Cassava Chips and Granules - Philippine Rural Development Project

Transcription

PHILIPPINE RURAL
DEVELOPMENT PROJECT
(PRDP)
I-PLAN Component
Mindanao Cluster
VALUE CHAIN ANALYSIS AND
COMPETITIVENESS STRATEGY:
CASSAVA
Mindanao
DEPARTMENT OF AGRICULTURE
Mindanao Regions
September 2014
0
CONTENTS
CONTENTS
Page
EXECUTIVE SUMMARY
6
Section 1: Introduction
9
A.
Background Information Objectives
9
B.
Objective of the VCA
10
C.
Methodology and Approach
11
Section 2: Overview of the Industry
12
A.
Product Description
12
B.
Production Trends
14
Section 3: Nature and Structure of Industry
24
A.
Value Chain Mapping
24
B.
Key Players and Functions
28
C.
Nature of Interfirm Relationships
41
D.
Price and Cost Structure
45
Section 4: Markets and Market Opportunities
49
A.
Markets and Market Trends
49
B.
Price Trends
59
Section 5: Support Services
62
A.
Financial Services
62
B.
Non-Financial Services
63
Section 6: Enabling Environment
66
A.
Formal Rules, Regulations and Policies
66
B.
Informal Rules and Socio-Cultural Norms
64
Section 7: Constraints and Opportunities
Section 8: Competitiveness Direction
A.
Competitiveness Vision
68
76
76
B.
78
Priority Constraints / Opportunities and Intervention
Section 9: Conclusion and Recommendations
94
1
II/MB Final Report_November014
LIST OF TABLES
TABLES
1
Cassava By-Products for Industrial Use
2
Key Products Produces and Traded in Mindanao Region
3
Top 10 Cassava Producing Countries
4
Top 5 Countries In Terms of Average Yield (MT/hectare) CY 2013
5
RP Cassava Production CY 2013
6
Top Cassava Producers in the Philippines CY 2013
7
Top 10 Provinces: Volume and Yield
8
Production Trends: Zamboanga Peninsula
9
Production Trends: Northern Mindanao CY 2009-2013
10 Production Trends: Davao Region CY 2009-2013
11 Production Trends: SOCCSKSARGEN CY 2009-2013
12 Production Trends: Caraga CY 2009-2013
13 Production Trends: ARMM CY 2009-2013
14 Planting Materials Commonly Available in Mindanao
15 Distribution of Commercial Mixed Feed Manufactures by Region as of November 2012
16 List of Feed Mills and Integrators that have been Identified to the date to be sourcing
cassava from Mindanao
17 Starch Companies in Mindanao
18 Snapshot Relationship Assessment: Feeds Supply Chain
19 Lost and Retains: Cassava Farming – 1 Hectare
20 Relative Financial Position of VC Players: Cassava Chips and Granules
21 Relative Financial Position of VC Players: Cassava Chips and Granules
22 Philippine Export of Cassava. 2009-2013
23 Exporters of Cassava Chips and Pellets
24 Key Exporting of Countries of Cassava Products
25 Key of Importing of Cassava Products: 2013
26 Quality Standards
27 Philippine Imports of Chips and Pellets
28 Philippine Imports of Cassava Starch
29 Annual Per Capita Consumption of Cassava (Kg/year)
30 Price of Cassava Chips in Thailand
31 Indicative Prices of Cassava Products
32 Constraints and Opportunities
33 Summary of Constraints/Opportunities and Intervention
34 Proposed Value Chain Focus for Regions in Mindanao
Page
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LIST OF FIGURES
No.
Title
Page
1
SUPLY CHAINS IN THE CASSAVA SUBSECTOR
12
2
CASSAVA PRODUCTION IN THE PHILIPPINES, CY 2013
15
3
VALUE CHAIN MAP OF CASSAVA CHIPS AND GRANULES FOR FEEDS IN MINDANAO
24
4
VALUE CHAIN MAP OF CASSAVA TUBERS FOR STARCH COMPANIES IN MINDANAO
25
5
VALUE CHAIN MAP OF CASSAVA TUBERS FOR WET MARKETS IN MINDANAO
26
6
VALUE CHAIN MAP OF CASSAVA GRADES AND DELICACIES IN MINDANAO
27
7
FLOW OF CASSAVA PRODUCTS IN MINDANAO
28
8
HORIZONTAL METHOD OF PLANTING CASSAVA IN SULU
30
9
TYPICAL WAYS THAT FARMERS DRY THE CHIPS AND TUBERS
35
10
TYPICAL STORAGE AREAS OF CASSAVA CHIPS AND GRANULES IN MINDANAO
36
11
RELATIVE FINANCIAL POSITION OF VC PLAYERS: CASSAVA CHIPS AND GRANULES IN
MINDANAO, SCENARIO 1
46
12
RELATIVE FINANCIAL POSITION OF VC PLAYERS: CASSAVA CHIPS AND GRANULES IN
MINDANAO, SCENARIO 2
48
13
CASSAVA SUPPLY UTILIZATION IN THE PHILIPPIENES, 2013
53
14
SAMPLE OF CASSAVA CHIPS IN OTHER COUNTRIES
58
15
AVERAGE EXPORT PRICE OF CASSAVA CHIPS IN THE WORLD MARKET
59
16
SYNTHESIS FOR CASSAVA VALUE CHAIN COMPETITIVENESS VISION IN MINDANAO
76
17
SYNTHESIS FOR CASSAVA VALUE CHAIN COMPETITIVENESS VISION IN ARMM
77
18
SAMPLE INTERVENTION MODEL TO FACILITATE FARMERS’ ACCESS TO GOOD
QUALITY PLANTING MATERIALS
76
3
ANNEXES
Annexes :Ranking and Prioritizarion
Annex 1: Zamboanga Peninsula
Annex 2: Northern Mindanao
Annex 3: Davao Region
Annex 4: SOCCSKSARGEN
Annex 5: Caraga
Annex 6: ARMM
97
98
99
100
101
102
4
ACRONYMS
ASEAN
AFTA
ARMM
BAR
BAS
CDA
CFSA
CLOA
DA
DAR
DAR
DENR
DSWD
DTI
EU
FAO
FGD
FMA&RD
GAP
GHG
GMP
HACCP
IFAD
IFPRI
KII
MICC
MinDA
MLGU
MRDP
NCCAP
PDP
PIDS
PLGU
PPD
PRDP
SEC
SMFI
SOCCSKSARGEN
TCT
VCA
Association of Southeast Asian Nations
Asean Free Trade Area
Autonomous Region in Muslim Mindanao
Bureau of Agricultural Research
Bureau of Agriculture Statistics
Cooperative Development Authority
Certified Financial Services Auditor
Certificate of Land Ownership Award
Department of Agriculture
Department of Agrarian Reform
Department of Agrarian Reform
Department of Environment and Natural Resources
Department of Social and Welfare and Development
Department of Trade and Industry
European Union
Food and Agriculture Organization
Focus Group Discussion
Federal Ministry of Agriculture and Rural Development
Good Agriculture Practices
Greenhouse Gas
Good Manufacturing Practices
Hazard Analytical Critical Control Point
International Fund for Agricultural Development
International Food Policy Research Institute
Key Informant Interview
Matling Industrial & Commercial Corporation
Mindanao Development Authority
Municipal Local Government Unit
Mindanao Rural Development Project
National Climate Change Action Plan
Philippine Development Plan
Philippine Institute of Development Studies
Provincial Local Government Unit
Post-Harvest Physiology Deterioration
Philippine Rural Development Project
Security and Exchange Commission
San Miguel Foods Inc.
South Cotabato, Cotabato, Sultan Kudarat, Sarangani and General
Santos City.
Transfer Certificate of Title
Value Chain Analysis
5
EXECUTIVE SUMMARY
The Philippine Rural Development Project (PRDP), a flagship project of the Department of
Agriculture (DA), is designed to establish the government’s platform for a modern, climate-smart
and market-oriented agri-fishery sector. The design of PRDP and its implementation aspects draw
heavily on the experiences of the Mindanao Rural Development Projects (MRDP 1 and2), a program
that has been successfully implemented over the past decade. The program adopts a value chain
development approach as a platform for promoting inclusive, climate resilient, and sustainable
growth in key agricultural subsectors and value chains.
Cassava is one of the priority products of all the regions in Mindanao. Cassava has a strong
economic relationship with resource-constrained farmers situated in forest margins and marginal
lands. The crop can be grown under marginal conditions where few other crops could survive. It is
relatively tolerant of poor soil and seasonal drought and has an unrivalled ability to recover from
damage by pests and diseases. The crop offers the convenient flexibility that it can be harvested
when the farmers need it. It can be left in the ground for 7 months to 2 years after planting and then
harvested as needed. These characteristics make this crop a fundamental food and income security
in marginal agricultural lands. Hence, any development in cassava will have an implication on food
security, poverty alleviation, and on the protection and utilization of marginal lands in the
Philippines that at present contribute very little to agriculture.
Cassava is also an industrial crop and is now increasingly used by leading feed manufacturers in the
Philippines. Production of chips and granules for the feed industry provides a source of livelihood to
farmers and their household members and laborers in Northern Mindanao, SOCCSKSARGEN,
Zamboanga Peninsula, and Davao Region. The use of cassava in feed production has also contributed
to reducing corn importation.
The increase in cassava production in Mindanao has also to some extent helped in sustaining the
starch industry in the Philippines. Farmers in Lanao del Sur, Bukidnon, and Misamis Oriental are the
main suppliers of fresh tubers to the Mindanao starch industry.
Of the 2,361,527.54 MT of cassava produced nationwide in 2013, 77% came from Mindanao.
Between the period 2009 and 2013, cassava production in Mindanao increased by 17%. ARMM and
Northern Mindanao accounted for 90% of the Mindanao production.
National average yield in 2013 was at 10.88 MT per hectare while in Mindanao, it was at 13.16 MT.
At the regional level, SOCCSKSARGEN had the highest average yield at 25.70 MT followed by
Northern Mindanao at 23.89 MT.
The world trade in cassava products is sustained mainly by industrial demand. There are three main
cassava products that are traded in the international market, namely: chips, pellets, and starch.
Thailand accounted for about 68% of total chips and pellets exported and 82% of starch exports in
2013. As the biggest single country exporter, Thailand sets the price in the world market.
Collectively, average value of cassava products traded in the international market ranges from US$ 3
to 3.5 billion.
Cassava produced by Mindanao is used mainly as feed ingredients in the form of chips and granules,
as a raw material for starch production, and as food. Current supply of cassava is not sufficient to
meet requirements of the domestic feed industry. Philippines imports cassava chips and pellets from
Vietnam and Thailand. On the average, Philippines spent about US $ 4.25 million annually for
6
importation of chips and pellets during the last five years. The country is a net importer of cassava
chips and pellets. With livestock and aquaculture production and consumption in an increasing
trend, the use of dried cassava chips/cassava granules is expected to continue growing. With corn
production not expected to increase significantly, cassava is projected to become an increasingly
attractive option for commercial feeds manufacturers. Price competitiveness of cassava chips vis-àvis imported corn will be a major determinant on the sustained use of cassava for feed mixes. The
price of complementary products such as soybean meals also affects the demand for cassava
granules and chips.
Starch end-use applications have grown in number over the years and almost all major industries
have found some uses for starch. The food industry ranks as the largest end-use sector, with
sweetener applications representing the largest sub-segment worldwide. Cassava starch users in the
Philippines, however, prefer to source from Thailand because of price and quality characteristics
such as blandness, digestibility, lower gelatinization temperature, suitability for the manufacture of
top quality remoistening gums for labels, envelopes, and the like, good acid resistance and long
shelf life. Philippines spend an average of US$ 27.16 million per year for cassava starch imports.
Based on BAS data, annual per capita consumption of cassava decreased from 3.12 kilograms in
2008/09 to 2.83 kg in 2012. Many of the areas where there was a steep decline in annual per capita
consumption also had downward trend in their cassava production and/or an increase in
chips/granule production. The highest per capita consumption was in ARMM with 11.69 kg.
Zamboanga Peninsula ranked second with 4.45 kg. The national government and the Department of
Agriculture are conducting campaigns to increase cassava consumption to 5 kg as one of the
measures to ease the demand for rice.
Demand of cassava for human consumption will largely be driven by population growth especially in
Muslim communities rather than the general shift of preference for cassava. There is likely to be a
greater potential for processed and snack foods, where cassava may find a niche market. It can be
positioned as a halal and gluten free product with low fat and sugar content. There is a lack of supply
of halal food products in the Philippines and many of those sold in the market are imported from
Malaysia.
Demand of cassava for industrial uses and, to some extent, food depends on the relative prices and
supply of corn and other suitable crops. Hence, the growth of the cassava industry in Mindanao and
the realization of its potential to contribute significantly to the improvement of living conditions of
communities in marginal/fragile ecosystem hinges on putting in place a system that will sufficiently
meet the requirements of price, quality, and reliability of supply of tubers and its intermediate
products for industries such as the feed, starch, and the traditional food sectors. Within the next five
years, theMindanao cassava subsector will focus on building its capacity and capability to meet the
needs of the domestic market. Development directions for ARMM will be geared more towards
building its capacity to supply HALAL certified food products and livestock feed. Table 1 summarizes
the key constraints and proposed intervention strategies and approaches as identified and defined
during the Stakeholders Consultations.
Within the next five years, the cassava subsector will focus on building its capacity and capability to
meet the needs of the domestic market. Development directions for ARMM will be geared more
towards building its capacity to supply HALAL certified food products and livestock feed.
The following are the specific industry changes required to boost the competitiveness of the cassava
subsector parallel to enhancing its contribution to the food security status of its producers and
consumers:
7
-
Improved supply, access, and use of good quality planting materials, cost-efficient fertilizer
and other inputs,
-
Improved flow and quality of embedded extension services and adoption of sustainable
farming practices
-
Increase in number of cassava producing areas with access to GMP compliant postharvest
facilities
-
Availability and access to improved processing technologies, product development services,
and GMP and Halal compliant common service facilities for cassava-based food production
-
Establishment of halal village level feed milling facilities in ARMM to promote judicious
utilization of cassava and mitigate risks of oversupply parallel to reducing cost of livestock
production and to lay the groundwork for production of halal certified meat products
-
Improved farm to market roads
-
Improved production planning and supply chain coordination
8
Section 1:
INTRODUCTION
A. BACKGROUND INFORMATION AND OBJECTIVES
The agricultural sector strategy (Agri-Pinoy) embodied in the Philippine Development Plan (PDP) for
2011-2016 advances the principles of inclusive growth, food staple sufficiency, natural resource
management and area-based development. Agri-Pinoy also includes the following new strategies: (i)
institutionalizing regionally-based, spatial planning (ii) developing a systems approach for both
planning and resource allocation; (iii) providing the critical infrastructure needed by priority value
chains; and (iv) building a more resilient production base to accommodate fluctuations in global
markets and effects of climate change. Complementing the Agri-Pinoy strategy is the National
Climate Change Action Plan (NCCAP) which highlights the priority to be given to the rural sector in
pursuing climate adaptation measures.
The Philippine Rural Development Project (PRDP), a flagship project of the Department of
Agriculture (DA), is aligned with the Agri-Pinoy strategy. It is a six-year program (2013-2019)
designed to establish the government’s platform for a modern, climate-smart and market-oriented
agri-fishery sector. Externally, it will focus on expanding market access and improving
competitiveness. Internally, it will introduce reforms in operating the DA bureaucracy. Specifically,
it aims to achieve the following development objectives:



At least, 5% increase in annual real household incomes of farmer beneficiaries; 30%
increase in income for targeted beneficiaries of enterprise development
7% increase in value of annual marketed output
20% increase in number of farmers & fishers with improved access to DA services
To facilitate the achievement of above objectives, the program has four main components, namely:




I-PLAN: Investment for AFMP Planning at the Local and National levels
I-BUILD: Intensified Building-Up of Infrastructure and Logistics for Development
I-REAP: Investments for Rural Enterprises and Agricultural and Fisheries Productivity
I-SUPPORT: Implementation Support to PRDP
The design of PRDP and its implementation aspects draw heavily on the experiences of the
Mindanao Rural Development Projects (MRDP 1 and 2), a program that has been successfully
implemented over the past decade. The program adopts a value chain development approach as a
platform for promoting inclusive, climate resilient, and sustainable growth in key agricultural
subsectors and value chains.
Cassava is one of the priority products of all the regions in Mindanao. The root crop is one of the
most widely cultivated crops in Mindanao. It is predominantly cultivated by small holder farmers.
Farmers perceive cassava farming to be less risky compared to cereal crops. Likewise, cassava also
serves as a “safety net”, in case of cereal crop shortfall. Compared to grains, cassava is more
tolerant to low soil fertility and more resistant to drought, pests and diseases. Cassava has, by
comparison to other crops, a relatively high yield.
Cassava has a strong economic relationship with resource-constrained farmers situated in forest
margins and marginal lands. The crop can be grown under marginal conditions where few other
9
crops could survive. It is relatively tolerant of poor soil and seasonal drought and has an unrivalled
ability to recover from damage by pests and diseases. The crop offers the convenient flexibility that
it can be harvested when the farmers need it. It can be left in the ground for 7 months to 2 years
after planting and then harvested as needed. These characteristics make this crop a fundamental
food and income security in marginal agricultural lands. Hence, any development in cassava will have
an implication on food security, poverty alleviation, and on the protection and utilization of marginal
lands in the Philippines that at present contribute very little to agriculture.
Cassava production systems play a key role for farmers and have considerable proportion household
involvement including women both in farming, primary processing, and trading. It is processed
mostly by women into chips and food products. It is one of the food security crops consumed in
large quantities in Muslim dominated communities.
Cassava is also an industrial crop and is now increasingly used by leading feed manufacturers in the
Philippines. Production of chips and granules for the feed industry provides a source of livelihood to
farmers and their household members and laborers in Northern Mindanao, SOCCSKSARGEN,
Zamboanga Peninsula, and Davao Region. The use of cassava in feed production has also contributed
to reducing corn importation.
The increase in cassava production in Mindanao has also to some extent helped in sustaining the
starch industry in the Philippines. Farmers in Lanao del Sur, Bukidnon, and Misamis Oriental are the
main suppliers of fresh tubers to the Mindanao starch industry.
In the world market, trade of cassava chips and starch collectively reach an average of US$ 3 to 3.5
billion yearly. Mindanao’s competitiveness in the world cassava market may be developed in two
phases. In the first phase, focus should be on the development of a vibrant domestic cassava based
industry spanning feeds, food, starch, and, possibly, ethanol. Once a healthy cassava industry has
been established, worldwide export opportunities can be aggressively pursued.
B. OBJECTIVES OF THE VCA
Given that the four Mindanao regions generally share the same set of buyers from the feed industry
and the commonalities in production and marketing systems, the cluster level approach to VCA was
undertaken. Likewise, the cluster level approach to value chain analysis also hopes to bring
cohesiveness into the various cassava development initiatives that would be undertaken on a
provincial basis.
This report provides an overview and analysis of the cassava value chain with the aim of identifying
main leverage points and key strategies to improve competitiveness of Mindanao regions and
promote development in a pro-poor and sustainable manner. It will provide the basis for the
formulation of the Provincial Commodity Investment Plan and will lay the foundation for PRDP’s
cooperation with the private sector and other government agencies active in the cassava industry.
Specifically, the value chain analysis aims to:
a) Provide an in-depth understanding of the range of factors and relationships that affect the
performance of the cassava industry in the six regions and in Mindanao in general, including end
markets, enabling environment and coordination/cooperation among firms.
10
b) Identify in a participatory process the systemic chain level issues that hinder or promote the
gainful participation of rural households, sustainability of the chain, and its competitiveness in
general.
c) Under a participatory process, identify and prioritize interventions needed to overcome
bottlenecks throughout the chain that would foster value chain competitiveness and climate
change resiliency.
d) Identify and explore how to catalyse private and public sector stakeholders in the cassava
industry to collaborate for improved industry performance
C.
METHODOLOGY AND APPROACH
An initial desk study was conducted to collect and summarize information from currently available
reports and studies. It provided guidance to issues that needed to be the focus of field research. The
field work component of the study was conducted using qualitative research techniques particularly
value chain analysis workshops, key informant interviews (KII), and focus group discussions (FGDs).
Key informants and participants to the workshops and FGDs consisted of farmers, traders,
processors, exporters, and representatives from relevant government agencies. Key informant
interviews were used for collecting data on individuals’ perspectives, experiences, and quantitative
data. FGDs were effective in generating broad overviews of issues of concerns to the groups or
subgroups represented and in the triangulation/vetting of information obtained from the KII.
Constraints and interventions were identified and further elaborated based on iterative and
inductive analysis of responses during the KII and FGD/Stakeholders Workshop primarily from the
following perspectives:

Context of key informants and FGD participants

Third party observations (e.g., government agencies, providers, VC facilitators with
experience in cassava VC development projects, etc.) were important for suggesting
important issues to explore and for substantiating the results of the company interviews

Experiences of other cassava producing countries such as Thailand and Latin American
countries

Past assessment studies of the Philippine cassava industry
Competitiveness is generally defined as the ability to efficiently produce goods (and services) for
which there is high demand that leads to increased income generation capacities that are
sustainable in the future. Strategy is about choice --- choosing what to do to build competitiveness
from a long list of viable and promising options. Given the competing and varied incentives and
motivations among and between stakeholders and players, the process required iterative ranking,
and prioritization, and arriving a consensus on what needs to be done within the next 5 years. The
competitiveness strategies proposed in this report reflect the choices made as a result of extensive
analysis of the industry’s key constraints and a dialogue with stakeholders and players.
11
Section 2:
OVERVIEW OF THE INDUSTRY
A. PRODUCT DESCRIPTION
Figure 1. Supply Chains in the Cassava Subsector
Cassava (ManihotesculentaCrantz) is an important food source in many developing countries.
According to the Food and Agriculture Organization (FAO), more or less a billion people depend on
cassava as food staple in 105 countries. Widely grown in tropical Africa, Asia, and Latin America,
cassava is the fourth most important crop in developing countries. In the Philippines, cassava
contributes 4% to the gross value added in agriculture. A FAO report published in May 2013 said
cassava has a huge potential and could turn from "a poor people's food into a 21st century crop" if
grown according to a new environment - friendly farming model.
Cassava, which is also known as manioc, yuca, balinghoy, mogo, mandioca, kamotengkahoy, is a
perennial, woody shrub that grows between one to four meters in height. The root can grow up to
15cm in diameter and reach 120cm in length to weigh between one and eight kilograms. The roots
of a 1-1.5 year-old cassava plant have a starch content between 20% and 32%, which is high
compared to other starch food crops. Cassava is an excellent source of carbohydrates but an inferior
source of protein, fat and vitamins.
The cassava plant contains a root and leaves, which can both be processed to make various
products. The leaves are good substitutes and supplement to commercial feeds while the damaged
12
roots and skin can also be used as animal feeds. More products, however, can be made from the
roots than the leaves. Products from cassava’s roots have greater value as these require more
complex value added activities. The roots need to be processed to reduce the cyanide content to
safe levels before consumption. Once harvested, cassava tubers begin to deteriorate and cannot be
stored for more than a few days. They are bulky with about 70% moisture content which makes
transportation of the tubers to urban markets difficult and expensive. Thus, there is a need for rapid
processing of the tubers (before spoilage sets in) into various products with increased shelf life.
Cassava is acquiring an increased role in rural development as raw material for many industrial
applications. The most important industrial uses of cassava are as source of energy in animal diets in
the feed industry, for the starch industry, and more recently for the production of ethanol.
Table 1. Cassava By-Products for Industrial Use
Product
Chips and Granules
Description
Cassava chips and granules are used as feed ingredients. It is used as an
alternative or substitute to corn.
Chips can either be produced from peeled or unpeeled tubers. Peeled
chips command a higher price in the market. However, farmers and
processors in Mindanao generally crop unpeeled chips due to lack of
mechanical equipment for peeling.
According to farmers and
processors, manual peeling is very tedious and laborious and is not cost
effective.
Starch
The starch which is extracted from fresh roots is commonly used in the
manufacture of baked goods and confections, as a thickening agent,
bodying agent or dusting agent, or as a base for pharmaceuticals
(drugs).
Flour
It is completely gluten-free and can be used as a substitute for wheat
flour. Cassava flour has yet to evolve into a commercial product.
It is also used as a glue extender in the plywood industry.
Ethanol
Ethanol is produced by fermenting and distilling cassava. Ethanol has
various industrial uses: It can be mixed with petrol or used on its own as
a transport fuel. It can also be used as a base for alcoholic beverages.
Lastly, ethanol can be utilized as industrial alcohol which is important in
the pharmaceutical and cosmetic industry.
Cassava varieties are generally classified according to their use namely: (a) for food, (b) for animal
feed and (c) for starch production. Varieties for food and feed must be low in hydrogen cyanide
(HCN) while those used for starch or ethanol production must be highKey cassava products
produced and traded in Mindanao are the fresh tubers, chips and granules, delicacies, starch, and
the grates. Grated cassava is a supplemental staple food in Muslim households. Grates are also used
as substitute for fresh cassava in preparing local delicacies.
13
Table 2. Key Products Produced and Traded in Mindanao Regions
Fresh Tuber
Chips and
Granules
Grates and
Delicacies
Zamboanga Peninsula



