value chain analysis of pen shell (baloko in the province

Amano & Mojados: Value Chain Analysis of Pen Shell (Baloko) in the Province of Sorsogon, Philippines

Value Chain Analysis of Pen Shell (Baloko) in the Province of Sorsogon, Philippines

Viola L. Amano1,* and Julieta V. Mojados2

Abstract

1Bicol University Jesse M. Robredo Institue of Governance and Development, Legazpi City2Bicol University College of Business, Economics and Management, Legazpi City

*Corresponding author: [email protected]

Sorsogon Bay is home to the pen shell (Atrina pectinata), locally known as Baloko. This study was designed to assess the existing value chains of pen shell and identify areas for improvement. The sites covered were the municipalities along Sorsogon Bay in the province of Sorsogon, Philippines. It employed the tracer methodology where only the processors and fisherfolks connected to the traders were selected as respondents of the study. Primary data were gathered through semi-structured questionnaires. Secondary data were used to establish a good understanding of the pen shell industry in the areas of the study. Results show that the adductor muscle or tinga is a substitute for scallops, thus, an export product. The other parts of pen shell or rambit are also of high demand. The highest volume of pen shell catch occur during October to April during the northeast monsoon (amihan) and gradually decline from May to September during the southwest monsoon (habagat) months. The value chain maps reflect the whole meat and semi-processed value chains, the two distinct marketing practices traced in the pen shell industry. The actors in the two value chains are the fisherfolks, processors, traders, and exporters. The enablers are the fisherfolks’ organization, local government unit (LGU), Bureau of Fisheries and Aquatic Resources (BFAR), City Fisheries and Aquatic Resources Management Council (CFARMC), microfinance institutions, Department of Trade and Industry (DTI), and Phil Export. There is uneven distribution of value added in both chains. More value is created and captured by the processors while the fisherfolks have negative gains. The value-added captured by the processors and traders are higher in semi-processed practice. There is the need to focus on the supply of pen shell, the effects of pollution of Sorsogon Bay, market information, technology to preserve the quality of products, industry association, and basic researches on pen shell under Sorsogon Bay condition.

Keywords: Atrina pectinata, pen shell, value chain, value chain analysis

Introduction

Pen shell (Atrina pectinata) is one of the current dominant mollusk species found in Sorsogon Bay. It is locally known as baloko, a meaty shellfish that can be prepared in many ways such as fried, adobo, or cooked in coconut milk with chili to taste like the extemely hot Bicol express. It is now a popular wet market commodity in Sorsogon Province as exotic delicacy for seafood lovers. Baloko is a member of family Pinnidae whose meat resembles that of a hybrid scallop and mussel with tentacle-like extension. This mollusk has a long, triangular, or wedge-shaped shell, and the pointed end is anchored in sandy, shallow sea bottoms.

A stiff pen shell can be up to 12 in long and 6.5 in wide. It has a brown or purplish-brown color and 15

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or more radiating ribs that fan out across the shell. It may also have erect, tubular spines found on sandy bottoms in shallow water. It attaches with its byssal threads, pointed end down. Pen shells have considerable economic importance as food, and they produce pearls of moderate value. Along the approach of the seaport in Sorsogon Bay, residents of mostly fishermen sell fresh meat of this mollusk from ₱35 to ₱60/kg (depending on the volume of stocks) and make it available to buyers.

Pen shell is now being acknowledged as one of the top marine products identified in Sorsogon province, which has the potential to augment the income of the fisherfolk sector. This replaced the green mussel (Perna viridis or tahong) industry that collapsed since the red tide occurrence in 2006 up to early 2009. This condition has given way to green mussel farmers and fisherfolk

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to resort to the gathering of baloko. This eventually led to the increase in production volume of 525 kg/day of operation per diving team of five members (C. Legazpi, personal communication, March 30, 2017).

Pen shell scallop (Figure 1A) being a major product has considerable economic importance not only to fisherfolk sector but also to other ancillary business sectors, which significantly augment their income due to increasing demand since its introduction to the market. Unfortunately, there are limited processed products available in the market, except from its semi-processed form.

