CENTRAL MINDANAO UNIVERSITYMaramag, Musuan, Bukidnon

CARROT INDUSTRY PROFILEProvince of Bukidnon

Prepared by:

JAN MICHAEL P. MERLA

September 2011

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Table of Contents

Page

I. INTRODUCTION 3

Historical Trends (2000-2010)a. Product 3b. Area Planted 5c. Total Productiond. Five (5) Carrot Major Producing Areas 10

II. TECHNICAL ASPECT 11

a. Carrot Varieties 11b. Cultural Practices 11c. Climatic Requirement 14d. Cost & Return per Hectare 15

III. MARKETING ASPECT 17

a. General Marketing Practices 17b. Carrots Demand 17c. Carrots Supply 20d. Prices 21e. Exports & Imports 22f. Processing & Distribution 24

IV. INDUSTRY STRUCTURE & PERCEIVED BARRIERS TO ENTRY27

V. POLICIES AFFECTING THE INDUSTRY 28

VI. REFERENCES 29

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CARROT INDUSTRY PROFILEProvince of Bukidnon

I. INTRODUCTION

According to the Carrot Museum, carrots are one of the most popular vegetables in the world. They are highly nutritious and easy to grow even for the novice.

Carrot originated from Central Asia with Afghanistan as the primary center of origin. It is one of the most important vegetables commonly grown in the Philippine highlands also. The production areas are in Benguet, Mountain Province, Ifugao, Nueva Vizcaya, Cebu, Davao del Sur, Negros Oriental, and Bukidnon.

Carrot, one of the best sources of beta carotene, is commonly grown in high elevation like some of the areas in Bukidnon. The province is one of the key players in vegetable production in Region 10. It produces high value vegetables for the famous food chains and restaurants in the country. Just like lettuce and other popular high value vegetables of the province, carrot is now a sunshine industry in Bukidnon. No wonder that the province is one of the top producers of carrot in the Philippines in the recent report of the Bureau of Agricultural Statistics (BAS).

This material presents the carrot industry profile of the province of Bukidnon.

HISTORICAL TRENDS (2000-2010)

a. Product

Both the wild and the cultivated carrots belong to the species Daucus carota. Wild carrot is distinguished by the name Daucus carota, Carota, whereas domesticated carrot belongs to  Daucus carota, sativus. It is a biennial crop. The leaves are feather like with long petioles and they are severally divided into sections. The sheath of the petiole opens at the base. The flowers are white, small and borne in compound terminal umbels. Carrot is propagated by seeds. The thickened fleshy root is the edible portion. The shape, color and size of the root vary according to varieties

Carrot comes in different colors – white, yellow, orange, purple and violet. Several hundred varieties exist, but there are four main types:

1. Imperator – has long roots (23-25cm), small shoulders and tapered tip;

2. Nantes – has medium length roots (15cm), uniform diameter and blunt tip;

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3. Danvers – is large, with medium length roots (18cm), a processing type used for dicing and slicing; and

4. Chantenay – is short (13cm) with large shoulders, and usually a large, distinctly colored core.

Figure 1. Main Types of Carrots

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Red Core Chantenay

The best tasting carrot. It is a versatile, good winter keeper, in the cellar or the ground, that is tasty raw or cooked.

Becomes sweeter in storage.

Nantes Coreless

Almost coreless cylindrical carrot with a brilliant orange color even through the soft core.

An excellent juicer and fine freezer type.

Scarlet Nantes

A sweet juicer, this bright red-orange, finely-flavored carrot contains the highest number of amino acids found in nutritional research.

b. Area Planted

As shown in Table 1, the total number of area planted with carrots in the Philippines is 5,115 hectares (as of 2010). Region X has 140 hectares only of the total area planted in the country. Almost 74% of total area planted of carrots can be found in the province of Bukidnon (see Table 2).

Table 1. Total Area Planted with Carrots, Philippines, 2000-2010 (in has.)

2005

Source: Bureau of Agricultural Statistics. June 2011

Table 2. Total Area Planted with Carrots, Bukidnon & Region-10, 2000-2010 (in has.)

Region-10  2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

NORTHERN MINDANAO 68 73 77 73.5 87.05 104.05 108 117 131.2 140.5 140

Bukidnon 40 40 41 40 65 78 82 89 95 105 103

Camiguin .. .. .. .. 0.05 0.05 0.06 0.02 .. .. ..Lanao del Norte 18 24 27 25 14 13 11 12 13.2 12 12

Misamis Occidental 4 3 4 4.5 5 5 7 10 16 18.5 20Misamis Oriental 6 6 5 4 3 8 8 6 7 5 5.. Data not availableSource: Bureau of Agricultural Statistics. June 2011

Vegetable Production Areas in Bukidnon with Carrot Crops

Municipality of Lantapan

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  PHILIPPINES

2000 2001 2002 2003 2004

3,414.00 3,441.00 3,535.88 3,505.26 3,561.63

2006 2007 2008 2009 2010

3,585.34 3,480.53 4,897.65 5,075.22 5,080.27 5,115.20

The municipality has 14 barangays and a total land area of approximately 36,465 hectares. Forty percent (40%) of Lantapan lies within Mt. Kitanglad Range Natural Park.

By volume, the top crops produced are broccoli, cabbage, potato, sweet pepper, squash, and carrots. These crops are produced in barangays Kaatuan, Capitan Juan, Songco, Victory, Cawayan, Basak, and Kibangay. These areas have been producing massively since the 1950’s. the average size of land utilized for vegetable production by a small-scale farmer ranges from 1/8 to ¼ of a hectare. The average volume of assorted veggies delivered daily in this municipality reaches 5 metric tons.

Table 3 shows the area planted and production of selected vegetables in the municipality.

