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MARKETING COSTS STRUCTURE:
O N I O N
Department of Agriculture BUREAU OF AGRICULTURAL STATISTICS 1184 Ben-Lor Bldg., Quezon Avenue, Quezon City
Tel. No.: +63(2) 372-3820 Fax. No.: +63(2) 371-2048
info@bas.gov.ph URL: http://bas.gov.ph
Department of Agriculture BUREAU OF AGRICULTURAL STATISTICS
ISSN-2012-0389
NOVEMBER 2007
MARKETING COSTS STRUCTURE:
O N I O N
TERMS OF USE Marketing Costs Structure: Onion 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 the 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: info@bas.gov.ph Website: www.bas.gov.ph
PROBLEM ILOCOS NORTE PANGASINAN NUEVA ECIJA
Low price received due to 2 1 14 imported onion Low price received during 2 5 harvest time Difficulty in selling directly 2 to Manila (Divisoria) Shrinkage of the commodity 1 1 1 Weak demand when buyer 1 1 1 have voluminous stocks in their bodegas Stealing 1 1 Price fluctuation 2 1 2 Bad debts 1 1 1 No problem 10 7 1
TOTAL 20 20 20
Table 18a. ONION: Distribution of farmer-respondents, by problems encountered, selected supply provinces, Philippines, 2006
79 74
MARKETING COSTS STRUCTURE:
O N I O N
FOREWORD This report presents the result of the study on Marketing Costs Structure Study for Onion. 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, Pangasinan and Nueva Ecija. It was aimed at providing information on the cost of marketing onion. The results of the study can hopefully address the need for information on the marketing flow of onion 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 onions from the producers to the consumers, this could serve as guide for farmers and policy makers in increasing the efficiency of the onion 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
Buying Selling Gross NetLEGASPI CITY
IRA-LD 36.44 44.00 7.36 7.56 0.09IRA-SD 36.00 44.00 6.99 8.00 1.01Retailer 45.00 55.00 4.81 10.00 5.19
CAGAYAN DE ORO CITYIRA-LD 40.00 48.00 7.36 8.00 0.64Retailer 43.00 52.00 8.49 9.00 0.51
CEBU CITYIRA-LD 45.67 54.67 3.54 9.00 5.43Retailer 59.75 73.00 12.68 13.25 0.57
DAVAO CITYIRA-LD 15.00 23.00 2.94 8.00 5.06BA-MD 19.00 25.00 0.86 6.00 5.11BA-SD 20.00 27.00 4.98 7.00 2.02Retailer 30.00 35.00 2.61 5.00 2.39
Table 18. (Continued)
MarginProvince/Marketing Participants
Prices Total Marketing Cost
i 78
MARKETING COSTS STRUCTURE:
O N I O N
TABLE OF CONTENTS
Page
FOREWORD ………………………………………………………………… i
HIGHLIGHTS ………………………………………………………………… 1a
I. Introduction …………………………………………………………… 2
II. Objectives ……………………………………………………………… 2
III. Methodology …………………………………………………………… 2Research site ………………………………………………………… 2Sample selection ……………………………………………………… 3
IV. Discussion of Results ………………………………………………… 3A. Number and Profile of Respondents …………………………… 4
1. Number of Respondents …………………………………… 42. Profile of Respondents……………………………………… 4 a. Land Ownership of Farmers …………………………… 4 b. Type of Business Ownership of Traders ……………… 4 c. Source of Capital ………………………………………… 5 d. Years in Farming/Trading ……………………………… 5
B. Geographical Flow ……………………………………………… 6C. Marketing Channels …………………………………………… 7D. Marketing Practices and Functions…………………………… 9
1. Procurement ……………………………………………… 92. Distribution ………………………………………………… 10
E. Marketing Costs and Margins ………………………………… 111. Marketing Costs …………………………………………… 112. Marketing Margins ………………………………………… 18
F. Marketing Problems Commonly Encountered by the Respondents …………………………………………… 20
V. Definition of Terms ……………………………………………………… 22
VI. Annexes ………………………………………………………………… 26
iii 76
Ilocos Norte Pangasinan Nueva Ecija
CashLabor 6.46 2.34 3.67 Transportation 2.57 1.01 1.18 Material Inputs 0.64 0.50 0.62 Other Operating 4.15 5.96 1.30
Non-cashImputed Cost 3.09 1.31 0.85
TOTAL 16.91 11.12 7.62
Table 17a. ONION: Total marketing costs by major components, selected supply provinces, 2006
Item peso per kilogram
Metro Manila
Naga City
Legaspi City
Cebu City
Cagayan de Oro City
Davao City
CashLabor 1.93 1.57 1.47 3.02 1.98 0.71 Transportation 2.91 5.97 3.89 1.66 2.69 1.43 Material Inputs 0.01 0.13 0.14 0.02 0.31 0.03 Other Operating 1.51 2.60 2.35 1.91 1.28 0.98
Non-cashImputed Cost 0.51 2.63 1.14 2.01 3.30 0.14
TOTAL 6.87 12.90 8.99 8.63 9.54 3.30
peso per kilogram
Table 17b. ONION: Total marketing costs by major components, selected demand areas, 2006
Item
MARKETING COSTS STRUCTURE:
O N I O N
IRA-LD BA-MD BA-SD Retailer
DEPRECIATIONSupplies & Equipment
Weighing scale 0.010 a/ a/ 0.001 Calculator a/ a/ a/ a/ComputerCellular phone a/Blower 0.001 Sorting table (metal) a/Money detector a/Tray a/
Transportation FacilitiesTruck 0.010 Elf a/Jeep 0.004 Multi-cab 0.020
UNPAID LABORProcurement 0.040 0.020 0.230 0.130
TOTAL 0.06 0.04 0.23 0.13 a/ less than 0.001
Table 16k. ONION: Imputed costs of marketing participants, by item, Davao City, 2006
peso per kilogramItem
75 iv
Table No. Page
1 ONION: Labor costs by marketing activity,selected supply provinces, Philippines, 2006 …………………… 11
2 ONION: Labor costs by marketing activity,selected demand areas, Philippines, 2006 ……………………… 12
3 ONION; Transportation costs, selected supply provinces, Philippines, 2006 …………………………………………………… 12
4 ONION: Transportation costs, selected demand areas, Philippines, 2006 …………………………………………………… 13
5 ONION: Materials used, selected supply provinces,Philippines, 2006 …………………………………………………… 13
6 ONION: Materials used, selected demand areas, Philippines, 2006 …………………………………………………… 13
7 ONION: Other operating costs, selected supply provinces,Philippines, 2006 …………………………………………………… 14
8 ONION: Other operating costs, selected demand areas, Philippines, 2006 …………………………………………………… 14
9 ONION: Imputed costs, selected supply provinces, Philippines, 2006 …………………………………………………… 14
10 ONION: Imputed costs, selected demand areas, Philippines, 2006 …………………………………………………… 14
11 ONION: Total marketing costs by major components, selected supply provinces, Philippines, 2006 …………………… 15
TABLE OF CONTENTS
MARKETING COSTS STRUCTURE:
O N I O N
v 74
IRA-LD Retailer
DEPRECIATIONSupplies & Equipment
Weighing scale a/ 0.018 Calculator 0.001 0.571 Cellular phone 0.001 0.044 Office table a/Chair 0.002 Electric fan 0.001
Transportation FacilitiesElf 0.147 0.014
UNPAID LABORProcurement 0.152 0.615 Distribution 2.396 2.641
TOTAL 2.70 3.90 a/ less than 0.001
peso per kilogramItem
Table 16j. ONION: Imputed costs of marketing participants, by item, Cagayan de Oro City, 2006 TABLE OF CONTENTS (Continued)
Table No. Page
12 ONION: Total marketing costs by major components, selected demand areas, Philippines, 2006 ……………………… 15
13 ONION: Costs of production, selected supply provinces, Philippines, 2006 …………………………………………………… 18
14 ONION: Marketing Costs and Margins of marketingparticipants, Ilocos Norte, 2006 …………………………………… 19
15 ONION: Marketing Costs and Margins of marketingparticipants, Pangasinan, 2006 …………………………………… 19
16 ONION: Marketing Costs and Margins of marketingparticipants, Nueva Ecija, 2006 …………………………………… 19
17a ONION: Percent distribution of farmer-respondents, by problemencountered, selected supply provinces,Philippines, 2006 …………………………………………………… 20
18b ONION: Percent distribution of trader-respondents, by problemencountered, selected demand provinces,Philippines, 2006 …………………………………………………… 21
MARKETING COSTS STRUCTURE:
O N I O N
73 vi
IRA-LD Retailer
DEPRECIATIONFacilities & Equipment
Weighing scale 0.001 0.010 Calculator a/ 0.002 Cellular phone 0.002 0.009 Fax machine 0.001 Electric fan 0.018
Transportation FacilitiesTruck 0.011 Tricycle 0.038 Multi-cab 0.009
UNPAID LABORProcurement 0.251 Distribution 1.673
TOTAL 0.02 2.01 a/ less than 0.001
peso per kilogramItem
Table 16i. ONION: Imputed costs of marketing participants, by item, Cebu City, 2006
Figure No. Page
1 Percent distribution of respondents by type,selected provinces, Philippines, 2006 ……………………………… 4
2 Percent distribution of farmer respondents by land ownership, selected provinces, Philippines, 2006 ……………………………… 4
3 Percent distribution of traders by type of business ownership, selected provinces, Philippines, 2006 ……………………………… 5
4 Percent distribution of farmer-respondents by source of capital,selected provinces, Philippines, 2006 ……………………………… 5
5 Percent distribution of trader-respondents by source of capital, selected provinces, Philippines, 2006 ……………………………… 5
6 Percent distribution of farmer-respondents by years in farming, selected provinces, Philippines, 2006 ……………………………… 5
7 Percent distribution of trader-respondents by years in trading, selected provinces, Philippines, 2006 ……………………………… 6
8 Geographic Flow of Onion, Ilocos Norte, 2006 ……………………… 6
9 Geographic Flow of Onion, Pangasinan, 2006 ……………………… 7
10 Geographic Flow of Onion, Nueva Ecija, 2006 ……………………… 7
11 Marketing Channels of Onion, Ilocos Norte, 2006 ………………… 8
12 Marketing Channels of Onion, Pangasinan, 2006 ………………… 8
13 Marketing Channels of Onion, Nueva Ecija, 2006 ………………… 9
LIST OF FIGURES
MARKETING COSTS STRUCTURE:
O N I O N
IRA-LD IRA-SD Retailer
DEPRECIATIONFacilities & Equipment Weighing scale 0.004 0.012 0.003 Electric fan 0.004 Chair 0.017 Wood stand 0.004 Stroller 0.003 Coleman "Hasag" 0.004 0.015 Facilities Storage/bodega 0.021 0.026 Drying place (papag) 0.018 0.084 0.034 Transportation Facilities Forward 0.094 Kariton 0.050
UNPAID LABOR Procurement 0.627 0.400 0.748 Distribution 0.230 0.410 0.230
TOTAL 1.01 0.98 1.06
Table 16h. ONION: Imputed costs of marketing participants, by item, Legaspi City, 2006
peso per kilogramItem
vii 72
Figure No. Page
14 Percent distribution of respondents by mode of buying, selected provinces, Philippines, 2006 ……………………………… 10
15 Percent distribution of respondents by terms of payment in procurement, selected provinces, Philippines, 2006 ……………… 10
16 Percent distribution of respondents by mode of selling, selected provinces, Philippines, 2006 ……………………………… 10
17 Percent distribution of respondents by terms of paymentin distribution, selected provinces, Philippines, 2006 ……………… 11
18 Percent distribution of Marketing Cost of Onion,by cost component, Ilocos Norte, 2006 …………………………… 15
19 Percent distribution of Marketing Cost of Onion,by cost component, Pangasinan, 2006 ……………………………… 16
20 Percent distribution of Marketing Cost of Onion,by cost component, Nueva Ecija, 2006 ……………………………… 16
21 Percent distribution of Marketing Cost of Onion,by cost component, Metro Manila, 2006 …………………………… 16
22 Percent distribution of Marketing Cost of Onion,by cost component, Naga City, 2006 ………………………………… 17
23 Percent distribution of Marketing Cost of Onion,by cost component, Legazpi City, 2006 …………………………… 17
24 Percent distribution of Marketing Cost of Onion,by cost component, Cebu City, 2006 ………………………………… 17
LIST OF FIGURES (Continued)
MARKETING COSTS STRUCTURE:
O N I O N
71 viii
IRA-LD MA-SD Agent Retailer
DEPRECIATIONSupplies & Equipment
Weighing scale 0.002 0.001 0.003 0.004 Calculator a/ 0.001 a/ 0.001 Cellular phone 0.001 0.001 Electric fan 0.001 Sorting table 0.001 Display rack 0.000 "Papag" 0.001 0.001 Umbrella 0.005 0.005
Transportation FacilitiesTruck 0.060 0.010 Elf 0.020 0.040 Jeep 0.050 Pick-up 0.160 0.060
UNPAID LABORDistribution 0.250 0.290
TOTAL 0.30 0.25 0.05 0.36 a/ less than 0.001
peso per kilogramItem
Table 16f. ONION: Imputed costs of marketing participants, by item, Metro Manila, 2006
IRA-LD IRA-MD Retailer
DEPRECIATIONSupplies & Equipment
Weighing scale 0.011 0.002 0.006 Calculator 0.001 0.003 0.017 Cellular phone 0.027 0.014
Transportation FacilitiesElf 0.445 0.645 Forward 0.343 Jeep 0.150 0.147
UNPAID LABORDistribution 1.562
TOTAL 0.83 0.81 1.73
peso per kilogramItem
Table 16g. ONION: Imputed costs of marketing participants, by item, Naga City, 2006
LIST OF FIGURES (Continued)
Figure No. Page
25 Percent distribution of Marketing Cost of Onion,by cost component, Cagayan de Oro City, 2006 …………………… 18
26 Percent distribution of Marketing Cost of Onion,by cost component, Davao City, 2006 ……………………………… 19
MARKETING COSTS STRUCTURE:
O N I O N
1a 70
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Tabl
e 16
c. O
NIO
N:
Impu
ted
cost
of m
arke
ting
part
icip
ants
, by
item
, Nue
va E
cija
, 200
6
Item
peso
per
kilo
gram
HIGHLIGHTS 1) Majority of the respondents interviewed operated under single-
proprietorship using personal funds to finance their business operation. Many respondents have been in the industry for about 5 to 10 years and more than 20 years. Only few were in operation for 11 to 20 years and less than 5 years.
2) There were only three types of participants involved in onion marketing,
namely: farmers, assembler-distributors or wholesalers and retailers. From the farmers, onion was distributed to the assembler-distributors and then to the retailers. Mode of procurement and distribution was usually pick up with terms of payments mostly made in cash basis.
3) The identified supply areas of onion were Ilocos Norte, Pangasinan and
Nueva Ecija. Onion supplies coming from Ilocos Norte were distributed to its respective municipalities and the provinces of Metro Manila, Cagayan, Isabela, Pangasinan, Nueva Ecija and also Metro Manila. In Pangasinan, demand areas included its municipalities and the provinces of Metro Manila, Batangas, Cavite, Pampanga, Bulacan, Zambales, Albay, Camarines Norte, and Davao. For Nueva Ecija, onion supplies were distributed within the provice and buyers outside the province coming from Metro Manila, Benguet, Cavite, Laguna, La Union, Albay, Misamis Oriental, South Cotabato and Sarangani.
4) Among the supply areas, Ilocos Norte registered the highest marketing cost
at P16.91 per kilogram. It was followed by Pangasinan at P11.12 per kilogram. Nueva Ecija recorded the lowest at P7.62 per kilogram. In the demand areas, Naga City posted the highest marketing cost at P12.90 per kilogram followed by Cagayan de Oro City at P9.54 per kilogram. The lowest marketing cost was incurred in Davao City at P3.30 per kilogram.
5) By marketing participants, the highest net margins was realized by Provincial Assembler-Medium Distributors (PA-MD) in Ilocos Norte at P9.35 per kilogram, followed by Inter-regional Assembler-Medium Distributor (IRA-MD) in Pangasinan at P6.28 per kilogram. Retailers got an average net margins of P5.98 (Pangasinan), P5.21 (Ilocos Norte) an P1.75 (Nueva Ecija).
Tabl
e 16
e. O
NIO
N:
Impu
ted
cost
of m
arke
ting
part
icip
ants
, by
item
, Nue
va E
cija
, 200
6Ta
ble
16e.
ON
ION
: Im
pute
d co
sts
of m
arke
ting
part
icip
ants
, by
item
, Nue
va E
cija
, 200
6
MARKETING COSTS STRUCTURE:
O N I O N
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 onion - the flow, participants and the margins at current levels. II. OBJECTIVES The general objective of this study was to determine the marketing costs structure of onion. Specifically, it aimed to:
1. identify and characterize the marketing participants involved; 2. determine the flow and channels of distribution of onion; 3. determine the practices in marketing of onion among participants;
and 4. determine the components of marketing costs of onion by type of
marketing participants. III. METHODOLOGY
Research Site The study covered three (3) onion supply provinces and six (6) demand areas. For supply areas, the provinces covered Ilocos Norte, Pangasinan and Nueva Ecija while demand areas included Metro Manila, Naga City, Legaspi City, Cebu City, Cagayan de Oro City and Davao City. Supply provinces were chosen based on their significant contribution to the total onion production in the country. The combined onion production of these areas accounted for more than 50 percent of national total. Demand provinces, however, were identified as the distribution and consumption areas of onion produced from the supply provinces. These provinces were identified during the interview phase in the supply areas.
1 68
Farmers RA-LD PA-LD PA-MD MA-LD Retailers
DEPRECIATIONSupplies & equipment
Weighing scale 0.033 0.007 0.01 a/ 0.007 0.013Calculator 0.019 0.001 0.001 a/ 0.004Cellular phone 0.034 0.007 0.012 a/ 0.004 0.033Paleta 0.006 a/
FacilitiesStorage/bodega 0.381 0.016 0.041
Transportation FacilitiesTruck 0.039 0.009Elf 1.300 0.015 0.216Jeep 0.039Tricycle 0.039 0.009 a/ a/Trailer 0.015Pick-up 0.234Forward 0.763Van 0.051
UNPAID LABORProcurement 0.016 0.025Distribution 3.186 0.300 1.605 0.133 0.893
TOTAL 6.049 0.395 0.023 0.020 0.328 0.943 a/ less than 0.0001
peso per kilogram
Table 16c. ONION: Imputed costs of of marketing participants, by item, Ilocos Norte, 2006
Item
MARKETING COSTS STRUCTURE:
O N I O N
Sample Selection The study utilized information from both producers and traders. The producers 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 onion farmers covered by the Cost 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 non-probability sampling method used when participants with specific characteristics are required and when there is difficulty in locating respondents with the characteristic of interest. This approach accumulated the data gathered from one trader respondent to another respondent at different levels of commodity marketing system. In the study, a minimum of three and maximum of five respondents per type of marketing participants were interviewed in 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
The study covers the costs incurred by the marketing participants in trading onion from the production point to the consumption point. The first part presents the profile of respondents while marketing practices and marketing cost components are discussed at the later part of the report. All relevant tables containing the details on the profile of respondents and the marketing costs item are appended.
67 2
Metro Manila
Naga City
Legaspi City
Cebu City
Cagayan de Oro City
Davao City
DEPRECIATIONSupplies & Equipment
Weighing scale 0.002 0.006 0.006 0.006 0.009 0.003 Calculator 0.001 0.007 0.001 0.286 a/Cellular phone 0.001 0.020 0.006 0.023 a/Fax machine 0.001 Display rack a/Office table a/Chair 0.017 0.002 Electric fan 0.001 0.004 0.018 0.001 Blower 0.001 Stroller 0.003 LonaWooden stand (palete) 0.004 Money detector a/Tray a/Coleman "Hasag" 0.010 Umbrella 0.005
FacilitiesStorage/bodega 0.024 "Papag" (used in drying) 0.001 0.046 Sorting table (metal) 0.001 a/
Transportation FacilitiesTruck 0.035 0.011 0.010 Elf 0.030 0.545 0.081 a/Jeep 0.050 0.149 0.004 Forward 0.343 0.094 Pick-up 0.110 Tricycle 0.038 Multi-cab 0.009 0.020 Kariton 0.051
UNPAID LABORProcurement 0.592 0.251 0.384 Distribution 0.270 1.562 0.290 1.673 2.519 0.105
TOTAL 0.506 2.632 1.138 2.014 3.303 0.143 a/ less than 0.001
peso per kilogram
Table 16b. ONION: Imputed costs by item, selected demand areas, Phili ppines, 2006
Item
MARKETING COSTS STRUCTURE:
O N I O N
A. Number and Profile of Respondents
1. Number of Respondents
Two (2) types of respondents were interviewed in the study, the farmers and traders. From the provinces covered, there were 221 respondents, 27% of whom were farmers and 73% were traders. The 161 trader-respondents were further classified into different types as follows: large distributors (62); medium distributors (14); small distributors (11); assemblers (7); agents (2); and retailers (65). They were classified based on their sphere of influence, geographical coverage and volume of transaction.
2. Profile of Respondents
a. Land Ownership of Farmers. Sixty two percent (62%) of the farmer-respondents owned the onion farm. Twelve (12) respondents or 20% were tenants, six were lessees, two were awardees of Certificate of Land Transfer (CLT), two occupied a rent-free farm and one was a contract grower (Figure 2). b. Type of Business Ownership of Traders. Almost all respondents (99%) were single proprietors. The remaining one percent had partners in their onion trading business (Figure 3).
Figure 1. Pe rce nt distribution of re sponde nt, by type , se le cted province s,
Phil ippine s, 2006
T rader73%
Farmer27%
Source: Annex Table 1
3 66
Ilocos Norte Pangasinan Nueva Ecija
DEPRECIATIONSupplies & Equipment
Weighing scale 0.014 0.002 0.002 Calculator 0.006 0.000 0.004 Cellular phone 0.018 0.001 0.007 Chair a/Electric fan 0.001 Blower a/ a/Stroller a/Lona 0.004 Wooden stand (palete) 0.006 0.001 Sizer a/
FacilitiesStorage/bodega 0.146 0.002 0.020 "Papag" (used in drying) 0.009
Transportation FacilitiesTrailer 0.055 Truck 0.024 0.330 0.007 Elf 0.510 0.083 0.011 Jeep 0.039 0.093 0.010 Forward 0.763 0.147 Tractor 0.190 Trailer 0.015 0.019 Pick-up 0.234 Van 0.051 Tricycle 0.024 0.054
UNPAID LABORProcurement 0.021 Distribution 1.223 0.619 0.483
TOTAL 3.09 1.31 0.85 a/ less tha 0.001
peso per kilogram
Table 16a. ONION: Imputed costs by item, selected supply provinces, Philippines, 2006
Item
Figure 2. Percent distribution of farmer-respondents by land ownership, se lected
provinces, Philippines2006
Owner62%
Tenant20%
Leasee10%
CLT-holder3%
Rent Free3%
Contract grower
2%
Source: Annex Table 3
MARKETING COSTS STRUCTURE:
O N I O N
c. Source of Capital. There were two (2) sources of capital identified by the farmer-respondents. Ninety seven percent (97%) used their own capital to finance their operation and three percent (3%) borrowed from relatives.
At the trader level, about 88% or 142 respondents declared that they have their own capital and 12% or 19 respondents used borrowed capital.
d. Years in Farming/Trading. Twenty-two farmer-respondents or 37% were in onion farming for 21 years and above. The rest had been in this venture for 5 –10 years (25%), 16-20 years (23%), and 11 – 15 years (10%). About 5% of the respondents were in onion farming for 5 years.
Forty percent (40%) or 63 trader-respondents were in the business for 5 – 10 years. About 17% each of the trader-respondents were in the business f 11 15 d 21 d
65 4
Figu re 3. Pe rce n t distribu tion of trade rs by type of bu sin e ss own e rsh ip, se le cte d
province s , Ph i l ippine s , 2006
P artner-ship1%
Single P roprie-torship
99%
Source: Annex Table 4
Figure 4. Percent distribution of farmer-respondents by source of capital, se lected
provinces, Philippines, 2006
self financed
97%
borrowed3%
Source: Annex Table 5
Fi g u re 5 . P e rce n t di s tri bu ti o n o f tra de r-re s po n de n ts by s o u rce o f ca pi ta l , s e l e cte d
pro vi n ce s , P h i l i ppi n e s , 2 0 0 6
self f in an ced
8 8 %
bo rro wed 1 2 %
Source: Annex Table 5
F ig ure 6 . P e rc e nt d is t rib ut io n o f f arme r- re s p o nd e nt s , b y ye ars in
f arming , s e le c t e d p ro v inc e s , P hil ip p ine s , 2 0 0 6
5 - 1025%
> 55%
21 & above37%
11 - 1510%
16 - 2023%
Source: Annex Table 6a
IRA-LD BA-MD BA-SD Retailer
Market fee/ticket 0.010 Stall rental/fee 0.100 0.006 0.060 0.030 WS* calibration fee a/ a/ a/ 0.001 Business Permit 0.001 0.001 0.010 0.002 Mayor's permit 0.060 0.290 1.260 0.001 Cell card 0.010 Electricity 0.010 0.001 0.030 Shrinkage 0.130 0.140 0.140 0.190 Meals & snacks 0.040 0.008 0.063 0.050 Others: Garbage fee a/ a/ 0.001 0.002 Health certification 0.010 0.030 0.070 0.001 Sanitary Permit 0.010 0.070 0.310 a/Sanitary inspection 0.010 - Renew sticker 0.040 0.030 0.150 a/Sign board 0.001 Tax clearance a/ 0.010 0.040 a/Zoning fee a/Fire safety fee 0.010 0.070 0.300 a/
Total 0.42 0.67 2.41 0.32 * Weighing scalea/ less than 0.001
Table 15k. ONION: Other operating costs, incurred by marketing participants, by item, Davao City, 2006
price per kilogramItem
MARKETING COSTS STRUCTURE:
O N I O N
for 11-15 years and 21 years and above, respectively. Fourteen (14%) or 23 respondents were in the business for less than 5 years while 12% or 19 respondents had 16-20 years of experience.