Given the economic significance of the pen shell industry in the Bicol region, research and development efforts should be focused towards determining the status of the industry to identify areas for improvement. This can be done by subjecting the industry to the lens of the value chain approach such that an overview of the industry, value chain map showing the functions, business links between the operators and enabling environment, and overall value added can be determined.

The value chain analysis determines the chain of activities that a firm in a specific industry performs in order to deliver a valuable product or service for the market. The idea of the value chain is based on the process view of organizations that it is made up of inputs, transformation processes, and outputs. Each stage of the chain is linked to each other. In each stage, additional value or return is expected to be created and captured by an industry. Focusing on all links in the chain and on all activities in each link helps to identify which activities are subject to increasing returns and which are subject to declining returns. As a result of

Materials and Methods

The study sites (Figure 1B) covered in this study were the municipalities along Sorsogon Bay, which are

Figure 1. Pen shells (A) and the study areas in the province of Sorsogon (B)

A B

being able to make these distinctions regarding the nature of returns throughout the various links in the chain, policy makers are assisted in formulating appropriate policies and making necessary choices. These may be to protect particularly threatened links or facilitate upgrading of other links in order to generate greater returns.

Value chain analysis has proved to be very useful to the Philippine Rural Development Project (PRDP) of the Department of Agriculture, which utilized this tool to determine the value-creation and rational distribution of benefits among the actors involved in the chain. PRDP employed the value chain approach in the preparation of the Provincial Commodity Investment Plan (PCIP) and in identifying priority interventions and programs to invest in (Baleza, 2015).

Thus, this study was designed to assess the existing value chain of pen shell in the province of Sorsogon and identify areas for improvement. Specifically, it aimed to provide an overview of the pen shell industry in the province of Sorsogon, develop value chain map for pen shell showing the production and marketing functions performed by the operators, vertical business links among the operators, support service providers, and enabling services or policies, determine the overall value added generated by the chain and shares of the different stages, and identify areas for improvement of the pen shell value chain.

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the pen shell producing areas. The sites covered were barangays of Sorsogon City, namely: Bitan-O, Balogo, Rizal, and Bulabog. Other municipalities in Sorsogon such as Casiguran and Juban were also covered in the study.

Purposive sampling was employed in the study to identify fisherfolks, processors, traders, and exporters of pen shells in the province of Sorsogon. Only the traders who were registered with the LGU were selected as respondents of the study. The traders were identified first and the processors and fisherfolks connected to them were traced and chosen as respondents.

With the assistance of the Office of the Provincial Agriculture (OPAg) in Sorsogon, the research team was able to locate the respondents of the study. The respondents were the value chain players of fresh whole meat and semi-processed pen shells. This was based on the dominant traders (major buyers) of pen shells in the covered areas. Based on the survey, there were seven dominant traders in Sorsogon province as summarized in Table 1.

Primary data were gathered through semi-structured questionnaires, which were based from the questionnaires of completed researches on supply chain and value chain of the researchers. The questionnaires were designed in such a way that it captured all the quantitative and qualitative information needed in answering the objectives of the study. This enabled the study to understand the dynamics in the chain and the behavioral and institutional features of the transactions involved to place the analysis in proper context.

Table 1. Respondents of the study.

AreaRespondents

Fisherfolks Assemblers/Processors Traders ExportersSorsogon City - - 3 -Bitan-o 30 1 - -Rizal 13 2 - -Balogo 7 - - -

Bulabog - - 3 -

Casiguran - - 1 -Tabaco City - - - 1Pasay/Naga City - - - 1Total 50 3 7 2

Results and Discussion

The Pen Shell Industry Profile

Bicol region has four major fishing grounds: San Miguel Bay, Ragay Gulf, Lagonoy Gulf, and Sorsogon Bay measuring a total of 1,666.28 km2. The region’s coastline measures 3,116.10 km. Sorsogon Bay is recognized as an essential fishing ground in the Philippines for small pelagic, demersal fishes, and shellfishes (Olano et al., 2009). It is an enclosed bay surrounded by five coastal municipalities, namely: Casiguran, Castilla, Magallanes, Juban, and Sorsogon City. According to Serafin Lacdang, head of the Fisheries Division of the Provincial Agricultural Office, Sorsogon Bay is home to pen shell that has emerged as the second top earner for local fisherfolks next to green mussel or tahong.

