terms of use marketing costs structure: garlic (native) is a publication of the bureau of...

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


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)


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


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)


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


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)


Weighing scale 0.001 0.020 Calculator 0.000 0.006 Cellphone 0.001 Winnow 0.008


TOTAL

0.094 7.663

Item RETAILER

(peso per kilogram)

DEPRECIATION

Supplies & Equipment

Weighing scale 0.107

Tarpaulin 0.031

Table 0.007


Forward 0.250

UNPAID LABOR

Distribution 0.458

TOTAL

0.853


G A R L I C


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


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


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


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


Weighing scale 0.170 0.002 a/ 0.004 0.001 0.005

Calculator 0.030 a/

Cellphone 0.500 0.001 a/ a/


Elf 0.010 0.004 0.050

Jeep 0.010

Tricycle 1.300 0.002

Car (kotse) 0.990


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


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


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


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


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


Figure 3. Percent distribution of trader-respondents by type of business ownership,

selected areas, Philippines, 2006


Partnership 3%

Single proprietorship

97%

Figure 1. Percent distribution of respondents by type, selected

areas, Philippines, 2006

Trader53%

Farmer 47%


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



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




(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%


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%


Figure 7. Percent distribution of trader-respondents, by years in trading, selected


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


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


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


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


(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


(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


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


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


picked-up60%

delivered38%

both2%

Figure 14. Percent distribution of trader-respondents by mode of buying selected


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


G A R L I C


(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%


50 11

Figure 15. Percent disrribution of trader-respondents by terms of payment in buying,


cash81%

credit11%

cash & credit8%

Figure 15. Percent distribution of trader-respondents by terms of payment in buying,



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


(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


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)


Figure 17. Percent distribution of respondents by terms of payment in selling, selected areas,

Philippines, 2006


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)


TOTAL

0.743


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)


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


(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


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


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


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)


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)


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


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)



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)


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)


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


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)



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


(peso per kilogram)


TOTAL

2.000


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)


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)


G A R L I C

2) Demand Areas

18 43


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


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


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%


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


G A R L I C


peso per kilogram

Vehicle rental

Procurement 0.516 0.147 1.670


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)


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


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


G A R L I C


(peso per kilogram)

Procurement

Hauling 0.002

Distribution

Sorting 0.730


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


TOTAL

0.552

Activity/Practice

RETAILER

(peso per kilogram)

Procurement

Hauling 1.000

TOTAL

1 .000


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


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


TOTAL

1.170 1.970

Activity/Practice

IRA-LD RETAILER


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


TOTAL

0.150 3.161


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


TOTAL

3.280 0.058 0.410 0.190 0.160


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


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


G A R L I C

Activity/Practice Metro Manila


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


G A R L I C


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


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


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


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


WITHIN 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



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


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


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


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


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


WITHIN 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



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


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


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


TOTAL

59 66 125


G A R L I C


Procurement

Loading 0.030 0.013

Hauling 0.156 0.020

Unloading 0.024

Cleaning 0.037 Sorting 0..312 0.037


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


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


G A R L I C

Activity/Practice Metro Manila


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


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


TOTAL

3.280 0.058 0.410 0.190 0.160


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


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


TOTAL

1.170 1.970

Activity/Practice

IRA-LD RETAILER


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


TOTAL

0.150 3.161


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


TOTAL

0.552

Activity/Practice

RETAILER

(peso per kilogram)

Procurement

Hauling 1.000

TOTAL

1 .000


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


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


TOTAL

1.594 6.912


G A R L I C


(peso per kilogram)

Procurement

Hauling 0.002

Distribution

Sorting 0.730


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/


TOTAL

0.250 0.050 0.100

Table 15. Marketing Cost and Margins of Marketing Participants, Ilocos Sur, 2006

(peso per kilogram)


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


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%


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)


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


G A R L I C


peso per kilogram

Vehicle rental

Procurement 0.516 0.147 1.670


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


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%


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


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


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


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)


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


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)


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)



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


(peso per kilogram)


Distribution 2.000

TOTAL

4.000


(peso per kilogram)


TOTAL

2.000


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)



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)


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)


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)


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


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


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)


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)


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


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


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)


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


(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


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


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


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)


Figure 17. Percent distribution of respondents by terms of payment in selling, selected areas,

Philippines, 2006


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


(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)


TOTAL

0.743


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%


50 11

Figure 15. Percent disrribution of trader-respondents by terms of payment in buying,


cash81%

credit11%

cash & credit8%

Figure 15. Percent distribution of trader-respondents by terms of payment in buying,



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


(peso per kilogram)

Plastic bag (small) 0.632 1.770 Kaing 1.000

TOTAL 0.632 2.770

Item RETAILER

(peso per kilogram)


TOTAL

0.500

Figure 16. Percent distribution of respondents by mode of selling, selected areas,

Philippines, 2006


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


picked-up60%

delivered38%

both2%

Figure 14. Percent distribution of trader-respondents by mode of buying selected


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


G A R L I C


(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


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


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


(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


(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


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


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


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%


Figure 7. Percent distribution of trader-respondents, by years in trading, selected


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


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


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



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




(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%


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


Leasee5%

CLT-holder

2%

RentFree2%

Single Proprie-torship67%

Tenant24%

Table 17a. GARLIC (Native): Imputed costs by item, selected supply provinces, Philippines, 2006


Figure 3. Percent distribution of trader-respondents by type of business ownership,



Partnership 3%

Single proprietorship

97%

Figure 1. Percent distribution of respondents by type, selected


Trader53%

Farmer 47%


G A R L I C


(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


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


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


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


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


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


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


Weighing scale 0.170 0.002 a/ 0.004 0.001 0.005

Calculator 0.030 a/

Cellphone 0.500 0.001 a/ a/


Elf 0.010 0.004 0.050

Jeep 0.010

Tricycle 1.300 0.002

Car (kotse) 0.990


TOTAL

5.890 0.029 0.005 0.054 0.001 1.145


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


G A R L I C


(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


Tractor 0.320 Trailer 0.030 Tricycle 0.810 0.060

UNPAID LABOR 0.700

TOTAL

2.063 0.086


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


(peso per kilogram)


Weighing scale 0.001 0.020 Calculator 0.000 0.006 Cellphone 0.001 Winnow 0.008


TOTAL

0.094 7.663

Item RETAILER

(peso per kilogram)

DEPRECIATION


Weighing scale 0.107

Tarpaulin 0.031

Table 0.007


Forward 0.250

UNPAID LABOR

Distribution 0.458

TOTAL

0.853


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


(peso per kilogram)


Weighing scale 0.004 0.054 Calculator 0.006 0.026 Cellphone 0.008 Electric fan 0.033


TOTAL 1.216 1.209


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)


Weighing scale 0.022 Calculator 0.095

UNPAID LABOR 2.547

TOTAL

2.664


(peso per kilogram)


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


Truck 0.060 Elf 0.010

UNPAID LABOR 0.150 2.400 2.250

TOTAL

0.224 2.441 2.250


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


(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


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


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


G A R L I C



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

terms of use marketing costs structure: garlic (native) is a publication of the bureau of...

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