B. Geographic Flow 1. Ilocos Norte
The major onion supply areas in the province were the municipalities of Vintar, Pasuquin, Burgos, Bacarra, and Badoc. Aside from these areas, onion was sourced from nearby municipalities of Ilocos Sur. The main trading centers within the province were the Public Markets of Laoag City and Badoc with Wednesday and Friday as trading days. During these days, farmers and traders within and outside the province meet together for direct buying and selling. Outside destinations included the provinces of Cagayan, Isabela, Pangasinan, Nueva Ecija, and Metro Manila.
2. Pangasinan
The identified top onion producing municipalities in Pangasinan were Bayambang, Bautista, San Quintin and Umingan. From the supply barangays, onions were brought to Bayambang “Bagsakan” situated in front of the town public market. Wholesale transaction was also being done at the Urdaneta City Trading Center. From the trading centers, onions were distributed within the province. Outside destination points included the provinces of Pampanga, Zambales, Nueva Ecija, Bulacan, Batangas, Cavite and Laguna. Supplies of onion were also brought to Metro Manila as a
5 64
Figure 7. Percent distribution of trader-respondents, by years in trading, se lected
provinces, Philippines, 2006
21 & above17%
16-2012%
11-1517%
> 514%
5-1040%
Source: Annex Table 6b
Laoag City Public Market Badoc Public Market
Within the province
Cagayan, Isabela, Pangasinan, Nueva Ecija, Metro Manila
Figure 8. Geographic Flow of Onion, Ilocos Norte, 2006
Vintar, Badoc, Pasuquin, and Bacarra
Ilocos Sur
IRA-LD Retailer
Entrance fee 0.003 Market fee 0.003 0.029 Stall rental/fee 0.053 0.174 Parking fee 0.017 WS* calibration fee 0.001 Business Permit 0.010 0.060 Cell card 0.012 0.247 Electricity 0.055 3.958 Water 0.023 Wastage 0.862 Shrinkage 0.222 Meals & snacks 0.045 0.831
TOTAL 0.20 6.40 * Weighing scale
Table 15i. ONION: Other operating costs, incurred by marketing participants, by item, Cebu City, 2006
peso per kilogramItem
IRA-LD Retailer
Entrance fee 0.005 Stall rental/fee 0.492 0.086 Warehouse fee 0.049 Agent commission 0.014 Business Permit 0.007 0.019 Telephone 0.009 Electricity 0.006 Water 0.003 Wastage 1.066 0.557 Meals & snacks 0.090 0.078
TOTAL 1.74 0.74
peso per kilogramItem
Table 15j. ONION: Other operating costs, incurred by marketing participants, by item, Cagayan de Oro City, 2006
MARKETING COSTS STRUCTURE:
O N I O N
and Laguna. Supplies of onion were also brought to Metro Manila as a transshipment point from supply provinces to demand areas in the Visayas and Mindanao. Onions from Pangasinan were also reportedly brought to the Bicol region.
3. Nueva Ecija
The major supply
areas of onion in the province were the municipalities of Bongabon, Rizal, Talavera, Pantabangan and the cities of San Jose & Palayan. Most onions produced in the province were traded in the markets of San Jose City, San Leonardo, Cabanatuan City and Sangitan. Large volumes of onion were brought to Metro Manila and to other regions in Luzon, Visayas and Mindanao.
C. Marketing Channels 1. Ilocos Norte
There were two identified linkages in marketing of onion in the province. One which is more prominent was that, from the farm, farmers sold their produce to regional and provincial assemblers who sold out onions to buyers outside the province The other linkage involved farmers distributing
63 6
Bayambang Bagsakan Area Urdaneta Trading Center
Within the province
Metro Manila Batangas, Cavite
Pampanga Bulacan Zambales
Bicol Region Misamis Or. Davao
Figure 9. Geographic Flow of Onion, Pangasinan, , 2006
Bayambang, Baustista San Quintin, Umingan Nueva Ecija
Figure 10. Geographic Flow of Onion, Nuev Ecija,2006
Sangitan P. M Cabanatuan City P.M San Jose P.M. San Leonardo P.M.
Within the provinceMetro Manila,
Benguet, , Cavite , Laguna, La Union,
Albay, Misamis Oriental, South Cotabato Sarangani
Bongabon, Talavera,, Rizal, San Jose City
Pantabangan, Palayan City
Pangasinan Ilocos Sur Ilocos Norte
IRA-LD IRA-SD Retailer
Market fee 0.162 0.913 0.175 Stall rental/fee 0.509 0.584 0.223 Commission fee 0.370 Business Permit 0.013 0.107 Cell card 0.036 0.131 Electricity 0.103 0.046 Water 0.037 Meals & snacks 0.767 0.236 Others
toll gate 0.240 stall repair 0.051 kerosene 0.037
TOTAL 1.47 2.40 0.84
peso per kilogramItem
Table 15h. ONION: Other operating costs, incurred by marketing participants, by item, Legaspi City, 2006
IRA-LD IRA-MD Retailer
Market fee 0.491 Parking fee 0.042 Stall rental/fee 0.029 0.131 WS* calibration fee a/ 0.001 Business permit 0.104 0.240 Electricity 0.481 0.254 0.120 Water 0.058 Meals & snacks 0.569 0.577 Others:
tong 0.125 toll gate fee 0.720 garbage fee 0.049
Total 2.07 1.02 0.90 * Weighing scale
peso per kilogram
Table 15e. ONION: Other operating costs, incurred by marketing participants, by item, Naga City, 2006
Item
Table 15g. ONION: Other operating costs, incurred by marketing participants, by item, Naga City, 2006
a/ less than 0.001
MARKETING COSTS STRUCTURE:
O N I O N
buyers outside the province. The other linkage involved farmers distributing onions to municipal assemblers to retailers and then to end users. This second linkage, provided the local requirement for onions within the province. 2. Pangasinan During harvest season, about 70% of the volume of onions assembled at the farm by the municipal and provincial assemblers were sold to inter regional assembler-distributor. From this stage, onions were passed to buyers outside the province while some were stored in bodega for anticipation of high price during lean months. All participants supplied onions to retailers, but the most common practice and the longest channel was that of farmer → MA/LD → PA/LD → IRA/LD → retailers → consumer chain.
3. Nueva Ecija
There were various types of assembler-distributors identified as players in onion marketing in Nueva Ecija. It ranged from barangay to interregional assemblers and small to large distributors performing similar trading practices. These traders assembled their onions which were sourced from farmers, agents and traders outside the province and distributed the same to buyers outside the
7 62
Figure 12. Marketing Channels for onion, Pangasinan, 2006
FARMER
MA-LD
PA-MD
IRA-LD IRA-MD
RETAILER
CONSUMER
AGENT
BA
SOP BOP
Storage
Figure 11. Marketing Channels of Onion, Ilocos Norte, 2006
RETAILER
CONSUMER
SOP
BOP
RA-LD MA-LDPA-LD
FARMER
IRA-LD MA-SD AGENT Retailer
Stall rental/fee 0.220 0.040 0.009 WS* calibration fee 0.004 a/ 0.010 a/Commission fee 0.400 Business Permit 0.030 0.002 Mayor's permit 0.010 Cell card 0.001 Electricity 0.070 0.002 0.001 Water 0.003 Wastage 0.040 Shrinkage 0.610 0.820 0.720 Meals & snacks 0.150 0.010 0.340 Others
Garbage fee a/ a/ a/ 0.001 Health certification 0.020 a/ a/Sanitary Permit a/ 0.001 a/ 0.001 Sign board inspection fee a/ 0.001 0.001 a/Fire safety fee a/ 0.060 a/ 0.006 BR** plate fee a/ 0.001 a/ 0.050 Building inspection fee a/ a/
Total 1.36 1.05 0.78 0.45 * Weighing scale**Business Registrationa/less than 0.001
peso per kilogram
Table 15f. ONION: Other operating costs, incurred by marketing participants, by item, Metro Manila, 2006
Item
MARKETING COSTS STRUCTURE:
O N I O N
traders outside the province and distributed the same to buyers outside the province. They also made use of the storage facilities to reserve surplus onions in anticipation for low supply level during lean seasons.
Onions in Nueva
Ecija passed through a long chain of participants before reaching the consumers, i.e., farmer → agent → ADs → retailer → consumer.
D. Marketing Practices and Functions
In buying and selling onions, farmers and traders performed several functions that add value to the products. The mode of delivery and terms of payment affect somehow the costs incurred in the procurement and distribution of the products. 1. Procurement
In the supply areas, traders procured onion from the producing barangays directly from the farmers especially during harvest season. During lean months or off seasons, traders sourced their supply from other traders who had the capacity to store onions.
a. Mode of Buying
Of the traders interviewed, 69% picked up onions from their suppliers and 30% let their suppliers delivered the products to their stalls. Two trader respondents or 1% practiced both pick up and delivery as their mode
61 8
Figure 13. Marketing Channels for Onion, Nueva Ecija, 2006
FARMER
AGENT BODEGA
ASSEMBLER/ DISTRIBUTOR
RETAILER
CONSUMER
SOP BOP
Farm
erIR
A-LD
PA-L
DPA
-MD
MA-
SDB
A-M
DB
A-SD
Asse
mbl
erR
etai
ler
Entra
nce
fee
0.00
1
Mar
ket f
ee0.
110
Cas
h tic
ket
0.01
0
0.19
0
0.02
0
0.00
4
0.19
0
0.18
0
0.15
0
St
all r
enta
l/fee
0.
040
0.
030
0.
750
0.
010
0.
110
0.
030
0.
270
Park
ing
fee
0.00
3
0.01
0
Com
mis
sion
fee
0.34
0
0.73
0
0.37
0
WS*
cal
ibra
tion
fee
0.00
1
a/Bu
sine
ss P
erm
it0.
211
0.
221
0.
100
0.
086
0.
496
Tele
phon
e0.
020
C
ell c
ard
0.01
0
0.01
0
0.00
5
0.05
0
Elec
trici
ty0.
001
0.
002
0.
240
Wat
era/
0.00
1
Shrin
kage
a/M
eals
& s
nack
s 0.
020
0.
030
0.
010
0.
180
0.
100
0.
370
0.
020
0.
120
Oth
ers
tol
l fee
0.01
0
0.02
0
0.11
0
TOTA
L0.
04
0.
61
1.
03
0.
40
0.
98
0.
01
0.
67
0.
87
1.
39
* W
eigh
ing
scal
ea/
less
than
0.0
01
peso
per
kilo
gram
Tabl
e 15
c. O
NIO
N:
Oth
er o
pera
ting
cost
s, in
curr
ed b
y m
arke
ting
part
icip
ants
, by
item
,
N
ueva
Eci
ja, 2
006
Item
Tabl
e 15
e. O
NIO
N:
Oth
er o
pera
ting
cost
s, in
curr
ed b
y m
arke
ting
part
icip
ants
, by
item
, N
ueva
Eci
ja, 2
006
MARKETING COSTS STRUCTURE:
O N I O N
trader-respondents or 1% practiced both pick-up and delivery as their mode of procurement.
b. Terms of Payment
About 82% of the trader-
respondents reported that they paid their suppliers in cash. Ten percent (10%) said that they opted to pay after one day of transaction and 8% stated that they practiced both cash and credit as terms of payment.
2. Distribution
Traders involved in onion marketing performed their distribution functions with varying modes and terms of payment depending on the market supply and demand situation.
a. Mode of Selling
The buyers commonly picked up their onions from the supply areas as represented by 67% of the respondents. These traders believed that they can be assured of the quality if they pick up the products by themselves. On the other hand, about 30% of the respondents relied on the onions delivered by their suppliers to their stalls, but they believed that this practice could help them establish a “suki” or good customer relationship.
9 60
Figure 14. Percent distribution of respondents, by mode of buying, se lected
areas, Philippines, 2006
both1%delivered
30%
picked-up69%
Source: Annex Table 7
F ig ure 15 . P e rc e nt d is tribut io n o f re s po nde nts , by te rm s o f pa ym e nt ,
s e le c te d pro v inc e s , P hilippine s , 2 0 0 6
cas h82%
credit10%
bo th8%
Source: Annex Table 8
Figure 16. Percent distribution of respondents, by mode of se ll ing, se lected
areas, Philippines, 2006
delivered30%
picked-up67%
both3%
Source: Annex Table 9
Farmer IRA-LD IRA-MD PA-MD MA-LD BA Agent Retailer
Entrance fee 0.056 0.667 0.004 Market fee 0.006 0.037 0.009 0.004 0.146 Stall rental/fee 0.006 0.018 0.005 WS* calibration fee a/ 0.001 a/ 0.001 0.004 Commission fee 0.406 0.370 0.370 Storage fee 4.867 Business Permit 0.006 0.015 0.011 0.063 0.019 Cell card 0.013 0.050 0.035 0.014 0.015 Electricity 0.014 0.019 0.005 0.001 Water 0.014 Shrinkage 0.137 0.226 Meals & snacks 0.064 0.177 0.038 0.017 0.351 Others
goodwill fee 0.004
TOTAL 0.08 5.73 0.47 1.37 0.10 0.00 0.02 0.52 * Weighing scalea/ less than 0.001
Table 15d. ONION: Other operating costs, incurred by marketing participants, by item, Pangasinan, 2006
Item peso per kilogram
MARKETING COSTS STRUCTURE:
O N I O N
Farmers RA-LD PA-LD PA-MD MA-LD Retailers
Entrance fee 0.108 0.023 Market fee 0.082 0.041 0.091 Stall rental/fee 1.066 Commision fee 0.100 WS* calibration fee 0.019 0.004 0.048 Business Permit 0.006 0.053 0.062 Mayor's permit 0.467 Cell card 0.060 0.001 0.055 0.259 Telephone 0.017 Electricity 0.131 Wastage 0.300 Shrinkage 1.000 Repair and maintenance 1.000 0.039 Meals & snacks 0.158 0.024 0.455 0.233 0.382
TOTAL 1.41 0.51 0.71 0.23 0.00 3.42 * Weighing scale
peso per kilogram
Table 15c. ONION: Other operating costs, incurred by marketing participants, by item, Ilocos Norte, 2006
Item
b. Terms of Payment Majority (93%) of the respondents sold their products on cash basis. About five percent (5%) practiced a combination of cash and credit. One percent (1%) disposed their products on credit. Two respondents from the supply area stated that they received a kilogram of rice in exchange for one kilogram of onions.
E. Marketing Costs and Margins 1. Marketing Costs
Moving onions from the supply areas to consumption areas entails a number of cost items. The costs incurred by identified marketing participant vary depending on the extent of their marketing operations. The succeeding topics discuss the major components of marketing costs for labor, transportation, materials, other operating expenses and imputed costs.
a. Labor Costs Labor costs are expenses incurred or paid for the services rendered by the workers during the procurement and distribution of the products. The identified labor expenses include hauling, cleaning, sorting, and bundling, weighing, packing and loading and unloading both in supply and demand areas.
Among the supply areas,
Ilocos Norte recorded the highest labor cost at P6.47 per kilogram. Nueva Ecija and Pangasinan spent
f P3 6 d
59 10
F ig ure 17 . P e rc e nt d is tribut io n o f re s po nde nts , by te rm s o f pa ym e nt , s e le c te d a re a s , P hilippine s , 2 0 0 6
credit1%
barte r1%
bo th 5%
cas h93%
Source: Annex Table 10
Source: Annex Table 12
Table 1. ONION: Labor costs by marketing activity, selected supply provinces, Philippines, 2006
(peso per kilogram)
Activity Ilocos Norte Pangasinan Nueva Ecija
Procurement 1.23 1.03 1.63
Distribution 5.24 1.34 2.04
TOTAL 6.47 2.34 3.67
MARKETING COSTS STRUCTURE:
O N I O N
Entrance fee 0.003 0.005 Market fee/ticket 0.491 0.417 0.016 0.010 Stall rental/fee 0.090 0.080 0.439 0.114 0.289 0.049 Parking fee 0.042 0.017 Agent commission/fee 0.400 0.370 0.014 WS* calibration fee 0.004 0.001 0.001 a/Warehouse fee 0.050 Business Permit 0.016 0.172 0.060 0.035 0.013 0.004 Mayor's permit 0.010 0.403 Cell card 0.001 0.084 0.129 0.010 Telephone 0.009 Electricity 0.024 0.285 0.074 0.055 0.006 0.014 Water 0.003 0.058 0.074 0.023 0.003 Meals & snacks 0.167 0.573 0.501 0.438 0.084 0.040 Wastage 0.040 0.862 0.812 Shrinkage 0.717 0.222 0.150 Repair & maintenance 0.051 Others** 0.042 0.894 0.277 0.300
TOTAL 1.51 2.60 2.35 1.91 1.28 0.98 * Weighing scale** include garbage fee, health certification fee, inspective fee, renew sticker, sign board fee, tax clearance fee, zoning fee, firesafety fee, business registration plate fee, building inspectiion feea/ less than 0.001
Item
Table 15b. ONION: Other operating costs, by item, selected demand areas, Philippines, 2006
peso per kilogram
Cagayan de Oro City
Davao City
Metro Manila
Naga City
Legaspi City
Cebu City
averages of P3.67 and P2.34, respectively. The costs of labor in the procurement of onions ranged from P1.00 to P1.63 per kilogram while distribution entailed costs ranging from P1.34 to P5.24 per kilogram.
At the demand areas, Cebu City had the highest labor cost at P3.02, followed by Cagayan de Oro City at P1.98 and Metro Manila at P1.93 per kilogram. On the other hand, Naga City posted an average labor cost of P1.58; Legaspi City at P1.47 and Davao City at P0.72 per kilogram. Labor costs in procurement ranged from P0.02 to P1.66 per kilogram, while, in distribution, the costs ranged from P0.70 to P1.36 per kilogram.
b. Transportation Costs
Transportation costs include all expenses incurred in moving the products from one place to another.
Ilocos Norte came up with the
highest transport costs among the supply provinces. This amounted to P1.96 if the vehicle used was rented and P0.62 per kilogram for gas and oil if private vehicle was used. Pangasinan recorded an average transportation costs at P 0.75 per kilogram for rentals and P0.26 for gas and oil. In Nueva Ecija, on the other hand, posted P0.96 for rental and P0.23 for gas and oil for owned vehicles.
From the demand areas, Naga, Legaspi and Cagayan de Oro cities
recorded more than P2.00 per kilogram for renting vehicles in procurement.
11 58
Source: Annex Table 12
Table 2. ONION: Labor costs by marketing activity, selected demand areas, Philippines, 2006
(peso per kilogram)
Activity Metro Manila
Naga City
Legaspi City
Cebu City
Cagayan de Oro
City
Davao City
Procurement 0.63 0.77 0.53 1.66 0.78 0.02
Distribution 1.30 0.81 0.94 1.36 1.20 0.70
TOTAL 1.93 1.58 1.47 3.02 1.98 0.72
Table 3. ONION: Transportation costs, selected supply provinces, Philippines, 2006
(peso per kilogram)
Item Ilocos Norte Pangasinan Nueva Ecija
Vehicle rental Procurement 0.86 0.54 0.54 Distribution 1.10 0.21 0.42
Private vehicle Gas & oil 0.62 0.26 0.23
Source: Annex Table 13
MARKETING COSTS STRUCTURE:
O N I O N
In using privately owned vehicle, transportation costs of traders in Cebu, Cagayan de Oro and Davao cities amounted to less than P0.10 per kilogram. Naga City, however, posted a relatively high cost for gas and oil at P3.19 per kilogram.
c. Material Costs The common materials used by the respondents in onion trading are red bags, tying materials such as twine and bamboo strips.
The average costs of
materials used in the supply areas ranged from P0.51 in Nueva Ecija to P0.64 per kilogram in Ilocos Norte. In Pangasinan, the cost of materials was P0.51 per kilogram.
At the demand areas,
Cagayan de Oro City had the highest cost of materials at P0.31, followed by Legaspi City and Naga City at P0.14 and P0.13 per kilogram, respectively.
d. Other Operating Costs
Listed in Annex Table 15 are the various operating costs of marketing participants in all provinces covered. Among these costs are rentals, licenses, utility fee, market fees, etc
57 12
Source: Annex Table 14
Table 5. ONION: Materials used, selected supply provinces, Philippines, 2006
(peso per kilogram)
Ilocos Norte Pangasinan Nueva Ecija
0.64 0.51 0.62
Table 4. ONION: Transportation costs, selected demand areas, Philippines, 2006 (peso per kilogram)
Item Metro Manila
Naga City
Legaspi City
Cebu City
Cagayan de Oro
City
Davao City
Vehicle rental
Procurement 1.94 2.78 2.40 1.62 2.62 1.40
Distribution 0.46
Private vehicle
Gas & oil 0.51 3.19 1.50 0.03 0.07 0.03 Source: Annex Table 13
Source: Annex Table 14
Ilocos Norte Pangasinan Nueva Ecija
Entrance fee 0.066 0.242 0.001 Market fee/ticket 0.071 0.040 0.118 Stall rental/fee 1.066 0.010 0.177 Parking fee 0.007 Commission fee 0.100 0.382 0.480 WS* calibration fee 0.024 0.001 0.001 Storage fee 4.867 Business Permit 0.040 0.023 0.223 Mayor's permit 0.467 Cell card 0.094 0.025 0.019 Telephone 0.017 0.020 Electricity 0.131 0.040 0.081 Water 0.014 0.001 Wastage 0.300 Shrinkage 1.000 0.181 a/Rrepair & maintenance 0.520 Meals & snacks 0.250 0.129 0.106 Others** 0.004 0.067
TOTAL 4.15 5.96 1.30 * Weighing scale** include toll fee, goodwill fee & tonga/ less than 0.001
peso per kilogram
Table 15a. ONION: Other operating costs, by item, selected supply provinces, Philippines, 2006
Item
Table 6. ONION: Materials used, selected demand areas, Philippines, 2006 (peso per kilogram)
Metro Manila
Naga City
Legaspi City
Cebu City
Cagayan de Oro
City Davao City
0.01
0.13
0.14
0.02
0.31
0.03
MARKETING COSTS STRUCTURE:
O N I O N
At the supply areas, Pangasinan got the highest operating expenses at P5.96 per kilogram. Ilocos Norte followed at P4.15 per kilogram while Nueva Ecija spent P1.30 per kilogram.
At the demand areas,
Naga City and Legaspi City posted average costs of P2.60 and P2.35 per kilogram, respectively. Other cities recorded lower operating costs per kilogram at P1.91 (Cebu); P1.51 (Metro Manila.); P1.28 (Cagayan de Oro) and P0.98 (Davao).
e. Imputed Costs
Ilocos Norte had the highest imputed costs per kilogram among the supply areas at P1.85 for depreciation and P1.24 for unpaid labor. Nueva Ecija ranked next at P2.44 per kilogram, in which P0.36 was for depreciation and P2.08 for unpaid labor. Pangasinan got less than a peso per kilogram for both imputed items.
The cost of
depreciation in the demand areas ranged from P0.04 (Davao City) to P1.07 per kilogram (Naga City). Meanwhile, imputed cost for unpaid labor was lowest in Davao City at P0.11 and highest in Cagayan de Oro City at P2.90 per kilogram.
13 56
Source: Annex Table 15
Source: Annex Table 15
Source: Annex Table 16
Table 9. ONION: Imputed cost, selected supply provinces, Philippines, 2006
(peso per kilogram)
Item Ilocos Norte Pangasinan Nueva
Ecija
Depreciation 1.85 0.69 0.36 Unpaid Labor 1.24 0.62 2.08
TOTAL 3.10 1.31 2.44
Table 10. ONION: Imputed cost, selected demand areas, Philippines, 2006 (peso per kilogram)
Item Metro Manila
Naga City
Legaspi City
Cebu City
Cagayan de Oro
City
Davao City
Depreciation 0.24 1.07 0.26 0.09 0.40 0.04
Unpaid Labor 0.27 1.56 0.88 1.92 2.90 0.11
TOTAL 0.51 2.63 1.14 2.01 3.30 0.14 Source: Annex Table 16
IRA-LD IRA-SD Retailer
plastic bag 0.10 0.08 winnow "bilao" 0.00 trapal 0.05
TOTAL 0.05 0.10 0.08
Table 14h. ONION: Cost of materials incurred by marketing participants, by item, Legaspi City, 2006
peso per kilogramItem
IRA-LD Retailer
Plastic bag 0.11 Red bag 0.21
TOTAL 0.21 0.11
peso per kilogramItem
Table 14j. ONION: Cost of materials incurred by marketing participants, by item, Cagayan de Oro City, 2006
IRA-LD BA-MD BA-SD Retailer
Plastic bag 0.01 0.00 0.09 0.02
TOTAL 0.01 0.001 0.09 0.02
Table 14k. ONION: Cost of materials incurred by marketing participants, by item, Davao City, 2006
peso per kilogramItem
IRA-LD Retailer
plastic bags 0.00 0.02 basket 0.01
TOTAL 0.00 0.03
peso per kilogramItem
Table 14g. ONION: Cost of materials incurred by marketing participants, by item, Cebu City, 2006
Table 7. ONION: Other operating costs, selected supply provinces, Philippines 2006 (peso per kilogram)
Ilocos Norte Pangasinan Nueva Ecija 4.15
5.96 1.30
Table 8. ONION: Other operating costs, selected demand areas, Philippines 2006 (peso per kilogram)
Metro Manila
Naga C ity
Legaspi City
Cebu City
Cagayan de Oro
City Davao City
1.51 2.60
2.35 1.91
1.28 0.98
Table 14i. ONION: Cost of materials incurred by marketing participants, by item, Cebu City, 2006
MARKETING COSTS STRUCTURE:
O N I O N
Plastic bag 0.008 Bilao 0.008 0.001
TOTAL 0.01 0.01 0.00
peso per kilogramItem
Table 14f. ONION: Cost of materials incurred by marketing participants, by item, Metro Manila, 2006
Agent RetailerIRA-LD
Average Marketing Costs
In the supply areas, non-cash costs ranged from P6.77 to P13.82 per kilogram, while cash costs ranged from P0.85 to P3.09 per kilogram. Ilocos Norte got the highest total average cost at P16.91. Pangasinan recorded at P11.31 while Nueva Ecija posted at P7.62 per kilogram.