In the Philippines, pen shell is marketed as a whole meat or processed by shellfish harvesters to separate the adductor muscle as an export commodity. The adductor muscles of pen shell are scallop-like and very expensive when it is marketed as an export commodity (₱331.25/kg compared to ₱198.00/kg). The adductor muscle or locally known as tinga is a substitute for scallops. The other parts of pen shell or rambit are also of

Secondary data were used to establish a good understanding of the pen shell industry in the areas of the study. These included data on volume and value of production, prices, and other market information.

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high demand by Bicolanos and, lately, became popular even to tourists.

Sorsogon City Agriculture Office (CAO) has recorded 1,866 registered fishing boats (bancas) (1,282 motorized and 584 non-motorized) in 2016. Less than 10% of these were gatherers of pen shell. The fishing gears (Figure 2) commonly used include fishnet or sinaya, goggles or sirip, gloves, compressors and hose. According to Sorsogon Sangguniang Panlungsod Resolution No. 1163 Series of 2005 Section 20, the use in the city waters of air compressors, self-contained underwater breathing apparatus (SCUBA) or any form of underwater breathing device shall be unlawful except for the construction, operation, and maintenance of licensed fish corals, fish pens, fish cages, mussel/oyster farms, pearl farms, and in fishery or aquatic research by legitimate institution. This helped regulate the over extraction of shellfish in Sorsogon Bay particularly pen shells and carpet shells.

Similar to other fishery commodity, pen shell production is seasonal and affected by northeast monsoon or amihan (October to April) and southwest monsoon or habagat (May to September). The data from the fisherfolk respondents reflect the seasonality of catch in the research areas (Figure 3). The highest volume of pen shell catch (4,222 kg) occurred during December to April during the northeast monsoon (amihan) in green-colored grid and gradually declined from May to November during the southwest monsoon (habagat) months, presented in dark yellow grid. Fisherfolks claimed that during January to early part

of May, seawater in Sorsogon Bay is clear and pen shell gathering is relatively easy. However, during southwest monsoon or habagat, the seawater is blurry making gathering of pen shells difficult. Likewise, during the habagat months there were usually three to four typhoons per month that visited the province of Sorsogon (PAGASA, 2016).

Figure 2. Fishing gears used in gathering of pen shells

Quality Grades of Pen shells

Domestic Production and Consumption of Pen shells

There are no standard quality grades for pen shells. Through their experience, the processors and traders are able to classify the pen shell as small, medium, and large by visual inspection. The fisherfolks sell the pen shells unclassified or rambol and the traders are the ones who classify the pen shell according to sizes. The adductor muscle or tinga are not classified. This means that the classification made is not required by the market and only practiced by the traders and processors as a bargaining tool to lower the price especially when there are greater number of small sizes. Sorsogon Sangguniang Panlungsod Resolution No. 1163 Series of 2005 Section 20 prohibits the gathering of pen shell shorter or below 22.5 cm in shell length (classified “large”). This indicates that traders and processors should only buy large pen shell to comply with the law.

There is very little literature on the biology of pen shell in Sorsogon Bay. Reproductive effort is unstudied. Quantitative data on gonad mass or egg number relative

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to body size are difficult to obtain in this species. But it is obvious visually that the fully-developed gonad makes a small proportion of the tissue than in oysters or scallops. However, there have been many studies on the number of spawning seasons studied in other areas of the world. Baik (2002) and Chung and colleagues (2006) reported that the number of spawning season of A. pectinata is once a year by qualitative histological analysis. It is assumed that the number of spawning seasons during the year of bivalve species vary with latitudinal gradients (locations) of the world.