Table 3. Area planted to selected vegetables in Lantapan, Bukidnon

CropsArea Planted in Hectares Growth

Rate2003 2004 2005 2006 2007Tomato 58.75 63.35 88.50 110.75 61.50 7.05 Broccoli 27.00 16.00 25.00 50.75 55.50 31.97 Cabbage 104.75 63.15 96.25 98.00 87.83 1.04 Carrot 13.00 5.00 15.00 24.50 40.10 66.37 Cauliflower 22.00 15.50 31.50 56.25 38.00 29.95 Sweet Pepper 21.76 34.38 27.50 21.50 39.25 24.68 Squash 27.45 24.75 29.50 62.75 88.01 40.58 Baguio Beans 17.50 12.00 18.00 8.50 40.75 86.30 Sweet Potato 9.25 13.50 13.50 44.00 60.10 77.12 White Potato 51.50 50.00 31.00 32.00 37.80 (4.89)Chinese Cabbage 73.75 54.75 54.75 87.75 No data (16.37)Total 477.46 391.63 462.25 691.25 593.24 8.85

Source: Municipal Agriculture Office (MAO), Lantapan, 2007

Municipality of Manolo Fortich

Manolo Fortich is located in the northern foothills of Mount Kitanglad. It is one of the major watersheds of the Northern Mindanao region. The municipality is 55 kilometers from Cagayan de Oro City, the commercial center of Region-10, and 55 kilometers from the city of Malaybalay, the capital city of the province of Bukidnon. It has 22 barangays and a total land area of approximately 42,556 hectares.

About 17,126 hectares of the total land area is used for agricultural crop production but only 243 hectares are planted to vegetables. As shown in Table 2, only 1% of the total area of the municipality is planted with carrots. Baranggays Dahilayan, Lindaban, Sankayan, Mampayag, Santiago and Guilang-Guilang are the top vegetable producers in the municipality. Multi-National

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Companies (MNCs) such as Del Monte Philippines and the Lapanday Group of Companies occupy one-third of the municipality’s agricultural land.

Table 4. Area planted to selected vegetables in Manolo Fortich, Bukidnon

Type of Crop Area of Production (in Has)

Broccoli 12Carrots 3Lettuce 19Plastic Pepper 30Sweet Peas 20Tomato 155

Source: MAO, Manolo Fortich, 2007

Municipality of Impasug-ong

Impasug-ong has 13 barangays and a total land area of approximately 107,167 hectares. As of 2006, about 17,053 hectares are used for agricultural production. Major vegetable producers are concentrated in the southern most part of Impasug-ong covering the areas of Impalutao, La Fortuna, Poblacion, Cawayan, Capt. Bayong and Kibenton, Specifically in Sitio Kubayan and Intavas. These barangays are bounded by the Kitangland mountain ranges. Barangays Hagpa and Kalabugao are in the northern portion of Impasug-ong near the Pantaron mountain range.

Almost all 13 barangays produce vegetables such as tomato, cabbage, Chinese cabbage (Wom Bok), squash bell pepper, and carrot. Some vegetables are grown in commercial scale while others in small plots or patches of land. Some large-scale growers rent land at P6,000 per hectare per year.

Impasug-ong is also known as the home of one of Bukidnon’s largest lettuce suppliers, the Green Haven Farm. Other notable farms are Aldes Farms, Bukidnon Highlanders Farms and Bukidnon Plateau Gardens.

The municipality is a major producer of high value temperate vegetables due to its high altitude and its year round cool climate. Assuming that there are two cropping cycles per year, total volume is projected as follows; Tomato is the leading high value vegetable with the total area of 685.75 hectares and with annual production of 34,287.5 metric tons. Irish potato ranks next planted in 128.9 hectares and with annual production of 3,867 metric tons; followed by cabbage in 98 hectares and with 1,962.6 metric tons; carrots in 24.38 hectares and with 731.4 metric tons; and pepper in 90 hectares with 1,803.0 metric tons.

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Table 5. Area planted to selected vegetables in Impasug-ong, Bukidnon

Type of Crop Area of Production (in Has)

Ampalaya 9Broccoli 5Chayote 60Chinese Cabbage 26Carrots 20Cauliflower 10Eggplant 8Ginger 2Potato 14Lettuce 20Squash 51Sweet Bell Pepper 26Sweet Peas 10Tomato 400

Source: MAO, Impasug-ong, 2007

Talakag

Talakag has 29 baranggays and a total land area of approximately 94,799 hectares. The vegetable production areas are in the southeastern portions of Talakag (barangays Lirongan, Miarayon, Lapot, San Miguel and Tagbak) and in Brgy. Domonirog the southern portion. The area is collectively called the Miarayon Region.

Tomatoes are grown in commercial scale in the central western portions of Talakag. Major vegetables produced in the area are carrots. Tomatoes, cabbage and eggplant. Brgy. San Miguel is known for potatoes and broccoli. While most lands are private properties, some lands are rented. An increase in carrot production has been noted in 2005 due to high demand from a tuna cannery in General Santos City.

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Table 6. Area planted to selected vegetables in Talakag, Bukidnon

Type of Crop Area of Production (in Has)Ampalaya 11Asparagus 400Cabbage 102Carrots 473Chayote 5Eggplant 26Garlic 0.5Irish Potato 3Okra 123Onion 7Sweet Bell Pepper 27Tomato 230

SOURCE: MAO, TALAKAG, 2007

c. Total Production

Among the provinces of Region X, the province of Bukidnon (see Tables 7 & 8 ) has the highest volume of carrots production from 2000-2010, followed by Province of Lanao del Norte, Misamis Occidental, Misamis Oriental, and lastly Province of Camiguin.