At the demand areas, non-
cash costs ranged from P3.15 to P10.27 per kilogram. Cash costs ranged from P0.14 to P4.39 per kilogram. The highest average marketing cost was noted in Naga City at P12.90 while the lowest was in Davao City at P3.30 per kilogram.
Figures 18-20 depict the percent distribution of each cost component
for the supply areas while Figures 21-26 describe for the demand areas. Supply Areas
a. Ilocos Norte
Among the supply areas covered, Ilocos Norte incurred the highest marketing cost at P16.91 per kilogram. Labor accounted for 38%, other operating expenses 25%, imputed cost 18%, and transportation cost 15%. The cost of materials shared four percent.
55 14
Source: Annex Table 18
Source: Annex Table 18
IRA-LD IRA-MD Retailer
plastic bag 0.09 0.08 0.16 tiklis/basket 0.01 0.01 winnow " bilao" 0.01 0.00 wooden box 0.00
TOTAL 0.10 0.10 0.16
Table 14g. ONION: Cost of materials incurred by marketing participants, by item, Naga City, 2006
peso per kilogramItem
red bag 0.28 0.23 0.35 0.25 0.33 0.32 twine 0.00 0.01 0.00 twine 0.00 a/ 0.00 plastic bag 0.02 0.01 needle a/
TOTAL 0.28 0.23 0.36 0.25 0.35 0.32 0.01 a/ less than 0.0001
Item
Table 14c. ONION: Cost of materials incurred by marketing participants, by item, Nueva Ecija, 2006
peso per kilogramPA-MD MA-SD AssemblerFarmer IRA-LD PA-LD Retailer
Table 11. ONION: Total marketing costs by major component, selected supply provinces, Philippines, 2006 (peso per kilogra m)
Item Ilocos Norte Pangasinan Nueva Ecija
Non-cash 13.82
10.00 6.77
Cash
3.09
1.31 0.85
TOTAL
16.91
11.31 7.62
Table 12. ONION: Total marketing costs by major component, selected demand areas, Philippines, 2006 (peso per kilogram)
Item Metro Manila
Naga City
Legaspi City
Cebu City
Ca gayan de Oro
City
Davao City
Non-cash 6.36
10.27
7.86
6.61
6.27
3.15
Cash 0.51
2.63
1.56
2.02
4.39
0.14
TOTAL 6.87
12.90
9.42
8.63
10.65
3.30
Figure 18. Percent distribution of marketing
costs of onion, by cost component, Ilocos Norte, 2006
Labor38% Imputed
Cost18%
Other Operating
25%Material s
4%
Transpor-tation 15%
Source: Annex Table 17
Table 14e. ONION: Cost of materials incurred by marketing participants, by item, Nueva Ecija, 2006
MARKETING COSTS STRUCTURE:
O N I O N
b. Pangasinan
Farmers and traders in Pangasinan recorded an average marketing cost of P11.12 per kilogram. Half of this (54%) accounted for other operating expenses. The shares of other cost components were: labor cost (21%), imputed cost (12%), transportation (9%) and materials (4%). c. Nueva Ecija
In Nueva Ecija, an average of P7.62 per kilogram was spent by the respondents in the marketing of onions. About 40% were spent for labor, 26% for imputed items and 14% for other operating expenses. The costs of transportation and materials shared 13% and 7%, respectively.
Demand Areas
a. Metro Manila Traders in Metro Manila spent an average of P6.87 per kilogram in onion marketing. About 43% were spent for transportation, 28% for labor, and 22% for other operating expenses. About 7 percent represented imputed cost of marketing.
15 54
Fi g u r e 19 . P e r c e n t a g e d i s t r i b u t i o n o f m a r k e t i n g c o s t s , b y c o s t c o m p o n e n t ,
P a n g a s i n a n , 2 0 0 6
Imput e d Cost12%
La bor21%
Tra nspor-t a t ion
11%
Ma t e r ia ls 4%
Ot he r Ope ra t ing
52%
S ource: A nnex Tab le 17
Fi g u r e 2 0 . P e r c e n t a g e d i s t r i b u t i o n o f m a r k e t i n g c o s t s , b y c o s t c o m p o n e n t s ,
N u e v a Ec i ja , 2 0 0 6
Imput e d Cost26%
La bor40%
Tra nspor-t a t ion
13%Ma t e ria l
7%
Ot he r Ope ra t ing
14%
S ource: A nnex Tab le 17
Fi g u r e 2 1. P e r c e n t a g e d i s t r i b u t i o n o f m a rk e t i n g c o s t s , b y c o s t c o m p o n e n t s ,
Me t ro Ma n i l a , 2 0 0 6
Labor28%
Transport a t ion 43%
Ma t e ria ls0%
Ot he r Ope ra t ing
22%
Imput ed Cost7%
7
So urce: A nnex Tab le 17
red bag 0.353 twine 0.002 0.002 0.002 0.327 0.001 plastic bag 0.058 0.003 0.155 kaing 0.005 basket a/bilao 0.002 basin 0.002 pail 0.002 trapal 0.002
TOTAL 0.36 0.002 0.002 0.38 0.004 0.16 a/ less than 0.001
Table 14d. ONION: Cost of materials incurred by marketing participants, by item, Pangasinan, 2006
peso per kilogramPA-MD MA-LDFarmer IRA-LD IRA-MD RetailerItem
Farmers RA-LD PA-LD Retailers
Sacks 0.093 0.300 Plastic bag (small) 0.245 Red bag 0.155 0.080 Bamboo strips 0.078
TOTAL 0.33 0.30 0.08 0.25
Table 14a. ONION: Cost of materials incurred by marketing participants, by item, Ilocos Norte, 2006
peso per kilogramItem
Figure 19. Percent distribution of marketing costs of onion, by cost component, Pangasinan, 2006
Figure 20. Percent distribution of marketing costs of onion, by cost component, Nueva Ecija, 2006
Figure 21. Percent distribution of marketing costs of onion, by cost component, Metro Manila, 2006
Table 14c. ONION: Cost of materials incurred by marketing participants, by item, Ilocos Norte, 2006
Transpor -tation 9%
Operating 54%
MARKETING COSTS STRUCTURE:
O N I O N
b. Naga City Among the six demand areas, Naga City posted the highest average marketing cost at P12.98 per kilogram. The cost of transportation accounted for 47%, while other operating costs and imputed costs made up 20% each. The costs of labor and materials accounted for 12% and one percent, respectively. c. Legaspi City In Legaspi City onions were sourced from Pangasinan and Nueva Ecija. About P8.99 per kilogram was the average cost in marketing onions. Of this, about 43% went to transportation (P3.89). Other operating expenses were recorded at 26% (P2.35), labor at 16% (P1.47), imputed cost at 13% (P1.14), and cost of materials used at 2% (P0.14). d. Cebu City The supply of onion in Cebu came from Luzon for which traders spent an average of P8.63 per kilogram. About 35% of the total cost, was on labor of P3.02 per kilogram. Imputed cost which consist of 23% (P2.01) of all costs. Other operating costs were 22% of the total costs. Transportation shared 19% while the cost of materials accounted for one percent.
53 16
Fi g u r e 2 2 . P e r c e n t a g e d i s t r i b u t i o n o f m a r k e t i n g c o s t s , b y c o s t c o m p o n e n t s ,
N a g a C i t y 2 0 0 6 Imput e d
Cost20%
La bor12%
Tra nsport a t ion 47%
Ot he r Ope ra t ing
20% Ma t e ria ls1%
So urce: A nnex Tab le 17
Figure 23 . Percentage d istribution of m arketing cost, by cost com ponent,
L egaspi C ity , 2006
O ther O perating
26%
Im puted C ost13%
Labor16%
Transpor-tation 43%
M aterial 2%
Source: Annex Table 17
Fi g u re 2 4 . P e rc e n t a g e d i s t r i b u t i o n o f m a rk e t i n g c o s t s , b y c o s t c o m p o n e n t s ,
C e b u C i t y , 2 0 0 6
Imput ed Cost23%
Labor35%
Tra nspor-t a t ion
19%Ma t e ria l 1%
Ot he r Ope ra t ing
22%
S o urce: A nnex Tab le 17
Item
red bag 0.207 plastic bag 0.008 0.107 0.091 0.012 0.102 0.030 basket 0.014 0.006 bilao 0.001 0.005 0.001 trapal 0.052 wooden box 0.004
TOTAL 0.01 0.13 0.14 0.02 0.31 0.03
peso per kilogram
Table 14b. ONION: Cost of materials by item, selected demand areas, Philippines, 2006
Metro Manila
Naga City
Legaspi City
Cebu City
Cagayan de Oro City
Davao City
Figure 22. Percent distribution of marketing costs of onion, by cost component, Naga City, 2006
Figure 23. Percent distribution of marketing costs of onion, by cost component, Legaspi City, 2006
Figure 24. Percent distribution of marketing costs of onion, by cost component, Cebu City, 2006
Source: Annex Table 17
Ilocos Norte Pangasinan Nueva
Ecija
red bag 0.118 0.353 0.587 twine 0.067 0.006 plastic bag 0.245 0.072 0.030 kaing 0.005 basket a/winnow "bilao" 0.002 basin 0.002 pail 0.002 trapal 0.002 sack 0.197 bamboo strips 0.078
TOTAL 0.64 0.51 0.62
peso per kilogram
Item
Table 14a . ONION: Cost of materia ls by item, se lected supply provinces, Philippines, 2006
a/ less than 0.001
MARKETING COSTS STRUCTURE:
O N I O N
e. Cagayan de Oro In Cagayan de Oro City traders spent an average of P9.56 per kilogram in marketing onion. The imputed cost of P3.03 per kilogram represented the biggest portion of the total cost at 35%. Expenses on transportation ranked second at 28% (P2.69). Shares for labor costs, other operating costs and materials were at 21%, 13% and 3%, respectively. f. Davao City In Davao City, an average of P3.30 was spent by the respondent in marketing onion. About 43% (P1.43) of this were spent on transportation. Other operating expenses accounted for 30% (P0.98). Labor cost which were represented by P0.71 were 22% of the total cost. About four percent (P0.14) were spent on imputed cost and one percent (P0.03) on materials used.
2. Marketing Margins
a. Ilocos Norte
The farmers sold a kilogram of onion at P30.00, and spent a total amount of P13.09 per kilogram for production and P13.60 in marketing. A net margin of P3.31 per kilogram was realized. Among the trader-respondents, Provincial Assembler-Medium Distributor
17 52
Fi g u r e 2 5 . P e r c e n t a g e d i s t r i b u t i o n o f m a r k e t i n g c o s t s , b y c o s t c o m p o n e n t s ,
C a g a y a n d e Or o C i t y , 2 0 0 6
Imput e d Cost35%
Labor21%
Tra nspor-t a t ion
28%
Ma t e ria l 3%
Ot he r Ope ra t ing
13%Source: A nnex Tab le
Fi g u r e 2 6 . P e r c e n t a g e d i s t r i b u t i o n o f m a r k e t i n g c o s t s , b y c o s t c o m p o n e n t s ,
D a v a o C i t y , 2 0 0 6
La bor22%
Transport a t ion 43%
Ot he r Ope ra t ing
30%
Ma t e ria l 1%
Imput e d Cost4%
Source: A nnex Tab le 17
Source: Costs and Returns Survey (CRS)
Vehicle rental
Procurement 2.370 0.080 2.100 1.060
Private vehicle
Gas & oil 0.030
TOTAL 2.37 0.08 2.10 1.06
Table 13k. ONION: Transportation costs incurred by marketing participants, by item, Davao City, 2006
Retailerpeso per kilogram
IRA-LD BA-MD BA-SDItem
Vehicle rental
Procurement 0.103 0.441 Distribution 2.349
Private vehicle
Gas & oil 0.042 0.097
TOTAL 2.45 0.44
Table 12h. ONION: Transportation costs incurred by marketing participants, by activity, Cagayan de Oro City, 2006
peso per kilogramIRA-LD RetailerItem
Figure 25. Percent distribution of marketing costs of onion, by cost component, Cagayan de Oro City,
2006
Figure 26. Percent distribution of marketing costs of onion, by cost component, Davao City, 2006
Imputed Other Costs Labor
Source: Annex Table 17
Source: Annex Table 17
Table 13. ONION: Cost of production, selected supply provinces, 2006 (peso per kilogram)
Ilocos Norte Pangasinan Nueva Ecija
13.09 10.25
11.61
Table 13j. ONION: Transportation costs incurred by marketing participants, by item, Cagayan de Oro City, 2006
MARKETING COSTS STRUCTURE:
O N I O N
Among the trader-respondents, Provincial Assembler-Medium Distributor had the highest net margin at P 9.35 per kilogram. While the retailers netted an amount of P5.21, PA-LD, RA-LD, MA-LD, garnered P2.61, P1.16 and P1.09, respectively.
b. Pangasinan
As shown in Table 13, average cost of producing one kilogram of onion in Pangasinan was P10.25. When this amount and the total marketing cost of P2.88 were subtracted from the farmgate price of P28.00, farmers realized a net margin of P14.87. RA-LD’s margin was P1.10. IRA-MD’s at P6.28, while retailers had P5.98 per kilogram. Other marketing participants like PA-MD, MA-LD, BA had net margins ranging from P3.16 to P3.27 per kilogram. Agent had the lowest net margin at less than one peso (P0.98) per kilogram. c. Nueva Ecija The average price of onion at the farm was P25.00 per kilogram. Farmers realized a net margin of P11.02 per
51 18
Source: Annex Table 18
Table 14. ONION: Marketing costs and margins, Ilocos Norte, 2006 (peso per kilogram)
Prices Margin Item Buying Selling
Total Marketing
Cost Gross Net FARMER 30.00 13.60 16.91 3.31 RA-LD 30.00 35.00 3.71 4.87 1.16 PA-LD 30.00 45.00 2.39 5.00 2.61 PA-MD 30.00 35.00 0.65 10.00 9.35 MA-LD 30.00 35.00 3.92 5.00 1.08 RETAILER 40.00 56.00 8.79 14.00 5.21
Source: Annex Table 18
Table 15. ONION: Marketing costs and margins, Pangasinan, 2006 (peso per kilogram)
Prices Margin Item Buying Selling
Total Marketing
Cost Gross Net FARMER 28.00 2.88 17.75 14.87 IRA-LD 30.00 39.00 7.90 9.00 1.10 IRA-MD 32.00 40.00 1.72 8.00 6.28 PA-MD 33.00 39.00 2.84 6.00 3.16 MA-LD 35.00 40.00 1.22 5.00 3.78 BA-LD 30.00 35.00 1.73 5.00 3.27 AGENT 34.00 35.00 0.02 1.00 0.98 RETAILER 41.00 51.00 4.02 10.00 5.98
Table 16. ONION; Marketing costs and margins, Nueva Ecija, 2006 (peso per kilogram)
Prices Margin Item Buying Selling
Total Marketing
Cost Gross Net Farmer 25.00 2.37 13.39 11.02 Assembler 26.00 32.00 4.97 6.00 1.03 IRA-LD 26.00 32.00 4.26 6.00 1.74 PA-LD 32.00 37.00 4.44 5.00 0.56 PA-MD 35.00 37.00 1.08 2.00 0.92 BA-MD 37.00 38.00 0.03 1.00 0.97 MA-SD 38.00 44.00 5.32 6.00 0.68 BA-SD 44.00 45.00 0.74 1.00 0.26 Retailer 45.00 50.00 3.25 5.00 1.75
Source: Annex Table 18
Vehicle rental
Procurement 2.11 3.07 2.00
Private vehicle
Gas & oil 1.50
TOTAL 3.61 3.07 2.00
Table 13h. ONION: Transportation costs incurred by marketing participants, by item, Legaspi City, 2006
peso per kilogramIRA-LD IRA-SD RetailerItem
Vehicle rental
Procurement 2.778
Private vehicle
Gas & oil 3.017 3.370
TOTAL 3.02 3.37 2.78
Table 13e. ONION: Transportation costs incurred by marketing participants, by item, Naga City, 2006
peso per kilogramIRA-LD IRA-MD RetailerItem
Vehicle rental
Procurement 1.624
Private vehicle
Gas & oil 0.026 0.041
TOTAL 1.65 0.04
Item
Table 13g. ONION: Transportation costs incurred by marketing participants, by item, Cebu City, 2006
peso per kilogramIRA-LD Retailer
Table 14. ONION: Marketing costs and margin of marketing participants, Ilocos Norte, 2006
(peso per kilogram)
Table 15. ONION: Marketing costs and margin of marketing participants, Pangasinan, 2006
(peso per kilogram)
Table 16. ONION: Marketing costs and margin of marketing participants, Nueva Ecija, 2006
(peso per kilogram)
Table 13g. ONION: Transportation costs incurred by marketing participants, by item, Naga City, 2006
Table 13i. ONION: Transportation costs incurred by marketing participants, by item, Cebu City, 2006
MARKETING COSTS STRUCTURE:
O N I O N
margin of P11.02 per kilogram after deducting the costs incurred in production and marketing at P11.61 and P2.37, respectively. Traders in the province recorded net margins ranging from P0.26 to P1.75 per kilogram, on the average. Interregional Assembler got the highest net margin at P1.74 while Barangay Assembler got the lowest at P0.26 per kilogram.
F. Marketing Problems Commonly Encountered by the Respondents
The common
problems cited by farmer-respondents in Ilocos Norte were low price received, weak demand for onion, stealing, price fluctuation and bad debts.
Seventy percent
(70%) of farmer-respondents in Nueva Ecija cited the low price received due to the presence of imported onion.
In Pangasinan,
farmers were problematic on the low prices they received during peak seasons and on the difficulty in directly selling to Divisoria.
For trader-respondents, the common problems cited were: competition
with other traders, shrinkage and spoilage of the commodity. Some trader-respondents also mentioned the low quality of onion being traded. Other problems identified were bad debts, stealing and high cost of securing a business license.
19 50
Table 17a. ONION: Percentage distribution of farmer-respondents, by problems encountered, selected provinces, Philippines, 2006
Problems Ilocos Norte
Panga-sinan
Nueva Ecija
Low price received due to imported onion 10 5 70
Low price received during harvest time 10 25
Difficulty in selling directly to Manila (Divisoria) 10
Shrinkage of the commodity 5 5 5
Weak demand when buyer have voluminous stocks in their bodegas 5 5 5
Stealing 5 5
Price fluctuation 10 5 10
Bad debts 5 5 5
No problems 50 35 5
Total 100 100 100 Source: Annex Table 19a
Vehicle rental
Procurement 0.430 0.330 0.870 0.640 Distribution 0.080 0.660 0.620 1.470 0.540
Private vehicle
Gas & oil 0.100 0.350
TOTAL 0.08 1.09 1.05 2.34 1.53
peso per kilogram
Table 13e. ONION: Transportation costs incurred by marketing participants, by item, Nueva Ecija, 2006
MA-SDFarmer IRA-LD PA-LD AssemblerItem
Vehicle rental
Procurement 1.940 Distribution 0.460
Private vehicle
Gas & oil 0.810 0.200
TOTAL 0.81 0.66 1.94
peso per kilogramRetailer
Table 13f. ONION: Transportation costs incurred by marketing participants, by item, Metro Manila, 2006
IRA-LD AgentItem
Table 17a. ONION: Percent distribution of farmer-respondents by problems encountered, selected supply provinces, Philippines, 2006
MARKETING COSTS STRUCTURE:
O N I O N
4920
Source: Annex Table 19b
Table 19b. ONION: Percentage distribution of trader-respondents, by problems encountered, selected areas, 2006
Problems Ilocos Norte Pangasinan Nueva
Ecija Metro Manila
Naga City
Legaspi City
Cebu City
Cagayan de Oro City
Davao City
Competition with other traders 8 14 10 18 22 20 11 11 14
Shrinkage and spoilage of commodity
15 9 3 9 22 7 11 11 21
Low quality of products traded 8 9 3 9 11 7 6 11 7
Price fluctuation 4 5 11 7 17 11 7
Bad debts 4 3 5 11
Stealing 8 4 3 11 20 High cost of securing business license
4 3 11 7
No problem 61 52 75 54 32 55 56 51
Total 100 100 100 100 100 100 100 100 100
Vehicle rental
Procurement 0.640 0.267 0.703 Distribution 0.203 0.221
Private vehicle
Gas & oil 0.012 0.232 0.664 0.306 0.026 0.641 0.007 0.217
TOTAL 0.22 1.09 0.66 0.31 0.29 0.64 0.01 0.92
Table 13d. ONION: Transportation costs incurred by marketing participants, by item, Pangasinan, 2006
Itempeso per kilogram
PA-MD MA-LD BA-LD AgentFarmer IRA-LD IRA-MD Retailer
Vehicle rental
Procurement 0.110 0.511 1.563 1.250 Distribution 0.411 0.998 1.875
Private vehicle
Gas & oil 0.948 0.288
TOTAL 1.36 0.40 1.51 3.44 1.25
Table 13a. ONION: Transportation costs incurred by marketing participants, by item, Ilocos Norte, 2006
peso per kilogramPA-LD MA-LDFarmer RA-LD RetailerItem
Table 17b. ONION: Percent distribution of trader-respondents, by problems encountered, selected demand areas, Philippines, 2006
Table 13c. ONION: Transportation costs incurred by marketing participants, by item, Ilocos Norte, 2006
MARKETING COSTS STRUCTURE:
O N I O N
Definition of Terms Assembler – procures onion from farmers and traders in the supply areas. These types of traders are classified according to their area of procurement.
a) Barangay Assembler (BA) – procures within the barangay. b) Municipal Assembler (MA) – procures from two or more barangays
within the municipality c) Provincial Assembler (PA) – procures from two or more
municipalities within the province d) Regional Assembler (RA) – procures from two or more province
within the region. e) Interregional Assembler (IRA) – procures from two or more regions.
Assembler – Distributor – uses about the same effort and resources in procuring and selling a commodity; may finances farmers and traders in supply areas and has agents responsible for procurement; sells commodities to other traders. The following combinations were identified in the study:
a) Barangay Assembler – Small Distributor (BAS-SD) b) Municipal Assembler – Medium Distributor (MA-MD) c) Provincial Assembler – Small Distributor (PA-SD) d) Provincial Assembler – Medium Distributor (PA-MD) e) Provincial Assembler – Large Distributor (PA-LD)
Delivered – mode of procurement and or distribution wherein the supplier go to
the buyer to sell the commodity. Demand areas – provinces/areas where most of the onion produced in the
supply areas were sold or brought. Distributor – sells commodities to other traders and consumers. Since his/her
function is primarily to sell than to procure, he/she provides more services to his/her buyers than to his/her suppliers. They can be
21 48
Ilocos Norte Pangasinan Nueva Ecija
Vehicle rental
Procurement 0.859 0.536 0.541 Distribution 1.095 0.212 0.418
Private vehicle
Gas & oil 0.618 0.263 0.225
TOTAL 2.57 1.01 1.18
peso per kilogram
Table 13a. ONION: Transportation costs by item, selected supply provinces, Philippines, 2006
Item
Vehicle rental
Procurement 1.940 2.778 2.396 1.624 0.272 1.403 Distribution 0.460 2.349
Private vehicle
Gas & oil 0.505 3.194 1.498 0.034 0.070 0.030
TOTAL 2.91 5.97 3.89 1.66 2.69 1.43
Itempeso per kilogram
Table 13b. ONION: Transportation costs by item, selected demand areas, Philippines, 2006
Naga City
Legaspi City
Cebu City
Cagayan de Oro City
Davao City
Metro Manila
MARKETING COSTS STRUCTURE:
O N I O N
services to his/her buyers than to his/her suppliers. They can be classified according to the relative volume of commodities as follows:
a) Small Distributor (SD) – handles a small volume of commodity;
sells to retailers within the same market; may sell to several small eateries.
b) Medium Distributor (MD) – sells larger volume than small
distributor; sell to trading coming from other markets in the province; may sell to few institutional buyers (hotel, restaurants, hospital, military camp).
c) Large Distributor (LD) – handles the largest volume among the
three types of distributors; usually sell to traders from other markets within and outside the province; may sell to several institutional buyers.