According to the growth curves for the mean shell height fitted to the von Bertalanffy equation by Baik and colleagues (2001), ages (year) and mean shell

Table 2. Pen Shell production in the province of Sorsogon

Source: NSAP, OPAg and Exporters

Years Production (kg) Demand (kg) Unmet Demand (kg)2006 No data 121,874.662007 0 102,893.41 -102,893.412008 0 103,922.34 -103,922.342009 0 104,961.56 -104,961.562010 0 106,011.18 -106,011.182011 0 107,071.29 -107,071.292012 70,813.60 128,142.00 -57,328.402013 46,032.12 369,223.42 -323,191.302014 57,800.58 370,315.66 -312,515.082015 204,333.66 431,418.82 -227,085.162016 18,822.23 432,533.00 -413,710.77

Figure 3. Seasonality of Pen shells

lengths (mm) were estimated as follows: 1 year (14.51 cm), 2 years (19.47 cm), 3 years (22.24 cm), 4 years (24.47 cm), 5 years (26.09 cm), 6 years (27.33 cm), 7 years (28.31 cm), 8 years (29.11 cm), 9 years (29.76 cm), and 10 years (30.35 cm). The specified size of pen shells allowed by the city ordinance is not shorter than 22.5 cm. This connotes that three years is required for the pen shell to grow into harvestable size.

The production data (Table 2) provided by the National Stock Assessment Program (NSAP) in Tabaco City and the Office of the Provincial Agriculture (OPAg) of Sorsogon indicated the very low production of pen shells. The high demand for pen shells particularly of the export market remained unsatisfied. The highest

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production of pen shell of 204,333.66 kg was recorded in 2015. There was no data in 2006 and there was no recorded gathering of pen shells from 2007 to 2011 because of the red tide infestation in Sorsogon Bay. This gave way to its growth and preservation as harvesting, selling, transporting and eating them have been banned like all other shell fish species from Sorsogon bay. In the later part of 2012, gathering of pen shells commenced even though it was still banned. It can be observed that even though extraction has just been done for few months, the catch of 70,813.60 kg was significantly high. The prohibition of harvesting due to red tide enabled the pen shells to grow and mature before they were harvested. It can also be observed that the quantity harvested still was not enough to satisfy the demand of the market. It can be noted that the production further declined in 2016 to 18,822.23 kg due to over extraction aggravated by the worsening condition of Sorsogon bay (based on Sorsogon Sangguniang Panlungsod Resolution No. 1163 Series of 2005).

There were two emerging products traced in the pen shell industry: the fresh whole meat (adductor muscles or tinga and other internal organs or rambit) and the semi-processed pen shell (adductor muscles or tinga only). The Value Chain Maps prepared were based on these two products.

The Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) model (2007) was adopted in this study. The Value Chain Map for fresh whole meat pen shell (Figure 4), wherein the first chain operators were the fisherfolks who carried out the input provision tasks of gathering and selling their catch to the traders. The subsequent activity was trading wherein the common tasks were receiving the fresh pen shells, de-

Value Chain Mapping

Domestic Prices

Similar to other fishery products, the data on the domestic prices of pen shells are inadequate. However, during the conduct of the research, it was found out that

the prices vary greatly depending on the products. Fresh pen shells are bought at ₱3.00 per piece. The fresh whole meat which includes the internal organs (rambit) and the adductor muscles (tinga) can be purchased at ₱80.00 to ₱100.00/kg. The prices for internal organs without adductor muscles ranged from ₱30.00 to ₱35.00/kg. However, exporters set the prices for adductor muscles from US$5.25 to US$9.00/kg.