Northern Mindanao



Davao Region



SOCCSKSARGEN



CARAGA



ARMM

Starch



B. PRODUCTION TRENDS
1. Global Production
Total cassava production from 103 countries in 2013 was about 281,320,084MT. Africa accounted
for 57% of global production with Nigeria as the top producer. Production from Nigeria made up
about 19% of world production in 2012. Asia contributed to around 32% of world production with
Thailand and Indonesia as the top producers. Philippines ranked 25th in terms of production volume.
Table3.Top 10 Cassava Producing Countries, 2012
Country
Production Volume (in MT)
% to World Production
Nigeria
54,000,000
19%
Thailand
30,228,000
11%
Indonesia
23,936,921
9%
Brazil
21,225,782
8%
Democratic Republic of the Congo
16,500,000
6%
Angola
16,411,674
6%
Ghana
14,550,000
5%
Mozambique
10,000,000
4%
Viet Nam
9,742,500
3%
Cambodia
8,000,000
3%
Others
76,725,207
27%
World Production
262,585,741
100%
Source: FAOSTAT
Except for Thailand and Vietnam, the top 10 producing countries produce cassava for domestic
consumption. Thailand, on the other hand, exports about 68% of its production in the form of
ethanol, pellets, and powder. Growth of cassava production is being fueled by rising demand for
food in the African continent and increasing industrial applications of cassava in East and Southeast
Asia, especially for ethanol and starch.
14
In 2013, India had the highest average yield at 34.96 MT/hectare, followed by Cook Islands at 25.75
MT/hectare. These yields have been surpassed by some provinces in Mindanao like South Cotabato.
Table 4.Top 5 Countries in terms of Average Yield (MT/hectare), 2013
Country
Average Yield (MT/hectare)
India
34.96
Cook Islands
25.75
Lao People's Democratic Republic
25.17
China, Taiwan Province of
24.55
Suriname
23.33
Source: FAOSTAT
2. Domestic Production
Figure 2. Percentage Breakdown ofCassava Production in the Philippines by Region, 2013
Of the 2,361,527.54 MT of cassava produced nationwide in 2013, 77% came from Mindanao.
Between the period 2009 and 2013, cassava production in Mindanao increased by 17%. Except for
CARAGA which registered a decrease of 61%, all of the other regions had increased cassava
production during the same period. SOCCSKSARGEN registered the highest percentage increase in
production volume followed by Zamboanga Peninsula. Among provinces, South Cotabato had the
highest percentage increase in production between 2009 and 2013.
15
Table 5. Cassava Production in the Philippines, 2013
Region/Island Group
Production Volume (MT)
% to RP Production
Luzon
305,695.74
13%
Visayas
243,589.26
10%
1,812,242.54
77%
Zamboanga Peninsula
52,310.18
2%
Northern Mindanao
601,288.53
25%
Davao Region
15,968.61
1%
SOCCSKSARGEN
89,868.15
4%
CARAGA
17,699.89
1%
ARMM
1,035,107.18
44%
Philippines
2,361,527.54
100%
Mindanao
Source: BAS
ARMM and Northern Mindanao accounted for 90% of the Mindanao production. ARMM is the top
cassava producing region in the Philippines followed by Northern Mindanao. The other regions
comprising the top 5 in terms of production volume in 2013 were Bicol, Central Visayas, and
Eastern Visayas.
At the provincial level, the top 5 cassava producers are all provinces in Mindanao particularly ARMM
and Northern Mindanao. Lanao del Sur had the highest production at 505,128.88 MT followed by
Bukidnon at 397,051 MT.
Table 6. Top Cassava Producers in the Philippines, 2013
Top 5 Regions
Top 5 Provinces
Volume
(jn MT)
% to RP
Production
Volume
(jn MT)
% to RP
Production
1,035,107.18
44%
Lanao del Sur
505,128.88
21%
Northern Mindanao
601,288.53
25%
Bukidnon
397,051.00
17%
Bicol Region
113,789.70
5%
Basilan
257,532.00
11%
Central Visayas
90,697.63
4%
Sulu
172,975.00
7%
Eastern Visayas
90,331.26
4%
Misamis Oriental
133,832.00
6%
Region
ARMM
Region
Source: BAS
In 2013, total land area planted to cassava was 217,142.62hectares and of which 63% were in
Mindanao. ARMM had the largest area planted to cassava at 97,486 hectares followed by Northern
Mindanao at 25,168 hectares.
Between the years 2009 and 2013, total area planted to cassava in the Philippines increased only by
1% while production volume grew by 16%. This implies that increase in production volume was
brought about by increase in yield rather than area expansion which is a better strategy. In
Mindanao, land area planted to cassava increased by 4% while volume increased by 17%.
16
National average yield in 2013 was at 10.88 MT per hectare while in Mindanao, it was at 13.16 MT.
On the other hand, the percentage increase in average yield between 2009 and 2013 was lower in
Mindanao compared to the national average.
At the regional level, SOCCSKSARGEN had the highest average yield at 25.70 MT followed by
Northern Mindanao at 23.89 MT. ARMM ranked third at 10.62 MT. Similar to ARMM, the three
other Mindanao regions had average yield lower than the national average.
Among provinces in Mindanao, South Cotabato had the highest yield at 33.17 MT. The six provinces
that were among the Top 10 in both volume and average yield are Lanao del Sur, Bukidnon, Basilan,
Misamis Oriental, South Cotabato, and Lanao del Norte.
Table 7. Top 10 Provinces in the Philippines in terms of Volume and Yield, 2013
Top 10 Provinces: Production Volume (MT)
Province
Volume
(in MT)
Ave Yield
(MT/ha)
Lanao del Sur
505,129
15.31
Bukidnon
397,051
Basilan
Top 10 Provinces: Average Yield (MT/hectare)
Province
Ave Yield
(MT/ha)
Area Planted
(ha)
South Cotabato
33.17
2,250
24.59
Bukidnon
24.59
16,150
257,532
14.73
Misamis Oriental
23.86
5,610
Sulu
172,975
6.33
Mis Occidental
23.14
1,830
Misamis Oriental
133,832
23.86
Sarangani
20.05
100
Tawi-tawi
95,636
5.05
Lanao del Norte
18.85
1,305
South Cotabato
74,622
33.17
Lanao del Sur
15.31
33,000
Lanao del Norte
24,599
18.85
Basilan
14.73
17,479
Zamboanga del Sur
21,060
7.69
Sultan Kudarat
13.78
157
Zamboanga City
19,947
9.83
Camiguin
12.66
273
Source: BAS
Zamboanga Peninsula
Production volume in Zamboanga Peninsula increased from 30,416.06 MT in 2009 to 52,310.18 MT
in 2013. Zamboanga del Sur had the highest production volume at 21,060.21 MT, followed by
Zamboanga City which produced a total of 19,946.79 MT.Expansion in cassava farming was primarily
triggered with the establishment of the BMEG feedmill in Zamboanga City. Another trigger for the
increase in production was the distribution of graters which provided farmers with opportunity to
pursue value addition.
Farm productivity in the region is still generally low and below the national average yield.
Nevertheless, cassava production in the region appears to be on an upward trend. Between 2012
and 2013, there was also a significant increase in average yield in all provinces. Cassava industry
players attributed the increase to the use of clean planting materials.Average yield of the region
though was still low and below the national average yield.
In Zamboanga del Sur, the local government in collaboration with the Department of Social Welfare
and Development (DSWD) and TVI Resource Development Philippines, Inc. (TVIRD)launched the
Cassava Production Project sometime third quarter 2012. The DSWD – PLGU project was piloted in
17
the municipalities of Pitogo, San Miguel, Kumalarang, Mahayag, Aurora and Pagadian City. The
beneficiary-barangays under the PLGU-TVIRD funding included Sigacad, Balukbahan, Matin-ao,
Datagan, Bubuan, Canuayan, Deporihan, Conacon, Bantal, Liba, Camp Blessing, Supon, Dipili,
Depore, Pulangbato, Dimalinao, Balunbunonan, San Isidro and Depase.
Table 8. Production Trends in Zamboanga Peninsula, 2009 to 2013
Volume: Metric Tons
Area Planted: Hectares Average Yield: MT/hectare
2009
2010
2011
2012
2013
Annual %
Growth Rate
ZAMBOANGA PENINSULA
Volume
30,416.06
30,746.41
30,352.44
30,053.28
52,310.18
14%
Area Planted
7,098.00
7,052.34
7,015.00
6,989.00
6,499.00
-2%
Average Yield
4.29
4.36
4.33
4.30
8.05
18%
Volume
7,500.31
6,798.07
6,156.88
5,877.73
7,703.11
1%
Area Planted
1,721.00
1,659.00
1,620.00
1,579.00
1,350.00
-4%
Average Yield
4.36
4.10
3.80
3.72
5.71
6%
Volume
11,116.95
12,061.07
12,251.28
12,098.70
21,060.21
18%
Area Planted
2,724.00
2,748.00
2,754.00
2,733.00
2,739.00
0%
Average Yield
4.08
4.39
4.45
4.43
7.69
18%
2,694.11
2,773.47
2,802.88
2,782.75
3,600.07
7%
Area Planted
428.00
449.34
480.00
464.00
380.00
-2%
Average Yield
6.29
6.17
5.84
6.00
9.47
10%
Volume
9,104.69
9,113.80
9,141.40
9,294.10
19,946.79
24%
Area Planted
2,225.00
2,196.00
2,161.00
2,213.00
2,030.00
-2%
Average Yield
4.09
4.15
4.23
4.20
9.83
28%
Zamboanga del Norte
Zamboanga del Sur
Zamboanga Sibugay
Volume
Zamboanga City
Source: BAS
Northern Mindanao
From 2009 to 2013, farm productivity in Northern Mindanao increased by an average of 2% per year.
All provinces except Misamis Oriental registered an increase in yield during the same period.
Production volume increased from 417,942.77 MT in 2009 to 601,288.53 MT in 2013. Highest
percentage increase in production volume was observed in Bukidnon. Bukidnon farmers generally
consider cassava as one of their main sources of income.
18
Table 9. Production Trends in Northern Mindanao, 2009 to 2013
Volume: Metric Tons
2009
2010
2011
2012
2013
Annual %
Growth Rate
NORTHERN MINDANAO
Volume
417,942.77
471,510.90
551,122.51
558,954.78
601,288.53
9%
Area Planted
18,933.00
20,938.00
24,358.00
24,440.00
25,168.00
7%
Average Yield
22.07
22.52
22.63
22.87
23.89
2%
Volume
240,200.00
255,200.00
306,178.00
312,000.00
397,051.00
13%
Area Planted
11,020.00
11,510.00
13,700.00
13,750.00
16,150.00
9%
Average Yield
21.80
22.17
22.35
22.69
24.59
3%
2,889.02
3,378.90
3,251.02
3,001.78
3,456.08
4%
Area Planted
272.00
280.00
272.00
252.00
273.00
0%
Average Yield
10.62
12.07
11.95
11.91
12.66
4%
Volume
21,407.00
23,900.00
24,350.00
24,770.00
24,598.95
3%
Area Planted
1,291.00
1,310.00
1,316.00
1,330.00
1,305.00
0.1%
Average Yield
16.58
18.24
18.50
18.62
18.85
3%
Volume
40,337.00
42,518.00
46,382.80
49,268.00
42,350.50
1%
Area Planted
1,810.00
1,888.00
1,897.00
2,048.00
1,830.00
0.2%
Average Yield
22.29
22.52
24.45
24.06
23.14
1%
113,109.75
146,514.00
170,960.69
169,915.00
133,832.00
4%
Area Planted
4,540.00
5,950.00
7,173.00
7,060.00
5,610.00
5%
Average Yield
24.91
24.62
23.83
24.07
23.86
-1%
Bukidnon
Camiguin
Volume
Lanao del Norte
Misamis Occidental
Misamis Oriental
Volume
Source: BAS
Davao Region
From 2009 to 2013, cassava production in Davao Region grew by an average of 1% per year. Davao
del Sur had the highest production volume in 2013 followed by Compostela Valley. Davao Region
had the highest percentage increase in production during the last 5 years.
Yield in Davao Region is generally low. The only province that registered a significant increase in
yield between 2009 and 2013 was Davao City.
Davao Oriental is gearing up to become the country’s top cassava producer after China via IRYAV
Development Corporation tapped the province to become one of their cassava suppliers. The
cassava processing plant venture is tied up with the Guangxi State Farms of Nanning City in Guangxi
19
Province, China. Target of the Chinese company is the phased establishment of a total of 8,200
hectares of cassava plantation. The municipalities identified for the cassava plantations are
Tarragona, San Isidro, Governor Generoso, Lupon, Banaybanay and Mati City. In Mati City, the
Chinese firm plans to secure 2,700 hectares for their cassava plantation while in the municipality of
Tarragona, 2,500 hectares; in San Isidro, 500 hectares; in Governor Generoso, 1,500 hectares; in
Lupon, 500 hectares; in Manay, 500 hectares; and in Banaybanay, 500 hectares. Target yield per
hectare is 50 MT. According to the Provincial Government, only the idle lands will be planted with
cassava while irrigated lands will solely be for rice so as not to affect the rice sufficiency program.
Table 10. Production Trends in Davao Region, 2009 to 2013
Volume: Metric Tons
2009
2010
2011
2012
2013
Annual %
Growth Rate
Volume
14,990.17
14,788.40
14,510.79
14,453.74
15,968.61
1%
Area Planted
2,218.50
2,174.00
2,159.00
2,106.00
2,175.00
-0.4%
Average Yield
6.76
6.80
6.72
6.86
7.34
2%
2,887.35
2,846.02
2,911.70
3,003.77
3,116.42
2%
Area Planted
416.00
410.00
420.00
429.00
453.00
2%
Average Yield
6.94
6.94
6.93
7.00
6.88
-0.2%
5,282.45
4,984.29
4,600.35
4,543.85
4,637.71
-2%
Area Planted
733.00
705.00
685.00
647.00
648.00
-2.32%
Average Yield
7.21
7.07
6.72
7.02
7.16
-0.1%
2,206.06
2,189.91
2,288.43
2,259.47
2,296.57
1%
Area Planted
350.50
340.00
340.00
333.00
363.00
1%
Average Yield
6.29
6.44
6.73
6.79
6.33
0.1%
3,766.61
3,921.88
3,792.96
3,630.92
3,656.53
-1%
Area Planted
470.00
470.00
458.00
422.00
410.00
-2.6%
Average Yield
8.01
8.34
8.28
8.60
8.92
2%
Volume
847.70
846.30
917.35
1,015.73
2,261.38
33%
Area Planted
249.00
249.00
256.00
272.00
301.00
4%
Average Yield
3.40
3.40
3.58
3.73
7.51
24%
DAVAO REGION
Davao del Norte
Volume
Davao del Sur
Volume
Davao Oriental
Volume
Compostela Valley
Volume
Davao City
Source: BAS/PSA
20
SOCCSKSARGEN
From 31,319.96 MT in 2009, SOCCSKSARGEN’s production increased to 89,868.15 MT in 2013. The
highest percentage increase in production of 88% occurred between 2012 and 2013. A big chunk of
the increase in volume came from South Cotabato, which in 2013 accounted for 83% of the
production. The second largest producer of cassava in the region in 2013 was North Cotabato. The
province though had the lowest yield among all provinces in the region. However, its yield was still
higher than the national average.
Table 11. Production Trends: in SOCCSKSARGEN, 2009 to 2013
Volume: Metric Tons
2009
2010
2011
2012
2013
Annual %
Growth Rate
Volume
31,313.96
34,555.57
43,385.96
47,851.78
89,868.15
37%
Area Planted
1,884.00
1,984.00
2,110.50
2,214.83
3,497.40
17%
Average Yield
16.62
17.42
20.56
21.61
25.70
11%
9,807.95
10,142.80
10,465.00
10,822.56
11,070.68
3%
Area Planted
955.00
983.00
987.00
990.00
990.00
1%
Average Yield
10.27
10.32
10.60
10.93
11.18
2%
1,783.00
1,720.00
1,755.25
1,767.50
2,013.00
3%
Area Planted
99.00
96.00
97.50
97.83
100.40
0%
Average Yield
18.01
17.92
18.00
18.07
20.05
2%
17,850.80
20,690.06
28,506.00
32,855.00
74,621.60
64%
Area Planted
670.00
735.00
831.00
952.00
2,250.00
47%
Average Yield
26.64
28.15
34.30
34.51
33.17
5%
1,872.21
2,002.71
2,659.71
2,406.72
2,162.87
3%
Area Planted
160.00
170.00
195.00
175.00
157.00
-0.4%
Average Yield
11.70
11.78
13.64
13.75
13.78
4%
SOCCSKSARGEN
North Cotabato
Volume
Sarangani
Volume
South Cotabato
Volume
Sultan Kudarat
Volume
Source: BAS
CARAGA
Cassava production in the region during the last five years has generally been on a declining trend
especially in terms of area planted. Land area planted to cassava decreased from 7,631.41 hectares
in 2009 to 2,860.00 hectares or a 63% decline. The highest percentage decline in volume was in
Surigao del Norte and Surigao del Sur. Decline in production volume in Surigao del Norte was
primarily due to decrease in land area. In Surigao del Sur, significant decrease in volume was
brought about by decline in land area and yield.
21
Based on stakeholders’ account, production of cassava in CARAGA was affected by the series of
typhoons in the area and farmers were not able to recover from the losses. Another thing, the
consolidators in the area temporarily stopped their operations. The industry is now looking forward
to revitalizing the industry.
Table 12. Production Trends in Caraga, 2009 to 2013
Volume: Metric Tons
2009
2010
2011
2012
2013
Annual %
Growth Rate
Volume
47,885.96
41,123.90
23,609.35
20,100.81
17,699.89
-13%
Area Planted
7,631.41
6,678.00
4,474.00
4,085.00
2,860.00
-13%
Average Yield
6.27
6.16
5.28
4.92
6.19
-0.3%
Volume
8,461.20
7,588.96
5,708.21
5,147.73
4,323.71
-10%
Area Planted
1,160.00
1,068.00
950.00
770.00
510.00
-11%
Average Yield
7.29
7.11
6.01
6.69
8.48
3%
5,453.89
5,693.90
3,593.81
3,792.32
4,209.66
-5%
Area Planted
520.00
547.00
415.00
425.00
480.00
-2%
Average Yield
10.49
10.41
8.66
8.92
8.77
-3%
Volume
11,973.92
8,401.04
4,154.24
3,265.76
3,121.52
-15%
Area Planted
3,054.41
2,458.00
1,349.00
1,130.00
540.00
-16%
Average Yield
3.92
3.42
3.08
2.89
5.78
9%
Volume
21,996.95
19,440.00
10,153.09
7,895.00
6,045.00
-15%
Area Planted
2,897.00
2,605.00
1,760.00
1,760.00
1,330.00
-10.8%
Average Yield
7.59
7.46
5.77
4.49
4.55
-8%
CARAGA
Agusan del Norte
Agusan del Sur
Volume
Surigao del Norte
Surigao del Sur
Source: BAS
ARMM
During the last 5 years, ARMM produced an average of 1,016,545.50 MT of cassava per year. The
high production volume of cassava in the region is attributed to two factors, namely: i) cassava is a
staple food crop in Sulu Archipelago and among Muslim population in Lanao and Cotabato; and ii)
the presence of Matling Industrial & Commercial Corporation (MICC) which started cassava
production way back in 1954.
ARMM’s production in 2013 slightly increased by 2% over 2009 performance. This was brought
about primarily by the increase in land area planted to cassava which grew at an average of 1% per
year during the five year period. The increase in land area, however, was negated with the decline
22
in yield at the average rate of 0.3% per year. From 2009 to 2013, production volume increased by an
average of 0.4% per year.
Table 13. Production Trends in ARMM, 2009 to 2013
Volume: Metric Tons
2009
2010
2011
2012
2013
Annual %
Growth
Rate
1,012,330.46
1,008,867.31
1,007,453.58
1,018,968.97
1,035,107.18
0.4%
Area Planted
94,091.00
94,029.00
94,171.00
95,777.00
97,486.00
1%
Average Yield
10.76
10.73
10.70
10.64
10.62
-0.3%
Volume
237,262.80
240,150.73
245,923.55
249,966.00
257,532.00
2%
Area Planted
17,223.00
17,224.00
17,469.00
17,474.00
17,479.00
0.3%
Average Yield
13.78
13.94
14.08
14.31
14.73
1%
Volume
494,004.00
493,780.00
485,744.67
495,878.00
505,128.88
0.5%
Area Planted
29,220.00
29,220.00
29,220.00
31,000.00
33,000.00
3%
Average Yield
16.91
16.90
16.62
16.00
15.31
-2%
4,194.00
4,000.00
3,732.00
3,653.00
3,835.30
-2%
Area Planted
805.00
815.00
718.00
700.00
745.00
-1%
Average Yield
5.21
4.91
5.20
5.22
5.15
-0.2%
Volume
178,285.00
172,509.00
173,800.00
172,990.00
172,975.00
-1%
Area Planted
27,864.00
27,826.00
27,826.00
27,665.00
27,325.00
-0.4%
Average Yield
6.40
6.20
6.25
6.25
6.33
-0.2%
Volume
98,584.66
98,427.58
98,253.36
96,481.97
95,636.00
-1%
Area Planted
18,979.00
18,944.00
18,938.00
18,938.00
18,937.00
-0.04%
Average Yield
5.19
5.20
5.19
5.09
5.05
-1%