Handling – carrying onion from one place to another, which composed of
loading and unloading. Hauling – bringing the harvest from the farm to the first point of sale. Moving
the commodity from the farm to the trading or bagsakan areas. Loading – carrying onion inside the vehicle. Marketing channels – refers 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.
Market margins – difference between the value of a product at one stage and
the value of the same product at another stage.
47 22
ProcurementUnloading 0.010 0.020
DistributionHauling 0.010 1.080 Cleaning 0.010 Sorting 0.010 Weihging 0.010 Packing 0.010 Loading 0.010 0.150 Unloading 0.010 0.050
TOTAL 0.08 0.07 0.15 1.08
Retailer
Table12i. ONION: Labor costs incurred by marketing activity, by province, Davao City, 2006
peso per kilogramIRA-LD BA-MD BA-SDMarketing Activity
Table 12k. ONION: Labor costs incurred by marketing participants, by activity, Davao City, 2006
MARKETING COSTS STRUCTURE:
O N I O N
Partnership – type of business ownership where capital is shared and managed by two to five persons with the intention of sharing profit.
Pick-up – mode of procurement and or distribution wherein the buyer goes to
the supplier to buy the commodity. Retailer – type of trader who sources his/her stock either directly from the
farmer or from distributor and sells directly to consumers. Self-financed – source of capital where the operator or trader used his own
fund to finance onion marketing operations. Single proprietorship – business is owned solely by farmer or trader. Sorting – classifying or grading of onion according to size, quality and
freshness. Supply areas – top three onion producing provinces in the country in terms of
quantity produced. Unloading – carrying the sacked or bundled onion outside the vehicle.
23 46
ProcurementHauling 0.001 0.926Cleaning 0.001Sorting 0.001Weighing 0.001Packing 0.001Unloading 0.001 0.208
DistributionHauling 0.010Cleaning 0.029Sorting 0.083 0.439Weighing 0.029 0.439Packing 0.083 0.440Loading 0.004Unloading 0.004
Salaries & wages 0.167 1.048
TOTAL 0.40 2.37a/ less than 0.001
Table 12j. ONION: Labor costs incurred by marketing participants, by activity, Cagayan de Oro City, 2006
peso per kilogramIRA-LD RetailerMarketing Activity
MARKETING COSTS STRUCTURE:
O N I O N
ANNEXES
25 44
ProcurementHauling 0.276Loading 0.259 0.234Unloading 0.259 0.234
Salaries & wages 0.687 0.923
TOTAL 1.21 0.47 1.20
peso per kilogram
Table 12g. ONION: Labor costs incurred by marketing participants, by activity, Naga City, 2006
IRA-LD IRA-MD RetailerMarketing Activity
ProcurementHauling 0.200 0.320 0.160 0.310Unloading 0.070 0.150 0.220Loading 0.170 0.150 0.160 0.480
DistributionHauling 0.010 0.020 0.030Cleaning 0.110 0.020 0.100 0.330Sorting 0.100 0.020 0.100 0.380Weighing 0.100 0.090 0.100 0.390Packing 0.020 0.100 0.120
Salaries & wages 0.110 0.200 1.670
Total 0.76 0.90 0.92 3.93
Table12d. ONION: Labor costs incurred by marketing activity, Metro Manila, 2006
peso per kilogramIRA-LD MA-SD Agent RetailerMarketing Activity
Table 12f. ONION: Labor costs incurred by marketing participants, by activity, Metro Manila, 2006
MARKETING COSTS STRUCTURE:
O N I O N
ProcurementHauling 0.047 0.089 0.071 0.167 0.123 0.457Cleaning 0.086 0.096 0.333Sorting 0.108 0.034 0.156 0.556Weighing 0.029 0.123Packing 0.328 0.166 0.159 0.123Loading 0.048 0.034Unloading 0.047 0.033
DistributionHauling 0.047 0.014 1.000Cleaning 0.006Sorting 0.022 0.023Weighing 0.022 0.006Packing 0.285 0.026 0.123Loading 0.244Unloading 0.032 0.074 0.143Selling
Salaries & wages 0.019 0.032 0.206 0.205 0.596 0.398
TOTAL 0.64 0.83 0.53 0.62 0.82 1.09 2.41
Marketing Activity
Table12d. ONION: Labor costs incurred by marketing participants, by activity, Pangasinan, 2006
peso per kilogramPA-MD MA-LD BA-LDFarmer IRA-LD IRA-MD Retailer
27 42
PROVINCE FARMER TRADER TOTAL
SUPPLY AREASILOCOS NORTE 20 13 33PANGASINAN 20 23 43NUEVA ECIJA 20 29 49
DEMAND AREASMETRO MANILA 22 22NAGA CITY 9 9LEGASPI CITY 15 15CEBU CITY 18 18CAGAYAN DE ORO CITY 18 18DAVAO CITY 14 14
TOTAL 60 161 221
Table 1. ONION: Number of respondents, selected provinces, Philippines, 2006
MARKETING COSTS STRUCTURE:
O N I O N
41 28
IRA-
LD/
R
A-LD
/
PA-L
D/
M
A-LD
/
BA-
LD
IRA-
MD
/ R
A-M
D/
PA
-MD
/
MA-
MD
/
BA-
MD
IRA-
SD/
R
A-SD
/
PA-S
D/
M
A-SD
/
BA-
SD
ASSE
MB
LER
AGEN
TR
ETAI
LER
SU
PPLY
AR
EAS
ILO
CO
S N
OR
TE20
81
433
PAN
GAS
INAN
2011
41
16
43N
UE
VA
EC
IJA
209
35
66
49
DEM
AND
AR
EAS
MET
RO
MAN
ILA
72
112
22N
AGA
CIT
Y2
25
9LE
GAS
PI C
ITY
63
615
CE
BU
CIT
Y6
1218
CAG
AYAN
DE
OR
O
108
18D
AVAO
CIT
Y3
41
614
TOTA
L60
6214
117
265
221
TOTA
L
TRAD
ER
Tabl
e 2.
ON
ION
: N
umbe
r of r
espo
nden
ts b
y ty
pe o
f mar
ketin
g pa
rtic
ipan
ts, s
elec
ted
prov
ince
s,
PRO
VIN
CE
FAR
MER
Phili
ppin
es, 2
006
ProcurementHauling 0.020 0.067 0.050cleaning 1.500 0.050Sorting 0.020Bundling 0.400 0.050Packing 0.080 0.023Loading 0.080 0.023 0.067Unloading 0.023 0.067
DistributionHauling 0.120 0.067Cleaning 1.489Drying 0.393 0.133Sorting 0.782 0.857Weighing 0.100 0.693Braiding 0.293 0.693Bundling 0.782Packing 0.383 0.693Loading 0.113Unloading 0.004
Salaries & wages 0.036 0.014 0.693
TOTAL 4.46 2.10 0.07 0.40 0.15 2.94
peso per kilogram
Table12c. ONION: Labor costs incurred by marketing participants, by activity, Ilocos Norte, 2006
Farmer RA-LD PA-LD RetailerPA-MD MA-LDMarketing Activity
MARKETING COSTS STRUCTURE:
O N I O N
ProcurementHauling 0.248 0.276 0.295 0.577 0.463Cleaning 0.001Sorting 0.062 0.210Weighing 0.001Packing 0.001Loading 0.240 0.247 0.112 0.600Unloading 0.147 0.247 0.123 0.424 0.105 0.015
DistributionHauling 0.020 0.010 0.545Cleaning 0.140 0.077 0.228 0.029 0.010Sorting 0.150 0.106 0.261 0.010Weighing 0.170 0.099 0.267 0.234 0.010Packing 0.080 0.106 0.262 0.010Loading 0.196 0.004 0.080Unloading 0.196 0.004 0.030
Salaries & wages 0.740 0.805 0.768 0.262 0.399
TOTAL 1.93 1.57 1.47 3.02 1.98 0.71
Table12b. ONION: Labor costs by marketing activity/practice, selected demand areas, Philippines, 2006
Cagayan de Oro City
Davao CityMarketing Activity
peso per kilogram
Metro Manila
Naga City
Legaspi City
Cebu City
29 40
LAND TENURE ILOCOS NORTE PANGASINAN NUEVA
ECIJA TOTAL
Owned 11 12 14 37 Tenanted 8 3 1 12 Leased 5 1 6 Held under CLT 1 1 2 Contract grower 1 1 Rent free 2 2
TOTAL 20 20 20 60
Table 3. ONION: Number of farmer-respondents by tenure status, selected provinces, Philippines, 2006
PROVINCE SINGLE PROPRIETORSHIP
PARTNERSHIP TOTAL
SUPPLY AREASILOCOS NORTE 13 13PANGASINAN 23 23NUEVA ECIJA 28 1 29
DEMAND AREASMETRO MANILA 22 22NAGA CITY 9 9LEGASPI CITY 15 15CEBU CITY 18 18CAGAYAN DE ORO CITY 18 18DAVAO CITY 14 14
TOTAL 160 1 161
Table 4. ONION: Number of trader-respondents, by type of ownership, selected provinces, Philippines, 2006
MARKETING COSTS STRUCTURE:
O N I O N
PROVINCE SELF-FINANCED
BORROWED/LOAN TOTAL
SUPPLY AREASILOCOS NORTE 20 13 33PANGASINAN 39 4 43NUEVA ECIJA 29 20 49
DEMAND AREASMETRO MANILA 22 22NAGA CITY 9 9LEGASPI CITY 15 15CEBU CITY 18 18CAGAYAN DE ORO CITY 16 2 18DAVAO CITY 14 14
TOTAL 182 39 221
Table 5 ONION: Number of respondents by source of capital, selected provinces, Philippines, 2006
39 30
Ilocos Norte Pangasinan Nueva Ecija
ProcurementHauling 0.046 0.159 Cleaning 0.775 0.172 0.243 Sorting 0.030 0.214 0.443 Bundling 0.225 Weighing 0.076 0.255 Packing 0.052 0.301 0.180 Loading 0.057 0.041 0.303 Unloading 0.045 0.040 0.208
DistributionHauling 0.094 0.354 0.142 Cleaning 1.489 0.006 0.296 Drying 0.263 0.230 Cutting 0.120 Sorting 0.820 0.023 0.246 Tagging 0.070 Weighing 0.397 0.014 0.128 Braiding 0.493 Bundling 0.782 Packing 0.538 0.217 0.226 Loading 0.113 0.244 0.140 Unloading 0.004 0.083 0.175
Salaries & wages 0.244 0.398 0.262
TOTAL 6.46 2.34 3.67
Table12a. ONION: Labor costs by marketing activity/ practice, selected supply provinces, Philippines, 2006
peso per kilogramMarketing Activity
MARKETING COSTS STRUCTURE:
O N I O N
WIT
HIN
TH
E PR
OVI
NC
EO
UTS
IDE
THE
PRO
VIN
CE
WIT
HIN
TH
E PR
OVI
NC
EO
UTS
IDE
THE
PRO
VIN
CE
DEM
AND
AR
EAS
MET
RO
MAN
ILA
Nue
va E
cija
, Ilo
cos
Sur,
Met
ro M
anila
R
izal
, Cav
ite, B
icol
R.
Iloco
s N
orte
, C
otab
ato,
N
ueva
Viz
caya
, D
avao
City
&Pa
ngas
inan
&
Cag
ayan
de
Oro
City
Min
doro
Occ
iden
tal
NAG
A C
ITY
Pang
asin
an,
Cam
arin
es S
urN
ueva
Eci
ja,
Min
doro
Occ
iden
tal
LEG
ASPI
CIT
YD
ivis
oria
, Bal
inta
wak
,G
uino
bata
n,
Mas
bate
, Sor
sogo
n,Pa
ngas
inan
, Ta
baco
City
, C
atan
duan
es,
Nue
va E
cija
, Le
gasp
i City
, M
indo
ro O
ccid
enta
lSt
o. D
omin
go, T
iwi,
Baca
cay,
Dar
aga
CEB
U C
ITY
Div
isor
iaC
arbo
n, S
ibon
ga,
Leyt
e, B
ohol
C
ebu
City
, Ta
gbila
ran
City
Man
daue
City
, La
pu-la
pu C
ity
CAG
AYAN
DE
OR
O C
ITY
Div
isor
ia,
Car
men
, Ago
ra,
Ceb
u, B
ukid
non,
M
indo
ro O
ccid
enta
l, C
ogon
Iliga
n, C
amig
uin,
Pa
ngas
inan
&
Butu
an, O
roqu
ieta
Nue
va E
cija
Surig
ao, M
araw
i,
DAV
AO C
ITY
Bino
ndo,
Ton
do,
Bang
oy, D
avao
City
,Ta
gum
, D
ivis
oria
Toril
, Cal
inan
,N
orth
Cot
abat
o &
Bang
kero
han
Sout
h C
otab
ato
Tabl
e 11
. (C
ontin
ued)
SOU
RC
ESD
ESTI
NAT
ION
SPR
OVI
NC
E
31 38
less
than
52
55
12
35
326
5 - 1
011
1118
82
67
105
7811
- 15
48
65
33
14
3416
- 20
48
45
16
31
133
21 &
abo
ve12
1116
31
32
11
50
TOTA
L33
4349
229
1518
1814
221
Cag
ayan
de
Oro
City
Dav
ao
City
Pang
asin
an
Tabl
e 6.
ON
ION
: N
umbe
r of r
espo
nden
ts b
y ye
ars
in tr
adin
g, s
elec
ted
prov
ince
s, P
hilip
pine
s, 2
006
TOTA
LN
ueva
Ec
ijaM
etro
M
anila
Nag
a C
ity
YEA
RS
IN
TRA
DIN
G
Supp
ly A
reas
Dem
and
Area
s
Iloco
s N
orte
Lega
spi
City
Ceb
u C
ity
Iloco
s N
orte
Pang
asin
anN
ueva
Eci
ja
less
than
51
25
- 10
55
511
- 15
23
116
- 20
47
321
& a
bove
94
9
TOTA
L20
2020
Tabl
e 6a
. O
NIO
N:
Num
ber o
f far
mer
-res
pond
ents
by
year
s in
tr
adin
g, s
elec
ted
prov
ince
s, P
hilip
pine
s, 2
006
YEAR
S IN
FA
RM
ING
Supp
ly A
reas
MARKETING COSTS STRUCTURE:
O N I O N
Iloco
s N
orte
Pang
asin
anN
ueva
Ec
ijaM
etro
M
anila
Nag
a C
ityLe
gasp
i C
ityC
ebu
City
Cag
ayan
de
Oro
City
Dav
ao
City
less
than
52
43
12
35
323
5 - 1
06
613
82
67
105
6311
- 15
25
55
33
14
2816
- 20
11
51
63
11
1921
& a
bove
37
73
13
21
128
TOTA
L13
2329
229
1518
1814
161
Tabl
e 6b
. O
NIO
N:
Num
ber o
f tra
der-
resp
onde
nts
by y
ears
in tr
adin
g, s
elec
ted
prov
ince
s, P
hilip
pine
s, 2
006
Supp
ly A
reas
Dem
and
Area
sYE
ARS
IN
TRAD
ING
TOTA
L
37 32
WIT
HIN
TH
E PR
OVI
NC
EO
UTS
IDE
THE
PRO
VIN
CE
WIT
HIN
TH
E PR
OVI
NC
EO
UTS
IDE
THE
PRO
VIN
CE
SU
PPLY
AR
EAS
ILO
CO
S N
OR
TEVi
ntar
, Bad
oc,
Iloco
s Su
rLa
oa
g C
ity, B
adoc
,M
etro
Man
ila, C
agay
an,
Pasu
guin
, Bac
arra
Pasu
quin
, Bac
arra
Isab
ela,
Pan
gasi
nan,
N
ueva
Eci
ja,
PAN
GAS
INAN
Baya
mba
ng, B
autis
ta,
Gui
mba
, Tal
aver
a,
San
Car
los
City
, M
etro
Man
ila, L
agun
a,Sa
n Q
uint
in, U
min
gan
San
Jose
City
, Bo
linao
, Lin
gaye
n Ba
tang
as, P
ampa
nga,
Bong
abon
&
Alam
inos
City
Bula
can,
Bat
aan,
Zam
bale
z, N
ueva
Ec
ija &
Bic
ol R
egio
n
NU
EVA
ECIJ
AM
unoz
, San
Jos
e,
Pang
asin
anSa
n Jo
se C
ity,
Met
ro M
anila
, Sa
n Ag
ustin
, Gui
mba
, Ta
lave
ra, B
onga
bon,
Ba
tang
as, L
agun
a,
Riz
al, G
apan
, G
apan
, Riz
al,
Cav
ite, R
izal
Bic
ol,
Pant
aban
gan,
C
aban
atua
n C
ityQ
uezo
n, C
ebu,
Iloilo
, Bo
ngab
on &
Lla
nera
Dav
ao, C
agay
an d
e O
ro,
Zam
boan
ga
Tabl
e 11
. O
NIO
N:
Maj
or s
ourc
es a
nd d
estin
atio
ns, b
y pr
ovin
ce, P
hilip
pine
s, 2
006
SOU
RC
ESD
ESTI
NAT
ION
SPR
OVI
NC
E
Tabl
e 11
. Oni
on: M
ajor
sou
rces
and
des
tinat
iions
, sel
ecte
d pr
ovin
ces,
Phi
lippi
nes,
200
6
MARKETING COSTS STRUCTURE:
O N I O N
33 36
PROVINCE PICKED-UP DELIVERED BOTH TOTAL
SUPPLY AREASILOCOS NORTE 9 4 13PANGASINAN 22 1 23NUEVA ECIJA 15 13 1 29
DEMAND AREASMETRO MANILA 11 10 1 22NAGA CITY 4 5 9LEGASPI CITY 11 4 15CEBU CITY 9 9 18CAGAYAN DE ORO CITY 18 18DAVAO CITY 11 3 14
TOTAL 110 49 2 161
Table 7. ONION: Number of respondent by type of traders, by mode of procurement, selected provinces, Philippines, 2006
PROVINCE CASH CREDIT CASH & CREDIT TOTAL
SUPPLY AREASILOCOS NORTE 11 1 1 13PANGASINAN 23 23NUEVA ECIJA 29 29
DEMAND AREASMETRO MANILA 22 22NAGA CITY 6 2 1 9LEGASPI CITY 12 3 15CEBU CITY 6 7 5 18CAGAYAN DE ORO CITY 9 6 3 18DAVAO CITY 14 14
TOTAL 132 16 13 161
Table 8. ONION: Number of respondents by terms of payment in procurement, selected provinces, Philippines, 2006
PROVINCE CASH BARTER TOTAL
SUPPLY AREASILOCOS NORTE 18 2 20PANGASINAN 20 20NUEVA ECIJA 20 20
TOTAL 58 2 60
Table 10a. ONION: Number of farmer-respondents, by terms of payment in distribution, selected provinces, Philippines, 2006
PROVINCE CASH CREDIT CASH & CREDIT TOTAL
SUPPLY AREASILOCOS NORTE 7 1 5 13PANGASINAN 22 1 23NUEVA ECIJA 29 29
DEMAND AREASMETRO MANILA 22 22NAGA CITY 6 3 9LEGASPI CITY 13 2 15CEBU CITY 15 2 1 18CAGAYAN DE ORO CITY 17 1 18DAVAO CITY 14 14
TOTAL 145 4 12 161
Table 10b. ONION: Number of trader-respondents, by terms of payment in distribution, selected provinces, Philippines, 2006
MARKETING COSTS STRUCTURE:
O N I O N
35 34
PROVINCE PICKED-UP DELIVERED BOTH TOTAL
SUPPLY AREASILOCOS NORTE 16 16 1 33PANGASINAN 37 4 2 43NUEVA ECIJA 28 19 2 49
DEMAND AREASMETRO MANILA 7 15 22NAGA CITY 8 1 9LEGASPI CITY 13 1 1 15CEBU CITY 18 18CAGAYAN DE ORO CITY 18 18DAVAO CITY 3 11 14
TOTAL 148 66 7 221
Table 9. ONION: Number of respondents, by mode of distribution, selected provinces, Philippines, 2006
PROVINCE PICKED-UP DELIVERED BOTH TOTAL
SUPPLY AREASILOCOS NORTE 8 12 20PANGASINAN 16 2 2 20NUEVA ECIJA 8 12 20
TOTAL 32 26 2 60
Table 9a ONION: Number of farmer-respondents, by mode of distribution, selected provinces, Philippines, 2006
PROVINCE PICKED-UP DELIVERED BOTH TOTAL
SUPPLY AREASILOCOS NORTE 8 4 1 13PANGASINAN 21 2 23NUEVA ECIJA 20 7 2 29
DEMAND AREASMETRO MANILA 7 15 22NAGA CITY 8 1 9LEGASPI CITY 13 1 1 15CEBU CITY 18 18CAGAYAN DE ORO CITY 18 18DAVAO CITY 3 11 14
TOTAL 116 40 5 161
Table 9b ONION: Number of trader-respondents, by mode of distribution, selected provinces, Philippines, 2006
PROVINCE CASH CREDIT CASH & CREDIT BARTER TOTAL
SUPPLY AREASILOCOS NORTE 25 1 5 2 33PANGASINAN 42 1 43NUEVA ECIJA 49 49
DEMAND AREASMETRO MANILA 22 22NAGA CITY 6 3 9LEGASPI CITY 13 2 15CEBU CITY 15 2 1 18CAGAYAN DE ORO CITY 17 1 18DAVAO CITY 14 14
TOTAL 203 4 12 2 221
Table 10. ONION: Number of respondents, by terms of payment in distribution, selected provinces, Philippines, 2006
MARKETING COSTS STRUCTURE:
O N I O N
35 34
PROVINCE PICKED-UP DELIVERED BOTH TOTAL
SUPPLY AREASILOCOS NORTE 16 16 1 33PANGASINAN 37 4 2 43NUEVA ECIJA 28 19 2 49
DEMAND AREASMETRO MANILA 7 15 22NAGA CITY 8 1 9LEGASPI CITY 13 1 1 15CEBU CITY 18 18CAGAYAN DE ORO CITY 18 18DAVAO CITY 3 11 14
TOTAL 148 66 7 221
Table 9. ONION: Number of respondents, by mode of distribution, selected provinces, Philippines, 2006
PROVINCE PICKED-UP DELIVERED BOTH TOTAL
SUPPLY AREASILOCOS NORTE 8 12 20PANGASINAN 16 2 2 20NUEVA ECIJA 8 12 20
TOTAL 32 26 2 60
Table 9a ONION: Number of farmer-respondents, by mode of distribution, selected provinces, Philippines, 2006
PROVINCE PICKED-UP DELIVERED BOTH TOTAL
SUPPLY AREASILOCOS NORTE 8 4 1 13PANGASINAN 21 2 23NUEVA ECIJA 20 7 2 29
DEMAND AREASMETRO MANILA 7 15 22NAGA CITY 8 1 9LEGASPI CITY 13 1 1 15CEBU CITY 18 18CAGAYAN DE ORO CITY 18 18DAVAO CITY 3 11 14
TOTAL 116 40 5 161
Table 9b ONION: Number of trader-respondents, by mode of distribution, selected provinces, Philippines, 2006
PROVINCE CASH CREDIT CASH & CREDIT BARTER TOTAL
SUPPLY AREASILOCOS NORTE 25 1 5 2 33PANGASINAN 42 1 43NUEVA ECIJA 49 49
DEMAND AREASMETRO MANILA 22 22NAGA CITY 6 3 9LEGASPI CITY 13 2 15CEBU CITY 15 2 1 18CAGAYAN DE ORO CITY 17 1 18DAVAO CITY 14 14
TOTAL 203 4 12 2 221
Table 10. ONION: Number of respondents, by terms of payment in distribution, selected provinces, Philippines, 2006
MARKETING COSTS STRUCTURE:
O N I O N
33 36
PROVINCE PICKED-UP DELIVERED BOTH TOTAL
SUPPLY AREASILOCOS NORTE 9 4 13PANGASINAN 22 1 23NUEVA ECIJA 15 13 1 29
DEMAND AREASMETRO MANILA 11 10 1 22NAGA CITY 4 5 9LEGASPI CITY 11 4 15CEBU CITY 9 9 18CAGAYAN DE ORO CITY 18 18DAVAO CITY 11 3 14
TOTAL 110 49 2 161
Table 7. ONION: Number of respondent by type of traders, by mode of procurement, selected provinces, Philippines, 2006
PROVINCE CASH CREDIT CASH & CREDIT TOTAL
SUPPLY AREASILOCOS NORTE 11 1 1 13PANGASINAN 23 23NUEVA ECIJA 29 29
DEMAND AREASMETRO MANILA 22 22NAGA CITY 6 2 1 9LEGASPI CITY 12 3 15CEBU CITY 6 7 5 18CAGAYAN DE ORO CITY 9 6 3 18DAVAO CITY 14 14
TOTAL 132 16 13 161
Table 8. ONION: Number of respondents by terms of payment in procurement, selected provinces, Philippines, 2006
PROVINCE CASH BARTER TOTAL
SUPPLY AREASILOCOS NORTE 18 2 20PANGASINAN 20 20NUEVA ECIJA 20 20
TOTAL 58 2 60
Table 10a. ONION: Number of farmer-respondents, by terms of payment in distribution, selected provinces, Philippines, 2006
PROVINCE CASH CREDIT CASH & CREDIT TOTAL
SUPPLY AREASILOCOS NORTE 7 1 5 13PANGASINAN 22 1 23NUEVA ECIJA 29 29
DEMAND AREASMETRO MANILA 22 22NAGA CITY 6 3 9LEGASPI CITY 13 2 15CEBU CITY 15 2 1 18CAGAYAN DE ORO CITY 17 1 18DAVAO CITY 14 14
TOTAL 145 4 12 161
Table 10b. ONION: Number of trader-respondents, by terms of payment in distribution, selected provinces, Philippines, 2006
MARKETING COSTS STRUCTURE:
O N I O N
Iloco
s N
orte
Pang
asin
anN
ueva
Ec
ijaM
etro
M
anila
Nag
a C
ityLe
gasp
i C
ityC
ebu
City
Cag
ayan
de
Oro
City
Dav
ao
City
less
than
52
43
12
35
323
5 - 1
06
613
82
67
105
6311
- 15
25
55
33
14
2816
- 20
11
51
63
11
1921
& a
bove
37
73
13
21
128
TOTA
L13
2329
229
1518
1814
161
Tabl
e 6b
. O
NIO
N:
Num
ber o
f tra
der-
resp
onde
nts
by y
ears
in tr
adin
g, s
elec
ted
prov
ince
s, P
hilip
pine
s, 2
006
Supp
ly A
reas
Dem
and
Area
sYE
ARS
IN
TRAD
ING
TOTA
L
37 32
WIT
HIN
TH
E PR
OVI
NC
EO
UTS
IDE
THE
PRO
VIN
CE
WIT
HIN
TH
E PR
OVI
NC
EO
UTS
IDE
THE
PRO
VIN
CE
SU
PPLY
AR
EAS
ILO
CO
S N
OR
TEVi
ntar
, Bad
oc,
Iloco
s Su
rLa
oag
City
, Bad
oc,
Met
ro M
anila
, Cag
ayan
,Pa
sugu
in, B
acar
raPa
suqu
in, B
acar
raIs
abel
a, P
anga
sina
n,
Nue
va E
cija
,
PAN
GAS
INAN
Baya
mba
ng, B
autis
ta,
Gui
mba
, Tal
aver
a,
San
Car
los
City
, M
etro
Man
ila, L
agun
a,Sa
n Q
uint
in, U
min
gan
San
Jose
City
, Bo
linao
, Lin
gaye
n Ba
tang
as, P
ampa
nga,
Bong
abon
&
Alam
inos
City
Bula
can,
Bat
aan,
Zam
bale
z, N
ueva
Ec
ija &
Bic
ol R
egio
n
NU
EVA
ECIJ
AM
unoz
, San
Jos
e,
Pang
asin
anSa
n Jo
se C
ity,
Met
ro M
anila
, Sa
n Ag
ustin
, Gui
mba
, Ta
lave
ra, B
onga
bon,
Ba
tang
as, L
agun
a,
Riz
al, G
apan
, G
apan
, Riz
al,
Cav
ite, R
izal
Bic
ol,
Pant
aban
gan,
C
aban
atua
n C
ityQ
uezo
n, C
ebu,
Iloilo
, Bo
ngab
on &
Lla
nera
Dav
ao, C
agay
an d
e O
ro,
Zam
boan
ga
Tabl
e 11
. O
NIO
N:
Maj
or s
ourc
es a
nd d
estin
atio
ns, b
y pr
ovin
ce, P
hilip
pine
s, 2
006
SOU
RC
ESD
ESTI
NAT
ION
SPR
OVI
NC
E
Tabl
e 11
. Oni
on: M
ajor
sou
rces
and
des
tinat
iions
, sel
ecte
d pr
ovin
ces,
Phi
lippi
nes,
200
6
MARKETING COSTS STRUCTURE:
O N I O N
WIT
HIN
TH
E PR
OVI
NC
EO
UTS
IDE
THE
PRO
VIN
CE
WIT
HIN
TH
E PR
OVI
NC
EO
UTS
IDE
THE
PRO
VIN
CE
DEM
AND
AR
EAS
MET
RO
MAN
ILA
Nue
va E
cija
, Ilo
cos
Sur,
Met
ro M
anila
R
izal
, Cav
ite, B
icol
R.
