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Marketing Costs Structure Calamansi PDF
Marketing Costs Structure Calamansi PDF
Series 6
June 2003
MARKETING COSTS
STRUCTURE FOR CALAMANSI
FOREWORD
ROMEO S. RECIDE
Director
Foreword ......................................................................................... i
Table of Contents ........................................................................... ii
Statistical Table .............................................................................. vii
List of Figures ................................................................................. vii
I. Introduction
Objectives
Scope and Limitation ....................................................... 1
II. Research
Methodology ................................................................... 2
IV. Problems/Constraints
Encountered ..................................................................... 32
13 Total Marketing Costs for Calamansi, by Point of Destination, Mindoro Oriental, 2001
14 Total Marketing Costs for Calamansi, by Point of Destination, Quezon, 2001 …………….
15 Total Marketing Costs for Calamansi, by Point of Destination, Guimaras, 2001 ……….
17 Marketing Cost for Calamansi, by level of Marketing Participants, Mindoro Oriental, 2001
I. Introduction
Objective
This study aims to determine the marketing flow and the corresponding
expenses incurred by marketing participants in distributing calamansi from the
producers to the consumers.
The study covered key supply and demand areas for calamansi in the
provinces of Quezon, Mindoro Oriental and Guimaras, representing Luzon and
Visayas.
The study traced the flow and the marketing costs of calamansi from the
production to the demand areas. At the demand areas, the study concentrated
on the costs incurred in marketing calamansi coming from a supply province but
not on calamansi produced in the demand province itself. For instance, in
Batangas, the costs borne by traders of calamansi from Mindoro Oriental were
covered but not the costs of moving calamansi produced in the municipalities
within Batangas province.
For each of the key supply province, the top 5 producing barangays were
chosen from the results of the household listing under the High Value
Commercial Crops (HVCC) project. From these top producing barangays, 40
calamansi farmers were selected purposively. Farmers who were engaged in
producing/trading calamansi from July 2000 to June 2001 were selected and
interviewed.
From the farm level, the team traced the traders identified by the farmer-
respondents as buyers of their produce. Most of them were located in the
trading centers. From the traders, the team then moved to the next point of sale
consisting of retail markets within the province and/or trading centers in the
partner provinces.
The first part of the report describes the distribution, profile and the
marketing functions and practices of the respondents. Part 2 presents the
marketing costs and the problems encountered by the respondents.
Profile of Respondents
Sample Farmers
Size of Farm. The size of farm of farmer respondents ranged from less
than 1.0 to more than 5.0 hectares (Table 3).
Sample Traders
Nature of Capitalization
! One respondent from Mindoro Oriental, one from Quezon and two
from Guimaras operated their businesses under financing.
30
20
10
0
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec.
25
20
15
10
0
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec.
40
30
20
10
0
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec.
Length of Experience
Procurement
Manner of Procurement
! There was one trader from Iloilo who procured calamansi fruits using
both pick-up and delivery.
Distribution
The following describes the mode of delivery and the terms of payment
made by the respondents.
! Thirty three (33) of the sample farmers and 3 traders from Mindoro
Oriental delivered calamansi to their buyers. On the other hand, 7
farmers and 6 traders let their buyers picked up the fruits from them.
Geographic Flow
Mindoro Oriental
Trading Centers:
-Naujan
-Pola
TRADING -Guitad
CENTERS -Calapan
-Victoria
-Bago
-Bagong Silang
-Lumang Bayan
Mindoro Oriental:
-Naujan
SUPPLY
-Pola
AREAS
-Guitad
-Calapan
-Victoria
-Bago
-Bagong Silang
-Lumang Bayan
Quezon Trading
Centers:
-Lopez
TRADING -Gumaca
CENTERS -Alabat
-Atimonan
-Tagcauayan
Quezon:
-Lopez
SUPPLY
-Gumaca
AREAS
-Alabat
-Atimonan
-Caglate
-Tagcauayan
-Caridad
-Magsino
San Lorenzo
Gaban
TRADING Buena Vista
CENTERS Jordan
Buena Vista
Sibunag
SUPPLY
San Lorenzo
AREAS
Gabon
Jordan
! Quezon
# From the farm, the fruits were distributed to the markets of Lopez,
Gumaca, Alabat, Atimonan and Tagcauayan (all within Quezon)
and to the provinces of Camarines Norte, Rizal and Metro Manila.