Figure 4. Value Chain Map for Whole Meat Pen Shell (Adopted GTZ Model)

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Figure 5. Value Chain Map for Semi-Processed Pen Shell (Adopted GTZ Model)

meating of pen shells (the process of separating the meat from the shell), transporting, wholesaling, or retailing and providing cash payment to fisherfolks. The consumers of this chain were the residents of Sorsogon City and local tourists. The enablers, which assisted the actors in the primary production were the fisherfolks organization Unyon ng Mga Mandaragat ng Sorsogon Association (UMASA), the local government unit (LGU) of Sorsogon, the Municipal Agriculture Office (MAO), the City Fisheries and Aquatic Resources Management Council (CFARMC), the Bureau of Fisheries and Aquatic Resources (BFAR), the Office of the Provincial Agriculture (OPAg)–Fishery Section in Sorsogon, and the Union of Fisherfolks of Balogo (UFOB). There were also microfinance institutions that provided additional capital for the fisherfolks. The Department of Trade and Industry was the sole enabler for the trading function.

Figure 5 illustrates the Value Chain Map for semi-processed pen shell. The value chain also started from the input provision by the fisherfolks whose tasks were gathering and selling the fresh pen shells to the processors. The succeeding function is processing wherein the tasks commenced with procuring fresh pen shells, de-meating, separating adductor muscle (tinga) from other internal organs (rambit), washing, sorting, packaging, freezing, and delivering the adductor muscles to exporters in the cities of Tabaco, Naga or Pasay (cities outside of the province), and selling the rambit to wholesalers or retailers. The tasks in the trading

function were the same for both chains. The consumers for the adductor muscles or tinga were the export market, which were in Japan and America, according to the exporter (C. Reyes, personal communication, June 30, 2017). The rambit are sold in the local market. The enablers of the fisherfolks were the same for both chains. LGU, MAO, and BFAR were the enablers of the processors. DTI was an enabler for both processors and the traders. The Philippine Exporters Confederation, Inc. (PHILEXPORT) as an enabler was the umbrella organization of the Philippine exporters.

All of the fisherfolks from both chains incurred net loss from their gathering operation (Table 3). In the Whole Meat Pen shell value chain, the sales generated for one kg of whole meat was ₱54.00, which was equivalent to an average of 18 pieces of pen shells. The total cost was ₱91.14 resulting to a net gathering loss of ₱37.14. In the Semi-processed pen shell value chain, 67 pieces of pen shells on the average were needed to produce 1 kg of adductor muscles, which generated ₱198.00 sales. When total cost of ₱238.91was deducted from the sales, it resulted to ₱40.91 net loss.

It can be observed that in both chains, operating expenses were significantly high due to low catch of pen shells (Table 4). They continuously dive in search for pen shells. This in turn resulted to very high labor expenses.

Value Addition

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Item

Value ChainWhole

Meat Pen Shell (₱)

Semi-processed

Pen Shell (₱)Cash ReturnsSales 54.00 198.00Total Returns 54.00 198.00Cash CostsOperating Expenses 51.33 132.67Labor Expense 16.04 44.91Other Expenses 15.13 46.19Total Cash Costs 82.50 223.77Non-Cash CostDepreciation Cost 8.64 15.13Total Non-Cash Cost 8.64 15.13Total Costs 91.14 238.91Net Gathering Income (Loss) (37.14) (40.91)

Net Cash Income (Loss) (28.50) (25.77)

Return on Cost (ROC) (%) -40.75 -17.12

Table 3. Cost and Return Analysis Per Kilogram of Gathering Pen Shell

The operating expenses included the gasoline, crude oil and food of the fisherfolks. Labor expense covered the payment for the fisherfolks and for the water boy. The role of the water boy was to safeguard the hose of the air compressor from folding and to prevent water from entering the boat while the fisherfolks were gathering pen shells. Other costs were the payment for registration of their fishing gears such as boat, engine, and compressors. The depreciation costs were expense incurred for the use of boat and other fishing gears. This in turn resulted to very high labor cost as well as fuel and operating expenses. The return on cost (ROC) indicates that for every ₱100.00 of cost, the fisherfolks incurred net loss of ₱40.75 for the whole meat pen shell value chain and ₱17.12 for the semi-processed pen shell.