Iloco
s N
orte
, C
otab
ato,
N
ueva
Viz
caya
, D
avao
City
&Pa
ngas
inan
&
Cag
ayan
de
Oro
City
Min
doro
Occ
iden
tal
NAG
A C
ITY
Pang
asin
an,
Cam
arin
es S
urN
ueva
Eci
ja,
Min
doro
Occ
iden
tal
LEG
ASPI
CIT
YD
ivis
oria
, Bal
inta
wak
,G
uino
bata
n,
Mas
bate
, Sor
sogo
n,Pa
ngas
inan
, Ta
baco
City
, C
atan
duan
es,
Nue
va E
cija
, Le
gasp
i City
, M
indo
ro O
ccid
enta
lSt
o. D
omin
go, T
iwi,
Baca
cay,
Dar
aga
CEB
U C
ITY
Div
isor
iaC
arbo
n, S
ibon
ga,
Leyt
e, B
ohol
C
ebu
City
, Ta
gbila
ran
City
Man
daue
City
, La
pu-la
pu C
ity
CAG
AYAN
DE
OR
O C
ITY
Div
isor
ia,
Car
men
, Ago
ra,
Ceb
u, B
ukid
non,
M
indo
ro O
ccid
enta
l, C
ogon
Iliga
n, C
amig
uin,
Pa
ngas
inan
&
Butu
an, O
roqu
ieta
Nue
va E
cija
Surig
ao, M
araw
i,
DAV
AO C
ITY
Bino
ndo,
Ton
do,
Bang
oy, D
avao
City
,Ta
gum
, D
ivis
oria
Toril
, Cal
inan
,N
orth
Cot
abat
o &
Bang
kero
han
Sout
h C
otab
ato
Tabl
e 11
. (C
ontin
ued)
SOU
RC
ESD
ESTI
NAT
ION
SPR
OVI
NC
E
31 38
less
than
52
55
12
35
326
5 - 1
011
1118
82
67
105
7811
- 15
48
65
33
14
3416
- 20
48
45
16
31
133
21 &
abo
ve12
1116
31
32
11
50
TOTA
L33
4349
229
1518
1814
221
Cag
ayan
de
Oro
City
Dav
ao
City
Pang
asin
an
Tabl
e 6.
ON
ION
: N
umbe
r of r
espo
nden
ts b
y ye
ars
in tr
adin
g, s
elec
ted
prov
ince
s, P
hilip
pine
s, 2
006
TOTA
LN
ueva
Ec
ijaM
etro
M
anila
Nag
a C
ity
YEA
RS
IN
TRA
DIN
G
Supp
ly A
reas
Dem
and
Area
s
Iloco
s N
orte
Lega
spi
City
Ceb
u C
ity
Iloco
s N
orte
Pang
asin
anN
ueva
Eci
ja
less
than
51
25
- 10
55
511
- 15
23
116
- 20
47
321
& a
bove
94
9
TOTA
L20
2020
Tabl
e 6a
. O
NIO
N:
Num
ber o
f far
mer
-res
pond
ents
by
year
s in
tr
adin
g, s
elec
ted
prov
ince
s, P
hilip
pine
s, 2
006
YEAR
S IN
FA
RM
ING
Supp
ly A
reas
MARKETING COSTS STRUCTURE:
O N I O N
PROVINCE SELF-FINANCED
BORROWED/LOAN TOTAL
SUPPLY AREASILOCOS NORTE 20 13 33PANGASINAN 39 4 43NUEVA ECIJA 29 20 49
DEMAND AREASMETRO MANILA 22 22NAGA CITY 9 9LEGASPI CITY 15 15CEBU CITY 18 18CAGAYAN DE ORO CITY 16 2 18DAVAO CITY 14 14
TOTAL 182 39 221
Table 5 ONION: Number of respondents by source of capital, selected provinces, Philippines, 2006
39 30
Ilocos Norte Pangasinan Nueva Ecija
ProcurementHauling 0.046 0.159 Cleaning 0.775 0.172 0.243 Sorting 0.030 0.214 0.443 Bundling 0.225 Weighing 0.076 0.255 Packing 0.052 0.301 0.180 Loading 0.057 0.041 0.303 Unloading 0.045 0.040 0.208
DistributionHauling 0.094 0.354 0.142 Cleaning 1.489 0.006 0.296 Drying 0.263 0.230 Cutting 0.120 Sorting 0.820 0.023 0.246 Tagging 0.070 Weighing 0.397 0.014 0.128 Braiding 0.493 Bundling 0.782 Packing 0.538 0.217 0.226 Loading 0.113 0.244 0.140 Unloading 0.004 0.083 0.175
Salaries & wages 0.244 0.398 0.262
TOTAL 6.46 2.34 3.67
Table12a. ONION: Labor costs by marketing activity/ practice, selected supply provinces, Philippines, 2006
peso per kilogramMarketing Activity
MARKETING COSTS STRUCTURE:
O N I O N
ProcurementHauling 0.248 0.276 0.295 0.577 0.463Cleaning 0.001Sorting 0.062 0.210Weighing 0.001Packing 0.001Loading 0.240 0.247 0.112 0.600Unloading 0.147 0.247 0.123 0.424 0.105 0.015
DistributionHauling 0.020 0.010 0.545Cleaning 0.140 0.077 0.228 0.029 0.010Sorting 0.150 0.106 0.261 0.010Weighing 0.170 0.099 0.267 0.234 0.010Packing 0.080 0.106 0.262 0.010Loading 0.196 0.004 0.080Unloading 0.196 0.004 0.030
Salaries & wages 0.740 0.805 0.768 0.262 0.399
TOTAL 1.93 1.57 1.47 3.02 1.98 0.71
Table12b. ONION: Labor costs by marketing activity/practice, selected demand areas, Philippines, 2006
Cagayan de Oro City
Davao CityMarketing Activity
peso per kilogram
Metro Manila
Naga City
Legaspi City
Cebu City
29 40
LAND TENURE ILOCOS NORTE PANGASINAN NUEVA
ECIJA TOTAL
Owned 11 12 14 37 Tenanted 8 3 1 12 Leased 5 1 6 Held under CLT 1 1 2 Contract grower 1 1 Rent free 2 2
TOTAL 20 20 20 60
Table 3. ONION: Number of farmer-respondents by tenure status, selected provinces, Philippines, 2006
PROVINCE SINGLE PROPRIETORSHIP
PARTNERSHIP TOTAL
SUPPLY AREASILOCOS NORTE 13 13PANGASINAN 23 23NUEVA ECIJA 28 1 29
DEMAND AREASMETRO MANILA 22 22NAGA CITY 9 9LEGASPI CITY 15 15CEBU CITY 18 18CAGAYAN DE ORO CITY 18 18DAVAO CITY 14 14
TOTAL 160 1 161
Table 4. ONION: Number of trader-respondents, by type of ownership, selected provinces, Philippines, 2006
MARKETING COSTS STRUCTURE:
O N I O N
41 28
IRA-
LD/
R
A-LD
/
PA-L
D/
M
A-LD
/
BA-
LD
IRA-
MD
/ R
A-M
D/
PA
-MD
/
MA-
MD
/
BA-
MD
IRA-
SD/
R
A-SD
/
PA-S
D/
M
A-SD
/
BA-
SD
ASSE
MB
LER
AGEN
TR
ETAI
LER
SU
PPLY
AR
EAS
ILO
CO
S N
OR
TE20
81
433
PAN
GAS
INAN
2011
41
16
43N
UE
VA
EC
IJA
209
35
66
49
DEM
AND
AR
EAS
MET
RO
MAN
ILA
72
112
22N
AGA
CIT
Y2
25
9LE
GAS
PI C
ITY
63
615
CE
BU
CIT
Y6
1218
CAG
AYAN
DE
OR
O
108
18D
AVAO
CIT
Y3
41
614
TOTA
L60
6214
117
265
221
TOTA
L
TRAD
ER
Tabl
e 2.
ON
ION
: N
umbe
r of r
espo
nden
ts b
y ty
pe o
f mar
ketin
g pa
rtic
ipan
ts, s
elec
ted
prov
ince
s,
PRO
VIN
CE
FAR
MER
Phili
ppin
es, 2
006
ProcurementHauling 0.020 0.067 0.050cleaning 1.500 0.050Sorting 0.020Bundling 0.400 0.050Packing 0.080 0.023Loading 0.080 0.023 0.067Unloading 0.023 0.067
DistributionHauling 0.120 0.067Cleaning 1.489Drying 0.393 0.133Sorting 0.782 0.857Weighing 0.100 0.693Braiding 0.293 0.693Bundling 0.782Packing 0.383 0.693Loading 0.113Unloading 0.004
Salaries & wages 0.036 0.014 0.693
TOTAL 4.46 2.10 0.07 0.40 0.15 2.94
peso per kilogram
Table12c. ONION: Labor costs incurred by marketing participants, by activity, Ilocos Norte, 2006
Farmer RA-LD PA-LD RetailerPA-MD MA-LDMarketing Activity
MARKETING COSTS STRUCTURE:
O N I O N
ProcurementHauling 0.047 0.089 0.071 0.167 0.123 0.457Cleaning 0.086 0.096 0.333Sorting 0.108 0.034 0.156 0.556Weighing 0.029 0.123Packing 0.328 0.166 0.159 0.123Loading 0.048 0.034Unloading 0.047 0.033
DistributionHauling 0.047 0.014 1.000Cleaning 0.006Sorting 0.022 0.023Weighing 0.022 0.006Packing 0.285 0.026 0.123Loading 0.244Unloading 0.032 0.074 0.143Selling
Salaries & wages 0.019 0.032 0.206 0.205 0.596 0.398
TOTAL 0.64 0.83 0.53 0.62 0.82 1.09 2.41
Marketing Activity
Table12d. ONION: Labor costs incurred by marketing participants, by activity, Pangasinan, 2006
peso per kilogramPA-MD MA-LD BA-LDFarmer IRA-LD IRA-MD Retailer
27 42
PROVINCE FARMER TRADER TOTAL
SUPPLY AREASILOCOS NORTE 20 13 33PANGASINAN 20 23 43NUEVA ECIJA 20 29 49
DEMAND AREASMETRO MANILA 22 22NAGA CITY 9 9LEGASPI CITY 15 15CEBU CITY 18 18CAGAYAN DE ORO CITY 18 18DAVAO CITY 14 14
TOTAL 60 161 221
Table 1. ONION: Number of respondents, selected provinces, Philippines, 2006
MARKETING COSTS STRUCTURE:
O N I O N
43 26
ProcurementCleaning 0.350 0.160 Sorting 0.300 0.160 Weighing 0.250 Packing 0.220 0.250 0.070 Loading 0.325 0.240 0.180 0.085 Unloading 0.325 0.150 0.085
DistributionHauling 0.080 0.090 0.160 0.210 0.170 Cutting 0.120 Cleaning 0.070 0.170 0.260 0.260 0.160 Drying 0.230 Sorting 0.160 0.180 0.120 0.210 0.160 Tagging 0.070 Weighing 0.070 0.140 0.080 0.260 0.070 0.150 Packing 0.160 0.140 0.060 0.210 0.160 Loading 0.050 0.090 0.080 0.075 0.150 Unloading 0.160 0.070 0.075 0.120 0.040
Salaries & wages 0.130 0.052 0.080 0.160 0.710
TOTAL 1.07 2.14 1.88 0.15 1.51 0.07 1.87 0.88
IRA-LD PA-LD RetailerMarketing Activitypeso per kilogram
PA-MD MA-SD BA-SD AssemblerFarmer
Table 12e. ONION: Labor costs incurred by marketing participants by activity, Nueva Ecija, 2006
MARKETING COSTS STRUCTURE:
O N I O N
ANNEXES
25 44
ProcurementHauling 0.276Loading 0.259 0.234Unloading 0.259 0.234
Salaries & wages 0.687 0.923
TOTAL 1.21 0.47 1.20
peso per kilogram
Table 12g. ONION: Labor costs incurred by marketing participants, by activity, Naga City, 2006
IRA-LD IRA-MD RetailerMarketing Activity
ProcurementHauling 0.200 0.320 0.160 0.310Unloading 0.070 0.150 0.220Loading 0.170 0.150 0.160 0.480
DistributionHauling 0.010 0.020 0.030Cleaning 0.110 0.020 0.100 0.330Sorting 0.100 0.020 0.100 0.380Weighing 0.100 0.090 0.100 0.390Packing 0.020 0.100 0.120
Salaries & wages 0.110 0.200 1.670
Total 0.76 0.90 0.92 3.93
Table12d. ONION: Labor costs incurred by marketing activity, Metro Manila, 2006
peso per kilogramIRA-LD MA-SD Agent RetailerMarketing Activity
Table 12f. ONION: Labor costs incurred by marketing participants, by activity, Metro Manila, 2006
MARKETING COSTS STRUCTURE:
O N I O N
45 24
ProcurementHauling 0.109 0.083 0.692 Loading 0.135 0.182 0.018 Unloading 0.123 0.120 0.125
DistributionCleaning 0.099 0.056 Weighing 0.099
Salaries & wages 0.768
Total 1.33 0.44 0.84
peso per kilogram
Table 12h. ONION: Labor costs incurred by marketing participants, by activity, Legaspi City, 2006
IRA-LD IRA-SD RetailerMarketing Activity
ProcurementHauling 0.577Loading 0.389 0.811Unloading 0.205 0.642
DistributionCleaning 0.048 0.407Sorting 0.048 0.164Weighing 0.048 0.485Packing 0.048 0.164Loading 0.196Unloading 0.196
Salaries & wages 0.491 0.954
TOTAL 1.67 4.20
Table 12i. ONION: Labor costs incurred by marketing participants, by activity, Cebu City, 2006
peso per kilogram
IRA-LD RetailerMarketing Activity
MARKETING COSTS STRUCTURE:
O N I O N
Partnership – type of business ownership where capital is shared and managed by two to five persons with the intention of sharing profit.
Pick-up – mode of procurement and or distribution wherein the buyer goes to
the supplier to buy the commodity. Retailer – type of trader who sources his/her stock either directly from the
farmer or from distributor and sells directly to consumers. Self-financed – source of capital where the operator or trader used his own
fund to finance onion marketing operations. Single proprietorship – business is owned solely by farmer or trader. Sorting – classifying or grading of onion according to size, quality and
freshness. Supply areas – top three onion producing provinces in the country in terms of
quantity produced. Unloading – carrying the sacked or bundled onion outside the vehicle.
23 46
ProcurementHauling 0.001 0.926Cleaning 0.001Sorting 0.001Weighing 0.001Packing 0.001Unloading 0.001 0.208
DistributionHauling 0.010Cleaning 0.029Sorting 0.083 0.439Weighing 0.029 0.439Packing 0.083 0.440Loading 0.004Unloading 0.004
Salaries & wages 0.167 1.048
TOTAL 0.40 2.37a/ less than 0.001
Table 12j. ONION: Labor costs incurred by marketing participants, by activity, Cagayan de Oro City, 2006
peso per kilogramIRA-LD RetailerMarketing Activity
MARKETING COSTS STRUCTURE:
O N I O N
services to his/her buyers than to his/her suppliers. They can be classified according to the relative volume of commodities as follows:
a) Small Distributor (SD) – handles a small volume of commodity;
sells to retailers within the same market; may sell to several small eateries.
b) Medium Distributor (MD) – sells larger volume than small
distributor; sell to trading coming from other markets in the province; may sell to few institutional buyers (hotel, restaurants, hospital, military camp).
c) Large Distributor (LD) – handles the largest volume among the
three types of distributors; usually sell to traders from other markets within and outside the province; may sell to several institutional buyers.
Handling – carrying onion from one place to another, which composed of
loading and unloading. Hauling – bringing the harvest from the farm to the first point of sale. Moving
the commodity from the farm to the trading or bagsakan areas. Loading – carrying onion inside the vehicle. Marketing channels – refers 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.
Market margins – difference between the value of a product at one stage and
the value of the same product at another stage.
47 22
ProcurementUnloading 0.010 0.020
DistributionHauling 0.010 1.080 Cleaning 0.010 Sorting 0.010 Weihging 0.010 Packing 0.010 Loading 0.010 0.150 Unloading 0.010 0.050
TOTAL 0.08 0.07 0.15 1.08
Retailer
Table12i. ONION: Labor costs incurred by marketing activity, by province, Davao City, 2006
peso per kilogramIRA-LD BA-MD BA-SDMarketing Activity
Table 12k. ONION: Labor costs incurred by marketing participants, by activity, Davao City, 2006
MARKETING COSTS STRUCTURE:
O N I O N
Definition of Terms Assembler – procures onion from farmers and traders in the supply areas. These types of traders are classified according to their area of procurement.
a) Barangay Assembler (BA) – procures within the barangay. b) Municipal Assembler (MA) – procures from two or more barangays
within the municipality c) Provincial Assembler (PA) – procures from two or more
municipalities within the province d) Regional Assembler (RA) – procures from two or more province
within the region. e) Interregional Assembler (IRA) – procures from two or more regions.
Assembler – Distributor – uses about the same effort and resources in procuring and selling a commodity; may finances farmers and traders in supply areas and has agents responsible for procurement; sells commodities to other traders. The following combinations were identified in the study:
a) Barangay Assembler – Small Distributor (BAS-SD) b) Municipal Assembler – Medium Distributor (MA-MD) c) Provincial Assembler – Small Distributor (PA-SD) d) Provincial Assembler – Medium Distributor (PA-MD) e) Provincial Assembler – Large Distributor (PA-LD)
Delivered – mode of procurement and or distribution wherein the supplier go to
the buyer to sell the commodity. Demand areas – provinces/areas where most of the onion produced in the
supply areas were sold or brought. Distributor – sells commodities to other traders and consumers. Since his/her
function is primarily to sell than to procure, he/she provides more services to his/her bu yers than to his/her suppliers. They can be
21 48
Ilocos Norte Pangasinan Nueva Ecija
Vehicle rental
Procurement 0.859 0.536 0.541 Distribution 1.095 0.212 0.418
Private vehicle
Gas & oil 0.618 0.263 0.225
TOTAL 2.57 1.01 1.18
peso per kilogram
Table 13a. ONION: Transportation costs by item, selected supply provinces, Philippines, 2006
Item
Vehicle rental
Procurement 1.940 2.778 2.396 1.624 0.272 1.403 Distribution 0.460 2.349
Private vehicle
Gas & oil 0.505 3.194 1.498 0.034 0.070 0.030
TOTAL 2.91 5.97 3.89 1.66 2.69 1.43
Itempeso per kilogram
Table 13b. ONION: Transportation costs by item, selected demand areas, Philippines, 2006
Naga City
Legaspi City
Cebu City
Cagayan de Oro City
Davao City
Metro Manila
MARKETING COSTS STRUCTURE:
O N I O N
4920
Source: Annex Table 19b
Table 19b. ONION: Percentage distribution of trader-respondents, by problems encountered, selected areas, 2006
Problems Ilocos Norte Pangasinan Nueva
Ecija Metro Manila
Naga City
Legaspi City
Cebu City
Cagayan de Oro City
Davao City
Competition with other traders 8 14 10 18 22 20 11 11 14
Shrinkage and spoilage of commodity
15 9 3 9 22 7 11 11 21
Low quality of products traded 8 9 3 9 11 7 6 11 7
Price fluctuation 4 5 11 7 17 11 7
Bad debts 4 3 5 11
Stealing 8 4 3 11 20 High cost of securing business license
4 3 11 7
No problem 61 52 75 54 32 55 56 51
Total 100 100 100 100 100 100 100 100 100
Vehicle rental
Procurement 0.640 0.267 0.703 Distribution 0.203 0.221
Private vehicle
Gas & oil 0.012 0.232 0.664 0.306 0.026 0.641 0.007 0.217
TOTAL 0.22 1.09 0.66 0.31 0.29 0.64 0.01 0.92
Table 13d. ONION: Transportation costs incurred by marketing participants, by item, Pangasinan, 2006
Itempeso per kilogram
PA-MD MA-LD BA-LD AgentFarmer IRA-LD IRA-MD Retailer
Vehicle rental
Procurement 0.110 0.511 1.563 1.250 Distribution 0.411 0.998 1.875
Private vehicle
Gas & oil 0.948 0.288
TOTAL 1.36 0.40 1.51 3.44 1.25
Table 13a. ONION: Transportation costs incurred by marketing participants, by item, Ilocos Norte, 2006
peso per kilogramPA-LD MA-LDFarmer RA-LD RetailerItem
Table 17b. ONION: Percent distribution of trader-respondents, by problems encountered, selected demand areas, Philippines, 2006
Table 13c. ONION: Transportation costs incurred by marketing participants, by item, Ilocos Norte, 2006
MARKETING COSTS STRUCTURE:
O N I O N
margin of P11.02 per kilogram after deducting the costs incurred in production and marketing at P11.61 and P2.37, respectively. Traders in the province recorded net margins ranging from P0.26 to P1.75 per kilogram, on the average. Interregional Assembler got the highest net margin at P1.74 while Barangay Assembler got the lowest at P0.26 per kilogram.
F. Marketing Problems Commonly Encountered by the Respondents
The common
problems cited by farmer-respondents in Ilocos Norte were low price received, weak demand for onion, stealing, price fluctuation and bad debts.
Seventy percent
(70%) of farmer-respondents in Nueva Ecija cited the low price received due to the presence of imported onion.
In Pangasinan,
farmers were problematic on the low prices they received during peak seasons and on the difficulty in directly selling to Divisoria.
For trader-respondents, the common problems cited were: competition
with other traders, shrinkage and spoilage of the commodity. Some trader-respondents also mentioned the low quality of onion being traded. Other problems identified were bad debts, stealing and high cost of securing a business license.