! Guimaras
Marketing Channels
! Mindoro Oriental
PROCESSOR
RETAILER
BODEGA
BOP
MA-MD
PA-LD BA-SD
FARMER
BUYERS
OUTSIDE
PROVINCE
RETAILER
BA-SD PA-LD
FARMER
INSTITUTIONAL
BUYERS
RETAILER
RETAILER FROM
OTHER MARKETS
BA-SD
MA-LD PA-LD
FARMER
! Quezon
! Guimaras
Marketing Costs
Labor
! Quezon incurred the highest labor cost with an average of P1.32 per
kilogram of calamansi which include labor in shipping, (P0.01) and
distribution cost, (P1.31).
! In Guimaras, relatively lower cost for labor was estimated at P0.66 per
kilogram of calamansi.
Transportation
Material Inputs
Costs of materials include those for containers (like “kaing”, sacks, plastic
bags, “bilao”, basket or wooden box), twine, old newspapers, etc. Aside from
those materials, banana leaves, needle, tie wire, different types of bags and
sacks were used in selling calamansi (Table 16).
! From farm to market, the cost of material inputs was P0.39 per kilogram
in Mindoro Oriental.
! Material cost for marketing was highest in Quezon at P0.82 per kilogram
of calamansi.
Depreciation
! In Iloilo and Guimaras, depreciation costs were P0.10 and P0.14 per
kilogram of calamansi, respectively.
The total marketing cost items includes the costs incurred by the sample
respondents on labor, transportation, material inputs, other operating expenses
and imputed costs on labor and depreciation of materials, equipment and
facilities. These items were aggregated according to cash outlay which include
cash, non cash and imputed costs.
! In Metro Manila, labor cost accounted for the biggest share at P1.30
which included salaries and wages; transportation costs, P0.69; other
operating expenses, P0.58; material inputs, P.57, and imputed costs,
P0.07.
! Quezon
Marketing Costs
Supply Area/ Destination
(peso per kilogram)
Mindoro Oriental
- supply area to markets within the province 2.36
- supply area to Batangas 1.91
- supply area to Metro Manila 1.62
Quezon
- supply area to markets within the province 1.23
- supply area to Rizal 1.13
Guimaras
- supply area to markets within the province 0.66
- supply area to Negros Occidental 0.80
- supply area to Metro Manila 0.89
Metro Manila
Mindoro Oriental to
Batangas = P1.91
Batangas
Mindoro Oriental
Quezon
Figure 11. Total marketing costs for Calamansi, by point of destination, Quezon,
2001
Guimaras to Metro
Manila = P0.89
Metro Manila
Within Guimaras =
P0.66
Guimaras/Iloilo
Negros Occidental
Guimaras to Negros
Occidental = P0.80
Figure 12. Total marketing costs for Calamansi, by point of destination, Guimaras,
2001
! Mindoro Oriental
! Guimaras
Marketing Margins
The estimation of marketing margin needs price data at which the product
is bought and sold at each stage in the marketing process. Costs incurred in
marketing plus the buying price give the estimated selling price.
RP
NM
TGM
FP + TC
FP
! Mindoro Oriental
! Quezon
At buying price of P12.73 and total marketing cost of P3.34, the estimated
selling price was P16.07 per kilogram. At the retail price of P41.53 per
kilogram, the trader’s share was P19.97.
PA-LD BA-SD
Shipping 0.56
Materials 0.053
Labor 0.10
Transporting 0.35
FARMER
Pre-marketing
Transportation 0.49
Figure 13. Marketing Costs for Calamansi, by level of Marketing Participants, Mindoro Oriental, 2001
Amount Market Price*
CONSUMER Practice/Activity/Cost Item
(P/kg) Level Price Range Ave.
BUYERS
OUTSIDE Estimated Selling Price w/o margin Retail 12.54 - 58.50 41.53
PROVINCE (buying price & total costs) 16.07
Materials 0.698
Labor 1.31
Transporting 0.26
Depreciation 0.22
Others 0.55
BA-SD PA-LD
Shipping 0.01
Transportation 0.16
Materials 0.13
FARMER
Figure 14. Marketing Costs for Calamansi, by level of Marketing Participants, Quezon, 2001
Amount Market Price*
CONSUMER Practice/Activity/Costs Item
(P/kg) Level Price Range Ave.