Table 7. Carrot Production Volume (in tons), Region-10, 2000-2004

Carrot Production Volume

2000 2001 2002 2003 2004

PHILIPPINES 34,599.80 33,792.88 34,512.28 34,665.80 35,783.75

NORTHERN MINDANAO 322.4 326.68 332.74 329.67 573.95

Bukidnon 153.41 158.4 158.15 158.3 453.8

Camiguin .. .. .. .. 0.05

Lanao del Norte 130.53 135.26 143.54 139.14 93.27

Misamis Occidental 13.47 7.02 9.1 11.21 12.63

Misamis Oriental 25 26 21.95 21.02 14.2.. Data not availableSource: Bureau of Agricultural Statistics. June 2011

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Table 8. Carrot Production Volume (in tons), Region-10, 2005-2010

Carrot Production Volume

2005 2006 2007 2008 2009 2010

PHILIPPINES 35,418.42 35,693.79 65,023.88 68,366.00 68,327.69 72,108.91

NORTHERN MINDANAO 717.73 766.37 827.76 1,200.72 1,346.66 1,284.45

Bukidnon 585.95 613 668 1,010.00 1,150.00 1,085.00

Camiguin 0.45 0.05 0.2 .. .. ..

Lanao del Norte 77.17 80.35 89 92.7 95 97

Misamis Occidental 13.82 30.15 35.98 62.41 75.5 76.45

Misamis Oriental 40.34 42.82 34.58 35.61 26.16 26

.. Data not availableSource: Bureau of Agricultural Statistics. June 2011

d. Five (5) Major Producing Areas

Table 9 shows the Philippine provincial production of Carrots. Benguet Province has the highest volume of carrot production followed by the provinces of Mountain Province, Cebu, Negros Oriental, and Bukidnon.

Table 9. Top Five (5) Carrots Producing Provinces, 2005-2010

Province  2005 2006 2007 2008 2009 2010Benguet 25,795.37 25,754.84 50,936.76 52,918.80 52,617.46 57,706.04Mountain Province 2,034.40 2,098.60 6,193.78 6,790.78 5,838.41 5,127.50Cebu 2,935.83 2,927.31 2,542.23 2,226.04 3,329.33 2,013.25Negros Oriental 931.33 1,093.53 1,163.40 1,659.23 1,604.80 2,502.35Bukidnon 585.95 613 668 1,010.00 1,150.00 1,085.00

Source: Bureau of Agricultural Statistics. June 2011

In the world, Republic of China is considered as the Carrot production King, the US ranks among the other top nations in the production of carrots: fourth in acreage and volume, third in terms of yield (31.7 tons/ha). Russia, Japan, France and the United Kingdom are also leading producers. World wide 13.37 million tons were produced in 1990, a 30% increase over the past decade.

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II. TECHNICAL ASPECT

a. Varieties

Practically, all varieties in the Philippines are of the Chantenay type. Open pollinated (OP) and hybrid varieties are available commercially. Most recommended varieties to be planted for mid and high elevation areas are:

1. OP Varieties – Kuroda, New Koroda OP, Nikko Kuroda, KS Kuroda, Super Kuroda, New Kuroda Guson, Kuroda Max, Kuroda Improved, Chunlong, Kuroda Selection, Kuroda Gold, Terracota, Kuroda EW 35, Royal Chantenay

2. F1 Hybrids – Beniyama, S-505, Hybrid Sigma, Winter, All Season Cross, Rain Winner, Terracotta F1

For low elevation areas:

1. Kuroda strains such as EW 35 and Terracotta.

b. Cultural Practices

Many Filipino carrot farmers are practicing the recommendations of the Department of Agriculture (DA) and the Philippine Council for Agriculture, Forestry and Natural Resources Research and Development (PCARRD) for carrot production.

Land Preparation

Generally, Filipino farmers plowed and harrowed the land several times until a fine filth is attained. They prepare raised beds 20cm high, 0.7-0.8m wide, and 0.3m apart. They also pulverize the soil and incorporate fully decomposed chicken at 3-5 t/ha and complete fertilizer at 3-5 bags/ha one week before planting.

According to PCARRD, a thorough field preparation is very necessary for the plant because it is small- seeded and usually planted direct in the field. Crops planted in a well-prepared field seem to have better well-shaped, marketable roots than plants grown in a poorly prepared soil which tends to have irregularly-shaped roots.

Also PCARRD and DA encouraged the farmers to do the following activities in carrot production management:

  Crop Establishment

One hectare of carrots would require 6 to 8 kg seeds. The seeds are uniformly distributed in furrows and covered with fine soil at about 2 cm thick. It

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may take about 2 weeks from sowing to complete the emergence of the seedlings.

In low elevation areas, the best time to plant is from the last week of October up to February or during the coolest part of the year. In the highlands, planting can be done through out the year.

Nutrient Management

The general fertilizer recommendation is 126 kg/ha N, 71 kg/ha P2O5, and 175 kg/ha K2O. However, fertilization should be based on soil analysis. Apply organic fertilizers such as well decomposed manure or compost at 3-5 t/ha 1-2 weeks before planting to contribute 60-100 kg NPK and micronutrients. The remaining nutrient requirement can be applied at 30 days from sowing, just after weeding and thinning. Cover the fertilizer with soil during hilling up. Tea manure and fermented plant juice (FPJ) may also be used to improve soil fertility.

To prepare tea manure, soak ¾ sack of dried cow or horse manure in ¾ plastic drum (200-L capacity) of water. Soak for 5-7 days with frequent stirring. Dilute tea manure in up to 20 parts water and spray on the leavers at 1-2 weeks interval. To prepare FPJ, mix three parts chopped plant shoots or banana trunk with one part raw sugar or molasses. Ferment mixture for 5-7 days. Dilute 1 part FPJ to 20-40 parts water and drench on the plots or use as foliar fertilizer.