The processors in the semi-processed value chain generated ₱56.09 net income (Table 4). High net income can be attributed to high sales revenue brought about by sales of tinga at ₱250.00/kg and the by-product of 2.5 kg of rambit at ₱30.00/kg. It can be observed that

the total cost was very high due to the high cost of fresh pen shells. This was due to the large quantity of pen shells required for one kilogram of adductor muscles or tinga. This is so because the pen shells were bought on rambol basis and majority of catch, during the conduct of this study, were small and medium sizes. The net income was also affected by other expenses. Labor expense accounted for the payment of labor services for de-meating and removing the adductor muscles (tinga) including other processing activities such as washing, checking for rejects, packaging, and freezing. Marketing cost incurred was due to communication and transaction costs. The products were delivered to the exporters incurring transportation cost. Other cost was paid for miscellaneous expenses that the processors incurred during the processing activities. Non-cash costs were also accounted for such as depreciation due to fixed assets used and losses from spoilage. The adductor muscles (tinga) require the application of

Table 4. Cost and Return Analysis Per Kilogram of Processing of Pen Shell

ItemValue Chain

Semi-Processed Pen Shell (₱)

Cash ReturnsSales 250.00Other Sales 75.00Total Returns 334.00Cash CostsFresh Pen Shell 198.00Labor Expense 12.72Marketing expense 7.04Transportation Expense 4.74Other Expenses 2.34Total Cash Costs 224.84Non-CashDepreciation Cost 34.34Losses from Wastage 9.73Total Non-Cash Cost 44.07Total Costs 268.91Net Processing Income 56.09Net Cash Income 100.16Return on Cost (ROC) (%) 20.86

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food grade preservative 12 hours before harvesting to prevent spoilage. However, delays in the transport due to unavoidable circumstances result to the spoilage.

The cost-and-return analysis revealed that the processors were better off than the fisherfolks in both value chains since they got an ROC of 20.86% even though the processing costs were substantially high. They obtained net profit from their operation, which indicates their profitability.

The traders in both chains obtained high ROC of 27.69% for whole meat pen shell and 31.91% for the semi-processed pen shell (Table 5). This means that for every ₱100.00 of total cost, the traders in whole meat pen shell value chain generated ₱27.69 net trade income while the traders in the other value chain who sold rambit

only obtained net trade income of ₱31.91. The higher net trade income of the semi-processed pen shell value chain was due to high sales and low cash costs. The high sales revenue generated in whole meat pen shell value chain was brought about by the reasonably high selling price of rambit with tinga worth ₱100.00/kg. Based on the interview with the exporter, consumers preferred whole meat even if the price is quite high because of the delectable taste of adductor muscle. On the other hand, the traders in semi-processed pen shell value chain were also able to create clear-cut profit by selling the rambit at ₱60.00/kg. Low trading costs made positive impact on the profit earning performance of this venture.

The research team analyzed the cost and return per kilogram of semi-processed pen shell traded in the export market (Table 6). The ROC of 9.67% was obtained by the exporters, which means that for every ₱100.00 of total cost, the exporters obtained net trade income of ₱9.67. The table reveals that the exporters earned considerable amount of profit albeit the high exporting costs. Bulk

Item

Value ChainWhole Meat

Pen Shell (Rambit & Tinga) (₱)

Semi-processed Pen Shell

(Rambit) (₱)Cash ReturnsSales 100.00 60.00Total Returns 100.00 60.00Cash CostsRaw Material 54.00 30.00Labor Expense 9.00 7.50Marketing expense 2.71 1.35Transportation Expense 2.01 1.58

Other Expenses 1.10 1.70Total Cash Costs 68.82 42.13Non-Cash CostDepreciation Cost 7.45 2.25Losses from Wastage 2.04 1.11Total Non-Cash Cost 9.49 3.36Total Costs 78.31 45.49Net Trade Income 21.69 14.52Net Cash Income 31.18 16.87Return on Cost (ROC) (%) 27.69 31.91

Table 5. Cost and Return Analysis Per Kilogram of Gathering of Pen Shell

Table 6. Cost and Return Analysis of Exporting of Semi-Processed Pen Shells (kg)

ItemValue Chain

Semi-Processed Pen Shell (₱)