INSTITUTIONAL
BUYERS Estimated Selling Price w/o margin Retail 9.65 - 20.60 17.08
(buying price & total costs) 10.09
Materials 0.30
Labor 0.20
BA-SD Transporting 0.31
Depreciation 0.14
Others 0.23
MA-LD PA-LD
Shipping
Labor 0.14
Figure 15. Marketing Costs for Calamansi, by level of Marketing Participants, Guimaras, 2001
! Guimaras
Traders bought calamansi at P7.98 and spent about P2.11 per kilogram
during procurement and distribution. At an average retail price of P17.08, the
traders net margin was P6.99 per kilogram.
! Abundant supply and low quality of calamansi being produced by the farmers
resulted to lower price. One farmer stated that he lack information and
knowledge on the proper production and post harvest technology.
! Ten respondents from different province reported that their creditors did not
pay their loan or sometimes the payment for the commodities were delayed.
! Two traders lack capital to finance the buying and selling of calamansi.
Metro Manila 20 20
Pasay City 3 3
Quezon City 6 6
Manila 8 8
Mandaluyong 2 2
Caloocan City 1 1
Batangas 11 11
Tanauan City 5 5
Batangas City 6 6
Quezon 40 12 52
Alabat 16 4 20
Caridad 8 3 11
Magsino 8 8
Tagcauayan 8 8
Lopez 1 1
Gumaca 3 3
Atimonan 1 1
Mindoro Oriental 40 9 49
Pola 8 8
Baco 8 8
Naujan 10 10
Victory 14 2 17
Calapan 7 7
Guimaras 40 8 48
Buenavista 32 4 36
Jordan 2 2
San Lorenzo 8 2 10
Iloilo 11 11
Guimbal 1 1
La Paz 1 1
Iloilo City 9 9
Metro Manila 7 13 20 10
Mindoro Oriental 40 6 3 49 26
Batangas 7 4 11 6
Quezon 40 5 3 4 52 27
Guimaras 40 4 1 3 48 25
Iloilo 3 1 2 5 11 6
TOTAL 120 27 6 6 32 191 100
Table 3. CALAMANSI: Number and percentage distribution of farmer respondents,
by size of farm, by province, 2001
1.00 - 1.99 11 8 3 22 18
2.00 - 2.99 8 4 12 10
3.00 - 3.99 2 2 4 3
4.00 - 4.99 2 2 2
Mindoro
Tenurial Status Quezon Guimaras Total Percent
Oriental
Owner 32 35 39 106 88
CLT 2 1 3 3
Tenant 5 4 1 10 8
Others* 1 1 1
Metro Mindoro
Type of Business Batangas Quezon Guimaras Iloilo Total Percent
Manila Oriental
Single Proprietorship 20 5 11 12 7 11 66 93
Partnership 3 1 4 6
Corporation 1 1 1
TOTAL 20 9 11 12 8 11 71 100
Table 5a. CALAMANSI: Distribution of trader respondents, by type of marketing participants,
by type of business, by province, 2001
Metro Manila
Single Proprietorship 7 13 20
Mindoro Oriental
Single Proprietorship 2 3 5
Corporation 1 1
Partnership 3 3
Batangas
Single Proprietorship 7 4 11
Quezon
Single Proprietorship 5 3 4 12
Guimaras
Single Proprietorship 3 1 3 7
Partnership 1 1
Iloilo City
Single Proprietorship 3 1 2 5 11
TOTAL 27 6 6 32 71
Table 6. CALAMANSI: Distribution of trader respondents,
by nature of capitalization, by province, 2001
Metro Mindoro
Nature of Capitalization Batangas Quezon Guimaras Iloilo Total Percent
Manila Oriental
Self-financed 20 7 11 11 5 11 65 91
Under financing 1 1 2 4 6
TOTAL 20 9 11 12 8 11 71 100
Table 6a. CALAMANSI: Distribution of trader respondents, by nature of capitalization, by province, 2001
Metro Manila
Self-financed 7 13 20
Mindoro Oriental
Self-financed 5 2 7
Under financing 1 1
Under contract agreement 1 1
Batangas
Self-financed 7 4 11
Quezon
Self-financed 5 3 3 11
Under financing 1 1
Guimaras
Self-financed 3 2 5
Under financing 1 1 2
Under contract agreement 1 1
Iloilo
Self-financed 3 1 2 5 11
TOTAL 27 6 6 32 71
Table 7. CALAMANSI: Distribution of trader respondents, by length of experience,
by province, 2001
Metro Mindoro
Years in business Batangas Quezon Guimaras Iloilo Total Percent
Manila Oriental
less than 5 4 1 3 2 1 2 13 18
5 - 10 4 6 2 3 4 5 24 34
11 - 15 6 1 2 3 1 13 18
16 - 20 1 3 3 7 10
more than 20 5 1 1 1 3 3 14 20
TOTAL 20 9 11 12 8 11 71 100
Table 8. CALAMANSI: Major sources and destinations, by location,
by province, 2001
Source Destination
Province/City/Area
Within the province Outside the province Within the province Outside the province
Province Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec.