 

Water Management

Carrot needs a lot of moisture during the first 30 days of growth. Irregular watering leads to cracking and forking. Water every 5-7 days or as needed.

Put mulch after planting and water the beds. Mulch with rice straws or any other mulching materials to minimize weed growth and moisture loss. After two weeks or after the seeds have germinated, remove the mulch and put mulch between rows.

Thinning and Hilling Up

Thinning is done to provide enough space to the growing roots. Start thinning at 30 days after sowing, at a spacing of 10cm between plants. Hill up immediately after thinning to cover the side dressed fertilizer. Second weeding and hilling up is done 45 days after the first weeding.

 

Pest Management

Pests

1. Cutworm

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Spray with biological insecticide such as Bacillus thuringiensis (Bt) and Nuclear Polyhedrosis Virus (NPV) following the recommended rates. If needed, spray with inseticide like fipronil, fevalerate, permethrin, or other registered chemicals following the recommended rates.

2. Mole Cricket

Use biological sprays such as Bt and NPV. Spray with pesticides such as diazinon following the recommended rates. Use carbofuran following the recommended rates, as a last resort.

3. Slugs

Spread rice hull ash or slug pellets around the plots just to cover the soil

4. Aphids

Spray with hot pepper extract (100g macerated hot pepper / 16L water). If needed, spray carbaryl or malathion following the recommended rates.

5. Armyworm

Spray with Bt following the recommended rates. Maintain populations of ground beetles and tachinid flies. Spread ash baits along the field borders. If needed, spray recommended pesticide such as carbaryl, fenvalerate, or malathion following the recommended rates.

 

Diseases

1. Powdery Mildew

Spray sulfur based fungicides or mancozeb following the recommended rates

2. Bacterial Soft Rot

Avoid injury to the roots during harvest and remove the infected roots.

3. Root-knot

Practice crop rotation with non-host crops like corn. Plant marigold by broadcasting the seeds in between seasons. Plow under the marigold plants at land preparation. Marigold may also be intercropped along borders and alleys.

4. Alternaria blight

Use resistant or tolerant varieties such as Terracotta and S-505. If infection is severe, spray appropriate fungicides such as mancozeb and chlorothalonil following the recommended rates.

 

Harvest Management

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Carrots can be harvested 2-3 months after sowing, depending on the variety used. Harvest the carrots if the leaves turn yellowish and the roots are big enough. Loosen the soil using a spading fork then pull the carrot roots carefully. Remove split roots. Haul the roots to the packing house immediately after harvest. Yields are usually 20-30 t/ha under favorable and good management.

Postharvest Handling

Cut the leaves 5-8cm from the shoulder. Wash the roots and air-dry. Sort and classify according to size and appearance. Roots that are cracked, deformed, and forked are considered non-marketable, but can still be cooked or processed

Uses, Processing and Utilization

Carrot is used in many preparations. It can be a principal ingredient of a dish like carrot salads. It gives attractive appearance and color to pickles. It is excellent for garnishing and very rich in vitamins (carotene).

Carrots may be prepared in glass jars as follows:

1. Select small young and tender carrots. Remove tops and scrub.

2. Boil enough water to cover for 5-10 minutes. Plunge in cold water.

3. Slip off skins and scrape if necessary. Cut into cubes or slice as desired. Pack in sterile jars.

4. Add ½ tsp salt per pint jar. Fill with boiling water. Half seal bottles.

5. Sterilize pint jars using pressure cooker at 10 lbs for 20 minutes. Seal completely. Cool.

c. Climatic and Soil Requirements

Carrot grows best in high elevation areas 1,000 m above sea level. Under such conditions, carrots are more succulent and less fibrous, with smother texture and deeper color. Roots attain optimal color when air temperature is 15-21 °C, but colors deepen rapidly in this temperature range about three weeks before harvest. Temperature below 10 °C and above 30 °C reduce quality and yield of carrots.

Carrot can be planted in low and mid elevation areas, but only during the coolest months. Otherwise, the roots will be fibrous, lighter in color, and deformed.

Carrots grows best in deep sandy loam soil rich in organic matter with pH ranging from 5.5 to 6.8.

 

 

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c. Cost and Return Analysis per Hectare