ARMM
Volume
Basilan
Lanao del Sur
Maguindanao
Volume
Sulu
Tawi-tawi
Source: BAS
23
Section 3:
NATURE AND STRUCTURE OF THE INDUSTRY
A. VALUE CHAIN MAPPING
Cassava is among the important source of food, feed, and starch in Mindanao and the Philippines as
a whole. Below are the key supply chains of cassava in Mindanao.
Cassava Chips and Granules for Feeds
Figure 3. Value Chain Map of Cassava Chips and Granules for Feeds in Mindanao
Farmers have the option of selling their harvest as fresh tubers or as dried chips. Many of the
farmers prefer to sell fresh tubers either to traders or to the cooperatives engaged in chips and
granule production. Harvesting and transport of tubers or chips are taken cared by traders but with
costs deducted from gross proceeds. The traders and the cooperatives deliver the chips and/or
granules to assemblers or directly to the feed companies. Feed companies accept both chips and
granules but there is a general preference for granules. Many of the traders and assemblers are
vertically integrated companies with activities spanning from input provision to granule production
and sales to feed companies.
Areas with chips and granule production are Northern Mindanao (especially Misamis Oriental,
Bukidnon, and Misamis Occidental), South Cotabato, Sarangani, Davao Region, Zamboanga City, and
Zamboanga del Sur. Excapt for Zamboanga del Sur, chips and/or granules are sold within the region.
24
Zamboanga del Sur brings their chips and granules to Ozamis City.It is estimated that the feed
industry utilizes about 28% of Mindanao’s production or about 507,334 MT of cassava tubers in
2013.
Fresh Tuber for Starch Companies
Figure 4. Value Chain Map of Cassava Tubers for Starch Companies in Mindanao
The starch supply chain is very short. Starch companies transact directly with growers. Bulk of their
supply is sourced from contract growers within the provinces where the plants are established and
neighboring municipalities. Independent farmers can deliver directly to the companies. The
companies buy fresh tubers at PhP 2 to 2.50/ kilo. Matling sources from General Santos when they
lack supply. Buying price at General Santos is at PhP 4 to 4.50 to be at par with the price offered by
intermediaries for the chips and granules subsector.The starch industry utilizes about 26% of
Mindanao’s production or approximately 474,340 MT of cassava tubers in 2013.
Fresh Tuber for the Wet Market
For cassava farmers in areas with noprocessing facilities, starch factories, SMFI /BMEG buying
stations, and feedmills, the wet market and bagsakan are their key markets. Fresh tubers are sold
either directly to the vendors or to wholesalers. In areas like Northern Mindanao and South
Cotabato, farmers sell to the wet market when they have surplus production or when in need of
immediate cash. Price paid by vendors is generally higher than institutional buyers. However,
absorption capacity is smaller compared to industrial processors. Main buyers of fresh tubers are
25
Muslim households and those engaged in the production of cassava based delicacies. About 11% of
Mindanao’s production is sold in the wet markets or an estimated of 190,546 MT in 2013.
Figure 5. Value Chain Map of Cassava Tubers for Wet Markets in Mindanao
Cassava Grates and Local Delicacies mainly for Muslim communities
In this chain, cassava is processed into traditional food products at household and micro processing
centers. Processing is usually carried out by farmers themselves of by micro enterprises in makeshift
cooking areas. For processors without their own supply of tubers, they can buy from farmers,
traders, and from vendors in wet markets. Traders in this chain buy fresh tubers, grates, and
delicacies. Grates and the cassava delicacies are usually sold in wet markets or in neighbourhood
stores/stalls. Some enterprising Filipinos sell small quantities of cassava grates and delicacies to
Tausogs in Sabah and Malaysia.
It is estimated that about 30% of Mindanao’s cassava production (about 549,410 MT) is utilized in
the manufacture of grates and local delicacies. About 85% of the cassava supply came from ARMM
and utilized within the provinces.The chain is very dominant in ARMM provinces. Zamboanga
Peninsula supplies cassava grates and delicacies to ARMM provinces.
26
Figure 6. Value Chain Map of Cassava Grates and Delicacies in Mindanao
Inter-regional trade of cassava products is minimal given the perishability of products and bulkiness
of tubers. The decision to trade outside the region is borne out of ease and cost of transportation.
Traders and producers of chips in Zamboanga del Sur, for example, prefers to sell to the SMFI
assembler in Ozamis City rather than to the BMEG feedmill in Zamboanga City due to proximity.
Trading of cassava grates and delicacies is very robust though between Zamboanga City, Basilan,
Sulu, and Tawi-tawi. Cassava grates processors in Zamboanga City sometimes source fresh tubers
from Zamboanga del Sur.
27
Figure 7. Flow of Cassava Products in Mindanao
B. KEY PLAYERS AND FUNCTIONS
1. Input Provision
Farmers acquire planting materials from their own farms from previous cropping or they buy from
other cassava growers engaged in selling of planting materials. A hectare of land devoted to growing
of planting materials can provide stalks sufficient for at least 7 hectares. The planting materials are
sold by sack with price ranging from PhP 60 to 100/sack. The price variations seem to be location
specific. The practice of buying planting materials is more prevalent in South Cotabato compared to
other cassava producing regions. The more dominant practice among farmers is to select the best
stalks from their own farm. Many of the farmers following this practice related that they had
declining yield especially after three consecutive years of “recycling” planting materials.
Starch companies generally provide planting materials to their outgrowers. Tateh has set-up a
nursery in their plant in Bukidnon to cater to the needs of their suppliers. SMFI/BMEG
providesadvice and recommendations on variety selection and in some cases provide planting
materials to their assemblers.
From the interviews and FGDs, it would appear that there is a lack of effective demand for nursery
produced planting materials primarily because many of the farmers are not aware of the
implications of using stalks from own farm. They are only able to acquire new planting materials
when government provides free planting materials or when they participate in growership program
28
via their cooperatives. In many cases though, the local government units do not have sufficient funds
to provide planting materials to all farmers and for an infinite period.
A concern raised by farmers who are buying planting materials is the lack of information on sources
of planting materials and areas with surplus production. Another concern raised by farmers is the
difficulties in sourcing planting materials of high yielding varieties other than the KU 50, Lakan 1, and
Rayong 5.
Table14. Planting Materials Commonly Available in Mindanao
Variety
Average Yield (Tons/Hectare)
Description
UPL Cv-2 or Lakan 1
46
All-purpose variety; yellow
flesh and cream cortex; dry
matter, 34-45%; starch, 2533%; field resistance to leaf
spot and bacterial blight
LSU Cv-15 or Rayong 5
40
All-purpose variety; white flesh
and pink cortex; dry matter,
40,.1%; starch, 29.4%; field
resistance to spider mites,
white peach scale insects, and
bacterial blight
Golden Yellow
30
Most
commonly
available
multi-purpose variety;
dry
matter, 40%
NSIC Cv 22 or KU - 50
52
Industrial (non-edible) variety;
DA’s national check variety; dry
matter, 39.1%
Sources: Bioethanol Website/Yields as per experience in South Cotabato
Other problems raised by farmers with regards to procurement of planting materials are: a)
inconsistent quality such as sale of immature stalks (less than 8 months old); b) supply is limited
especially during peak planting season; c) sources not readily accessible and high cost of
transporting planting materials since these are bulky; and d) no standard pricing. On the other
hand, there are only a few cassava growers/nursery operators who have the ability to rapidly mass
propagate the high yielding varieties. Another consideration is the cost in transporting the materials
which can be at times higher than the cost of the cuttings/stalk.
Chemical fertilizer is sourced from agri-vet suppliers. There are also suppliers of organic fertilizer
such as the vermicast but according to key informants these are more of soil conditioners and are
not certified. Likewise, the available supply of organic fertilizer is not closely aligned to
requirements for cassava.
Farmers who use fertilizer (only very few) are generally using the chemical fertilizer. Fertilizers
account for about 20% to 30% of total cost of production.The high prices of chemical inputs make it
almost impossible for farmers to access fertilizers. In some cases, traders or assemblers extend loan
or provide the fertilizer to their regular farmer-supplier. In the short term, this helps the farmer to
finance input requirements but, oftentimes, it also binds the farmer to discounted prices and/or high
interest rates.
29
A study conducted by the Philippine Institute of Development Studies (PIDS) revealed that fertilizer
prices are highest in ARMM. This was attributed to marketing inefficiencies and poor road
infrastructure.
2. Farming
Figure 8. Horizontal Method of Planting Cassava in Sulu
Cassava can be planted as a sole crop in monoculture system or intercropped with other crops.
Intercropping during early crop development is the common practice among farmers in Mindanao.
In Bukidnon though, majority of the farmers appear to plant cassava in monoculture system.
Yields in many areas in Mindanao as seen in the previous section, have risen much less over the last
five years. Factors that have contributed to the relatively slow growth in productivity include
occurrence of pests, diseases, a low application of inputs, the relatively slow dissemination of
improved cassava varieties, and poor farming practices. Low cassava yields relative to their
potential1 also reflect the influence of subsistence production systems, The following are the key
operations and typical practices of farmers in Mindanao.
Land Preparation
Cassava needs a sufficiently loose-textured soil to facilitate initial root penetration and to allow for
root thickening. It is also susceptible to weed competition, excessive soil moisture and root rot. As
such, it is necessary that stakes are planted in soil that has been loosened and cleared of weeds.
30
Land is prepared for cassava at different intensities. Majority practice the conventional tillage using
the tractor. There are still a few though who uses the carabao or both tractor and carabao.
Continuous conventional tillage may potentially bury the soil’s protective cover, kill soil biota, cause
the rapid decomposition of organic matter, and degrade soil structure by pulverizing soil aggregates.
It is also one of the high energy demanding activities in cassava farming. Likewise, rental of tractors
is costly for many of the smallholders. As such, some farmers combine both conventional and
conservation tillage.
In studies conducted by Villamayor (1983) and Pardales (1986), land preparation is one of the factors
that significantly affect the yield of cassava. According to these studies, the conventional method,
consisting of harrowing – plowing- harrowing-and making furrows gave the highest percentage
germination and yield. Due to resource constraints, smallholders often opt for “shortcuts” and the
minimum requirements to save on costs. Likewise, during the rice and corn planting season, cassava
farmers find it difficult to rent a tractor. Recent studies though have shown that tilling can be
minimized provided that the soil is healthy, well-structured and free of compaction (Derpsch, R., et.
al, 2010.) Experiences of farmers in South Cotabato attempting to shift towards an organic farming
system or simply to save on land preparation costs also support the findings that intensity of tillage
can be reduced through practices that improve organic matter content and soil structure.
In areas where farmers plant cassava continuously in the same field year after year, high levels of
pest and disease incidence and reduced yield have been observed. In Banga-South Cotabato,
farmers rotate the planting of corn and cassava. A rotation system generally improves soil fertility,
reduces soil erosion, helps to control diseases and pests, and increases net income per unit area of
land.
Planting
The use of quality planting, disease free planting materials of high yielding varieties is crucial in
cassava production. With vegetatively propagated crops, diseases and pests can build up over
several generations of propagation, a problem that is negligible with botanic seeds. Current practices
involve the use of cuttings/stalks gathered from own farm or bought from growers who are also into
propagation of cassava stalks. Farmers generally prefer to use planting materials from own farms
due primarily to cost considerations. The transportation costs involved in moving cassava planting
material from source to farm are high relative to its base cost, hence; cassava planting material is
multiplied more often at the farm level. The practices of using stalks from own farm can make the
crops vulnerable to pests and diseases. Likewise, this may result to declining yields.
Quality assurance system for planting materials is not yet well-established. Likewise, there is a lack
of an effective system for rapid multiplication and distribution of new varieties with high yield
potential, high harvest index, and high root starch content which is essential for sustainable
intensification of cassava production in Mindanao.
In many areas in Mindanao, cassava is primarily a rainfed crop with majority grown by smallholders.
Although farmers are very knowledgeable on the technical aspects of cassava farming, many still lack
the scientific know-how and rationale. Yields from rainfed cassava production, for example, can
further be optimized if farmers pay careful attention to planting dates, the selection of planting
methods and planting positions that make the most of available soil moisture, and soil management
practices that help to conserve water.
31
Weeding
Cassava requires effective weed control especially during the establishment phase of the crop for
optimum yields. Weed competition is a major constraint to yields (Fermont et al, 2010). Weeds are
often a more serious production constraint than pests or diseases and can reduce yields significantly.
Uncontrolled weed growth can result in almost total yield loss (Chew et al., 2012). However, as
gathered during the KII, only a small percentage of smallholders use the right quantity of herbicides
due to lack of appreciation of the benefits and/or lack of financial resources. Majority rely on
manual weeding with occasional use of herbicides Based on the experiences of farmers interviewed,
weed competition can also be reduced by early and adequate application of fertilizer to speed up
canopy closure and intercropping,
Fertilizer Management and Application
While cassava grows better than most crops on marginalized land, this does not mean that the crop
does not need, or does not respond to, fertilizer application. Like most other crops, cassava grows
and yields better on more fertile soils and responds well to fertilizer applications when grown in
poor soils. Farmers apply fertilizer but not necessarily in the adequate amounts or in the right
proportion of N, P, and K especially among smallholders. Application of fertilizer is of varying
intensities determined mainly by their access to resources and not necessary related to yield
considerations for many small farmers; the use of fertilizers will affect costs significantly. Based on
data gathered during the KII and FGDs, cassava generates marginal income when using low inputs
but income (returns) can more than double with the use of fertilizers.
Majority use chemical fertilizer. An emerging good practice that some farmers in Mindanao are
doing is the application of organic fertilizer. Experiences of these farmers, as shared during the FGD,
indicate that use of organic fertilizer can potentially lead to 33% increase in yield. Likewise, farmers
recounted that by using organic fertilizer, they are able to incrementally reduce the use of synthetic
fertilizer in subsequent croppings.
Fertilizer costs are among the major expenses in cassava farming. To reduce economically wasteful
and environmentally harmful losses of fertilizer nutrients, farmers should seek to maximize fertilizer
use efficiency starting with investment in soil analysis. Soil analysis is not generally made use of as a
guide to fertilizer management and application. SMFI suppliers and assemblers are now required to
submit a soil analysis.
Harvesting
To get maximum return, cassava must be harvested at the right age (10 months and above). If
harvested earlier as many of the smallholders do, dry matter content tend to be low resulting to
price discounts in addition to overall low yield.
A common practice among farmers in ARMM is not to harvest all cassava roots at one time. Instead,
harvesting is done on staggered basis, depending on household requirements or on marketing
schedule.
Care must also be taken that there are no bruises or cuts in the tubers. Wounds and bruises are the
triggers of primary deterioration. Wounds and bruises also constitute points of entry for microorganisms leading to the second stage of cassava root spoilage. Poor handling during harvesting and
transport are among the key factors contributing to postharvest losses.
32
Harvesting is the most expensive operation in cassava production. Labor and hauling costs are
usually shouldered by the traders/assemblers. Aside from the fact that many of the farmers are
financially constrained, it is to both the interest of the farmers and traders to have the tubers
delivered immediately to the processing plant to ensure product quality. The rapid post-harvest