Mindoro Oriental
Planting 1 1 1 1 1 3 3 3 1
Harvesting 22 20 28 27 24 18 26 28 26 22 17 21
Trading 23 21 30 29 24 18 26 31 29 25 17 21
Quezon
Harvesting 18 17 24 24 26 23 24 27 27 25 20 17
Trading 16 12 16 21 22 19 20 23 17 16 12 14
Guimaras
Harvesting 35 35 38 39 40 32 33 36 40 34 33 39
Trading 35 35 38 39 40 32 33 36 40 34 33 39
Table 10. CALAMANSI: Distribution of respondents, by manner of procurement,
by province, 2001
Metro Mindoro
Mode of Delivery Batangas Quezon Guimaras Iloilo Total Percent
Manila Oriental
Picked up 12 3 4 3 10 32 45
Delivered 8 9 8 8 5 38 54
Both 1 1 1
TOTAL 20 9 11 12 8 11 71 100
Table 10a. CALAMANSI: Distribution of respondents, by type of marketing participants,
by manner of procurement, by province, 2001
METRO MANILA
Picked-up 2 10 12
Delivered 5 3 8
MINDORO ORIENTAL
Delivered 6 3 9
BATANGAS
Picked-up 3 3
Delivered 7 1 8
QUEZON
Picked-up 3 1 4
Delivered 2 2 4 8
GUIMARAS
Picked-up 3 3
Delivered 1 1 3 5
ILOILO
Picked-up 2 1 2 5 10
Delivered 1 1
TOTAL 27 6 6 32 71
Table 11. CALAMANSI: Distribution of respondents, by mode of payment in procurement,
by province, 2001
Metro Mindoro
Mode of Payment Batangas Quezon Guimaras Iloilo Total Percent
Manila Oriental
Cash 17 5 5 4 5 6 42 59
Consignment 3 4 6 8 2 4 27 38
Delayed Payment 1 1 2 3
TOTAL 20 9 11 12 8 11 71 100
Table 11a. CALAMANSI: Distribution of trader respondents, by type of marketing participants,
by mode of payment in buying stocks, by province, 2001
METRO MANILA
Cash 4 13 17
Consignment 3 3
MINDORO ORIENTAL
Cash 2 3 5
Consignment 4 4
BATANGAS
Cash 2 3 5
Consignment 5 1 6
QUEZON
Cash 1 2 1 4
Consignment 4 1 3 8
GUIMARAS
Cash 2 1 2 5
Consignment 1 1 2
Delayed Payment 1 1
ILOILO
Cash 3 2 1 6
Consignment 4 4
Delayed Payment 1 1
TOTAL 27 6 6 32 71
Table 12. CALAMANSI: Distribution of respondents, by manner of distribution,
by province, 2001
Metro Mindoro
Mode of Delivery Batangas Quezon Guimaras Iloilo Total Percent
Manila Oriental
Picked up 19 13 10 37 37 10 126 66
Delivered 1 36 15 11 1 64 34
Both 1 1 a/
MINDORO ORIENTAL
Picked- up 7 3 3 13
Delivered 33 3 36
BATANGAS
Picked- up 7 3 10
Both 1 1
QUEZON
Picked- up 33 2 2 37
Delivered 7 3 3 2 15
GUIMARAS
Picked- up 35 2 37
Delivered 5 4 1 1 11
ILOILO
Picked- up 3 1 1 5 10
Delivered 1 1
Metro Mindoro
Mode of Payment Batangas Quezon Guimaras Iloilo Total Percent
Manila Oriental
Cash 17 16 5 28 27 10 103 54
Consignment 3 33 6 24 21 1 88 46
METRO MANILA
Cash 4 13 17
Consignment 3 3
MINDORO ORIENTAL
Cash 12 1 3 16
Consignment 28 5 33
BATANGAS
Cash 1 4 5
Consignment 6 6
QUEZON
Cash 19 4 1 4 28
Consignment 21 1 2 24
GUIMARAS
Cash 19 4 1 3 27
Consignment 21 21
ILOILO
Cash 3 1 1 5 10
Consignment 1 1
Marketing
RA/LD MA/LD Retailer
Activity/Practice
peso per kilogram
Marketing
FARMER PA-LD MA-LD RETAILER
Activity/Practice
peso per kilogram
Procurement 0.14 0.05