Table 10. Carrot Production Cost and Return Analysis per Hectare, 2000-2003

Source: BAS, June 2011

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  2000 2001 2002 2003

CASH COSTS 27,692 28,870 29,498 32,865

..Seeds/Planting Materials 1,444 1,444 1,438 2,203

..Fertilizers 5,484 6,531 6,442 8,050

....Fertilizers Organic 728 867 855 1,068

....Fertilizers Inorganic 4,756 5,664 5,587 6,982

..Pesticides 3,157 3,288 3,334 3,342

....Pesticides : Liquid 1,794 1,869 1,895 1,900

....Pesticides : Solid 1,363 1,419 1,439 1,442

..Hired Labor 9,101 9,101 9,597 10,078

..Land Tax 82 82 83 84

....Animal and Machine 2,079 2,079 2,147 2,477

..Transport of Inputs 1,021 1,021 1,038 1,074

..Interest on Crop Loan 892 892 920 1,012

..Food Expense 906 906 922 943

..Repairs 3,526 3,526 3,577 3,604

NON-CASH COSTS 16 11 11 17

..Seeds/Planting Materials Paid in Kind 16 11 11 17

IMPUTED COSTS 19,273 20,682 19,319 24,271

..Operator and Family Labor 11,687 11,933 12,322 12,940

..Depreciation 749 824 906 997

..Interest on Operating Capital 2,467 4,829 3,008 5,610

..Rental Value of Owned Land 4,370 3,096 3,083 4,724

ALL COSTS 46,981 49,563 48,828 57,153

GROSS RETURNS 166,214 114,120 113,050 175,350

RETURNS ABOVE CASH COST 161,458 85,250 83,552 142,485

RETURNS ABOVE CASH AND NON-CASH COSTS 161,442 85,239 83,541 142,468

NET RETURNS 142,169 64,557 64,222 118,197

NET PROFIT-COST RATIO 3.03 1.3 1.32 2.07

Cost Per Kilogram in Pesos 4.64 5.05 5 5.78

Yield Per Hectare in Kilograms 10,135 9,821 9,771 9,890

Farmgate Price in Pesos Per Kilogram 16.4 11.62 11.57 17.73

.. Data not available

Table 10. Carrot Production Cost and Return Analysis per Hectare, 2004-2009

  2004 2005 2006 2007 2008R 2009P

CASH COSTS 36,764 40,854 41,792 43,205 55,992 50,762

..Seeds/Planting Materials 2,141 2,081 2,259 1,972 2,424 3,051

..Fertilizers 10,893 13,549 13,460 14,282 24,298 17,893

....Fertilizers Organic 1,446 1,799 1,787 1,896 3,619 2,665

....Fertilizers Inorganic 9,447 11,750 11,673 12,386 20,679 15,228

..Pesticides 3,354 3,372 3,050 3,036 3,148 2,980

....Pesticides : Liquid 1,907 1,917 1,734 1,726 1,790 1,694

....Pesticides : Solid 1,447 1,455 1,316 1,310 1,358 1,286

..Hired Labor 10,510 11,121 11,589 12,046 13,137 13,356

..Land Tax 84 85 86 87 88 88

....Animal and Machine 2,583 2,733 2,848 2,960 3,228 3,282

..Transport of Inputs 1,210 1,432 1,614 1,622 1,795 1,710

..Interest on Crop Loan 1,113 1,224 1,346 1,481 1,629 1,792

..Food Expense 1,002 1,087 1,148 1,186 1,347 1,427

..Repairs 3,875 4,169 4,392 4,533 4,898 5,185

NON-CASH COSTS 16 16 17 15 18 23..Seeds/Planting Materials Paid in Kind 16 16 17 15 18 23

IMPUTED COSTS 23,485 24,768 25,908 26,168 30,552 31,421

..Operator and Family Labor 13,494 14,279 14,880 15,466 16,867 17,149

..Depreciation 1,097 1,206 1,327 1,460 1,606 1,766

..Interest on Operating Capital 4,304 4,820 4,857 5,014 6,881 5,965

..Rental Value of Owned Land 4,591 4,463 4,844 4,228 5,198 6,541

ALL COSTS 60,266 65,638 67,717 69,388 86,562 82,206

GROSS RETURNS 170,215 165,473 186,418 210,690 262,819 329,780

RETURNS ABOVE CASH COST 133,451 124,619 144,626 167,485 206,827 279,018

RETURNS ABOVE CASH AND NON-CASH COSTS 133,435 124,603 144,609 167,470 206,809 278,995

NET RETURNS 109,950 99,835 118,701 141,302 176,257 247,574

NET PROFIT-COST RATIO 1.82 1.52 1.75 2.04 2.04 3.01

Cost Per Kilogram in Pesos 6.1 6.64 6.6 5.23 6.43 6.12

Yield Per Hectare in Kilograms 9,879 9,879 10,254 13,276 13,471 13,433Farmgate Price in Pesos Per Kilogram 17.23 16.75 18.18 15.87 19.51 24.55

b/ - Less than 1 pesoR - Revised as of September 2010P - Preliminary data

Source: BAS, June 2011

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III. MARKETING ASPECT

a. General Marketing Practices

Carrots and other vegetable products of the province of Bukidnon and the rest of the provinces of Region 10 are shipped mainly to wet markets in Manila and in other major cities of Visayas and Mindanao such as Cebu, Iloilo, Bacolod, Zamboanga, Davao, Butuan and Palawan. The presence of regular flights and trips of boats and buses plying these areas warrant convenient flow of these commodities. Refrigerated vans of CRYO, likewise, enable shipment of highly perishable leafy vegetables like lettuce.

As shown in the existing carrot and other vegetable distribution channels diagram (Figure 7) in the province of Bukidnon and other provinces of Region-10, it is noted that the consolidators are vital in the distribution process. Consolidators are the ones who gather or consolidate vegetables from different sources/ farmers for distribution to wholesalers. The last level of traders then distribute these vegetables by land, sea and air to other provinces in Mindanao and Visayas and other major cities such as Cebu and Metro Manila.

With the present distribution channel, the probability of loss due to spoilage of vegetables is high due to the long distribution process. The presence of a farm produce terminal market or a trading post will address the problem on high incidence of spoilage. This idea came about during one of the workshops with the vegetable industry stakeholders.

b. Carrot Demand

Increasing consumption of vegetables due to growing urban population and demand for healthy food

Consumption of carrot and other vegetables in the Philippines is increasing due to growing population particularly in the urban areas and expanding demand for healthy foods such as vegetables. Considering the vegetable consumption estimate of the Food and Nutrition Research Institute (FNRI) in 1993 of about 39 kilos of vegetables per year per person, one expects the increase in consumption to be coming from the urban population. A survey conducted by Concepcion (2005) showed that vegetable consumption per person in the cities of Davao, Cagayan de Oro and General Santos in 2004 was about 87 kilos which is 123% more than the average consumption estimate in 1993. Urban consumption of vegetables appears to be increasing as more consumers become health conscious. Disaggregating population into urban and rural and using the FNRI estimate of per capita vegetable consumption reveals this trend. Urban consumption of vegetables is estimated to be increasing at 4.42% compared to only 0.2% in the rural areas based on data from 1980 to 2003 (Figure 2).