19 50
Table 17a. ONION: Percentage distribution of farmer-respondents, by problems encountered, selected provinces, Philippines, 2006
Problems Ilocos Norte
Panga-sinan
Nueva Ecija
Low price received due to imported onion 10 5 70
Low price received during harvest time 10 25
Difficulty in selling directly to Manila (Divisoria) 10
Shrinkage of the commodity 5 5 5
Weak demand when buyer have voluminous stocks in their bodegas 5 5 5
Stealing 5 5
Price fluctuation 10 5 10
Bad debts 5 5 5
No problems 50 35 5
Total 100 100 100 Source: Annex Table 19a
Vehicle rental
Procurement 0.430 0.330 0.870 0.640 Distribution 0.080 0.660 0.620 1.470 0.540
Private vehicle
Gas & oil 0.100 0.350
TOTAL 0.08 1.09 1.05 2.34 1.53
peso per kilogram
Table 13e. ONION: Transportation costs incurred by marketing participants, by item, Nueva Ecija, 2006
MA-SDFarmer IRA-LD PA-LD AssemblerItem
Vehicle rental
Procurement 1.940 Distribution 0.460
Private vehicle
Gas & oil 0.810 0.200
TOTAL 0.81 0.66 1.94
peso per kilogramRetailer
Table 13f. ONION: Transportation costs incurred by marketing participants, by item, Metro Manila, 2006
IRA-LD AgentItem
Table 17a. ONION: Percent distribution of farmer-respondents by problems encountered, selected supply provinces, Philippines, 2006
MARKETING COSTS STRUCTURE:
O N I O N
Among the trader-respondents, Provincial Assembler-Medium Distributor had the highest net margin at P 9.35 per kilogram. While the retailers netted an amount of P5.21, PA-LD, RA-LD, MA-LD, garnered P2.61, P1.16 and P1.09, respectively.
b. Pangasinan
As shown in Table 13, average cost of producing one kilogram of onion in Pangasinan was P10.25. When this amount and the total marketing cost of P2.88 were subtracted from the farmgate price of P28.00, farmers realized a net margin of P14.87. RA-LD’s margin was P1.10. IRA-MD’s at P6.28, while retailers had P5.98 per kilogram. Other marketing participants like PA-MD, MA-LD, BA had net margins ranging from P3.16 to P3.27 per kilogram. Agent had the lowest net margin at less than one peso (P0.98) per kilogram. c. Nueva Ecija The average price of onion at the farm was P25.00 per kilogram. Farmers realized a net margin of P11.02 per
51 18
Source: Annex Table 18
Table 14. ONION: Marketing costs and margins, Ilocos Norte, 2006 (peso per kilogram)
Prices Margin Item Buying Selling
Total Marketing
Cost Gross Net FARMER 30.00 13.60 16.91 3.31 RA-LD 30.00 35.00 3.71 4.87 1.16 PA-LD 30.00 45.00 2.39 5.00 2.61 PA-MD 30.00 35.00 0.65 10.00 9.35 MA-LD 30.00 35.00 3.92 5.00 1.08 RETAILER 40.00 56.00 8.79 14.00 5.21
Source: Annex Table 18
Table 15. ONION: Marketing costs and margins, Pangasinan, 2006 (peso per kilogram)
Prices Margin Item Buying Selling
Total Marketing
Cost Gross Net FARMER 28.00 2.88 17.75 14.87 IRA-LD 30.00 39.00 7.90 9.00 1.10 IRA-MD 32.00 40.00 1.72 8.00 6.28 PA-MD 33.00 39.00 2.84 6.00 3.16 MA-LD 35.00 40.00 1.22 5.00 3.78 BA-LD 30.00 35.00 1.73 5.00 3.27 AGENT 34.00 35.00 0.02 1.00 0.98 RETAILER 41.00 51.00 4.02 10.00 5.98
Table 16. ONION; Marketing costs and margins, Nueva Ecija, 2006 (peso per kilogram)
Prices Margin Item Buying Selling
Total Marketing
Cost Gross Net Farmer 25.00 2.37 13.39 11.02 Assembler 26.00 32.00 4.97 6.00 1.03 IRA-LD 26.00 32.00 4.26 6.00 1.74 PA-LD 32.00 37.00 4.44 5.00 0.56 PA-MD 35.00 37.00 1.08 2.00 0.92 BA-MD 37.00 38.00 0.03 1.00 0.97 MA-SD 38.00 44.00 5.32 6.00 0.68 BA-SD 44.00 45.00 0.74 1.00 0.26 Retailer 45.00 50.00 3.25 5.00 1.75
Source: Annex Table 18
Vehicle rental
Procurement 2.11 3.07 2.00
Private vehicle
Gas & oil 1.50
TOTAL 3.61 3.07 2.00
Table 13h. ONION: Transportation costs incurred by marketing participants, by item, Legaspi City, 2006
peso per kilogramIRA-LD IRA-SD RetailerItem
Vehicle rental
Procurement 2.778
Private vehicle
Gas & oil 3.017 3.370
TOTAL 3.02 3.37 2.78
Table 13e. ONION: Transportation costs incurred by marketing participants, by item, Naga City, 2006
peso per kilogramIRA-LD IRA-MD RetailerItem
Vehicle rental
Procurement 1.624
Private vehicle
Gas & oil 0.026 0.041
TOTAL 1.65 0.04
Item
Table 13g. ONION: Transportation costs incurred by marketing participants, by item, Cebu City, 2006
peso per kilogramIRA-LD Retailer
Table 14. ONION: Marketing costs and margin of marketing participants, Ilocos Norte, 2006
(peso per kilogram)
Table 15. ONION: Marketing costs and margin of marketing participants, Pangasinan, 2006
(peso per kilogram)
Table 16. ONION: Marketing costs and margin of marketing participants, Nueva Ecija, 2006
(peso per kilogram)
Table 13g. ONION: Transportation costs incurred by marketing participants, by item, Naga City, 2006
Table 13i. ONION: Transportation costs incurred by marketing participants, by item, Cebu City, 2006
MARKETING COSTS STRUCTURE:
O N I O N
e. Cagayan de Oro In Cagayan de Oro City traders spent an average of P9.56 per kilogram in marketing onion. The imputed cost of P3.03 per kilogram represented the biggest portion of the total cost at 35%. Expenses on transportation ranked second at 28% (P2.69). Shares for labor costs, other operating costs and materials were at 21%, 13% and 3%, respectively. f. Davao City In Davao City, an average of P3.30 was spent by the respondent in marketing onion. About 43% (P1.43) of this were spent on transportation. Other operating expenses accounted for 30% (P0.98). Labor cost which were represented by P0.71 were 22% of the total cost. About four percent (P0.14) were spent on imputed cost and one percent (P0.03) on materials used.
2. Marketing Margins
a. Ilocos Norte
The farmers sold a kilogram of onion at P30.00, and spent a total amount of P13.09 per kilogram for production and P13.60 in marketing. A net margin of P3.31 per kilogram was realized. Among the trader-respondents, Provincial Assembler-Medium
Distributor
17 52
Fi g u r e 2 5 . P e r c e n t a g e d i s t r i b u t i o n o f m a r k e t i n g c o s t s , b y c o s t c o m p o n e n t s ,
C a g a y a n d e Or o C i t y , 2 0 0 6
Imput e d Cost35%
Labor21%
Tra nspor-t a t ion
28%
Ma t e ria l 3%
Ot he r Ope ra t ing
13%Source: A nnex Tab le
Fi g u r e 2 6 . P e r c e n t a g e d i s t r i b u t i o n o f m a r k e t i n g c o s t s , b y c o s t c o m p o n e n t s ,
D a v a o C i t y , 2 0 0 6
La bor22%
Transport a t ion 43%
Ot he r Ope ra t ing
30%
Ma t e ria l 1%
Imput e d Cost4%
Source: A nnex Tab le 17
Source: Costs and Returns Survey (CRS)
Vehicle rental
Procurement 2.370 0.080 2.100 1.060
Private vehicle
Gas & oil 0.030
TOTAL 2.37 0.08 2.10 1.06
Table 13k. ONION: Transportation costs incurred by marketing participants, by item, Davao City, 2006
Retailerpeso per kilogram
IRA-LD BA-MD BA-SDItem
Vehicle rental
Procurement 0.103 0.441 Distribution 2.349
Private vehicle
Gas & oil 0.042 0.097
TOTAL 2.45 0.44
Table 12h. ONION: Transportation costs incurred by marketing participants, by activity, Cagayan de Oro City, 2006
peso per kilogramIRA-LD RetailerItem
Figure 25. Percent distribution of marketing costs of onion, by cost component, Cagayan de Oro City,
2006
Figure 26. Percent distribution of marketing costs of onion, by cost component, Davao City, 2006
Imputed Other Costs Labor
Source: Annex Table 17
Source: Annex Table 17
Table 13. ONION: Cost of production, selected supply provinces, 2006 (peso per kilogram)
Ilocos Norte Pangasinan Nueva Ecija
13.09 10.25
11.61
Table 13j. ONION: Transportation costs incurred by marketing participants, by item, Cagayan de Oro City, 2006
MARKETING COSTS STRUCTURE:
O N I O N
b. Naga City Among the six demand areas, Naga City posted the highest average marketing cost at P12.98 per kilogram. The cost of transportation accounted for 47%, while other operating costs and imputed costs made up 20% each. The costs of labor and materials accounted for 12% and one percent, respectively. c. Legaspi City In Legaspi City onions were sourced from Pangasinan and Nueva Ecija. About P8.99 per kilogram was the average cost in marketing onions. Of this, about 43% went to transportation (P3.89). Other operating expenses were recorded at 26% (P2.35), labor at 16% (P1.47), imputed cost at 13% (P1.14), and cost of materials used at 2% (P0.14). d. Cebu City The supply of onion in Cebu came from Luzon for which traders spent an average of P8.63 per kilogram. About 35% of the total cost, was on labor of P3.02 per kilogram. Imputed cost which consist of 23% (P2.01) of all costs. Other operating costs were 22% of the total costs. Transportation shared 19% while the cost of materials accounted for one percent.
53 16
Fi g u r e 2 2 . P e r c e n t a g e d i s t r i b u t i o n o f m a r k e t i n g c o s t s , b y c o s t c o m p o n e n t s ,
N a g a C i t y 2 0 0 6 Imput e d
Cost20%
La bor12%
Tra nsport a t ion 47%
Ot he r Ope ra t ing
20% Ma t e ria ls1%
So urce: A nnex Tab le 17
Figure 23 . Percentage distribution of m arketing cost, by cost com ponent,
L egaspi C ity , 2006
O ther O perating
26%
Im puted C ost13%
Labor16%
Transpor-tation 43%
M aterial 2%
Source: Annex Table 17
Fi g u r e 2 4 . P e r c e n t a g e d i s t r i b u t i o n o f m a r k e t i n g c o s t s , b y c o s t c o m p o n e n t s ,
C e b u C i t y , 2 0 0 6
Imput e d Cost23%
La bor35%
Tra nspor-t a t ion
19%Ma t e ria l 1%
Ot he r Ope ra t ing
22%
S o urce: A nnex Tab le 17
Item
red bag 0.207 plastic bag 0.008 0.107 0.091 0.012 0.102 0.030 basket 0.014 0.006 bilao 0.001 0.005 0.001 trapal 0.052 wooden box 0.004
TOTAL 0.01 0.13 0.14 0.02 0.31 0.03
peso per kilogram
Table 14b. ONION: Cost of materials by item, selected demand areas, Philippines, 2006
Metro Manila
Naga City
Legaspi City
Cebu City
Cagayan de Oro City
Davao City
Figure 22. Percent distribution of marketing costs of onion, by cost component, Naga City, 2006
Figure 23. Percent distribution of marketing costs of onion, by cost component, Legaspi City, 2006
Figure 24. Percent distribution of marketing costs of onion, by cost component, Cebu City, 2006
Source: Annex Table 17
Ilocos Norte Pangasinan Nueva
Ecija
red bag 0.118 0.353 0.587 twine 0.067 0.006 plastic bag 0.245 0.072 0.030 kaing 0.005 basket a/winnow "bilao" 0.002 basin 0.002 pail 0.002 trapal 0.002 sack 0.197 bamboo strips 0.078
TOTAL 0.64 0.51 0.62
peso per kilogram
Item
Table 14a . ONION: Cost of materia ls by item, se lected supply provinces, Philippines, 2006
a/ less than 0.001
MARKETING COSTS STRUCTURE:
O N I O N
b. Pangasinan
Farmers and traders in Pangasinan recorded an average marketing cost of P11.12 per kilogram. Half of this (54%) accounted for other operating expenses. The shares of other cost components were: labor cost (21%), imputed cost (12%), transportation (9%) and materials (4%). c. Nueva Ecija
In Nueva Ecija, an average of P7.62 per kilogram was spent by the respondents in the marketing of onions. About 40% were spent for labor, 26% for imputed items and 14% for other operating expenses. The costs of transportation and materials shared 13% and 7%, respectively.
Demand Areas
a. Metro Manila Traders in Metro Manila spent an average of P6.87 per kilogram in onion marketing. About 43% were spent for transportation, 28% for labor, and 22% for other operating expenses. About 7 percent represented imputed cost of marketing.
15 54
Fi g u r e 19 . P e r c e n t a g e d i s t r i b u t i o n o f m a r k e t i n g c o s t s , b y c o s t c o m p o n e n t ,
P a n g a s i n a n , 2 0 0 6
Imput e d Cost12%
La bor21%
Tra nspor-t a t ion
11%
Ma t e r ia ls 4%
Ot he r Ope ra t ing
52%
S ource: A nnex Tab le 17
Fi g u r e 2 0 . P e r c e n t a g e d i s t r i b u t i o n o f m a r k e t i n g c o s t s , b y c o s t c o m p o n e n t s ,
N u e v a Ec i ja , 2 0 0 6
Imput e d Cost26%
La bor40%
Tra nspor-t a t ion
13%Ma t e ria l
7%
Ot he r Ope ra t ing
14%
S ource: A nnex Tab le 17
Fi g u r e 2 1. P e rc e n t a g e d i s t r i b u t i o n o f m a rk e t i n g c o s t s , b y c o s t c o m p o n e n t s ,
Me t ro Ma n i l a , 2 0 0 6
Labor28%
Transport a t ion 43%
Mat e ria ls0%
Ot he r Ope ra t ing
22%
Imput ed Cost7%
7
So urce: A nnex Tab le 17
red bag 0.353 twine 0.002 0.002 0.002 0.327 0.001 plastic bag 0.058 0.003 0.155 kaing 0.005 basket a/bilao 0.002 basin 0.002 pail 0.002 trapal 0.002
TOTAL 0.36 0.002 0.002 0.38 0.004 0.16 a/ less than 0.001
Table 14d. ONION: Cost of materials incurred by marketing participants, by item, Pangasinan, 2006
peso per kilogramPA-MD MA-LDFarmer IRA-LD IRA-MD RetailerItem
Farmers RA-LD PA-LD Retailers
Sacks 0.093 0.300 Plastic bag (small) 0.245 Red bag 0.155 0.080 Bamboo strips 0.078
TOTAL 0.33 0.30 0.08 0.25
Table 14a. ONION: Cost of materials incurred by marketing participants, by item, Ilocos Norte, 2006
peso per kilogramItem
Figure 19. Percent distribution of marketing costs of onion, by cost component, Pangasinan, 2006
Figure 20. Percent distribution of marketing costs of onion, by cost component, Nueva Ecija, 2006
Figure 21. Percent distribution of marketing costs of onion, by cost component, Metro Manila, 2006
Table 14c. ONION: Cost of materials incurred by marketing participants, by item, Ilocos Norte, 2006
Transpor -tation 9%
Operating 54%
MARKETING COSTS STRUCTURE:
O N I O N
Plastic bag 0.008 Bilao 0.008 0.001
TOTAL 0.01 0.01 0.00
peso per kilogramItem
Table 14f. ONION: Cost of materials incurred by marketing participants, by item, Metro Manila, 2006
Agent RetailerIRA-LD
Average Marketing Costs
In the supply areas, non-cash costs ranged from P6.77 to P13.82 per kilogram, while cash costs ranged from P0.85 to P3.09 per kilogram. Ilocos Norte got the highest total average cost at P16.91. Pangasinan recorded at P11.31 while Nueva Ecija posted at P7.62 per kilogram.
At the demand areas, non-
cash costs ranged from P3.15 to P10.27 per kilogram. Cash costs ranged from P0.14 to P4.39 per kilogram. The highest average marketing cost was noted in Naga City at P12.90 while the lowest was in Davao City at P3.30 per kilogram.
Figures 18-20 depict the percent distribution of each cost component
for the supply areas while Figures 21-26 describe for the demand areas. Supply Areas
a. Ilocos Norte
Among the supply areas covered, Ilocos Norte incurred the highest marketing cost at P16.91 per kilogram. Labor accounted for 38%, other operating expenses 25%, imputed cost 18%, and transportation cost 15%. The cost of materials shared four percent.
55 14
Source: Annex Table 18
Source: Annex Table 18
IRA-LD IRA-MD Retailer
plastic bag 0.09 0.08 0.16 tiklis/basket 0.01 0.01 winnow " bilao" 0.01 0.00 wooden box 0.00
TOTAL 0.10 0.10 0.16
Table 14g. ONION: Cost of materials incurred by marketing participants, by item, Naga City, 2006
peso per kilogramItem
red bag 0.28 0.23 0.35 0.25 0.33 0.32 twine 0.00 0.01 0.00 twine 0.00 a/ 0.00 plastic bag 0.02 0.01 needle a/
TOTAL 0.28 0.23 0.36 0.25 0.35 0.32 0.01 a/ less than 0.0001
Item
Table 14c. ONION: Cost of materials incurred by marketing participants, by item, Nueva Ecija, 2006
peso per kilogramPA-MD MA-SD AssemblerFarmer IRA-LD PA-LD Retailer
Table 11. ONION: Total marketing costs by major component, selected supply provinces, Philippines, 2006 (peso per kilogra m)
Item Ilocos Norte Pangasinan Nueva Ecija
Non-cash 13.82
10.00 6.77
Cash
3.09
1.31 0.85
TOTAL
16.91
11.31 7.62
Table 12. ONION: Total marketing costs by major component, selected demand areas, Philippines, 2006 (peso per kilogram)
Item Metro Manila
Naga City
Legaspi City
Cebu City
Ca gayan de Oro
City
Davao City
Non-cash 6.36
10.27
7.86
6.61
6.27
3.15
Cash 0.51
2.63
1.56
2.02
4.39
0.14
TOTAL 6.87
12.90
9.42
8.63
10.65
3.30
Figure 18. Percent distribution of marketing
costs of onion, by cost component, Ilocos Norte, 2006
Labor38% Imputed
Cost18%
Other Operating
25%Material s
4%
Transpor-tation 15%
Source: Annex Table 17
Table 14e. ONION: Cost of materials incurred by marketing participants, by item, Nueva Ecija, 2006
MARKETING COSTS STRUCTURE:
O N I O N
At the supply areas, Pangasinan got the highest operating expenses at P5.96 per kilogram. Ilocos Norte followed at P4.15 per kilogram while Nueva Ecija spent P1.30 per kilogram.
At the demand areas,
Naga City and Legaspi City posted average costs of P2.60 and P2.35 per kilogram, respectively. Other cities recorded lower operating costs per kilogram at P1.91 (Cebu); P1.51 (Metro Manila.); P1.28 (Cagayan de Oro) and P0.98 (Davao).
e. Imputed Costs
Ilocos Norte had the highest imputed costs per kilogram among the supply areas at P1.85 for depreciation and P1.24 for unpaid labor. Nueva Ecija ranked next at P2.44 per kilogram, in which P0.36 was for depreciation and P2.08 for unpaid labor. Pangasinan got less than a peso per kilogram for both imputed items.
The cost of
depreciation in the demand areas ranged from P0.04 (Davao City) to P1.07 per kilogram (Naga City). Meanwhile, imputed cost for unpaid labor was lowest in Davao City at P0.11 and highest in Cagayan de Oro City at P2.90 per kilogram.
13 56
Source: Annex Table 15
Source: Annex Table 15
Source: Annex Table 16
Table 9. ONION: Imputed cost, selected supply provinces, Philippines, 2006
(peso per kilogram)
Item Ilocos Norte Pangasinan Nueva
Ecija
Depreciation 1.85 0.69 0.36 Unpaid Labor 1.24 0.62 2.08
TOTAL 3.10 1.31 2.44
Table 10. ONION: Imputed cost, selected demand areas, Philippines, 2006 (peso per kilogram)
Item Metro Manila
Naga City
Legaspi City
Cebu City
Cagayan de Oro
City
Davao City
Depreciation 0.24 1.07 0.26 0.09 0.40 0.04
Unpaid Labor 0.27 1.56 0.88 1.92 2.90 0.11
TOTAL 0.51 2.63 1.14 2.01 3.30 0.14 Source: Annex Table 16
IRA-LD IRA-SD Retailer
plastic bag 0.10 0.08 winnow "bilao" 0.00 trapal 0.05
TOTAL 0.05 0.10 0.08
Table 14h. ONION: Cost of materials incurred by marketing participants, by item, Legaspi City, 2006
peso per kilogramItem
IRA-LD Retailer
Plastic bag 0.11 Red bag 0.21
TOTAL 0.21 0.11
peso per kilogramItem
Table 14j. ONION: Cost of materials incurred by marketing participants, by item, Cagayan de Oro City, 2006
IRA-LD BA-MD BA-SD Retailer
Plastic bag 0.01 0.00 0.09 0.02
TOTAL 0.01 0.001 0.09 0.02
Table 14k. ONION: Cost of materials incurred by marketing participants, by item, Davao City, 2006
peso per kilogramItem
IRA-LD Retailer
plastic bags 0.00 0.02 basket 0.01
TOTAL 0.00 0.03
peso per kilogramItem
Table 14g. ONION: Cost of materials incurred by marketing participants, by item, Cebu City, 2006
Table 7. ONION: Other operating costs, selected supply provinces, Philippines 2006 (peso per kilogram)
Ilocos Norte Pangasinan Nueva Ecija 4.15
5.96 1.30
Table 8. ONION: Other operating costs, selected demand areas, Philippines 2006 (peso per kilogram)
Metro Manila
Naga C ity
Legaspi City
Cebu City
Cagayan de Oro
City Davao City
1.51 2.60
2.35 1.91
1.28 0.98
Table 14i. ONION: Cost of materials incurred by marketing participants, by item, Cebu City, 2006
MARKETING COSTS STRUCTURE:
O N I O N
In using privately owned vehicle, transportation costs of traders in Cebu, Cagayan de Oro and Davao cities amounted to less than P0.10 per kilogram. Naga City, however, posted a relatively high cost for gas and oil at P3.19 per kilogram.
c. Material Costs The common materials used by the respondents in onion trading are red bags, tying materials such as twine and bamboo strips.
The average costs of
materials used in the supply areas ranged from P0.51 in Nueva Ecija to P0.64 per kilogram in Ilocos Norte. In Pangasinan, the cost of materials was P0.51 per kilogram.
At the demand areas,
Cagayan de Oro City had the highest cost of materials at P0.31, followed by Legaspi City and Naga City at P0.14 and P0.13 per kilogram, respectively.
d. Other Operating Costs
Listed in Annex Table 15 are the various operating costs of marketing participants in all provinces covered. Among these costs are rentals, licenses, utility fee, market fees, etc
57 12
Source: Annex Table 14
Table 5. ONION: Materials used, selected supply provinces, Philippines, 2006
(peso per kilogram)
Ilocos Norte Pangasinan Nueva Ecija
0.64 0.51 0.62
Table 4. ONION: Transportation costs, selected demand areas, Philippines, 2006 (peso per kilogram)
Item Metro Manila
Naga City
Legaspi City
Cebu City
Cagayan de Oro
City
Davao City
Vehicle rental
Procurement 1.94 2.78 2.40 1.62 2.62 1.40
Distribution 0.46
Private vehicle
Gas & oil 0.51 3.19 1.50 0.03 0.07 0.03 Source: Annex Table 13
Source: Annex Table 14
Ilocos Norte Pangasinan Nueva Ecija
Entrance fee 0.066 0.242 0.001 Market fee/ticket 0.071 0.040 0.118 Stall rental/fee 1.066 0.010 0.177 Parking fee 0.007 Commission fee 0.100 0.382 0.480 WS* calibration fee 0.024 0.001 0.001 Storage fee 4.867 Business Permit 0.040 0.023 0.223 Mayor's permit 0.467 Cell card 0.094 0.025 0.019 Telephone 0.017 0.020 Electricity 0.131 0.040 0.081 Water 0.014 0.001 Wastage 0.300 Shrinkage 1.000 0.181 a/Rrepair & maintenance 0.520 Meals & snacks 0.250 0.129 0.106 Others** 0.004 0.067
TOTAL 4.15 5.96 1.30 * Weighing scale** include toll fee, goodwill fee & tonga/ less than 0.001
peso per kilogram
Table 15a. ONION: Other operating costs, by item, selected supply provinces, Philippines, 2006
Item
Table 6. ONION: Materials used, selected demand areas, Philippines, 2006 (peso per kilogram)
Metro Manila
Naga City
Legaspi City
Cebu City
Cagayan de Oro
City Davao City
0.01
0.13
0.14
0.02
0.31
0.03
MARKETING COSTS STRUCTURE:
O N I O N
Entrance fee 0.003 0.005 Market fee/ticket 0.491 0.417 0.016 0.010 Stall rental/fee 0.090 0.080 0.439 0.114 0.289 0.049 Parking fee 0.042 0.017 Agent commission/fee 0.400 0.370 0.014 WS* calibration fee 0.004 0.001 0.001 a/Warehouse fee 0.050 Business Permit 0.016 0.172 0.060 0.035 0.013 0.004 Mayor's permit 0.010 0.403 Cell card 0.001 0.084 0.129 0.010 Telephone 0.009 Electricity 0.024 0.285 0.074 0.055 0.006 0.014 Water 0.003 0.058 0.074 0.023 0.003 Meals & snacks 0.167 0.573 0.501 0.438 0.084 0.040 Wastage 0.040 0.862 0.812 Shrinkage 0.717 0.222 0.150 Repair & maintenance 0.051 Others** 0.042 0.894 0.277 0.300
TOTAL 1.51 2.60 2.35 1.91 1.28 0.98 * Weighing scale** include garbage fee, health certification fee, inspective fee, renew sticker, sign board fee, tax clearance fee, zoning fee, firesafety fee, business registration plate fee, building inspectiion feea/ less than 0.001
Item
Table 15b. ONION: Other operating costs, by item, selected demand areas, Philippines, 2006
peso per kilogram
Cagayan de Oro City
Davao City
Metro Manila
Naga City
Legaspi City
Cebu City
averages of P3.67 and P2.34, respectively. The costs of labor in the procurement of onions ranged from P1.00 to P1.63 per kilogram while distribution entailed costs ranging from P1.34 to P5.24 per kilogram.