Hauling 0.14 0.05
Marketing
PA-LD PA-MD RETAILER
Activity/Practice
peso per kilogram
Marketing
FARMER IRA-PA PA-LD PA-MD RETAILER
Activity/Practice
peso per kilogram
Distribution
Hauling 0.51 0.22 0.33
Handling 0.48 0.33
Sorting 0.64 0.56 0.16
Packing a/ 0.08 0.16 0.12
Cleaning 0.08
Weighing 0.08 0.16 0.12
Marketing
RA-LD RA-MD PA-SD RETAILER
Activity/Practice
peso per kilogram
Marketing
FARMERS IRA-LD PA-LD MA-LD MA-SD RETAILER
Activity/Practice
peso per kilogram
Shipping 0.14
Handling 0.11
Arrastre 0.03
METRO MINDORO
Practice/activity QUEZON ILOILO GUIMARAS
MANILA ORIENTAL
peso per kilogram
Pre-marketing 0.49
Procurement 0.35
Distribution 0.39
Procurement 0.35
Shipping 0.56
Marketing
RA-LD RA-MD PA-SD
Activity/Practice
peso per kilogram
Distribution 0.80
Marketing
IRA-LD PA-LD MA-LD MA-SD
Activity/Practice
peso per kilogram
Procurement 0.03 0.16 0.12 0.09
PUJ 0.03 0.16 0.12
Tricycle 0.09
Marketing Activity/
RA/LD MA/LD Retailer
Cost Item
peso per kilogram
Procurement 0.023
"Kaing" 0.020
Cover 0.003
Marketing Activity/
FARMER PA-LD MA-LD RETAILER
Cost Item
peso per kilogram
Marketing Activity/
RA-LD RA-MD PA-SD Retailer
Cost Item
peso per kilogram
Marketing Activity/
FARMER IRA-LD PA-LD MA-LD RETAILER
Cost Item
peso per kilogram
Metro Mindoro
Cost Item Batangas Quezon Iloilo Guimaras
Manila Oriental
peso per kilogram
Metro Mindoro
Cost Item Batangas Quezon Iloilo Guimaras
Manila Oriental
peso per kilogram
Transportation 0.010
Jeep 0.010
Materials used
Chair 0.002
Tent 0.014
"Bilao" 0.030
Basin 0.004
Equipment
Weighing scale 0.240 0.006 0.060 0.005 0.010
Facilities
Drying place 0.140
Metro Mindoro
Item Batangas Quezon Iloilo Guimaras
Manila Oriental
Cash
Labor 1.07 1.21 0.06 1.32 0.69 0.43
Hauling 0.10 0.35 0.10 0.16
Handling 0.03 0.34 0.13
Loading 0.20 0.05 0.03 0.09
Unloading 0.20 0.05 0.03 0.09
Sorting 0.50 0.45 0.31 0.08
Selling 0.14 0.15
Packing 0.19 0.09 0.10
Weighing 0.17 0.14 0.08
Cleaning 0.05 0.08 0.09
Handling fee 0.06 0.11
Arrastre
Stevedoring 0.01 0.03
Metro Mindoro
Item Batangas Quezon Iloilo Guimaras
Manila Oriental
Metro Mindoro
Item Batangas Quezon Iloilo Guimaras
Manila Oriental
Metro Mindoro
Item Batangas Quezon Iloilo Guimaras
Manila Oriental
Metro Mindoro
Item Batangas Quezon Iloilo Guimaras
Manila Oriental
Cart 0.02
Storage 0.02 0.02
Cell phone 0.004 0.07 0.004 0.01
Bilao 0.07 0.03 0.004
Basin 0.004
Drying place 0.14
Wooden box 0.01
Kamalig 0.05
Transportation
PUJ 0.01
Van 0.01
Jeep 0.01
Metro Mindoro
Item Batangas Quezon Iloilo Guimaras
Manila Oriental
Mindoro
Problems Batangas Quezon Iloilo Guimaras
Oriental
3. Delayed payment of
goods/non payment of
credit 5 3 2
4. Wastage 4
5. Inadequate farm to
market road 3
6. Absence of permanent
stall 3
7. Availability of shipping
lines that would transport
the goods. 3
9. Lack of information of
farm technology 1
13. Tong 1