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Figure 2. Increasing vegetable consumption (Source: National Statistics Office)

Expanding demand for quality and processed vegetables due to increasing income

Increasing incomes of Filipinos also contribute to increase in demand particularly for high quality and processed vegetables. As Filipinos increase their income and more dual income households exist, demand for convenience will grow. More Filipinos will shop from supermarkets, consume ready-to-eat and processed foods and eat in fastfood outlets. A survey made by Concepcion and Digal (2004) showed that the area devoted by supermarkets for fresh vegetables has increased over time. Data also indicated grocery sales which include food in modern distribution outlets such as supermarkets increased by 22% from 2005 to 2006 (Table 11). In addition, fastfood outlets and other institutional markets such as hotels have responded to this opportunity by increasing demand for high quality vegetables and healthy foods. They offer products that require the use of fresh or processed vegetables such as salads.

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Vegetable Consumption in the Philippines 1980-2003

0

1000000

2000000

3000000

4000000

1980

1983

1986

1989

1992

1995

1998

2001

Year

Vege

tabl

e co

nsum

ptio

n

total vegetableconsumption

rural vegetableconsumption

urban vegetableconsumption

Table 11. Retail Market Indicators, 2004-2006

Retail market indicators

Year Growth rates (%)

2004 2005 2006 2004-05 2005-06Retail sales (USD mn)

38,319 43,718 50,103 14 15Retail sales / capita (USD)

444 498 560 12 12Grocery retail sales ( USD mn)

24,172 27,284 30,948 13 13Grocery retail sales / capita ( USD)

280 311 346 11 11Modern grocery distribution, total sales (USD mn)

8,946 9,813 11,520 10 17Modern grocery distribution, total sales /capita (USD) 104 112 129 8 15Modern grocery distribution,Grocery sales (USD mn) 7,552 8,382 10,198 11 22Modern grocery distribution,Grocery sales/capita(USD) 88 95 114 8 20

Source: Planet Retail

Consumption of carrot and other vegetables in the Philippines has steadily increased over time. However, the increase of about 1.6% per year (from 1990-2005) exceeds the annual growth of domestic production of 1.5% resulting in a deficit of about 408,000 metric tons per year (Figure 2). Thus, it is not surprising to see imports increasing over time to fill up this gap. Despite this, the country managed to export vegetables of 35,000 metric tons per year during this period, albeit the growth rate for exports of 8% per year is lower than that of imports of 11% per year (Figure 3).

Figure 3. Consumption and production of vegetables in the

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Vegetable Consumption and Production in the Philippines (1990-2005)

-2,000.00

-1,000.000.00

1,000.002,000.00

3,000.00

4,000.005,000.00

6,000.00

1990 1992 1994 1996 1998 2000 2002 2004

Year

Consumption Production Surplus/(Deficit)

Philippines,1990-2005 (FAO Statistics, 2007).

Imported vegetables are posing increasing threats to Philippine vegetable growers (Macabasco, 2004). Imports of vegetables have grown sevenfold since 1996 to 2002. This is due mainly to the reduction of tariff rates and the changing market dynamics of the vegetable supply chain. Imported vegetables are said to be cheaper by 30-50% compared to some of the locally produced ones. They are better packed and generally of better quality. These attributes make them more attractive to the institutional markets and the supermarkets that cater to the high-end consumer markets.

c. Carrot Supply

Table 12 shows the gross supply of carrots of the country from year 2000 to 2009 and also its utilization. The supply is continuously increasing and so with the utilization of carrots.

Table 12. Carrots Supply and Utilization Accounts, Philippines (in tons)

YEAR SU Gross Supply

UT Feeds and Waste

UT Total Net Food

Disposable

UT Per Capita kg/yr

UT Per Capita gm/day

2000 34,657 2,773 31,884 0.42 1.152001 33,825 2,706 31,119 0.4 1.12002 35,159 2,813 32,346 0.41 1.122003 36,013 2,881 33,132 0.41 1.122004 36,137 2,887 33,199 0.4 1.12005 35,440 2,835 32,605 0.38 1.042006 35,695 2,856 32,839 0.38 1.042007 65,026 5,202 59,824 0.68 1.862008 68,372 5,470 62,902 0.7 1.922009 68,465 5,477 62,988 0.68 1.86

Source : BAS, June 2011

SU – Supply

UT - Utilization

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d. Price

The price of carrot and other vegetables is very volatile. Prices go up when supply from major suppliers is low due to poor harvest or bad weather. Tables 13, 14, & 15 show the farm gate, wholesale and retail price of carrot in Bukidnon and Region-10, respectively.

  2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010NORTHERN MINDANAO 22.73 18.28 13.28 14.03 14.11 22.27 22.53 18.6 20.53 26.71 26.7

Bukidnon .. .. .. 13.79 13.38 11.27 .. .. .. .. ..

Camiguin .. .. .. .. .. .. .. .. .. .. ..Lanao del Norte .. .. .. .. .. .. .. .. .. .. ..Misamis Occidental 22.73 18.28 13.28 15.43 19.09 24.15 22.53 18.6 20.53 26.71 26.7Misamis Oriental .. .. .. .. .. .. .. .. .. .. ..Table 13. Carrot Farm Gate Price, Bukidnon & Region 10, 2000-2010 (per kilo)

Source : BAS, March 2011 .. Data is not available

Table 14. Carrot Wholesale Price, Bukidnon & Region 10, 2000-2010 (per kilo)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010NORTHERN MINDANAO 20.26 19.47 18.84 21.72 21.04 20.95 21.82 27.06 29.88 27.66 32.49

Bukidnon .. .. .. .. .. .. .. .. .. .. ..