At the demand areas, Cebu City had the highest labor cost at P3.02, followed by Cagayan de Oro City at P1.98 and Metro Manila at P1.93 per kilogram. On the other hand, Naga City posted an average labor cost of P1.58; Legaspi City at P1.47 and Davao City at P0.72 per kilogram. Labor costs in procurement ranged from P0.02 to P1.66 per kilogram, while, in distribution, the costs ranged from P0.70 to P1.36 per kilogram.
b. Transportation Costs
Transportation costs include all expenses incurred in moving the products from one place to another.
Ilocos Norte came up with the
highest transport costs among the supply provinces. This amounted to P1.96 if the vehicle used was rented and P0.62 per kilogram for gas and oil if private vehicle was used. Pangasinan recorded an average transportation costs at P 0.75 per kilogram for rentals and P0.26 for gas and oil. In Nueva Ecija, on the other hand, posted P0.96 for rental and P0.23 for gas and oil for owned vehicles.
From the demand areas, Naga, Legaspi and Cagayan de Oro cities
recorded more than P2. 00 per kilogram for renting vehicles in procurement.
11 58
Source: Annex Table 12
Table 2. ONION: Labor costs by marketing activity, selected demand areas, Philippines, 2006
(peso per kilogram)
Activity Metro Manila
Naga City
Legaspi City
Cebu City
Cagayan de Oro
City
Davao City
Procurement 0.63 0.77 0.53 1.66 0.78 0.02
Distribution 1.30 0.81 0.94 1.36 1.20 0.70
TOTAL 1.93 1.58 1.47 3.02 1.98 0.72
Table 3. ONION: Transportation costs, selected supply provinces, Philippines, 2006
(peso per kilogram)
Item Ilocos Norte Pangasinan Nueva Ecija
Vehicle rental Procurement 0.86 0.54 0.54 Distribution 1.10 0.21 0.42
Private vehicle Gas & oil 0.62 0.26 0.23
Source: Annex Table 13
MARKETING COSTS STRUCTURE:
O N I O N
Farmers RA-LD PA-LD PA-MD MA-LD Retailers
Entrance fee 0.108 0.023 Market fee 0.082 0.041 0.091 Stall rental/fee 1.066 Commision fee 0.100 WS* calibration fee 0.019 0.004 0.048 Business Permit 0.006 0.053 0.062 Mayor's permit 0.467 Cell card 0.060 0.001 0.055 0.259 Telephone 0.017 Electricity 0.131 Wastage 0.300 Shrinkage 1.000 Repair and maintenance 1.000 0.039 Meals & snacks 0.158 0.024 0.455 0.233 0.382
TOTAL 1.41 0.51 0.71 0.23 0.00 3.42 * Weighing scale
peso per kilogram
Table 15c. ONION: Other operating costs, incurred by marketing participants, by item, Ilocos Norte, 2006
Item
b. Terms of Payment Majority (93%) of the respondents sold their products on cash basis. About five percent (5%) practiced a combination of cash and credit. One percent (1%) disposed their products on credit. Two respondents from the supply area stated that they received a kilogram of rice in exchange for one kilogram of onions.
E. Marketing Costs and Margins 1. Marketing Costs
Moving onions from the supply areas to consumption areas entails a number of cost items. The costs incurred by identified marketing participant vary depending on the extent of their marketing operations. The succeeding topics discuss the major components of marketing costs for labor, transportation, materials, other operating expenses and imputed costs.
a. Labor Costs Labor costs are expenses incurred or paid for the services rendered by the workers during the procurement and distribution of the products. The identified labor expenses include hauling, cleaning, sorting, and bundling, weighing, packing and loading and unloading both in supply and demand areas. Among the supply areas,
Ilocos Norte recorded the highest labor cost at P6.47 per kilogram. Nueva Ecija and Pangasinan spent
f P3 6 d
59 10
F ig ure 17 . P e rc e nt d is tribut io n o f re s po nde nts , by te rm s o f pa ym e nt , s e le c te d a re a s , P hilippine s , 2 0 0 6
credit1%
barte r1%
bo th 5%
cas h93%
Source: Annex Table 10
Source: Annex Table 12
Table 1. ONION: Labor costs by marketing activity, selected supply provinces, Philippines, 2006
(peso per kilogram)
Activity Ilocos Norte Pangasinan Nueva Ecija
Procurement 1.23 1.03 1.63
Distribution 5.24 1.34 2.04
TOTAL 6.47 2.34 3.67
MARKETING COSTS STRUCTURE:
O N I O N
trader-respondents or 1% practiced both pick-up and delivery as their mode of procurement.
b. Terms of Payment
About 82% of the trader-
respondents reported that they paid their suppliers in cash. Ten percent (10%) said that they opted to pay after one day of transaction and 8% stated that they practiced both cash and credit as terms of payment.
2. Distribution
Traders involved in onion marketing performed their distribution functions with varying modes and terms of payment depending on the market supply and demand situation.
a. Mode of Selling
The buyers commonly picked up their onions from the supply areas as represented by 67% of the respondents. These traders believed that they can be assured of the quality if they pick up the products by themselves. On the other hand, about 30% of the respondents relied on the onions delivered by their suppliers to their stalls, but they believed that this practice could help them establish a “suki” or good customer relationship.
9 60
Figure 14. Percent distribution of respondents, by mode of buying, se lected
areas, Philippines, 2006
both1%delivered
30%
picked-up69%
Source: Annex Table 7
F ig ure 15 . P e rc e nt d is tribut io n o f re s po nde nts , by te rm s o f pa ym e nt ,
s e le c te d pro v inc e s , P hilippine s , 2 0 0 6
cas h82%
credit10%
bo th8%
Source: Annex Table 8
Figure 16. Percent distribution of respondents, by mode of se ll ing, se lected
areas, Philippines, 2006
delivered30%
picked-up67%
both3%
Source: Annex Table 9
Farmer IRA-LD IRA-MD PA-MD MA-LD BA Agent Retailer
Entrance fee 0.056 0.667 0.004 Market fee 0.006 0.037 0.009 0.004 0.146 Stall rental/fee 0.006 0.018 0.005 WS* calibration fee a/ 0.001 a/ 0.001 0.004 Commission fee 0.406 0.370 0.370 Storage fee 4.867 Business Permit 0.006 0.015 0.011 0.063 0.019 Cell card 0.013 0.050 0.035 0.014 0.015 Electricity 0.014 0.019 0.005 0.001 Water 0.014 Shrinkage 0.137 0.226 Meals & snacks 0.064 0.177 0.038 0.017 0.351 Others
goodwill fee 0.004
TOTAL 0.08 5.73 0.47 1.37 0.10 0.00 0.02 0.52 * Weighing scalea/ less than 0.001
Table 15d. ONION: Other operating costs, incurred by marketing participants, by item, Pangasinan, 2006
Item peso per kilogram
MARKETING COSTS STRUCTURE:
O N I O N
traders outside the province and distributed the same to buyers outside the province. They also made use of the storage facilities to reserve surplus onions in anticipation for low supply level during lean seasons.
Onions in Nueva
Ecija passed through a long chain of participants before reaching the consumers, i.e., farmer → agent → ADs → retailer → consumer.
D. Marketing Practices and Functions
In buying and selling onions, farmers and traders performed several functions that add value to the products. The mode of delivery and terms of payment affect somehow the costs incurred in the procurement and distribution of the products. 1. Procurement
In the supply areas, traders procured onion from the producing barangays directly from the farmers especially during harvest season. During lean months or off seasons, traders sourced their supply from other traders who had the capacity to store onions.
a. Mode of Buying
Of the traders interviewed, 69% picked up onions from their suppliers and 30% let their suppliers delivered the products to their stalls. Two trader respondents or 1% practiced both pick up and delivery as their mode
61 8
Figure 13. Marketing Channels for Onion, Nueva Ecija, 2006
FARMER
AGENT BODEGA
ASSEMBLER/ DISTRIBUTOR
RETAILER
CONSUMER
SOP BOP
Farm
erIR
A-LD
PA-L
DPA
-MD
MA-
SDB
A-M
DB
A-SD
Asse
mbl
erR
etai
ler
Entra
nce
fee
0.00
1
Mar
ket f
ee0.
110
Cas
h tic
ket
0.01
0
0.19
0
0.02
0
0.00
4
0.19
0
0.18
0
0.15
0
St
all r
enta
l/fee
0.
040
0.
030
0.
750
0.
010
0.
110
0.
030
0.
270
Park
ing
fee
0.00
3
0.01
0
Com
mis
sion
fee
0.34
0
0.73
0
0.37
0
WS*
cal
ibra
tion
fee
0.00
1
a/Bu
sine
ss P
erm
it0.
211
0.
221
0.
100
0.
086
0.
496
Tele
phon
e0.
020
C
ell c
ard
0.01
0
0.01
0
0.00
5
0.05
0
Elec
trici
ty0.
001
0.
002
0.
240
Wat
era/
0.00
1
Shrin
kage
a/M
eals
& s
nack
s 0.
020
0.
030
0.
010
0.
180
0.
100
0.
370
0.
020
0.
120
Oth
ers
tol
l fee
0.01
0
0.02
0
0.11
0
TOTA
L0.
04
0.
61
1.
03
0.
40
0.
98
0.
01
0.
67
0.
87
1.
39
* W
eigh
ing
scal
ea/
less
than
0.0
01
peso
per
kilo
gram
Tabl
e 15
c. O
NIO
N:
Oth
er o
pera
ting
cost
s, in
curr
ed b
y m
arke
ting
part
icip
ants
, by
item
,
N
ueva
Eci
ja, 2
006
Item
Tabl
e 15
e. O
NIO
N:
Oth
er o
pera
ting
cost
s, in
curr
ed b
y m
arke
ting
part
icip
ants
, by
item
, N
ueva
Eci
ja, 2
006
MARKETING COSTS STRUCTURE:
O N I O N
buyers outside the province. The other linkage involved farmers distributing onions to municipal assemblers to retailers and then to end users. This second linkage, provided the local requirement for onions within the province. 2. Pangasinan During harvest season, about 70% of the volume of onions assembled at the farm by the municipal and provincial assemblers were sold to inter regional assembler-distributor. From this stage, onions were passed to buyers outside the province while some were stored in bodega for anticipation of high price during lean months. All participants supplied onions to retailers, but the most common practice and the longest channel was that of farmer → MA/LD → PA/LD → IRA/LD → retailers → consumer chain.
3. Nueva Ecija
There were various types of assembler-distributors identified as players in onion marketing in Nueva Ecija. It ranged from barangay to interregional assemblers and small to large distributors performing similar trading practices. These traders assembled their onions which were sourced from farmers, agents and traders outside the province and distributed the same to buyers outside the
7 62
Figure 12. Marketing Channels for onion, Pangasinan, 2006
FARMER
MA-LD
PA-MD
IRA-LD IRA-MD
RETAILER
CONSUMER
AGENT
BA
SOP BOP
Storage
Figure 11. Marketing Channels of Onion, Ilocos Norte, 2006
RETAILER
CONSUMER
SOP
BOP
RA-LD MA-LDPA-LD
FARMER
IRA-LD MA-SD AGENT Retailer
Stall rental/fee 0.220 0.040 0.009 WS* calibration fee 0.004 a/ 0.010 a/Commission fee 0.400 Business Permit 0.030 0.002 Mayor's permit 0.010 Cell card 0.001 Electricity 0.070 0.002 0.001 Water 0.003 Wastage 0.040 Shrinkage 0.610 0.820 0.720 Meals & snacks 0.150 0.010 0.340 Others
Garbage fee a/ a/ a/ 0.001 Health certification 0.020 a/ a/Sanitary Permit a/ 0.001 a/ 0.001 Sign board inspection fee a/ 0.001 0.001 a/Fire safety fee a/ 0.060 a/ 0.006 BR** plate fee a/ 0.001 a/ 0.050 Building inspection fee a/ a/
Total 1.36 1.05 0.78 0.45 * Weighing scale**Business Registrationa/less than 0.001
peso per kilogram
Table 15f. ONION: Other operating costs, incurred by marketing participants, by item, Metro Manila, 2006
Item
MARKETING COSTS STRUCTURE:
O N I O N
and Laguna. Supplies of onion were also brought to Metro Manila as a transshipment point from supply provinces to demand areas in the Visayas and Mindanao. Onions from Pangasinan were also reportedly brought to the Bicol region.
3. Nueva Ecija
The major supply
areas of onion in the province were the municipalities of Bongabon, Rizal, Talavera, Pantabangan and the cities of San Jose & Palayan. Most onions produced in the province were traded in the markets of San Jose City, San Leonardo, Cabanatuan City and Sangitan. Large volumes of onion were brought to Metro Manila and to other regions in Luzon, Visayas and Mindanao.
C. Marketing Channels 1. Ilocos Norte
There were two identified linkages in marketing of onion in the province. One which is more prominent was that, from the farm, farmers sold their produce to regional and provincial assemblers who sold out onions to buyers outside the province The other linkage involved farmers distributing
63 6
Bayambang Bagsakan Area Urdaneta Trading Center
Within the province
Metro Manila Batangas, Cavite
Pampanga Bulacan Zambales
Bicol Region Misamis Or. Davao
Figure 9. Geographic Flow of Onion, Pangasinan, , 2006
Bayambang, Baustista San Quintin, Umingan Nueva Ecija
Figure 10. Geographic Flow of Onion, Nuev Ecija,2006
Sangitan P. M Cabanatuan City P.M San Jose P.M. San Leonardo P.M.
Within the provinceMetro Manila,
Benguet, , Cavite , Laguna, La Union,
Albay, Misamis Oriental, South Cotabato Sarangani
Bongabon, Talavera,, Rizal, San Jose City
Pantabangan, Palayan City
Pangasinan Ilocos Sur Ilocos Norte
IRA-LD IRA-SD Retailer
Market fee 0.162 0.913 0.175 Stall rental/fee 0.509 0.584 0.223 Commission fee 0.370 Business Permit 0.013 0.107 Cell card 0.036 0.131 Electricity 0.103 0.046 Water 0.037 Meals & snacks 0.767 0.236 Others
toll gate 0.240 stall repair 0.051 kerosene 0.037
TOTAL 1.47 2.40 0.84
peso per kilogramItem
Table 15h. ONION: Other operating costs, incurred by marketing participants, by item, Legaspi City, 2006
IRA-LD IRA-MD Retailer
Market fee 0.491 Parking fee 0.042 Stall rental/fee 0.029 0.131 WS* calibration fee a/ 0.001 Business permit 0.104 0.240 Electricity 0.481 0.254 0.120 Water 0.058 Meals & snacks 0.569 0.577 Others:
tong 0.125 toll gate fee 0.720 garbage fee 0.049
Total 2.07 1.02 0.90 * Weighing scale
peso per kilogram
Table 15e. ONION: Other operating costs, incurred by marketing participants, by item, Naga City, 2006
Item
Table 15g. ONION: Other operating costs, incurred by marketing participants, by item, Naga City, 2006
a/ less than 0.001
MARKETING COSTS STRUCTURE:
O N I O N
for 11-15 years and 21 years and above, respectively. Fourteen (14%) or 23 respondents were in the business for less than 5 years while 12% or 19 respondents had 16-20 years of experience.
B. Geographic Flow 1. Ilocos Norte
The major onion supply areas in the province were the municipalities of Vintar, Pasuquin, Burgos, Bacarra, and Badoc. Aside from these areas, onion was sourced from nearby municipalities of Ilocos Sur. The main trading centers within the province were the Public Markets of Laoag City and Badoc with Wednesday and Friday as trading days. During these days, farmers and traders within and outside the province meet together for direct buying and selling. Outside destinations included the provinces of Cagayan, Isabela, Pangasinan, Nueva Ecija, and Metro Manila.
2. Pangasinan
The identified top onion producing municipalities in Pangasinan were Bayambang, Bautista, San Quintin and Umingan. From the supply barangays, onions were brought to Bayambang “Bagsakan” situated in front of the town public market. Wholesale transaction was also being done at the Urdaneta City Trading Center. From the trading centers, onions were distributed within the province. Outside destination points included the provinces of Pampanga, Zambales, Nueva Ecija, Bulacan, Batangas, Cavite and Laguna. Supplies of onion were also brought to Metro Manila as a
5 64
Figure 7. Percent distribution of trader-respondents, by years in trading, se lected
provinces, Philippines, 2006
21 & above17%
16-2012%
11-1517%
> 514%
5-1040%
Source: Annex Table 6b
Laoag City Public Market Badoc Public Market
Within the province
Cagayan, Isabela, Pangasinan, Nueva Ecija, Metro Manila
Figure 8. Geographic Flow of Onion, Ilocos Norte, 2006
Vintar, Badoc, Pasuquin, and Bacarra
Ilocos Sur
IRA-LD Retailer
Entrance fee 0.003 Market fee 0.003 0.029 Stall rental/fee 0.053 0.174 Parking fee 0.017 WS* calibration fee 0.001 Business Permit 0.010 0.060 Cell card 0.012 0.247 Electricity 0.055 3.958 Water 0.023 Wastage 0.862 Shrinkage 0.222 Meals & snacks 0.045 0.831
TOTAL 0.20 6.40 * Weighing scale
Table 15i. ONION: Other operating costs, incurred by marketing participants, by item, Cebu City, 2006
peso per kilogramItem
IRA-LD Retailer
Entrance fee 0.005 Stall rental/fee 0.492 0.086 Warehouse fee 0.049 Agent commission 0.014 Business Permit 0.007 0.019 Telephone 0.009 Electricity 0.006 Water 0.003 Wastage 1.066 0.557 Meals & snacks 0.090 0.078
TOTAL 1.74 0.74
peso per kilogramItem
Table 15j. ONION: Other operating costs, incurred by marketing participants, by item, Cagayan de Oro City, 2006
MARKETING COSTS STRUCTURE:
O N I O N
c. Source of Capital. There were two (2) sources of capital identified by the farmer-respondents. Ninety seven percent (97%) used their own capital to finance their operation and three percent (3%) borrowed from relatives.
At the trader level, about 88% or 142 respondents declared that they have their own capital and 12% or 19 respondents used borrowed capital.
d. Years in Farming/Trading. Twenty-two farmer-respondents or 37% were in onion farming for 21 years and above. The rest had been in this venture for 5 –10 years (25%), 16-20 years (23%), and 11 – 15 years (10%). About 5% of the respondents were in onion farming for 5 years.
Forty percent (40%) or 63 trader-respondents were in the business for 5 – 10 years. About 17% each of the trader-respondents were in the business f 11 15 d 21 d
65 4
Figu re 3. Pe rce n t distribu tion of trade rs by type of bu sin e ss own e rsh ip, se le cte d
province s , Ph i l ippine s , 2006
P artner-ship1%
Single P roprie-torship
99%
Source: Annex Table 4
Figure 4. Percent distribution of farmer-respondents by source of capital, se lected
provinces, Philippines, 2006
self financed
97%
borrowed3%
Source: Annex Table 5
Fi g u re 5 . P e rce n t di s tri bu ti o n o f tra de r-re s po n de n ts by s o u rce o f ca pi ta l , s e l e cte d
pro vi n ce s , P h i l i ppi n e s , 2 0 0 6
self f in an ced
8 8 %
bo rro wed 1 2 %
Source: Annex Table 5
F ig ure 6 . P e rc e nt d is t rib ut io n o f f arme r- re s p o nd e nt s , b y ye ars in
f arming , s e le c t e d p ro v inc e s , P hil ip p ine s , 2 0 0 6
5 - 1025%
> 55%
21 & above37%
11 - 1510%
16 - 2023%
Source: Annex Table 6a
IRA-LD BA-MD BA-SD Retailer
Market fee/ticket 0.010 Stall rental/fee 0.100 0.006 0.060 0.030 WS* calibration fee a/ a/ a/ 0.001 Business Permit 0.001 0.001 0.010 0.002 Mayor's permit 0.060 0.290 1.260 0.001 Cell card 0.010 Electricity 0.010 0.001 0.030 Shrinkage 0.130 0.140 0.140 0.190 Meals & snacks 0.040 0.008 0.063 0.050 Others: Garbage fee a/ a/ 0.001 0.002 Health certification 0.010 0.030 0.070 0.001 Sanitary Permit 0.010 0.070 0.310 a/Sanitary inspection 0.010 - Renew sticker 0.040 0.030 0.150 a/Sign board 0.001 Tax clearance a/ 0.010 0.040 a/Zoning fee a/Fire safety fee 0.010 0.070 0.300 a/
Total 0.42 0.67 2.41 0.32 * Weighing scalea/ less than 0.001
Table 15k. ONION: Other operating costs, incurred by marketing participants, by item, Davao City, 2006
price per kilogramItem
MARKETING COSTS STRUCTURE:
O N I O N
A. Number and Profile of Respondents
1. Number of Respondents
Two (2) types of respondents were interviewed in the study, the farmers and traders. From the provinces covered, there were 221 respondents, 27% of whom were farmers and 73% were traders. The 161 trader-respondents were further classified into different types as follows: large distributors (62); medium distributors (14); small distributors (11); assemblers (7); agents (2); and retailers (65). They were classified based on their sphere of influence, geographical coverage and volume of transaction.
2. Profile of Respondents
a. Land Ownership of Farmers. Sixty two percent (62%) of the farmer-respondents owned the onion farm. Twelve (12) respondents or 20% were tenants, six were lessees, two were awardees of Certificate of Land Transfer (CLT), two occupied a rent-free farm and one was a contract grower (Figure 2). b. Type of Business Ownership of Traders. Almost all respondents (99%) were single proprietors. The remaining one percent had partners in their onion trading business (Figure 3).
Figure 1. Percent distribution of re spondent, by type , se lected provinces,
Phil ippines, 2006
T rader73%
Farmer27%
Source: Annex Table 1
3 66
Ilocos Norte Pangasinan Nueva Ecija
DEPRECIATIONSupplies & Equipment
Weighing scale 0.014 0.002 0.002 Calculator 0.006 0.000 0.004 Cellular phone 0.018 0.001 0.007 Chair a/Electric fan 0.001 Blower a/ a/Stroller a/Lona 0.004 Wooden stand (palete) 0.006 0.001 Sizer a/
FacilitiesStorage/bodega 0.146 0.002 0.020 "Papag" (used in drying) 0.009
Transportation FacilitiesTrailer 0.055 Truck 0.024 0.330 0.007 Elf 0.510 0.083 0.011 Jeep 0.039 0.093 0.010 Forward 0.763 0.147 Tractor 0.190 Trailer 0.015 0.019 Pick-up 0.234 Van 0.051 Tricycle 0.024 0.054
UNPAID LABORProcurement 0.021 Distribution 1.223 0.619 0.483
TOTAL 3.09 1.31 0.85 a/ less tha 0.001
peso per kilogram
Table 16a. ONION: Imputed costs by item, selected supply provinces, Philippines, 2006
Item
Figure 2. Percent distribution of farmer-respondents by land ownership, se lected
provinces, Philippines2006
Owner62%
Tenant20%
Leasee10%
CLT-holder3%
Rent Free3%
Contract grower
2%
Source: Annex Table 3
MARKETING COSTS STRUCTURE:
O N I O N
Sample Selection The study utilized information from both producers and traders. The producers 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 onion farmers covered by the Cost 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 non-probability sampling method used when participants with specific characteristics are required and when there is difficulty in locating respondents with the characteristic of interest. This approach accumulated the data gathered from one trader respondent to another respondent at different levels of commodity marketing system. In the study, a minimum of three and maximum of five respondents per type of marketing participants were interviewed in 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
The study covers the costs incurred by the marketing participants in trading onion from the production point to the consumption point. The first part presents the profile of respondents while marketing practices and marketing cost components are discussed at the later part of the report. All relevant tables containing the details on the profile of respondents and the marketing costs item are appended.