physiological deterioration (PPD) of cassava within 3-4 days causes substantial quantitative and
qualitative post-harvest losses. Bruises and cuts inflicted during harvesting contribute to quality
deterioration. Proximity of the chipping and granule production plant to the farms is also a vital
consideration. In addition to quality considerations, the bulkiness of fresh cassava can cause
transportation costs to be a large share of the final price. To distance from the farm to the plant can
make a difference between profit and loss.
One of the constraints faced by farmers in cassava farming is the relatively long production cycle
compared to other crops that can be harvested and sold within a period of 3 to 4 months. Likewise,
in many areas, farmers usually plant cassava all at the same time thus processing plants (chipping
and granulation) are generally underutilized at certain times of the year. To address farmers’ and
processors’ problem, Zamboanga del Sur is experimenting with a modular and coordinated
approach to cassava farming that would allow farmers to plant several plots at various times of the
year with harvests spread out on a monthly basis. If successful, this can be something that other
cassava producing areas may want to adopt.
The rural road system in some of the cassava producing areas is inadequate and in poor state of
repairs requiring rehabilitation. Some of cassava growing areas are not accessible by motor vehicle.
This makes it difficult for farmers to bring their produce to the market or for traders to pick up the
fresh tubers. Delays in processing significantly contribute to quality deterioration.
3. Chips and Granule Production
Entry of feedmill companies in Mindanao provided incentives for farmers to expand into production
of dried cassava chips. Cassava is a tuberous root that contains 60% to 70% moisture and has a shelf
life of 2 to 3 days. Once harvested, it has to be either consumed immediately or processed into more
stable product forms. Processing also removes naturally-occurring toxins, reduces the product’s
weight for transport, decreases post-harvest losses resulting from root breakage, and extends shelf
life (FAO & IFAD, 2000). By processing the roots into dried chips, the problems of bulk and
perishability can be overcome. A stable product in the form of chips is reached when moisture
content falls 14% and below.
Chips and granules production is carried out by the following players in the chain:
a) Farmers: Farmers engaged in chip processing are primarily members of cooperatives and those
with more than 1 hectare of cassava farm. Many of the farmers prefer to sell fresh tubers due
to labor and transport cost considerations and limited access to facilities (knives, chipper, dryer).
Chipping is carried out manually using a knife or by using the mechanical chipper of the
cooperative for a fee of PhP 0.10 per kilo (for cooperative members) and PhP 0.15 (for nonmembers). The rental fee includes fuel. Labor cost is shouldered by the farmer. Drying is done
using a solar dryer or spread out in mats and concrete pavements.
Labor cost for manual chipping is at PhP 10 to 12/sack (about 50 to 60 kilos of fresh tubers). On
the average, a “chipper” earns PhP 240 to 300 per day during peak season. According to
farmers, recovery from manual chipping is higher by 3% compared to mechanical chipping.
33
b) Cooperatives: Cooperatives buy fresh tubers and chips from farmers (members and nonmembers) as well as provide farmer-members with cash advances for fertilizer, labor, and
planting materials. In cases where farmers deliver fresh tubers, the cooperative does the
chipping and drying. The dried cassava chips are either further processed into granules or sold
as chips to assemblers. In South Cotabato, farmers can rent the chipping facility of the
cooperatives.
c) Traders/Assemblers: In addition to their trading and distribution functions, many of the traders
and assemblers are also engaged in chipping and granulation. Assemblers in Northern Mindanao
prefer to buy chips and undertake the granulation themselves to ensure quality and compliance
to SMFI requirements.
The production of dried chips involves several operations, namely: a) washing of chips to remove
soil and other foreign matters; b) size reduction of roots or chipping with the use of a knife or a
mechanical chipper to shorten the drying time and ensure efficient elimination of cyanide present in
fresh roots; c) solar drying of chips to reduce moisture content to 14% and further eliminate cyanide
content; and d) granulation. Below is the description of the key operations and current practices
among cassava processors in Mindanao.
Washing/Cleaning of Tubers
Cleaning is usually done by washing the tubers. The other option is to air dry the tubers for 2 to 3
days. In Bukidnon and South Cotabato, a general practice among farmers is to air dry the tubers
prior to chipping rather than washing since water access is sometimes also a constraint and
constitutes additional cost. There are though a number chips are intended for feeds and not for
human consumption. Nevertheless, feeds consumed by livestock would indirectly also affect the
general well-being of both animals and consumers. Likewise, processing of fresh roots that have dirt
attached to them will result to poor quality dried chips because of the high ash content, especially
silica.
Chipping
Roots are chopped to increase the surface area that is exposed to the air to make the drying faster.
Cutting the roots also releases the cyanide and helps to reduce cyanide levels. Chipping is done
either manually with a knife or with mechanical chipping equipment. According to processors,
manual chipping results to a higher recovery but it is time consuming. Many farmers with no access
to mechanical chipper prefer to sell fresh tubers.
Sun Drying of Cassava Chips
Reducing moisture to a point where all physiological reactions and microbial growth are inhibited
can tremendously increase the short shelf-life of cassava tubers. In cassava, this point is at 12% to
14% moisture content, corresponding to a water activity of about 0.70. This involves two basic
operations: a) spreading of chips in the drying area; and b) turning the chips at regular interval
(every two hours) until these are completely dry.
Drying of chips in Mindanao is completely done by sun drying. In areas where there are no facilities
for drying, the chips are dried in concrete pavements or on the ground. Others utilize the drying
facilities for corn and rice, whenever available. One cooperative in South Cotabato has a mechanical
dryer but use has been discontinued since chips turned gel like or gelatinous.
34
Figure 9. Typical Ways that Farmers Dry the Chips and Tubers
Ideally, for each square meter of floor area, only 10 – 12 kilograms of chips should be spread. During
a sunny day, these chips should dry in two days. However, with the lack of drying facilities especially
during the peak season, this is not strictly followed. Larger quantities per square meter delay the
drying process resulting in loss efficiency for the enterprise. Quality of the chips (e.g. starch content,
white colour) is higher if the drying time is short. Likewise, during the wet season, drying becomes a
problem. Interrupted drying affects the quality of the finished chips. Similarly, spreading chips into
the ground increases potential for these to be crushed/walked over and to be contaminated with
dirt and other foreign matters.
Testing for Moisture Content
This is done by visual inspection, hand crushing test, and “writing” tests. Ideally, this should be done
with a moisture content tester to get a more accurate measurement of moisture content.
Although the writing and crushing tests are helpful in determining whether chips are dry, it does not
indicate the actual moisture content. As such, processors are almost always in disbelief when they
are informed by the feedmill companies that the moisture content of the granules or chips does not
conform to standards.
Packing and Weighing
If granulation is not done immediately, chips are packed in sacks (usually 40 to 50 kilogram content).
35
A critical point in the packing of chips is to ensure the use of clean sacks without holes and rips to
avoid wastage and pest infestation.
Granulation
Feed companies generally prefer to buy cassava in granulated form. Granulation involves the
processing of cassava into 8 to 12 mm in diameter formats.
To be cost effective, granulating should only be done when there is sufficient volume of chips vis-àvis processing capacity of granulator. For a plant to produce continuously, this implies that it should
have sufficient stock of chips whole year round.
Storage
When storage conditions are optimal, the chips that have been dried adequately (12 – 14% moisture
content) can be stored for 6 to 12 months without deteriorating in quality. The most critical point
during storage is to prevent moisture build-up and pest infestations which are key causes for fungi
growth and production of toxins. As such, warehouse should be clean, have good ventilation, and
low humidity. The sacks of granules should be placed in elevated platform or wooden pallets to
increase the flow of air.
Figure 10. Typical Storage Areas of Cassava Chips and Granules in Mindanao
Cassava is both perishable and bulky. To avoid losses from root deterioration and to minimize
transport costs, cassava processing should occur close to the production areas. To the extent
36
possible, fresh roots should be processed 1 to 3 days after harvest. Mobile mechanical chipping
units can potentially address the transportation challenges encountered by farmers in moving fresh
tubers from their farm to the plant.
Peeled cassava granules command a higher price than unpeeled granules. The cassava industry in
South Cotabato is not able to take advantage of this opportunity because there are no mechanical
peelers in the area. Manual peeling is labor intensive, arduous in nature, time consuming and
unsuitable for mass production.
Chips/granule recovery rate is dependent on variety, maturity of the tubers at the time of harvest,
and the drying of cassava chips. Optimum recovery is at 43%. Likewise, recovery rate should not be
less than 40%. According to cassava chips processors and granulators during the FGD, their recovery
rate ranges between 40% to 42%. However, processors frequently suffer from price discounts due
to quality problems especially with regards to the moisture content. Many of the quality problems
can be traced to non-conformance to Good Manufacturing Practices and constraints related to
drying of cassava chips especially during the rainy season. The key processing issues that lead to
quality problems and inefficiencies are the following:
a) Cassava root shape varies among cultivars. Roots with irregular shapes are difficult to harvest
and peel by hand, resulting in great losses of usable root materials. Root size also varies with
cultivars although it depends more on environmental factors such as soil. Smaller roots require
more labor for peeling. Varietal differences in dry matter content and in starch content and
quality influence the output and quality of the processed products.
b) Thickness of chips is above or below ¼”. Chips that are thicker than 0.25 inch thick destroy the
screen on the granulator while chips less than 0.25 inch thick generally end up as powder/dust
which is considered waste.
c) Drying of cassava chips during the rainy season has always been a challenge for processors. To
date, processors rely on solar drying. Likewise, many of the solar dryers available in cassava
producing areas are also used for other crops. As such, farmers make do with makeshift dryers
which are prone to contamination to soil, dust, and other extraneous matters in addition to
longer drying time. Chips must be protected from contamination and should be dried as quickly
as possible to avoid mold growth. Chips with molds are rejected.
4. Trading /Distribution (Chips and Granules)
Trading and distribution are carried out by traders or agents, private assemblers, and cooperativeassemblers. Majority of those engaged in trading are also into chips production or both chips and
granules production. Many of the traders and assemblers also have their own cassava farms.
Traders and assemblers deal with both chips and fresh tubers. Generally, even prior to harvest,
farmers have already committed their harvest to a specific trader. Traders usually provide credit for
inputs. They also shoulder the labor and hauling costs during harvest. Small-scale and fragmented
production units results in high transaction costs for both farmers and traders. Farm gate price is
lower for small volume production (e.g., for fresh tubers - less than 1 tons).
Traders sell both to feedmill companies and assemblers. The assemblers are affiliated with SMFI.
Under the SMFI marketing system, only assemblers can deliver to their buying stations. Traders in
South Cotabato generally prefer to sell their chips and/or granules to a cooperative assembler.
37
Cooperative-assemblers in Northern Mindanao, on the other hand, prefer to sell to private
assemblers at a lower price in order to immediately get the payment.
To qualify as an assembler under the SMFI Cassava Assembler Program, the following requirements
must be met:
Preliminary Requirements
a) Letter of Intent to join the program
b) Photocopy of Certificate of Ownership/Lease of Authority from DAR/DENR or other concerned
government agencies (TCT/CLOA/CFSA/Lease Agreement)
c) Photocopy of Certificate of SEC Registration/CDA or DTI Registration/Board Resolution(authority
to negotiate) for corporations and cooperatives
d) Property vicinity map
e) Suitability of site (subject to inspection by an SMFI Agribusiness representative)
 Topography
 Soil Classification
 Farm to Market road accessibility
 Effective arable area
Requirements per Contract
Farm Consolidation and Supply Agreement
 Preferably, with effective arable area of at least 20 hectares
 Area Development Plan for three (3) years
5. Feed Milling (Lead Firms in Chips and Granules Chain)
Dried cassava chips and granules are sold to feed milling companies as ingredient in the production
of livestock feeds. Cassava in feed ration can replace about 30─50% of the corn. Too much cassava
in feed ration or too much processing, however, can make the mixed feed unpalatable.
There are about 1,730 feed manufacturers in the country, most of which are concentrated in Central
Luzon and the National Capital Region (NCR). The Top 10 feedmill companies in terms of rated
capacity are: a) San Miguel Foods, Inc. (SMFI); b) Swift Foods, Inc.; c) Vitarich Corporation; d)
Purina Philippines; e) Universal Robina; f) Nutrimix Feeds Corporation; g) Pure Foods
Corporation; h) Foremost Farms; i) Selecta Feeds, Inc.; and j) Cargill Philippines.
Of the 448 registered commercial mixed feeds manufacturers, 14.51% are located in Mindanao. The
65 feedmills account for 10.17% of the total commercial feed mill capacity in the Philippines. There
are also integrators and home mixers in Mindanao. Among regions in Mindanao, SOCCSKSARGEN
OCCSKSARGEN has the most number of feed mills followed by Northern Mindanao. These two
regions had the highest average yield per hectare in 2013 and among the top hog producers in
Mindanao. ARMM has no commercial feed mill.
38
Table 15. Distribution of Commercial Mixed Feed Manufacturers by Region
As of November 2012
Region
No. of Feed Mills
Rated Capacity/8-hour shift
No.
% Share
In MT
% Share
Luzon
333
74.33
21,083.50
79.34
Visayas
50
11.16
2,785.55
10.48
Mindanao
65
14.51
2,703.50
10.17
Zamboanga Peninsula
6
1.34
58.00
0.22
Northern Mindanao
17
3.79
1,548.00
5.83
Davao Region
10
2.23
236.00
0.89
SOCCSKSARGEN
28
6.25
851.50
3.20
CARAGA
4
0.89
10.00
0.04
ARMM
0
0.00
0.00
0.00
448
100%
26,572.55
100%
Total - Philippines
Source: Bureau of Animal Industry
San Miguel Foods, Inc. has the biggest feed milling capacity and is the largest buyer of cassava chips
and granules. Its feed milling operation produces several types of animal feeds under the brand
name B-Meg. It operates about 41 feed plants in various strategic locations in the country. Its
scale of operation is large enough to make the company a price maker in the cassava chips and
granules market.
Another commercial feedmill that is already using cassava in their feed formulation is Tateh
Premium Feeds Corporation. To date, it would seem that procurement of cassava feeds is more or
less concentrated in the company’s feedmill in General Santos. Tateh’s feedmill in Bukidnon is in the
process of building up its supply base of cassava including the establishment of a nursery.
In the past, Purina/Cargill used to procure an average of 1000 MT of cassava granules. To date,
company is using cassava as binder and extender and volume requirement went down. It is said that
company sources from Bukidnon and SOCCSKSARGEN.
Table 16. List of Feed Mills and Integrators that have been identified to date to be
sourcing cassava from Mindanao
Company
SMFI/BMEG
Tateh
Region
9
10
11
12
X
X
X
X
X
CARAGA
ARMM
X
small
volume
Purina/Cargill
X
X
small
volume
small
volume
Biotech Farm
X
Progressive Farm
X
39
Table 16. List of Feed Mills and Integrators that have been identified to date to be
sourcing cassava from Mindanao
Region
Company
9
Manok ni San Pedro company
10
11
12
X
X
CARAGA
ARMM
X
small
volume
Other integrators
X
Source: KII/FGD
As can be seen from Table 16, buyers are concentrated in Northern Mindanao and SOCCSKSARGEN.
CARAGA used to deliver chips and granules to SMFI feed mills in Cagayan de Oro when there was still
an assembler operating in the region. When the assembler closed down its operations, the
production volumes of the cooperatives were too low for them to deliver directly to the feedmill. To
date, SMFI is in the process of developing assemblers in the region. ARMM is not a player in the
chain due to distance and high transport cost.
To secure their supply of cassava chips and granules, the commercial scale feedmill facilities provide
assistance to their consolidators/assemblers and cassava farmers’ cooperative. SMFI
Agribusiness/BMEG, for example, provides the following:



Guaranteed market with a marketing agreement according to mutually agreed product
quality, volume and delivery schedule;
Guaranteed floor price;
Start-up technical assistance in production, post-harvest and logistics operations
6. Manufacturing of Starch
To produce high quality cassava starch, a reliable supply of cassava with optimal maturity of 10-12
months is critical. Immature roots have high water content and soluble sugars and less starch. Over
mature roots contain reduced amounts of starch of lower quality and high fiber. Likewise, for
optimum quality starch and high yield, starch extraction must be done within 12 hours after harvest.
As such, cassava starch factories usually locate within the proximity of cassava producing areas. In
Mindanao, two of the three companies are located in Northern Mindanao while the other one is in
Lanao del Sur. These companies primarily source their fresh tubers via outgrowership agreements.
The companies though also accept walk-in suppliers.
Table 17. Starch Companies in Mindanao
Company
Location
Description
Matling Industrial and
Commercial Corporation
Malabang, Lanao del Sur
Bulk of the cassava tubers (are cultivated
and grown in land owned by company and
which have been leased to employees’
cooperative.
Also sources from cassava farmers in Lanao
del Sur. Company is main market of cassava
producing municipalities in Lanao del Sur.
40
Table 17. Starch Companies in Mindanao
Company
Location
Description
Produces food grade and industrial grade
cassava starch. Largest starch company in
Mindanao.
Bio-Green Processing and
Manufacturing Inc.
Misamis Oriental
Produces industrial and commercial grade
starch and flour. Products are sold in the
domestic market.
Works with farmers via contract growing
Phil-Agro
Corporation
Industrial
Bukidnon
Food and industrial grade cassava starch
Sources both from contract growers and
independent farmers.
Source: KII/FGD
7. Cassava Grates Production
Cassava grates production is usually undertaken at the household level by farmers and home-based
enterprises. In Zamboanga City, there are two to three cooperatives engaged in cassava grates
production.
The fresh roots undergo primary processing such as sorting, washing, and peeling prior to grating.
Drying of the grates is usually done via sun drying. In many cases, grating is done manually except for
those who have had already been recipients of mechanical graters from the government. Shelf life
of the products is just 2 to 3 days and quality deterioration is sometimes accelerated due to poor
packaging, handling, and storage. Quality of roots/tubers used and the grating and milling process
dictate the overall quality of the product.
C. NATURE OF INTERFIRM RELATIONSHIPS
1. Horizontal Relationship
Cooperatives engaged in chips and granules production are located in Northern Mindanao
(especially Misamis Oriental, Bukidnon, and Misamis Occidental), South Cotabato, Sarangani, Davao
Region, Zamboanga City, and Zamboanga del Sur. These cooperatives are more established and
developed compared to those involved in fresh tuber marketing and other chains in the cassava
industry. The promotion of collective action was an important strategy for increased smallholder
participation in the feeds market. In view of lower transaction costs and more effective capacities,
feed mills often prefer to work with organized farmers rather than individuals, despite the increased
bargaining power that groups enjoy.The entry of cooperatives in the trading system provided the
catalyst for traders to reconsider their relationship/offer to their suppliers, which was to the
advantage of smallholders.
Horizontal cooperation to access bulk inputs or jointly market higher volumes of products reduced
transaction costs of members both environmentally (lower carbon footprint) and financially.
Horizontal competition also,to someextent, drove upgrading by promoting productivity and
efficiency, improving quality or consistency, or otherwise responding to buyer demands.
41
The cooperatives though face problems on pole vaulting and non-delivery of commitments from
among its farmer members. Farmers, even members, could not immediately supply their produce to
the cooperative because these have already been pledged to traders, with whom they have had cash
advances. These farmers could not take advantage of the benefits of selling to their cooperative. On
the other hand, the cooperative could not come up with enough volume to judiciously optimize the
use of their facilities.
In the more progressive communities, farmers’ groups and traders help each other in fulfilling their
respective obligations. To sustain the spirit of cooperation, however, it is always important that all
those involve see and appreciate the connection between their individual efforts and the community
outcome and, that this translate back to better income generation opportunities and self-esteem.
Successful farm practices are seldom shared between and among peers. Cassava farmers especially
the majority who are not members of cooperatives seldom interact with each other --- in terms of
sharing of technology, market info, etc. Sharing information and regular interaction would help to
build trust in relationships and maintain the ability of a value chain to respond to changes. Strong
horizontal relationships are important for aggregating products, addressing shared constraints, or
marketing and lobby effectively. Governance and distributional outcomes in the value chain would
improve if all cassava farmers are able to band themselves into cooperatives that can negotiate
collectively with traders – processors – assemblers for more favourable conditions and, forge
mutually beneficial production contracts with these enterprises.
2. Vertical Relationships and Supply Chain Governance
The governance pattern in the Mindanao cassava industry appears to be a controlled hierarchical
relationship that are directed, monitored, and controlled by lead firms (the feed mills with
SMFI/BMEG as the main lead firm). In a recent delivery made by an assembler – cooperative to a
feedmill, the former was not aware that moisture content requirement has been reduced to 13%
from 14%. Price discounts were applied based on the new moisture content requirement. At the
municipality level, the assemblers yield the highest degree of power followed by the traders.
In SOCCSKSARGEN, the presence of other commercial scale feed mills to some extent mitigates risks
of farmers and granule producers to be trapped in captive relationships. In areas where SMFI is
more or less the only buyer of chips and granules, the presence of traders and intermediaries from
competing chains (e.g., fresh market and grates, starch companies in Northern Mindanao) provides
farmers with opportunities to choose more favourable conditions.In Lanao del Sur, farmers can
choose to sell either to Matling or to the local market. Indirectly, the presence of multiple chains
and marketing channels provides farmers with a certain level of bargaining and negotiation powers.
Likewise, this prevents monopolistic practices from the lead firms and traders.
On the other hand, the presence of multiple lead firms and marketing channels provides greater
temptation among farmers to pole-vault depending on the terms and conditions of payment. It also
creates some sort of complacency among farmers and intermediaries that there will always be other
buyers if the relationship does not work well. Similarly, less effort is exerted to make things work
when dissatisfaction comes in with one buyer.
Relationship between farmers and buyers in all chains in Miindanao regions is generally arm’s length
although there is a semblance of “long-term” relationship through the “suki” system. The cost of
switching to new partners is low for both parties. There are no formal contractual relationships
between farmers and their buyers even with assembler -cooperatives in which they are a member.
42
The dominance of short-term contracts and spot transactions result to adversarial relationship.
Short-term opportunism stifles innovation and provides few incentives to invest in improvements.
SMFI assemblers are bound by a Farm Consolidation and Supply Agreement valid for three (3) years.
With guaranteed markets, the assemblers are more inclined to invest in upgrading.
Traders-processors-assemblers generally practice the “all-in” procurement (flat price regardless of
quality) with the automatic deduction of two (2) kilos per sack to account for quality variances
(moisture content, thickness of chips, extraneous matter, etc.). The ‘all-in procurement’ provides
disincentives for upgrading although most players look at this as a risk mitigation tool. In the
absence of moisture content tester at the trader’s and assembler’s level, quality control cannot be
scientifically performed. To date, only the feed mills have the moisture quality control testing
equipment. The same practice of automatic deductions is applied in fresh tuber.
Transactions between farmers and their buyers are primarily conducted on a ‘cash and carry basis’
which requires access to sufficient working capital to remain competitive. Farmers are generally
price-takers. Aside from the fact that many of the farmers are beholden to traders due to loans and
cash advances, the short shelf life of fresh tubers makes it imperative for farmers to dispose their
harvest as fast as possible.
Smallholders rely on advances or credit from traders-processors-assemblers to finance inputs and
labor costs. These advances and credit, whether in cash or in-kind, are the main tool used to
increase leverage and ensure a regular supply of fresh tubers. Farmers who depend on this source of
working capital become captive suppliers. Harvests are pledged at the outset.
It would seem that lead firms especially SMFI and starch companies now approach supply chain
development from a capacity building perspective rather than exclusively from a price offer point of
view. SMFI has assigned one technician to provide extension services to farmers via the assemblers.
One cooperative – assembler also has a fulltime technician to assist farmers. Feed mill companies
though are more inclined to take on the tasks of “educating” their suppliers if they have a significant
production volume and have demonstrated the capacity to enter and maintain vertical relationships.
Starch companies provide technical and in-kind assistance (planting materials, fertilizer –
sometimes) to their outgrowers.
While spot market price information is widely available and efficiently transferred, the flow of other
product information (i.e., quality and quantity specifications) is not as transparent and well
disseminated and understood. Supply chain communication and collaboration is still generally weak
and can further be improved. Because each attribute of the finished product originates from a
particular point in the chain, the effectiveness of the entire supply chain is essential to the final
product’s success in the market. Food safety and quality, for example, should be principally assured
through the combined efforts of all the value chain participants. Communication along the supply
chain is essential to ensure that all relevant food safety hazards and quality defects are identified
and adequately controlled at each step within the supply chain. This implies recognition,
understanding, and interactive communication of process and product standards among and
between downstream and upstream players in the chain.
The presence of cooperative-assemblers has to a significant extent contributed to the development
of better understanding of standards in the feeds supply chain at the community level. Since the
cooperatives are based within the locality and are also owned by the farmers themselves, the
growers are able to see and observe the production process which provides them with a better
43
understanding of the importance of quality and its relation to recovery rates which is directly
correlated with income.
Interactions between and among players are generally limited especially so that harvest is only once
a year. Limited interaction and communication constrains the ability of farmers and other VC players
to expand and deepen their relationship.
Table 18. Snapshot Relationship Assessment: Feeds Supply Chain in Mindanao Regions
Aspect
Description
Farmer and Intermediary/
Processor/Assembler
Buyer and Supplier
Selection/
Procurement Process
Intermediary/Assembler – Feed
Mill Buying Station
Some semblance of long term Governed by a contract with a
relationships. Each trader has delivery quota and price ceiling
informal network of suppliers.
agreement
In many cases, harvest already 7 to 15 days payment term
pledged to an intermediary due to
advances. Intermediaries complain of
pole vaulting among farmers
Cash on delivery
Information Sharing/
Transparency
Some degree of information sharing
on demand trends,
pricing and
costing --- but more for the benefit of
intermediaries
Workflow and information are
exchanged in a manner that
permits the introduction of
innovation, better relationships
and joint efforts to better respond
In some cases, directive, one-way, to market demands.
and Just focused on current
transaction.
Quality Control and
Inspection
Visual
inspection
which
can Moisture content testing done
potentially lead to mistrust issues.
internally by buying station.
Assembler informed of results of
Automatic deduction to compensate testing and deductions applied
for whatever quality issues. This automatically
provides disincentives for upgrading.
Value added services/
Collaboration
and
cooperation
Trader provides cash advances/ loans Technical assistance from buyer --to secure supply
limited though because there is
only one technician.
Some learning and skills transfer but
limited to local norms and capability
of traders
Basis of Competition/
Offer
Volume
Volume
Source: FGD
44
D. PRICE AND COST STRUCTURE
1. Income and Profit
Table 19. Costs and Returns: Cassava Farming – 1 hectare
Particulars
Yield – 8 MT/ha
Yield – 15 MT/ha
Amount
%
Amount
%
Amount
%
MATERIALS
3,100.00
21%
5,400.00
27%
16,700.00
36%
Planting Materials
1,600.00
11%
1,600.00
8%
1,600.00
3%
Fertilizer
1,500.00
10%
2,500.00
13%
12,500.00
27%
1,300.00
7%
2,600.00
6%
Herbicides/Pesticides
-
Yield – 40 MT/ha
LABOR
11,650.00
79%
14,250.00
73%
29,450.00
64%
Land Preparation
6,250.00
42%
6,250.00
32%
6,350.00
14%
Cutting and Planting
1,500.00
10%
1,500.00
8%
1,500.00
3%
Weeding
1,500.00
10%
2,000.00
10%
3,600.00
8%
Harvesting
2,400.00
16%
4,500.00
23%
18,000.00
39%
Total
14,750.00
19,650.00
46,150.00
Yield per Hectare (kilos)
8,000.00
15,000.00
60,000.00
Cost per Kilo (PhP)
1.84
1.31
0.77
Farm Gate Price per Kilo (PhP)
2.50
2.50
2.50
Gross Income (PhP)
20,000.00
37,500.00
150,000.00
Net Income (PhP)
5,250.00
17,850.00
103,850.00
Input - Output Ratio
1.36
1.91
3.25
Profit Margin
26%
48%
69%
Source: KII/FGD
As can be seen from Table 19, farmer’s investment in fertilizer, pesticide, and herbicide including
regular farm maintenance has significant impact on yield and income. A farmer with yield of 8
MT/hectare would only be earning at end of production about PhP 5,250 plus labor of PhP 11,650 if
he/she utilized own labor or that of household members. A yield of 40 MT per hectare which has
been achieved by progressive farmers in South Cotabato provides a net income of PhP 103,850.
While cassava grows well on marginal land and is generally considered a resilient, low-input crop,
various biotic and abiotic constraints can impede its optimal production as can be seen in the
disparity of yield between farmers with access to technology and resources vis-à-vis those with
limited access. Lack of access to planting materials of high yielding varieties and inputs, weed
competition, and high labor requirements all constrain production and impact yield. Cassava farms
produced higher yields if farmers planted with improved genotypes, hired more labor, weeded more
often, and harvested their plots at the right maturity age.
The disparity in yield between farmers with access to resources and technology and those with
limited access suggests that the latter are not adequately benefiting from opportunities to improve
productivity through use of appropriate technologies and inputs. Many of the underlying causes of
low farm productivity among smallholders come down to lack of access to resources, knowledge,
45
and skills combined with the “puwede na” and “tingi” mentalities. Except for the more progressive
farmers, many of the cassava growers still generally do not use a standardized repeatable scientific
methodology to determine the functional components that are required to operate their farms.