Camiguin .. .. .. .. .. .. .. .. .. .. ..Lanao del Norte .. .. .. .. .. .. .. .. .. .. ..Misamis Occidental .. .. .. .. .. .. .. .. .. .. ..Misamis Oriental 20.26 19.47 18.84 21.72 21.04 20.95 21.82 27.06 29.88 27.66 32.49

Source : BAS, June 2011Data is not available

Table 15. Carrot Retail Price, Bukidnon & Region 10, 2000-2010 (per kilo)

  2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

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NORTHERN MINDANAO 29.58 27.4 26.95 27.9 32.03 31.61 34.96 37.14 43.76 43.28 47.11

Bukidnon 24.56 23.61 29.36 24.49 31.53 30.74 30.81 31.21 38.66 42.57 41.47

Camiguin 33.1 31 32.28 33.18 35.31 43.44 45.28 47.03 49.07 48.91 59.44Lanao del Norte 27.6 21.89 20.08 24.21 26.29 26.51 30 33.64 40.54 34.48 42.6Misamis Occidental 33.97 31.04 31.13 32.71 37.77 36.41 38.01 40.21 49.39 49.35 58.62Misamis Oriental 28.66 28.75 25.68 28.19 31.45 27.93 34.71 37.69 43.55 42.31 40.13

Source : BAS, June 2011

e. Exports & Imports

Export

The top three destinations of vegetable exports by regional blocks are Japan, Australasia, Oceania followed by the ASEAN block and then the Americas. The top ports of loading of Philippine exports are NAIA, Dadiangas/Gen. San City/South Cotabato and Davao City. Table 16 shows the quantity and value of Philippine agricultural export. The Bureau of Agricultural Statistics (BAS) has no data of carrots exported from Region-10, specifically from the province of Bukidnon.

Table 16. Quantity and Value of Philippine Agricultural Export

ITEM 2007 2008 2009Quantity

(kg)Value (USD)

Quantity (kg)

Value (USD)

Quantity (Kg)

Value(USD)

Carrots, dried, whole, cut, sliced, broken or in powder, but not further prepared 10,000 40,434 11,071 45,368 4,500 12,600Carrots, prepared or preserved otherwise than by vinegar or acetic acid, frozen

90 134

Source: BAS

The above data shows the Philippine agricultural export, in the past years in year 2007 the quantity (Kg) of export carrots, dried, whole, cut, sliced, broken or in powder, but not further prepared is10,000 (kg) which has a value of 40,434 US $, in year 2008 it increased 11,071 kg which has a value of 45,368 US $ and in year 2009 the quantity of exported carrots, dried, whole, cut, sliced, broken or in powder, but not further prepared decrease to 4,500 kg which has a value of 12,600 US $. and the quantity of exported carrots, prepared or preserved otherwise than by vinegar or acetic acid,

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frozen 90 kg which has a value of 134 US $, and it only exported in year 2007.

Import

Table 17. Quantity of Philippine Agricultural Import (in kg)

2005 2006 2007 2008 2009

Carrots, Fresh/Chilled 21,628 839 1,699 6,197 137,197Carrots, dried, whole, cut, sliced, broken or in powder, but not further prepared 20,183 67,912 51,807 9,660 59,900

Carrots, prepared or preserved otherwise than by vinegar or acetic acid, frozen 10,500Source: BAS

Table 18. Value (US $) Philippine Agricultural Product Import

2005 2006 2007 2008 2009

Carrots, Fresh/Chilled 12,467 617 1,241 3,987 15,614Carrots, dried, whole, cut, sliced, broken or in powder, but not further prepared 70,836 126,586 123,923 31,592 63,519

Carrots, prepared or preserved otherwise than by vinegar or acetic acid, frozen 6,053Source: BAS

The above table shows the quantity and value of Philippine Import coming from different countries. The Bureau of Agricultural Statistics (BAS) has no data of carrots imported by Region-10, specifically the province of Bukidnon. In year 2005 the quantity (kg) carrots, fresh/chilled 21,628 which has the value of 12467 US $ , carrots, dried, whole, cut, sliced, broken or in powder,

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but not further prepared 20,183 kg which has a value of 70,836 US $, in year 2006 the quantity of imported carrots, fresh/chilled decreased to 839 kg which has value 617 US $, and the quantity of import carrots, dried, whole, cut, sliced, broken or in powder, but not further prepared increased to 617,912 kg which has a value 126,586 US $, from year 2007 the quantity of imported carrots, fresh/chilled every year increased up to 2009 also the value, and the carrots, dried, whole, cut, sliced, broken or in powder, but not further prepared are decreased from 2007 to 2008 and it will increased again in year 2009. And in year 2007 Philippine are imported 10,500 kg carrots, prepared or preserved otherwise than by vinegar or acetic acid, frozen which has a value of 6,053 US $.

f. Processing and Distribution

Processing

The Philippines has the highest four-firm concentration ratio in Asia with approximately 28% of the total sales in the processing sector accounted for by the top 4 firms in the sector (Roy 2006) (Figure 5). Although not disaggregated by industry (i.e., vegetable processing is lumped with the Philippine food processing sector as a whole), the four-firm concentration ratio was recorded at 72% in 1994 from 64% in 1978, an increase of about 39% (NSO, 1994, NSO, 1978, Digal 2001).

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Four firm Concentration Ratio

0

5

10

15

20

25

30

35

40

45

50

Countries

Perc

enta

ge

Asia

Aus/NZ

Eastern Europe

Latin America Western Europe

Figure 5. Concentration ratio in Processing

The concentration ratio in the retail sector (i.e., supermarkets) as measured by the National Statistics Office appears to be low at 1.1% in 1994 since this is computed based on the sales of the top four individual supermarkets divided by the total sales supermarkets in the country. However, supermarket chains are treated as one unit, the concentration ratio would be higher. Data from Planet retail (2005) showed that the market share of 181 stores of the SM group accounts for 12% of total supermarket retail sales (Table 19).