67 2
Metro Manila
Naga City
Legaspi City
Cebu City
Cagayan de Oro City
Davao City
DEPRECIATIONSupplies & Equipment
Weighing scale 0.002 0.006 0.006 0.006 0.009 0.003 Calculator 0.001 0.007 0.001 0.286 a/Cellular phone 0.001 0.020 0.006 0.023 a/Fax machine 0.001 Display rack a/Office table a/Chair 0.017 0.002 Electric fan 0.001 0.004 0.018 0.001 Blower 0.001 Stroller 0.003 LonaWooden stand (palete) 0.004 Money detector a/Tray a/Coleman "Hasag" 0.010 Umbrella 0.005
FacilitiesStorage/bodega 0.024 "Papag" (used in drying) 0.001 0.046 Sorting table (metal) 0.001 a/
Transportation FacilitiesTruck 0.035 0.011 0.010 Elf 0.030 0.545 0.081 a/Jeep 0.050 0.149 0.004 Forward 0.343 0.094 Pick-up 0.110 Tricycle 0.038 Multi-cab 0.009 0.020 Kariton 0.051
UNPAID LABORProcurement 0.592 0.251 0.384 Distribution 0.270 1.562 0.290 1.673 2.519 0.105
TOTAL 0.506 2.632 1.138 2.014 3.303 0.143 a/ less than 0.001
peso per kilogram
Table 16b. ONION: Imputed costs by item, selected demand areas, Philippines, 2006
Item
MARKETING COSTS STRUCTURE:
O N I O N
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 onion - the flow, participants and the margins at current levels. II. OBJECTIVES The general objective of this study was to determine the marketing costs structure of onion. Specifically, it aimed to:
1. identify and characterize the marketing participants involved; 2. determine the flow and channels of distribution of onion; 3. determine the practices in marketing of onion among participants;
and 4. determine the components of marketing costs of onion by type of
marketing participants. III. METHODOLOGY
Research Site The study covered three (3) onion supply provinces and six (6) demand areas. For supply areas, the provinces covered Ilocos Norte, Pangasinan and Nueva Ecija while demand areas included Metro Manila, Naga City, Legaspi City, Cebu City, Cagayan de Oro City and Davao City. Supply provinces were chosen based on their significant contribution to the total onion production in the country. The combined onion production of these areas accounted for more than 50 percent of national total. Demand provinces, however, were identified as the distribution and consumption areas of onion produced from the supply provinces. These provinces were identified during the interview phase in the supply areas.
1 68
Farmers RA-LD PA-LD PA-MD MA-LD Retailers
DEPRECIATIONSupplies & equipment
Weighing scale 0.033 0.007 0.01 a/ 0.007 0.013Calculator 0.019 0.001 0.001 a/ 0.004Cellular phone 0.034 0.007 0.012 a/ 0.004 0.033Paleta 0.006 a/
FacilitiesStorage/bodega 0.381 0.016 0.041
Transportation FacilitiesTruck 0.039 0.009Elf 1.300 0.015 0.216Jeep 0.039Tricycle 0.039 0.009 a/ a/Trailer 0.015Pick-up 0.234Forward 0.763Van 0.051
UNPAID LABORProcurement 0.016 0.025Distribution 3.186 0.300 1.605 0.133 0.893
TOTAL 6.049 0.395 0.023 0.020 0.328 0.943 a/ less than 0.0001
peso per kilogram
Table 16c. ONION: Imputed costs of of marketing participants, by item, Ilocos Norte, 2006
Item
MARKETING COSTS STRUCTURE:
O N I O N
69
Farmer IRA-LD IRA-MD PA-MD MA-LD BA Retailer
DEPRECIATIONSupplies & Equipment
Weighing scale 0.007 0.001 0.001 0.001 0.001 0.001 0.003 Calculator a/ a/ 0.001 a/ a/ a/Cellular phone 0.001 0.001 Chair a/ 0.001 Electric fan 0.001 Blower a/Stroller a/
FacilitiesStorage/bodega 0.005 a/Papag (used in dryin g) 0.001 a/ 0.007
Transportation Facilities Truck 0.595 0.066 Elf 0.044 0.043 0.162 Jeep 0.111 0.074 Forward 0.260 0.034 Trailer 0.019
UNPAID LABORDistribution 0.619
TOTAL 1.59 0.24 0.04 0.16 0.00 0.00 0.01 a/ less than 0.0001
Table 16d. ONION: Imputed costs of marketing participants, by item, Pangasinan, 2006
peso per kilogramItem
MARKETING COSTS STRUCTURE:
O N I O N
1a 70
Farm
erIR
A-L
DPA
-LD
PA-M
DB
A-M
DM
A-S
DA
ssem
bler
Ret
aile
r
DEP
REC
IATI
ON
Sup
plie
s &
Equ
ipm
ent
Wei
ghin
g sc
ale
0.01
0
a/a/
0.00
2
a/0.
001
a/
0.00
1
C
alcu
lato
ra/
a/a/
0.01
0
a/a/
Cel
lula
r pho
ne0.
020
0.
003
a/
0.01
0
0.00
1
Blo
wer
a/a/
Sor
ting
tabl
e (m
etal
)a/
a/a/
a/M
oney
det
ecto
rLo
na0.
004
W
oode
n st
and
(pal
ete)
a/0.
001
Siz
era/
Faci
litie
sS
tora
ge/b
odeg
a0.
060
0.
001
0.
001
Tr
ansp
orta
tion
Faci
litie
sE
lf0.
003
0.
010
0.
020
Je
ep0.
020
a/
Trac
tor
0.19
0
Tric
ycle
0.14
0
0.05
0
0.02
0
0.02
0
0.00
4
Trai
ler
0.01
0
0.10
0
Truc
k0.
003
0.
010
UN
PAID
LAB
OR
Dis
tribu
tion
0.53
0
0.31
0
0.12
0
0.97
0
TOTA
L0.
90
0.
19
0.
02
0.
38
0.
02
0.
14
0.
03
0.
97
a/ l
ess
than
0.0
001
Tabl
e 16
c. O
NIO
N:
Impu
ted
cost
of m
arke
ting
part
icip
ants
, by
item
, Nue
va E
cija
, 200
6
Item
peso
per
kilo
gram
HIGHLIGHTS 1) Majority of the respondents interviewed operated under single-
proprietorship using personal funds to finance their business operation. Many respondents have been in the industry for about 5 to 10 years and more than 20 years. Only few were in operation for 11 to 20 years and less than 5 years.
2) There were only three types of participants involved in onion marketing,
namely: farmers, assembler-distributors or wholesalers and retailers. From the farmers, onion was distributed to the assembler-distributors and then to the retailers. Mode of procurement and distribution was usually pick up with terms of payments mostly made in cash basis.
3) The identified supply areas of onion were Ilocos Norte, Pangasinan and
Nueva Ecija. Onion supplies coming from Ilocos Norte were distributed to its respective municipalities and the provinces of Metro Manila, Cagayan, Isabela, Pangasinan, Nueva Ecija and also Metro Manila. In Pangasinan, demand areas included its municipalities and the provinces of Metro Manila, Batangas, Cavite, Pampanga, Bulacan, Zambales, Albay, Camarines Norte, and Davao. For Nueva Ecija, onion supplies were distributed within the provice and buyers outside the province coming from Metro Manila, Benguet, Cavite, Laguna, La Union, Albay, Misamis Oriental, South Cotabato and Sarangani.
4) Among the supply areas, Ilocos Norte registered the highest marketing cost
at P16.91 per kilogram. It was followed by Pangasinan at P11.12 per kilogram. Nueva Ecija recorded the lowest at P7.62 per kilogram. In the demand areas, Naga City posted the highest marketing cost at P12.90 per kilogram followed by Cagayan de Oro City at P9.54 per kilogram. The lowest marketing cost was incurred in Davao City at P3.30 per kilogram.
5) By marketing participants, the highest net margins was realized by Provincial Assembler-Medium Distributors (PA-MD) in Ilocos Norte at P9.35 per kilogram, followed by Inter-regional Assembler-Medium Distributor (IRA-MD) in Pangasinan at P6.28 per kilogram. Retailers got an average net margins of P5.98 (Pangasinan), P5.21 (Ilocos Norte) an P1.75 (Nueva Ecija).
Tabl
e 16
e. O
NIO
N:
Impu
ted
cost
of m
arke
ting
part
icip
ants
, by
item
, Nue
va E
cija
, 200
6Ta
ble
16e.
ON
ION
: Im
pute
d co
sts
of m
arke
ting
part
icip
ants
, by
item
, Nue
va E
cija
, 200
6
MARKETING COSTS STRUCTURE:
O N I O N
71 viii
IRA-LD MA-SD Agent Retailer
DEPRECIATIONSupplies & Equipment
Weighing scale 0.002 0.001 0.003 0.004 Calculator a/ 0.001 a/ 0.001 Cellular phone 0.001 0.001 Electric fan 0.001 Sorting table 0.001 Display rack 0.000 "Papag" 0.001 0.001 Umbrella 0.005 0.005
Transportation FacilitiesTruck 0.060 0.010 Elf 0.020 0.040 Jeep 0.050 Pick-up 0.160 0.060
UNPAID LABORDistribution 0.250 0.290
TOTAL 0.30 0.25 0.05 0.36 a/ less than 0.001
peso per kilogramItem
Table 16f. ONION: Imputed costs of marketing participants, by item, Metro Manila, 2006
IRA-LD IRA-MD Retailer
DEPRECIATIONSupplies & Equipment
Weighing scale 0.011 0.002 0.006 Calculator 0.001 0.003 0.017 Cellular phone 0.027 0.014
Transportation FacilitiesElf 0.445 0.645 Forward 0.343 Jeep 0.150 0.147
UNPAID LABORDistribution 1.562
TOTAL 0.83 0.81 1.73
peso per kilogramItem
Table 16g. ONION: Imputed costs of marketing participants, by item, Naga City, 2006
LIST OF FIGURES (Continued)
Figure No. Page
25 Percent distribution of Marketing Cost of Onion,by cost component, Cagayan de Oro City, 2006 …………………… 18
26 Percent distribution of Marketing Cost of Onion,by cost component, Davao City, 2006 ……………………………… 19
MARKETING COSTS STRUCTURE:
O N I O N
IRA-LD IRA-SD Retailer
DEPRECIATIONFacilities & Equipment Weighing scale 0.004 0.012 0.003 Electric fan 0.004 Chair 0.017 Wood stand 0.004 Stroller 0.003 Coleman "Hasag" 0.004 0.015 Facilities Storage/bodega 0.021 0.026 Drying place (papag) 0.018 0.084 0.034 Transportation Facilities Forward 0.094 Kariton 0.050
UNPAID LABOR Procurement 0.627 0.400 0.748 Distribution 0.230 0.410 0.230
TOTAL 1.01 0.98 1.06
Table 16h. ONION: Imputed costs of marketing participants, by item, Legaspi City, 2006
peso per kilogramItem
vii 72
Figure No. Page
14 Percent distribution of respondents by mode of buying, selected provinces, Philippines, 2006 ……………………………… 10
15 Percent distribution of respondents by terms of payment in procurement, selected provinces, Philippines, 2006 ……………… 10
16 Percent distribution of respondents by mode of selling, selected provinces, Philippines, 2006 ……………………………… 10
17 Percent distribution of respondents by terms of paymentin distribution, selected provinces, Philippines, 2006 …………… …11
18 Percent distribution of Marketing Cost of Onion,by cost component, Ilocos Norte, 2006 …………………………… 15
19 Percent distribution of Marketing Cost of Onion,by cost component, Pangasinan, 2006 …………………………… …16
20 Percent distribution of Marketing Cost of Onion,by cost component, Nueva Ecija, 2006 …………………………… …16
21 Percent distribution of Marketing Cost of Onion,by cost component, Metro Manila, 2006 ………………………… …16
22 Percent distribution of Marketing Cost of Onion,by cost component, Naga City, 2006 ……………………………… …17
23 Percent distribution of Marketing Cost of Onion,by cost component, Legazpi City, 2006 …………………………… 17
24 Percent distribution of Marketing Cost of Onion,by cost component, Cebu City, 2006 ……………………………… …17
LIST OF FIGURES (Continued)
MARKETING COSTS STRUCTURE:
O N I O N
73 vi
IRA-LD Retailer
DEPRECIATIONFacilities & Equipment
Weighing scale 0.001 0.010 Calculator a/ 0.002 Cellular phone 0.002 0.009 Fax machine 0.001 Electric fan 0.018
Transportation FacilitiesTruck 0.011 Tricycle 0.038 Multi-cab 0.009
UNPAID LABORProcurement 0.251 Distribution 1.673
TOTAL 0.02 2.01 a/ less than 0.001
peso per kilogramItem
Table 16i. ONION: Imputed costs of marketing participants, by item, Cebu City, 2006
Figure No. Page
1 Percent distribution of respondents by type,selected provinces, Philippines, 2006 ……………………………… 4
2 Percent distribution of farmer respondents by land ownership, selected provinces, Philippines, 2006 ……………………………… 4
3 Percent distribution of traders by type of business ownership, selected provinces, Philippines, 2006 ……………………………… 5
4 Percent distribution of farmer-respondents by source of capital,selected provinces, Philippines, 2006 ……………………………… 5
5 Percent distribution of trader-respondents by source of capital, selected provinces, Philippines, 2006 ……………………………… 5
6 Percent distribution of farmer-respondents by years in farming, selected provinces, Philippines, 2006 ……………………………… 5
7 Percent distribution of trader-respondents by years in trading, selected provinces, Philippines, 2006 ……………………………… 6
8 Geographic Flow of Onion, Ilocos Norte, 2006 ……………………… 6
9 Geographic Flow of Onion, Pangasinan, 2006 ……………………… 7
10 Geographic Flow of Onion, Nueva Ecija, 2006 ……………………… 7
11 Marketing Channels of Onion, Ilocos Norte, 2006 ………………… 8
12 Marketing Channels of Onion, Pangasinan, 2006 ………………… 8
13 Marketing Channels of Onion, Nueva Ecija, 2006 ………………… 9
LIST OF FIGURES
MARKETING COSTS STRUCTURE:
O N I O N
v 74
IRA-LD Retailer
DEPRECIATIONSupplies & Equipment
Weighing scale a/ 0.018 Calculator 0.001 0.571 Cellular phone 0.001 0.044 Office table a/Chair 0.002 Electric fan 0.001
Transportation FacilitiesElf 0.147 0.014
UNPAID LABORProcurement 0.152 0.615 Distribution 2.396 2.641
TOTAL 2.70 3.90 a/ less than 0.001
peso per kilogramItem
Table 16j. ONION: Imputed costs of marketing participants, by item, Cagayan de Oro City, 2006 TABLE OF CONTENTS (Continued)
Table No. Page
12 ONION: Total marketing costs by major components, selected demand areas, Philippines, 2006 ……………………… 15
13 ONION: Costs of production, selected supply provinces, Philippines, 2006 …………………………………………………… 18
14 ONION: Marketing Costs and Margins of marketingparticipants, Ilocos Norte, 2006 ………………………………… …19
15 ONION: Marketing Costs and Margins of marketingparticipants, Pangasinan, 2006 ………………………………… …19
16 ONION: Marketing Costs and Margins of marketingparticipants, Nueva Ecija, 2006 ………………………………… …19
17a ONION: Percent distribution of farmer-respondents, by problemencountered, selected supply provinces,Philippines, 2006 ………………………………………………… …20
18b ONION: Percent distribution of trader-respondents, by problemencountered, selected demand provinces,Philippines, 2006 ………………………………………………… … 21
MARKETING COSTS STRUCTURE:
O N I O N
IRA-LD BA-MD BA-SD Retailer
DEPRECIATIONSupplies & Equipment
Weighing scale 0.010 a/ a/ 0.001 Calculator a/ a/ a/ a/ComputerCellular phone a/Blower 0.001 Sorting table (metal) a/Money detector a/Tray a/
Transportation FacilitiesTruck 0.010 Elf a/Jeep 0.004 Multi-cab 0.020
UNPAID LABORProcurement 0.040 0.020 0.230 0.130
TOTAL 0.06 0.04 0.23 0.13 a/ less than 0.001
Table 16k. ONION: Imputed costs of marketing participants, by item, Davao City, 2006
peso per kilogramItem
75 iv
Table No. Page
1 ONION: Labor costs by marketing activity,selected supply provinces, Philippines, 2006 …………………… 11
2 ONION: Labor costs by marketing activity,selected demand areas, Philippines, 2006 ……………………… 12
3 ONION; Transportation costs, selected supply provinces, Philippines, 2006 …………………………………………………… 12
4 ONION: Transportation costs, selected demand areas, Philippines, 2006 …………………………………………………… 13
5 ONION: Materials used, selected supply provinces,Philippines, 2006 …………………………………………………… 13
6 ONION: Materials used, selected demand areas, Philippines, 2006 …………………………………………………… 13
7 ONION: Other operating costs, selected supply provinces,Philippines, 2006 …………………………………………………… 14
8 ONION: Other operating costs, selected demand areas, Philippines, 2006 …………………………………………………… 14
9 ONION: Imputed costs, selected supply provinces, Philippines, 2006 …………………………………………………… 14
10 ONION: Imputed costs, selected demand areas, Philippines, 2006 …………………………………………………… 14
11 ONION: Total marketing costs by major components, selected supply provinces, Philippines, 2006 …………………… 15
TABLE OF CONTENTS
MARKETING COSTS STRUCTURE:
O N I O N
TABLE OF CONTENTS
Page
FOREWORD ………………………………………………………………… i
HIGHLIGHTS ………………………………………………………………… 1a
I. Introduction ………………………………………………………… …2
II. Objectives …………………………………………………………… …2
III. Methodology ………………………………………………………… … 2Research site ………………………………………………………… 2Sample selection ………………………………………………………3
IV. Discussion of Results ……………………………………………… … 3A. Number and Profile of Respondents …………………………… 4
1. Number of Respondents …………………………………… 42. Profile of Respondents……………………………………… 4 a. Land Ownership of Farmers …………………………… 4 b. Type of Business Ownership of Traders ……………… 4 c. Source of Capital ………………………………………… 5 d. Years in Farming/Trading ……………………………… 5
B. Geographical Flow ……………………………………………… 6C. Marketing Channels …………………………………………… 7D. Marketing Practices and Functions…………………………… 9
1. Procurement ……………………………………………… 92. Distribution ………………………………………………… 10
E. Marketing Costs and Margins ………………………………… 111. Marketing Costs ……………………………………………11
2. Marketing Margins ………………………………………… 18F. Marketing Problems Commonly Encountered by the Respondents …………………………………………… 20
V. Definition of Terms …………………………………………………… …22
VI. Annexes ……………………………………………………………… … 26
iii 76
Ilocos Norte Pangasinan Nueva Ecija
CashLabor 6.46 2.34 3.67 Transportation 2.57 1.01 1.18 Material Inputs 0.64 0.50 0.62 Other Operating 4.15 5.96 1.30
Non-cashImputed Cost 3.09 1.31 0.85
TOTAL 16.91 11.12 7.62
Table 17a. ONION: Total marketing costs by major components, selected supply provinces, 2006
Item peso per kilogram
Metro Manila
Naga City
Legaspi City
Cebu City
Cagayan de Oro City
Davao City
CashLabor 1.93 1.57 1.47 3.02 1.98 0.71 Transportation 2.91 5.97 3.89 1.66 2.69 1.43 Material Inputs 0.01 0.13 0.14 0.02 0.31 0.03 Other Operating 1.51 2.60 2.35 1.91 1.28 0.98
Non-cashImputed Cost 0.51 2.63 1.14 2.01 3.30 0.14
TOTAL 6.87 12.90 8.99 8.63 9.54 3.30
peso per kilogram
Table 17b. ONION: Total marketing costs by major components, selected demand areas, 2006
Item
MARKETING COSTS STRUCTURE:
O N I O N
Buying Selling Gross Net ILOCOS NORTE
Farmer 30.00 13.60 16.91 3.31 RA-LD 30.00 35.00 3.71 5.00 1.16 PA-LD 30.00 45.00 2.39 15.00 2.61 PA-MD 30.00 35.00 0.65 5.00 9.35 MA-LD 30.00 35.00 3.92 5.00 1.08 RETAILER 40.00 56.00 8.79 16.00 5.21
PANGASINANFarmer 28.00 2.88 17.75 14.87 IRA-LD 30.00 39.00 7.90 9.00 1.10 IRA-MD 32.00 40.00 1.72 8.00 6.28 PA-MD 33.00 39.00 2.84 6.00 3.16 MA-LD 35.00 40.00 1.22 5.00 3.78 BA-LD 30.00 35.00 1.73 5.00 3.27 AGENT 34.00 35.00 0.02 1.00 0.98 RETAILER 41.00 51.00 4.02 10.00 5.98
NUEVA ECIJAFarmer 25.00 2.37 13.39 11.02 Assembler 26.00 32.00 4.97 6.00 1.03 IRA-LD 26.00 32.00 4.26 6.00 1.74 PA-LD 32.00 37.00 4.44 5.00 0.56 PA-MD 35.00 37.00 1.08 2.00 0.92 BA-MD 37.00 38.00 0.03 1.00 0.97 MA-SD 38.00 44.00 5.32 6.00 0.68 BA-SD 44.00 45.00 0.74 1.00 0.26 Retailer 45.00 50.00 3.25 5.00 1.75
METRO MANILAIRA-LD 48.00 52.00 3.24 4.00 0.76MA-SD 49.00 52.00 2.20 3.00 0.80Agent 49.00 52.00 2.42 3.00 0.58Retailer 52.00 65.00 6.68 13.00 6.32
NAGA CITYIRA-LD 35.00 45.00 7.22 10.00 2.78IRA-MD 35.00 45.00 5.77 10.00 4.21Retailer 46.00 56.00 6.78 10.00 3.22
Table 18. ONION: Average marketing costs and margins by marketing channel, selected supply and demand provinces, Philippines, 2006
MarginProvince/Marketing Participants
Prices Total Marketing Cost
77 74
MARKETING COSTS STRUCTURE:
O N I O N
FOREWORD This report presents the result of the study on Marketing Costs Structure Study for Onion. 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, Pangasinan and Nueva Ecija. It was aimed at providing information on the cost of marketing onion. The results of the study can hopefully address the need for information on the marketing flow of onion 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 onions from the producers to the consumers, this could serve as guide for farmers and policy makers in increasing the efficiency of the onion 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
Buying Selling Gross NetLEGASPI CITY
IRA-LD 36.44 44.00 7.36 7.56 0.09IRA-SD 36.00 44.00 6.99 8.00 1.01Retailer 45.00 55.00 4.81 10.00 5.19
CAGAYAN DE ORO CITYIRA-LD 40.00 48.00 7.36 8.00 0.64Retailer 43.00 52.00 8.49 9.00 0.51
CEBU CITYIRA-LD 45.67 54.67 3.54 9.00 5.43Retailer 59.75 73.00 12.68 13.25 0.57
DAVAO CITYIRA-LD 15.00 23.00 2.94 8.00 5.06BA-MD 19.00 25.00 0.86 6.00 5.11BA-SD 20.00 27.00 4.98 7.00 2.02Retailer 30.00 35.00 2.61 5.00 2.39
Table 18. (Continued)
MarginProvince/Marketing Participants
Prices Total Marketing Cost
i 78
MARKETING COSTS STRUCTURE:
O N I O N
TERMS OF USE Marketing Costs Structure: Onion 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 the 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: info@bas.gov.ph Website: www.bas.gov.ph
PROBLEM ILOCOS NORTE PANGASINAN NUEVA ECIJA
Low price received due to 2 1 14 imported onion Low price received during 2 5 harvest time Difficulty in selling directly 2 to Manila (Divisoria) Shrinkage of the commodity 1 1 1 Weak demand when buyer 1 1 1 have voluminous stocks in their bodegas Stealing 1 1 Price fluctuation 2 1 2 Bad debts 1 1 1 No problem 10 7 1
TOTAL 20 20 20
Table 18a. ONION: Distribution of farmer-respondents, by problems encountered, selected supply provinces, Philippines, 2006
79 74
MARKETING COSTS STRUCTURE:
O N I O N
Department of Agriculture BUREAU OF AGRICULTURAL STATISTICS
ISSN-2012-0389
NOVEMBER 2007
Com
petit
ion
with
oth
er
13
34
23
22
2
tra
ders
Shr
inka
ge a
nd s
poila
ge
22
12
21
22
3
of c
omm
odity
Low
qua
lity
of p
rodu
cts
12
12
11
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PRO
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A
Tabl
e 19
a. O
NIO
N:
Dis
trib
utio
n of
trad
er- r
espo
nden
ts, b
y pr
oble
ms
enco
unte
red,
sel
ecte
d ar
eas,
200
6
CAG
AYAN
DE
OR
O C
ITY
DAV
AO
CIT
YM
ETR
O
MAN
ILA
NAG
A C
ITY
LEG
ASPI
C
ITY
CEB
U
CIT
Y
79 80
Tabl
e 18
b. O
NIO
N: D
istr
ibut
ion
of tr
ader
-res
pond
ents
, by
prob
lem
s en
coun
tere
d, s
elec
ted
dem
and
area
s,
Ph
ilipp
ines
, 200
6
MARKETING COSTS STRUCTURE:
O N I O N
Department of Agriculture BUREAU OF AGRICULTURAL STATISTICS 1184 Ben-Lor Bldg., Quezon Avenue, Quezon City
Tel. No.: +63(2) 372-3820 Fax. No.: +63(2) 371-2048
info@bas.gov.ph URL: http://bas.gov.ph
Department of Agriculture BUREAU OF AGRICULTURAL STATISTICS
ISSN-2012-0389
NOVEMBER 2007
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