABOR 2.547
TOTAL
2.664
Item IRA-LD BA-SD RETAILER
(peso per kilogram)
DEPRECIATION Supplies & Equipment
Weighing scale a/ a/ a/ Calculator a/ a/ a/ Cellphone 0.001 Push cart 0.002 Blower 0.001 Table a/ Money detector 0.001
Transportation Equipment
Truck 0.060 Elf 0.010
UNPAID LABOR 0.150 2.400 2.250
TOTAL
0.224 2.441 2.250
MARKETING COSTS STRUCTURE:
G A R L I C
ii 55
Table 18a. GARLIC (Native): Total marketing costs by major components, selected supply provinces, Philippines, 2006
Table 18b. GARLIC (Native): Total marketing costs by major components, selected demand areas, Philippines, 2006
Item Ilocos Norte Ilocos Sur Nueva Ecija
(peso per kilogram)
CASH 5.922 5.042 6.981
Labor 2.138 2.613 3.040
Transportation Cost 1.425 .687 3.340
Materials used 1.229 1.103 .051
Other operating expenses 1.130 .639 .550
IMPUTED COST 2.480 3.750 1.657
Unpaid labor 1.619 1.700 .700
Depreciation .865 2.053 .957
TOTAL
8.402 8.792 8.638
Item Metro Manila Legaspi City Naga City Cebu City Cagayan de
Oro City Davao City
(peso per kilogram)
CASH 9.287 7.341 5.099 10.734 3.810 4.446
Labor 1.697 0.552 1.000 4.628 0.752 0.325
Transportation Cost 3.31 4.000 2.000 1.000 0.813 3.641
Materials used 2.090 0.740 1.560 2.200 0.500 -
Other operating expenses 2.190 2.049 0.539 2.906 1.745 0.480
IMPUTED COST 3.884 0.853 0.549 1.233 2.660 1.715
Unpaid labor 3.861 0.458 0.549 1.147 2.547 1.600
Depreciation 0.022 0.395 - 0.086 0.117 0.115
TOTAL
13.171 8.194 5.648 11.967 6.470 6.161
MARKETING COSTS STRUCTURE:
G A R L I C
FOREWORD
This report presents the result of the study on Marketing Costs Structure for Garlic. This serves to update the previous study conducted by the Bureau of Agricultural Statistics in 2002. The 2007 study covered the provinces of Ilocos Norte, Ilocos Sur and Nueva Ecija. It was aimed at providing information on the cost of marketing garlic.
The results of the study can hopefully address the need for information on the marketing flow of native garlic in the country, specifically, in the leading supply and demand areas. As this also contains information on marketing
functions/services and the corresponding costs incurred by various marketing participants in moving garlic from the farmers to the consumers, this could serve as guide for native garlic farmers and policy makers in increasing the efficiency of native garlic marketing system.
The BAS continues to find ways of improving the delivery of its statistical
outputs. Thus, the readers are encouraged to share their views, comments and suggestions regarding this report.
ROMEO S. RECIDE Director
Quezon City, Philippines
December 2007
56 i
Table 19. Problems on marketing commonly encountered by respondents, 2006
Problem Number of respondents Percent
A. FARMER 59 100
1. Strong competition with imported variety 13 22
2. Few buyers and usually they dictate bying price 9 15
3. Commodity were sold at lower price due to financial needs 8 14
4. Buyers always ask for additional bulbs free to what they 4 7
have bought
5. No response 25 42
B. TRADER 66 100
1. Few buyers particularly at retail makets where stalls are 7 11
located with few passers-by
2. High shipping cost 7 11
3. Many dues/fees imposed by the municipal/city government 7 11
4. Weight lose of commodity 4 5
5. No response
41
62
TOTAL
125
MARKETING COSTS STRUCTURE:
G A R L I C
Department of Agriculture BUREAU OF AGRICULTURAL STATISTICS
Department of Agriculture BUREAU OF AGRICULTURAL STATISTICS
Ben-Lor Bldg., 1184 Quezon Ave., Quezon City Agricultural Marketing Statistics Analysis Division
Telefax: 376-6365
[email protected] http://bas.gov.ph
DECEMBER 2007
ISSN-2012-0389