Table 19. Top 5 Grocery Retailers in 2005

Company No. of Stores

Sales Area

(sq.m)

Average Sales Area

(sq. m)

RetailBanner Sales 2005

(USD mn)

Market Share

(%)

SM Group 181 438,250 2,421 1,163 11.9Mercury Drug 510 153,000 300 879 9.0Robinsons 224 287,600 1,284 562 5.7Rustan 183 214,348 1,171 449 4.6SHV Makro 16 134,400 8,400 332 3.4Sub Total 1,114 1,227,598 3,385 34.5

Other 6,428 65.5

 Total 9,813 100

Source: Planet Retail

Distribution

About seventy five (75%) of vegetables continue to be sold in traditional chain where traders dominate and bulk of the produce is sold in so-called wet markets. On the other hand, the modern chain which includes supermarkets, fastfood chains, hotels and restaurants, accounts for twenty five percent (25%). This share is expected to increase as consumers demand for convenience and ready-to-cook vegetable packages.

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Vegetable Farmer

Wholesalers from Urban Wet Markets

Traders/

Consolidators

Vegetable Processors

Supermarkets

Fast Food Chains

Hotels and Restaurants

Wet Market

retailers

Households

Figure 7. Existing Marketing Distribution Channel of Carrots & Other Vegetables

Farmer/GrowerNorthern Mindanao

Consolidators

Compradors

Last Level TradersDivisoria Buyers

Cagayan de Oro City

By Land By Sea/Air By Sea/Air

Wholesaler-Retailer Wholesaler-RetailerCagayan de Oro City/ Cebu/Other Provinces in Other Provinces inMindanao Visayas

Retailer/Supermarket Retailer/SupermarketCagayan de Oro City/ Cagayan de Oro City/Other Provinces in Other Provinces inMindanao Mindanao

Institutional Buyer Institutional BuyerCagayan de Oro City/ METRO MANILA Cebu/Other Provinces in Other Provinces inMindanao Visayas

Divisoria Balintawak Q-Mart Others/Institutional Buyers

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Figure 6. Traditional Chain vs Modern Chain

Reference: Northern Mindanao Vegetable Producers Association Inc.

IV. INDUSTRY STRUCTURE & PERCEIVED BARRIERS TO ENTRY

Industry Structure

In the industry structure, the supplier, buyers and new entrants affect the intensity of rivalry in the industry. The following are the perceived specific barriers to entry.

Economies of Scale Access to Distribution Capital Requirements Importance of volume to supplier Buyer Volume Impact on Quality/Performance

Economies of Scale

In the industry, entrants can be affected by the critical volume of production because of some existing distribution requirements, like minimum volume of shipment on reefer vans. This will translate to the production volume requirement problems.

Access to Distribution

The existing distribution requirements like the cold chain can affect the new entrants of the industry in terms of requirements of the channel.

Access to Existing Networks of the Industry.

New entrants should access to existing networks to have the necessary information. These information ranges from technical, marketing and production requirements.

Capital Requirements

Small vegetable growers in the region need sufficient capital requirement to sustain production. The growers in the region had experienced losses

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due to lack of financing. This usually happen during the vegetative stage to harvesting stage where vital inputs are needed.

Importance of Volume to supplier

Volume to suppliers poses hindrance to new entrants especially if this is critical in their operation. As discussed in the economies of scale, volume really matters in the industry.

Buyer Volume

Buyer volume in the other hand could hinder new entrants especially if these are large entities and larger volume requirements.

Impact on Quality/Performance

Quality and performance must be consistent. Mostly suppliers can not meet requirements on these consistencies.

V. POLICIES AFFECTING THE INDUSTRY

In general, due to the Cabotage Law transportation cost of Mindanao produce to its major markets in the National Capital Region and major Cities in the Visayas the country is expensive. Vegetables coming from Mindanao cost 15% higher than then the vegetables coming from other parts of Luzon, assuming that all factors of production both in Northern Mindanao and Luzon are equal. Thus, producers in the region face stiff competition with that of Luzon producers.

 

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VI. REFERENCES

Bureau of Agricultural Statistics (countrySTAT),www.bas.gov.ph.

Carrot Museum, www.carrotmuseum.co.uk.

Concepcion, S. and Digal, L. (2004). Upstream and Downstream Linkage: the Case of Vegetable and Mango Industries in the Philippines, Regoverning Markets Program Country Report.

Digal, Larry (2005), “Quality Grading in the Food Chain: The Case of Vegetables in Southern Philippines.” Journal of International Food and Agribusiness Marketing, Vol 17 (1).

Digal, Larry (2001), “Analysis of the Philippine Retail Food Industry” Journal of Philippine Development, Vol XVIII,2

FAO Statistics (Faostat), www.fao.org.

Macabasco, Ditas (2004), “A Closer Look at Philippine Vegetable Imports”, Agrifood Trade Service, http://www.agr.gc.ca.

Mindanao Road Map Presentation (2005), Department of Agriculture.

Planet Retail Philippine Country report (2005). www.planetretail.com

Production guide on Carrot. Department Of Agriculture RFU-10. Northern Mindanao Integrated Agricultural Research Center. Brochure

Package of Technology of Different Vegetable Crops: Technology Generation and Dissemination for the Growth and Development of Vegetable Industry.2005.DA-RFU 4A& Bureau of Agricultural Research, Diliman Quezon City.

Roy, Davesh (2005). International Food and Policy Research Institute’s work on Modern Marketing Channels, June 13th, 2006, Indian Institute of Management Ahmedabad

University of the Philippines in Mindanao and Australian Center for International Agricultural Research ACIAR, “Improving the Efficiency of the Agribusiness

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Supply Chain and Quality Management for Small Agricultural Producers in Mindanao” ASEM 2000/101, unpublished research documents, 2004.

Vegetable Industry Profile (2008), Department of Trade Industry.

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