2. Relative Financial Position of Players
Computations presented below are based on the feeds supply chain.
Scenario 1: Farmer’s Yield: 8 MT/hectare
Figure 11. Relative Financial Position of Players in the Cassava Chips and Granules Value Chain in
Mindanao, Scenario 1
Production cost for one kilo of granules is about PhP 4.89 with farming accounting for 64%. Profit
per kilo of granules under the scenario of farmer’s yield at 8 MT per hectare is about PhP 6.61/kilo.
Although farming has the highest percentage share to profit at 43%, it is not proportionate to
farmer’s share to production cost. It can also be seen that chipping becomes more crucial in
boosting farmer’s profit when cassava is grown under a low input-low yield system.
46
Table20. Relative Financial Position of VC Players: Cassava Chips and Granules
Assumption:
1 kilo of granules = 2.4 kilos of fresh tubers
Farmer’s Yield: 8 MT/hectare
Function
Product
Costs
Profit
Margins
Total
Unit Cost
Added
Unit
Cost
%
Added
Unit
Cost
Unit
Price
Unit
Profit
% Profit
Unit
Margin
% to
Price
Farming
Tubers
3.14
3.14
64%
6.00
2.86
43%
6.00
52%
Trading
Tubers
6.25
0.25
5%
7.00
0.75
11%
1.00
9%
Chipping
Chips
7.50
0.50
10%
8.50
1.00
15%
1.50
13%
Granulation
Granules
9.50
1.00
20%
11.50
2.00
30%
3.00
26%
Total
4.89
6.61
11.50
Source: KII
Scenario 2: Farmer’s Yield: 40 MT/hectare
Table 21. Relative Financial Position of VC Players: Cassava Chips and Granules
Assumption:
1 kilo of granules = 2.4 kilos of fresh tubers
Farmer’s Yield: 40 MT/hectare
Function
Product
Costs
Profit
Margins
Total
Unit Cost
Added
Unit
Cost
%
Added
Unit
Cost
Unit
Price
Unit
Profit
% Profit
Unit
Margin
% to
Price
Farming
Tubers
1.85
1.85
51%
6.00
4.15
53%
6.00
52%
Trading
Tubers
6.25
0.25
7%
7.00
0.75
9%
1.00
9%
Chipping
Chips
7.50
0.50
14%
8.50
1.00
13%
1.50
13%
Granulation
Granules
9.50
1.00
28%
11.50
2.00
25%
3.00
26%
11.50
-
Total
3.60
7.90
Source: KII
Distribution of profit among players becomes equitable when farmers have high
productivity. Overall production cost per kilo of granules goes down from PhP 4.89 in
Scenario 1 to PhP 3.60.
Under Scenario 2, farmingcomprises51% of the cost and
percentage share to profit is 53%. Although these farmers already have high yields, a major
weakness common to all was the absence of soil analysis as basis for fertilizer application.
With further improvement in their practices, it is possible for these farmers to increase their
profits.
47
Intermediaries believe that with improved roads and farmers selling chips rather than
tubers, their profit margin can also increase. In many of the areas, intermediaries, which
include cooperatives, pick-up the tubers from farmers as a means of securing their supply.
Figure 12. Relative Financial Position of Players in the Cassava Chips and Granules in Mindanao,
Scenario 2
48
Section 4:
MARKETS AND MARKET OPPORTUNITIES
A. MARKETS AND MARKET TRENDS
1. Export Markets
Philippine Exports
Based on data from UN Comtrade and Intracen, Philippineshas been exporting cassava chips and
granules during the last five years. Export volume though has decreased from 1,320 MT in 2009 to
554 MT in 2013. In 2013, the main buyers were Canada with a 58.5% share of the export volume,
United States and Australia, which accounted for 20.6% and 15.7% respectively.
Table 22. Philippine Exports of Cassava: 2009 to 2013
Product: 071410 Manioc (cassava), fresh or dried, whether or not sliced or pelleted
Trade Indicators
2009
2010
2011
2012
2013
335
317
442
258
331
303,000
297,000
447,000
293,000
398,000
904
937
1,011
1,136
1,202
879
905
883
501
149
897,000
857,000
930,000
567,000
140,000
1,020
947
1,053
1,132
940
53
56
66
32
38
52,000
71,000
73,000
38,000
107,000
981
1,268
1,106
1,188
2,816
1,320
1,371
1,506
857
544
1,301,000
1,317,000
1,557
966,000
660,000
986
961
1
1,127
1,213
Canada
Volume (MT)
Value (in US $)
Unit Price per Ton (US $/MT)
United States
Volume (MT)
Value (in US $)
Australia
Volume (MT)
Value (in US $)
Total Philippine Exports
Volume (MT)
Value (in US $)
Source: Intracen
Companies exporting cassava products are generally also into trading of starch and other agricultural
products. It would seem that cassava-based products are only a small percentage of their product
portfolio.
49
Table 23. Exporters of Cassava Chips and Pellets
Company
Description
Macrolite Corporatation
Has a satellite office in Vietnam
Deals with starch, chips, pellets, residue powder and lumps
Snowking Enterprises
Said to have their own cassava farm and can supply 3,000 MT of
chips per month
Palm View Trade
Cassava powder, meal, starch, and chips for feeds and industrial
uses. Main product seems to be banana flour
Source: Alibaba Website
World Exports
Table 24. Key Exporting Countries of Cassava Products
Exporter
2013 Export
Volume (MT)
Unit Price/
MT (US $)
Value (US$)
% Annual Growth Rate
(2009 – 2013)
Volume
Value
CASSAVA CHIPS AND PELLETS
Thailand
5,816,935
1,317,646,000
227
7
20
Viet Nam
1,689,833
407,397,000
241
2
16
Cambodia
493,957
71,102,000
144
28
68
Costa Rica
90,815
65,488,000
721
9
15
Indonesia
127,025
32,111,000
253
-17
-6
8,320,162
1,935,904,000
233
6
19
World
CASSAVA STARCH
Product : 110814 Manioc (cassava) starch
Thailand
2,428,550
1,139,138,000
469
10
22
Viet Nam
380,199
173,494,000
456
12
22
Indonesia
58,654
27,388,000
467
20
25
Paraguay
29,494
18,979,000
643
32
29
Germany
3,511
7,598,000
2,164
10
46
2,934,240
1,391,955,000
474
10
11
World
Source: Intracen/International Trade Center
The world trade in cassava products is sustained mainly by industrial demand. There are three main
cassava products that are traded in the international market, namely: chips, pellets, and starch.
World export of cassava chips and pellets grew by 6% per year with value increasing at an annual
rate of 19%. Volume of starch exported has a higher annual growth rate than chips but lower annual
percentage increase in value. According to the FAO Food Outlook report, the sustained growth of
cassava in 2012 in the international market was the result of the price competitiveness that cassava
has gained over corn which was largely a result of government policies on trade and agribusiness in
50
Thailand. Thailand accounted for about 68% of total chips and pellets exported and 82% of starch
exports in 2013. As the biggest single country exporter, Thailand sets the price in the world market.
Market outlook in the coming years depends on how the price relation between corn and cassava
evolves and on the competitiveness of cassava in the production of ethanol vis-à-vis other
feedstocks.
Table 25. Key Importing Countries of Cassava Products: 2013
Country
Volume (in MT)
Value (US $)
Unit Price (US$/MT)
CASSAVA CHIPS AND PELLETS
China
7,388,280
1,827,354,000
247
Korea, Republic of
577,440
131,092,000
227
United States of America
93,382
68,976,000
739
Thailand
472,876
63,687,000
135
Netherlands
10,786
11,652,000
1,080
Japan
28,687
7,355,000
256
Spain
7,091
6,412,000
904
France
4,655
5,737,000
1,232
Philippines
16,163
5,553,000
344
United Kingdom
3,458
4,907,000
1,419
8,686,940
2,158,390,000
248
1,420,495
669,690,000
471
Taipei, Chinese
329,877
153,992,000
467
Indonesia
220,088
107,237,000
487
Malaysia
133,579
80,246,000
601
Japan
134,241
63,794,000
475
United States of America
62,631
48,229,000
770
Singapore
60,010
30,138,000
502
Philippines
50,876
22,949,000
451
Korea, Republic of
30,835
14,883,000
483
Bangladesh
31,024
14,381,000
464
2,695,399
1,347,994,000
500
World
CASSAVA STARCH
China
World
For the last ten years, international trade flows were increasingly concentrated in Asia especially
China. Starting in 2001, cassava imports by developing countries exceeded those of developed
countries for the first time. Philippines is among the top 10 importers of cassava chips, granules,
and starch.. South Korea and Taiwan are also among the key buyers.
The global market for cassava chips and pellets is on the average about US$ 2 billion. A key demand
driver was the growth in use for the animal feed market, ethanol and bio‐fuels market.China is the
51
world’s largest buyer of cassava chips. In 2011, China utilized an estimated 6 million metric tons, of
which 4 million tons or 66% was imported. In 2013, China represented 85% of world imports of
cassava chips and pellets.
During the last decade, demand has shifted from pellets or granules to cassava chips. This was due
to the weak demand from the European Union (EU) and the increased demand from China. For a
long time, the European Union was the main destination for global exports of cassava but during the
recent years, import volume has significantly reduced and fluctuates according to the European
cereal market. Since 2009, the abundance of Community supplies of feed grain has contributed to
the reduction in imports.China has cushioned the collapse of the EU cassava market, but it has also
resulted in the shift from pellets back to chips.
China uses the chips as ethanol input rather than animal feed. China is the 3rd top producer of
ethanol in the world behind United States and Brazil. China has increasingly been switching from
corn to molasses to cassava for ethanol inputs. Recent increase in food prices culminated in the ban
of new grain-based ethanol plans to discourage the use of cereals e.g. corn for non-food purposes
(Tian, 2007). The use of molasses in ethanol production is also discouraged due to the environmental
implications from its waste (OAE, 2006). These restrictions triggered the growth in cassava use in
China’s ethanol industry of food. China is currently the only substantial export market for dried
cassava as ethanol input. However this market trajectory might soon be changed as China has
reduced ethanol tariff from 30% to just 5% (Niu and Miles, 2009). China might directly import
ethanol instead of chips in the future. Such a scenario implies the need to develop the capacity to
competitively produce chips and ethanol. The bioethanol market in China requires at least 67%
starch content. The huge livestock feed market in China is still relatively untapped as a possible
market for chips and granules.
Nigeria, the leading producer of cassava, is said to be aggressively pursuing the China market for its
chips. Various reports indicated that the Federal Ministry of Agriculture and Rural Development
(FMA&RD) reached agreement with Chinese cassava importers for the export of 800,000 metric tons
of cassava chips with moisture content of 12% over a 12 month period starting in May or June 2012.
Purchase price was set at US$ 236/ton CIF China.
Major foreign importers of Vietnamese cassava products are China, South Korea, Taiwan, the
Philippines, Malaysia and Japan. China, as the biggest buyer, has imported from Vietnam in 2012
roughly US$855 million worth of nearly 2.9 million tons of cassava, about 88% of the total. The
second biggest buyer is South Korea with some US$30.6 million, followed by Taiwan with US$22
million, the Philippines with US$13.55 million1, Malaysia with approximately US$8.3 million and
Japan with around US$3.15 million.
South Korea generally buys residue pellets which are made out of starch waste rather than chips.
Starch content requirement is 55%. Currently, main supplier of the residue pellets is Thailand.
In the cassava starch international trade, China is also the biggest importer.Cassava starches are
used as inputs into various food and non-food industries in China, notably textile and paper. China’s
importation of starch continues to increase but there is a growing tendency towards cheaper and
lower quality starch. Trade experts speculate that the change in demand pattern may be due to the
following: i) A reflection of the building of China’s own starch modification capacity as indicated by
the significant increase in production of modified starch; and ii) a shift in end users from export
oriented industries targeting high end markets to less sophisticated domestic oriented industries. In
1
This does not tally with Intracen/ITC statistics. Data was taken from Vietnam’s export sales of cassava chips.
52
general, growth of cassava starch in the international trade would depend on its price
competitiveness vis-à-vis corn and potato starches.
For the Philippines and Mindanao, in particular, to become a major player in the international trade
market, price competitiveness and compliance to standards particularly moisture and starch content
are the more critical factors. Economists, however, feel that the EU market would continue to
reduce its imports given that Ukraine is fast becoming a major feed grain supplier. The more viable
markets are the developing economies in Asia particularly those with growing livestock sectors.
Halal World Market
It is estimated that Muslims account for about 25% of the global population, and the Muslim
population is younger and growing faster as a whole, increasing at a rate of 1.8% per year (Carnegie
Endowment for International Peace). The global Halal food market is worth an estimated US $635
billion. The Halal market in Europe alone represents US $67 billion, highlighting that the Halal food
market in non-Muslim countries is also substantial.
According to the Halal Industry Development Corporation of Malaysia, among all Halal products on a
global scale, 10% is represented by meats, and 35% is processed food and non-alcoholic beverages.
Value-added beef products and deli are classified within the processed food category, which also
includes a wide variety of other products, such as cookies, candies, etc. The production of halal
livestock with cassava as one of the key feed ingredients and the upgrading of the various delicacies
can be among the opportunities that ARMM can potentially pursue.
2. Domestic Market
Figure 13. Cassava Supply Utilization in the Philippines, 2013
53
Based on BAS data, 84% of the total available supply of cassava in 2013 was utilized for processing.
Total net food disposable was only about 10% of the total supply which translated to an annual per
capita of 2.45 kg/year. Feeds and waste which most likely arose from poor postharvest practices
and farm management accounted for 6% of the total supply.
Cassava Chips and Granules
The use of dried cassava chips as ingredients for animal feeds was triggered mainly by the growing
corn supply shortfalls.Although the idea of using dried cassava chips initially received a lukewarm
response in the Philippines due to quality and reliability problems, resistance has gradually declined
during the recent years. Major commercial feed brands in the country are now increasingly using
cassava in their feed formulation. SMFI is the biggest buyer and requires 500,000 tons of dried
cassava chips for its feed operations. Tateh is increasingly using cassava in its feed formulation.
Main quality requirements of feed companies for granules include 65% starch content, 13% moisture
content, 8 to 10 millimeters size of granules, and should be free from extraneous matter, molds,
insect infestation and damage. The Philippine quality standards for chips and granules are
presented in Table 27 .
Table 26. Quality Standards
Philippine National Standards
Properties
Specifications
Feed
25 mg/kg
Food
10 mg/kg
Other Industrial Uses
No limit
Maximum Hydrocyanic acid
(HCN), dry weight basis
Maximum starch
65%
65%
65%
Maximum ash
1.0%
5.0%
5.0%
Maximum sand
0.5%
2.0%
2.0%
Maximum crude fiber
2.0%
4.0%
4.0%
Maximum crude protein
0.5%
1.5%
0.5%
Maximum moisture content
14%
14%
14%
Note: During the recent years, SMFI/BMEG and other feed mills require 13% moisture content.
Current supply of cassava is not sufficient to meet domestic market requirements. Philippines
imports cassava chips and pellets from Vietnam and Thailand. SMFI has also feedmilling operations
in Vietnam. On the average, Philippines spent about US $ 4.25 million per year for importation of
chips and pellets during the last five years. The country is a net importer of cassava chips and
pellets.
Table 27. Philippine Imports of Chips and Pellets, 2009 to 2013
Notes: No recorded importation in 2009; Import data differs depending on source
Import Indicators
2010
2011
2012
2013
Thailand
Volume (in MT)
18,150
10,458
Value (in US $)
4,107,000
3,611,000
Unit Price (US $/MT)
226
345
54
Table 27. Philippine Imports of Chips and Pellets, 2009 to 2013
Notes: No recorded importation in 2009; Import data differs depending on source
Import Indicators
2010
2011
2012
2013
Volume (in MT)
6,348
12,706
78
5,705
Value (in US $)
2,147,000
5,183,000
22,000
1,937,000
338
408
282
340
Volume (in MT)
24,500
12,706
78
16,163
Value (in US $)
6,261,000
5,183,000
22,000
5,553,000
256
408
282
344
Vietnam
Total Imports
With livestock and aquaculture production and consumption in an increasing trend, the use of dried
