Linking smallholder vegetable producers in the Philippines to urban markets - a scoping study

• University of the Philippines, Diliman, Philippines

Increasing urbanisation in the Philippines and through South East Asia requires the development of market linkages between consumers in the cities and smallholder vegetable growers in agricultural regions. A number of regions of the Philippines, in particular Luzon and poor areas of Mindanao can produce good quality vegetables, however quality is inadequate by the time vegetables reach urban consumers, especially at the upper end of the market. This scoping study undertook preliminary investigations into the issues of enhancing quality of smallholder vegetable produce, product aggregation methods, contractual/quality/price transmission issues and the role of market intermediaries.

Arising from this scoping study, six chains were identified:
Market specialist consolidator Chain leader: Dizon Farms, as the largest vegetable consolidator in Manila, is interested in establishing better linkages with farmer groups. Issues that need addressing for the chain associated with Dizon Farms include:
agronomic support at the farm level
poor handling and packing procedures
opportunism, inconsistent quantity and quality
chemical residues and food safety.
Product specialist consolidator Chain leader: Eden Corporation, the largest specialist tomato consolidator servicing the metro Manila market. Eden ships fruit from Northern Mindanao and Luzon. Issues that need addressing for the chain associated with Eden Corporation include:
technical expertise at the farm level
over-ripe and small fruit
disease issues
lack of market understanding
opportunism
high costs of transport.
Vegetable processor Chain leader: GTGF Corporation, a new processor who is a key supplier of coleslaw and lettuce to Jolibee and KFC. Issues that need addressing for the chain associated with GTGF include: lack of technical expertise at the farm level;
infrastructure, transport and packaging from the farm to processor
quality assurance along the chain
quality assurance at the processing factory.
Farmer group consolidator Chain leader: NORMIN Veggies, a collaborative farmer association mainly composed of independent farmers who are shipping better quality product to institutional markets in Manila, the Visayas and Mindanao. Issues that need addressing for the chain associated with NORMIN Veggies include:
technical expertise at the farm level; packaging and logistics
conflicts between small and large farmers
poor quality due to disease and weather
market opportunities in the Visayas.
Assisted farmer cluster groups Chain leader: Catholic Relief Services (CRS) - in Maragusan, several farm clusters are being assisted by CRS, the Kasilak Foundation and NORMIN Veggies to consolidate vegetables for institutional markets in Davao and the Visayas. Issues that need addressing for the Maragusan chain include:
agronomic assistance
identification of suitable markets for the quantities and qualities supplied by the farmer clusters
the best approach for organising farmers to deliver consistent quantities of product.
Food manufacturer Chain leader: General Tuna Corporation - the largest tuna cannery in Southern Mindanao. It produces a number of canned products that require a regular and reliable supply of vegetables. Currently, it relies upon imported and dehydrated vegetables primarily because it cannot identify a reliable supply from local producers. Issues that need addressing include:
facilitating the clustering process and the linkage to market
technical expertise at the farm level
quality assurance along the chain.
The first four chains already have some established market linkages. However, they each have areas for improvement and opportunities to create new linkages with collaborative farmer groups. For example, GTGF has already had discussions with NORMIN Corp and Benguet State University about creating linkages with additional groups of farmers. The latter two chains are in the development phase and will require linkages to be established along the chain. All chains are directly or indirectly linked to the Manila market and there are opportunities for ACIAR-related activities to observe and assist chain development based around a range of drivers, stages of development, length, quality and type of relationships, product requirements and geographic locations.