Value Chain Analysis of Carabao and Carabao-based Products in the Visayas and Mindanao
Click to downloadValue Chain Analysis (VCA) is a comprehensive diagnostic tool that is now used worldwide to identify which policy/project/program strategies should be adopted to develop sustainable value chains. A sustainable food value chain is profitable throughout, has broad-based benefits for society and shows a positive neutral impact on the natural environment (Neven 2014).
Carabao value chain covers the full range of activities required to bring carabao and carabao-based products to final consumers, passing through the different phases of production, processing, and delivery via market-focused collaboration among different stakeholders who produce and market value-added products. An analysis of the carabao value chain is essential for understanding markets, relationships, different players, as well as the constraints that limit production and the competitiveness of small hold farmers (IFAD 2010).
In recent years, carabao production in the Philippines has gained importance as a vital component in achieving food security and increasing farm income, since it is now a main source of both draft power and meat for smallholder farmers. The supply chain of carabao products follow a traditional system. Carabaos are transported to Manila by ship in the case of Mindanao and smaller island provinces. Individual small-hold farmers sell carabao products at the spot market to traders, wholesaler and retailers. The products are passed on to institutional buyers like dairy product manufacturers and meat processors.
In the overall supply and value chain, farmers remain the losers in the market place for getting the lowest gain from production of carabao products. An assessment of the value chain of carabao and carabao-based products is deemed important to identify and analyze the constraints facing the key players in the different segments of the chain and also suggest policy directions and strategies to enhance the industry’s competitiveness and increase the participation of small-hold farmers and their share of value added.
It is against this background that the Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA) is again commissioned by the Department of Agriculture–Philippine Carabao Center (DA-PCC) to conduct a Value Chain Analysis (VCA) of carabao and carabao-based products in Visayas and Mindanao.
The project officially started in the first week of May 2016 and is expected to run for 12 months with Dr. Flordeliza A. Lantican, an agricultural economist specializing in agricultural policy and marketing and trade of agricultural products, as the Team Leader cum VCA Specialist.
Project Duration: 6 May 2016 – 5 May 2017
The project generally aims to analyze the value chains of carabao and carabao-based products in selected regions in the Visayas and Mindanao, and recommend specific measures for improvement. The process through which these products pass through the different segments in the value chain, together with the resulting variety of products, will be examined. Specifically, the project intends to:
Provide an overview of the carabao and carabao-based products situation in the global setting, national level (Philippines) and different administrative regions in the Visayas and Mindanao;
Analyze the nature and structure of the industry, focusing on the description of the players by segment in the value chain, the value chain maps of carabao and select carabao-based products, economic analysis, and inter-firm relationships;
Identify and analyze the market trends and opportunities in the value chains of carabao and carabao-based products;
Determine the existing support services (financial and non-financial) in the value chain, and their adequacy;
Analyze the business enabling environment affecting the value chains of carabao and carabao-based products; and
Analyze the constraints and opportunities in each segment of the value chain and provide specific policy directions and strategies to improve the carabao industry, in general, and the specific value chains of selected carabao-based products, in particular.
The project covers only two major carabao-based products which have big market potentials, carabao’s milk and milk products and meat and meat products. These products have been selected considering that there is an increasing demand for high-quality dairy and meat products, given the fast-changing consumer preferences, changing lifestyles, increasing human population, and increased household income in the country.
The study areas are Regions 6 (Negros Occidental and Iloilo), 7 (Bohol and Cebu), 8 (Leyte), and 10 (Bukidnon and Cagayan de Oro), and Davao City; Negros Occidental and Cagayan de Oro as demand centers, the remaining study sites as production areas.
This project is expected to yield the following results:
Overview of the carabao and carabao-based products situation in the Visayas and Mindanao, with emphasis on global, national, and regional production (animal inventory stocks/heads, milk production and number of carabao slaughtered) and product forms;
Nature and structure of the industry which focuses on the description and number of players in the value chain, value chain maps showing the key players and their functions, participation of women in the different activities and processes in the value chain, product and information flows, economic analysis, and nature of inter-firm relationships (horizontal and vertical integration);
Analysis of markets and market opportunities of carabao products (market trends and product standards and requirements, including current and potential markets);
Support services (financial and non-financial) and business enabling environment;