Cash ReturnsSales 331.25Total ReturnsCash CostsAdductor Muscle 250.00Marketing Cost 2.27Rental of Facility 16.75Labor 4.00Transportation 12.50Other Costs 4.00Total Cash Costs 289.72Non-Cash CostDepreciation Cost 12.32Total Non-cash Cost 12.32Total Costs 302.04Net Exporting Income 29.21Net Cash Income 41.53Return on Cost (ROC) (%) 9.67

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Figure 6. Value-Added and Shares of the Different Operators for Whole Meat Pen Shell Value Chain

of the costs was due to high cost of adductor muscles. This was inevitable as the exporters cannot dictate their own price due to low supply of pen shells. They tend to adopt the existing price in the market. Costs of rental, transportation, and depreciation were also prominent, which resulted to decrease in net exporting income. One exporter claimed that although the transportation service provider was charging them with significantly high fee, they had no choice but to concede because that was the only transport service provider which has regular transport schedule in the Bicol region. There was no shipping cost since the importer of the product shouldered the cost from Manila up to the country of destination.

The cost-and-return analysis reveals that processors and traders, as well as the exporters, were at an advantage compared with the fisherfolks in both chains. They obtained net profit from their operation, which indicates profitability. The ROCs of processors were much higher compared to all other operators. The traders in both chains ranked second. The exporters also earned profit though not as much as the traders and processors had.

Figure 6 illustrates the value addition map for whole meat pen shells, and Figure 7 for semi-processed pen shells. The maps presented the value-added and captured at different stages and the overall value added

by the chain. In both chains, the selling price of pen shell was on a per piece basis at ₱3.00 each, regardless of size. The locals called it rambol basis. The fisherfolks knew that the price of the pen shells was very low but the traders and processors were their suki (loyal buyer) and would purchase all their catch even if some of the shells were small. In the whole meat pen shell value chain, instead of creating value for their catch, the fisherfolks incurred a net loss of ₱37.14/kg. The value addition map reveals the piteous condition of the fisherfolks, which is critical to the pen shell industry if not addressed immediately. The blank box in the figure shows that fisherfolks were not able to capture any benefit from the chain. In comparison with the fisherfolks, the traders captured all of the value-added in the chain (100%). They were able to earn reasonable profit although they were burdened with losses due to spoilage.

In semi-processed pen shell value chain, the fisherfolks have similar fate as that of the fisherfolks in the whole meat pen shell value chain. They incurred net loss of ₱40.91. An addition of ₱56.09/kg was obtained by the processors, which has 56.19% net value added. They obtained this from sales of adductor muscles or tinga at ₱250.00/kg, plus the sales of other internal organs or rambit at ₱30.00/kg. The processors sold the adductor muscles to exporters while the other internal organs were sold to local traders. The traders of rambit acquired an additional value of ₱14.52/kg corresponding to

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Figure 7. Value-Added and Shares of the Different Operators in Semi-processed Pen Shell

14.54% net value added. The exporters of tinga, on the other hand, created added value of ₱29.21, which corresponds to 29.27% net value added. Similar to the Whole Meat Pen Shell Value Chain, the blank box in the figure shows that fisherfolks were not able to capture any benefit from the chain. The highest value-added was captured by the processors. The exporters were next in rank followed by the traders. Due to the transformation made by the processors more value was created and captured. The additional effort of the exporters to sell in international market created additional value. Likewise, the selling activities of the traders provided additional value to the product.

The value addition maps disclosed the uneven distribution of value added in both chains. Likewise, the maps revealed that more value was created and captured by the traders of pen shells. This is so because for the whole meat pen shell value chain, they were able to procure the pen shells on rambol basis, which entails lower per unit cost. The gatherers were not able to command higher price for their catch because of this mode of selling. They did not classify their catch as to sizes, and therefore, they were bound to follow the price that the traders dictated. The data also reflect the unfortunate condition of the fisherfolks in both chains that need immediate intervention by the concerned government agencies. Dwindling pen shell catch adversely affected the gathering activity of the fisherfolks, which resulted to significant losses instead

of value creation. It is worth mentioning that these fisherfolks were unaware of how much they were losing because they do not have insights on proper recording of the financial transactions. The data can be used to further study and assess the legal framework relevant to the chain development particularly on fishery. The traders may use the value chain maps in evaluating their decision to adopt proper inventory management to improve their efficiency. The efficiency gain is likely to translate into improved competitiveness resulting to greater market share and, thus, value creation of the trader.

The following areas of concern were derived from the findings of the study and were the basis for the recommendations for improvement of the value chain.

Dwindling supply of raw pen shell. According to the Sorsogon OPAG Fishery Section, this is due to over-extraction that even the small sizes are gathered. There is an existing ordinance in Sorsogon City regarding the use of fishing gears and acceptable pen shell size for gathering. What is lacking is the strict implementation of the ordinance. The assistance of the Bantay Dagat may be sought to help in ensuring that the ordinance will be strictly followed.

Pollution of Sorsogon Bay. According to

Areas of Improvement

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fisherfolks, there are two big companies that dispose chemicals in the rivers, which are connected to Sorsogon Bay. These, together with the disposal of garbage and sewerage of residents along the coast of Sorsogon bay, make the seawater of the bay polluted. The Philippine Clean Water Act specifically prohibits these practices. The Local Government Unit of Sorsogon City should strictly implement this law with the assistance of the barangay officials.

Lack of Market Information of Fisherfolks. The fisherfolks were price takers and cannot negotiate for better price because of the lack of market information. They do not know the options where they can sell their pen shell catch. This is also the reason why they do not engage in value adding. Based on the interview of the fisherfolks, they are not aware that selling the tinga and rambit separately will provide them higher income. The market information may be provided by BFAR or OPAg.

Inadequate Technology to Preserve the Quality of Tinga. Losses incurred by processors of pen shells were due to spoilage. This was caused by the improper techniques used to preserve the quality of tinga during transport. The food grade preservatives are applied by the exporters and not by the traders. This can already be done by the traders to prevent the discoloration of the products. Improvement in the logistics should also be done to prevent delays in the transport of the product.

Absence of Viable Industry Association. Fisherfolks have organizations but with very limited activities. Processors and traders are not organized at all. Industry association is needed to cater to the needs of the sector and obtain greater bargaining power. Unity of actions and decisions of the sector is also facilitated. It is very important for the organizations of fisherfolks to be active and consider consolidating the products so they can sell directly the tinga to exporters to capture more value.

Inadequate Research on the Biology, Ecology, Growth, and Reproduction of Pen Shell Under Sorsogon Bay Condition. Much of the studies conducted on pen shell were in other countries and even these studies indicate the inadequateness of their studies along biology, ecology, growth, and reproduction of pen shell. Such studies are needed to be able to come up with a good plan for sustainable fishing of pen shell in Sorsogon Bay.

The value chain maps reflect the whole meat and semi-processed value chains, the two distinct marketing practices traced in the pen shell industry. The actors in the two value chains are the fisherfolks, processors, traders, and exporters. The enablers are the fisherfolks’ organization, LGUs, BFAR, BFARMC, CFARMC, microfinance institutions, DTI, and Phil Export.

There is uneven distribution of value added in both chains. More value is created and captured by the processors while the fisherfolks have negative gains. The value-added captured by the processors and traders are higher in semi-processed practice.

The areas of improvement will provide solutions to the problems on the supply of pen shell, pollution of Sorsogon Bay, market information, technology to preserve the quality of products, industry association, and research on the biology, ecology, growth, and reproduction of pen shell under Sorsogon Bay condition.

Conclusion and Recommendations

Acknowledgment

The authors wish to express great appreciation to Bicol University Research and Development Management Division (BURDMD) for providing the project funds. We also thank the head and staff of the Office of Provincial Agriculture–Sorsogon, the City Agriculture Office–Sorsogon, the Municipal Agriculture Office–Juban, the National Stock Assessment Program–BFAR, and the Local Government Unit–Sorsogon City.

References

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