cassava chips/cassava granules is expected to continue growing. With corn production not expected
to increase significantly, cassava is projected to become an increasingly attractive option for
commercial feeds manufacturers. Price competitiveness of cassava chips vis-à-vis imported corn will
be a major determinant on the sustained use of cassava for feed mixes. The price of complementary
products such as soybean meals also affects the demand for cassava granules and chips.
Given that there are no existing feed mills in ARMM, the production of halal feeds and,
consequently, livestock targeting Muslim communities can be something that the region can
explore. It is said that most of the Filipino Muslims’ halal foods and non-food stuff are still imported
from Malaysia because local halal producers are deemed not credible.
Cassava chips are also used as alternative material for the production of liquor alcohol. Ginebra San
Miguel’s distillery in Negros Occidental needs 4 million kilos of dried cassava chips monthly. Mega
Plywood in Zamboanga City has a regular requirement of 400 tons of cassava chips for plywood glue.
Cassava also has a potential to become another major bio-energy crop. Alcohol production from
cassava has an overall efficiency of 32%. Based on the Philippine average annual gasoline
consumption of four billion liters and a mix of 5% ethanol to 95% gasoline, the estimated feedstock
requirements to produce 200 million liters of ethanol translates to 2.35 million tons of sugarcane or
500,000 tons of corn or 1.25 million tons of cassava.
Starch
Starch end-use applications have grown in number over the years and almost all major industries
have found some uses for starch. In food industries, starch is used to give functional properties to
processed foods such as thickening, binding, filling, and taste. Starch is used in canned soups, instant
desserts, ice creams, processed meats, sauces, and bakery products. Starch can also be converted
into sugar. It is used to manufacture sweeteners and syrups. The food industry ranks as the largest
end-use sector, with sweetener applications representing the largest sub-segment worldwide.
Nestle Philippines is said to require cassava for the manufacture of its non-dairy coffee creamer.
55
Uses of starch in non-food industries include the textile, paper, plywood, and adhesive industries.
Starch is also used in the manufacture of pharmaceuticals.
Cassava starch users prefer to source from Thailand because of price and quality characteristics such
as blandness, digestibility, lower gelatinization temperature, suitability for the manufacture of top
quality remoistening gums for labels, envelopes, and the like, good acid resistance and long shelf
life. Since 1978, seven out of the 10 mills have ceased operations.
Table 28. Philippine Imports of Cassava Starch, 2009 to 2013
Trade Indicators
2009
2010
2011
2012
2013
Volume (in MT)
62,955
48,017
38,793
35,724
34,731
Value (in US $)
16,858,000
21,529,000
21,323,000
17,456,000
15,411,000
268
448
550
489
444
Volume (in MT)
26,248
11,415
13,812
25,187
14,185
Value (in US $)
7,181,000
4,266,000
6,809,000
11,146,000
6,751,000
274
374
493
443
476
Volume (in MT)
92,515
59,986
54,409
62,959
50,876
Value (in US $)
24,581,000
25,954,000
28,764,000
29,329,000
22,949,000
266
433
529
466
451
Thailand
Vietnam
Total Imports
Source: Intracen/international Trade Center
Philippines spends an average of US$ 27.16 million per year for cassava starch imports. Volume
imported though decreased from a high of 92,515 MT in 2009 to 50,876 MT in 2013. Perhaps, with
the ASEAN integration in 2015 and with increased farm productivity, the starch industry would be
able to encourage large users in the Philippines to source their requirements locally.
Cassava Flour
Cassava flour is the finest product extracted from cassava roots and from dried cassava grates, and is
among the best substitute for wheat flour in many bakery products. Studies have shown that
cassava flour could substitute wheat flour from 20-100%. For bread products, the substitution rate
can go as high as 20% while for quick breads could be 100% substitution.
To date, the use of cassava flour in bakery products is not popular.
Cassava Grates and Local Delicacies/Home Consumption
Based on BAS data, annual per capita consumption of cassava decreased from 3.12 kilograms in
2008/09 to 2.83 kg in 2012. Many of the areas where there was a steep decline in annual per capita
consumption also had downward trend in their cassava production and/or an increase in
56
chips/granule production. The highest per capita consumption was in ARMM with 11.69 kg.
Zamboanga Peninsula ranked second with 4.45 kg. The national government and the Department of
Agriculture are conducting campaigns to increase cassava consumption to 5 kg as one of the
measures to ease the demand for rice.
Table 29. Annual per Capita Consumption of Cassava (Kg/Year) in the Philippines,
2008/09 and 2012
Region
Annual Per Capita Consumption (Kg/Year)
% Change
2008/09
2012
PHILIPPINES
3.12
2.83
-9%
NCR
0.26
0.32
23%
CAR
1.61
2.15
33%
Ilocos Region
1.82
1.09
-40%
Cagayan Valley
2.44
1.83
-25%
Central Luzon
1.14
1.21
6%
CALABARZON
2.39
2.73
14%
MIMAROPA
4.16
7.03
69%
Bicol Region
5.88
3.83
-35%
Western Visayas
1.92
2.61
35%
Central Visayas
3.64
3.14
-14%
Eastern Visayas
5.46
4.41
-19%
Zamboanga Peninsula
6.34
4.45
-30%
Northern Mindanao
5.30
3.64
-31%
Davao Region
2.08
1.60
-23%
SOCCSKSARGEN
4.52
3.24
-28%
CARAGA
3.80
3.69
-3%
ARMM
10.40
11.69
12%
Source: BAS
Demand of cassava for human consumption will largely be driven by population growth especially in
Muslim communities rather than the general shift of preference for cassava. There is likely to be a
greater potential for processed and snack foods, where cassava may find a niche market. It can be
positioned as a halal and gluten free product with low fat and sugar content. There is a lack of supply
of halal food products in the Philippines and many of those sold in the market are imported from
Malaysia. One of the main strengths of cassava snack foods is that these are less oily than other
traditional chips. Compared to other starches, cassava absorbs less fat during frying process. Latin
American countries have developed a range of cassava products and successfully marketed these in
the United States, European, and Japanese markets.
In terms of food, grates are the basic sub products traded to those who are into final processed
cassava food products, and mainly found as:
57
a) Fresh Cassava Grates
Fresh cassava grates are the main ingredients in many native food delicacies such as cassava cake,
puto, suman, pitsi-pitsi, etc. However, fresh cassava grates are not readily available in the market but
one has to get the supply of roots first then process these into grates. Fresh cassava grates may be
sold in the market as a frozen product.
b) Dried Cassava Grates
Dried cassava grates are already utilized as main ingredient in many food products where fresh
cassava grates are utilized. Food products other than the traditional Muslim delicacies have been
developed from dried cassava grates like cassava cookies, jolly rolls, espasol, puffed products, etc.
The challenge is scaling up production and distribution to a commercial level. Likewise, there is an
issue of perishability.
Figure 14. Sample of Cassava Chips in Other Countries
58
B. PRICE TRENDS
1. Export Market
Price of cassava is influenced by the prices of grains. From a high of US$ 260.75 per MT in 2010/11,
price of cassava chips went down to US$ 235.83 in 2012/13. During the recent months (2014), FOB
price of cassava chips in the export market ranges from US $ 220 to 240 per metric ton.
Figure 15. Average Export Price of Cassava Chips in the World Market
EXPORT PRICE: CASSAVA CHIPS (in US $)
300.00
Price per MT (US $)
250.00
200.00
150.00
100.00
50.00
Price per MT (in US $)
2009/10
2010/11
2011/12
2012/13
190.33
260.75
240.08
235.83
Theaverage world export price in 2013 is about PhP 10.26 per kilo in Philippine pesos. The table
below which shows the historical FOB price of Thai chips to China also indicates that export price to
be around PhP 10.28/kilo In both cases, the FOB price is almost at the same level as the buying price
of feed mills from assemblers. This implies that entry to the export market and/or import
substitution would require improvement in productivity and efficiency to boost price
competitiveness.
Table 30. Price of Cassava Chips in Thailand
PhP Equivalent
of 2013 Price
2011
2012
2013
Chips to China (F.O. B. Bangkok)
263.4
234.5
236.2
10,275/MT or
10.275/kilo
Thai domestic price of tubers
79.6
80.70
90.3
3,928/MT
3.93/MT
or
Source: FAO Food Outlook November 2013
59
In Table 30, it can also be seen that domestic price of fresh tubers had a more robust growth than
export price. Likewise, it would seem that Thai farmers receive better price for their tubers than
their Filipino counterpart.
2. Domestic Market
The price of tubers varies depending on the marketing channels. The feeds and starch supply chains
offer the lowest price at PhP 2 to PhP 2.50 per kilo. These supply chains buy in bulk and offer
guaranteed markets and floor price. Price in the starch and feed supply chains has been stable
during the last five years. Price of tubers sold to wet markets for home consumption and for
processing ranges from PhP 2 to 7 depending on demand and supply. The demand is huge but these
are spread out among many micro and small scale entrepreneurs. Absorption capacity of each micro
enterprise is low. This channel is ideal for farmers with low production volume and for those who
prefer to sell in small quantities. The transaction cost though is high in this channel and can
potentially offset gains made by farmers from the relatively higher price than in the feeds and starch
supply chains.
Table 31. Indicative Prices of Cassava Products, 2014
Marketing Channel/
Product Format
Indicative Price (PhP)
Notes/Comments
Home Consumption/Food Processing/Local Delicacies
Fresh tubers
PhP 2 to 7/kilo
Price generally higher in Muslim dominant
areas
Grated cassava (Tampin)
2.5 kilos per pack
PhP 20 to 30/pack
Price fluctuates depending on supply of
cassava
PhP 2 to 2.50/kilo
Intermediaries usually offer a higher price
for those with high volume
Feeds
Fresh tuber
Farmers with cash advances from traders
(not cooperatives) usually get a lower
price
Chips
PhP 8.50 to 9.20/kilo
For cooperatives, price offered to buyers
depend on pricing policy
Additional of PhP 1 to 2 offered for peeled
cassava chips. Farmers though not
enthusiastic since manual peeling is
laborious.
Premium given to farmers who can deliver
high volume
Granules
PhP 11.50/kilo
Subject to discounts based on quality and
moisture content
Premium given to peeled cassava granules
60
Table 31. Indicative Prices of Cassava Products, 2014
Marketing Channel/
Product Format
Indicative Price (PhP)
Notes/Comments
Starch
Fresh tuber
PhP 2.00 to 2.50/kilo
Offers PhP 4 to 4.50 for suppliers outside
the region; starch companies buy outside
the region when they lack supply
Source: KII/FGD
61
Section 5:
SUPPORT SERVICES
A. FINANCIAL SERVICES
Although Mindanao has a vibrant formal financial sector, the vast majority of funding in the cassava
supply chain flows from the value chain actors themselves. Value chain actors have different drivers
for supplying credit, most often the desire to secure supply, increase production and efficiency, and
increase market share. As a result, downstream players are more willing than financial institutions to
accept the risks associated with agricultural finance. In addition, value chain actors have more
information on business activity, cash flows and firms within the value chain than financial
institutions do, which lowers their transaction costs and reduces risk. The interdependence of value
chain actors further reduces credit risks. In the case of value chain finance for inputs such as
fertilizer, non-payment would likely result in losing access to the input as well as the related
financing.Assemblers in need of financial services use their contracts with SMFI to facilitate access to
finance from banks.
Smallholders generally do not have the collateral nor signed contracts with buyers that they can
present to banks. As such, farmers and resource poor players generally have limited access to
formal finance and are also hesitant to avail of loans from banks and MFIs. Resource poor players,
therefore, borrow money from informal sources because these are accessible; require no collateral
and voluminous documents like those required by formal lending institutions.
Financial institutions in the Philippines have quite a wide range of products and add-in services that
attempt to serve the needs of the poor while managing the risks of lending to them. The cash flowbased lending, for example, that uses regular household cash flow analysis and collects payments
frequently provides a valuable line of credit for households engaged in farming activities but may not
be appropriate among marginal farmers who do not have other sources of income. Production costbased lending provides more promise to increase profits and help marginal farmers without other
sources of income to mitigate the uncontrollable risks to agriculture.
Another viable option to facilitate access of VC actors to financial services particularly the resource
poor is to strengthen the existing value chain financing structure and facilitate its shift towards a
win-win proposition. Parallel to this is the need to provide value chain actors providing financial
services with training and technical assistance on agricultural finance portfolio management.
Cooperatives, for example, could use assistance in evaluating their approach to providing finance to
make sure that all unit costs are adequately factored and risks are cost-effectively managed.
Financial institutions, on the other hand, need assistance in understanding value chains and how to
manage risks associated with lending to the cassava sector. While most financial institutions are
averse to lending directly to farmers, by introducing the mechanism of value chain financing they
can identify lending opportunities to facilitate the expansion of the entire value chain.
Safety nets, savings, and insurance products are also needed to improve the resilience of
smallholders and other resource poor players in the South Cotabato cassava value chain. Farmers
are confronted with high performance and market risks which can be mitigated through access to
savings and insurance products combined with short-term credit. Poverty often forces farmers to
sell crops when the time is not right. Without access to finance (savings and credit), farmers will
remain in low-investment/low-productivity agricultural operations. Farmers can also make good use
62
of insurance products in their risk management and lower risk averseness which, oftentimes, hinders
upgrading initiatives.
B. NON-FINANCIAL SERVICES
Business development and logistic services in the cassava value chain is provided in the following
ways:
1. Informal:Information, knowledge and advice available to farmers and other VC actors through
social relationships. This could include information and advice on price, market and technology
trends through social networks or mediation through traditional cultural mechanisms. Examples
of these would be the informal discussions/sharing on fertilizer management and application,
increasing cassava yield recovery during meetings, a farmer consulting a peer on problems
encountered in his/her farm, etc.
2. Embedded:Services are provided within a buying or selling transaction, whereby the costs of the
service provision form part of the overall cost calculation of the supplier, while the service user
does not have to pay for service delivery. Embedded services are an added feature to the main
business transaction. Examples of these are the following:
- SMFI: one technical person assigned per key area of operation to provide extension
services primarily via the cooperatives.
- Traders/Assemblers/Cooperatives: Transportation and harvesting services; technical
advice and quality control services
- Cooperatives: training and extension services
3. Commercially sponsored mechanism:An example of this would be radio programs mentioned
by farmers during the KII that they found useful in getting technical and business information on
cassava farming and processing. Whereas the magazine-style programs include farming and
agribusiness tips to cover the issues of most interest to their listeners, the radio station derives
their revenue from companies and personalities that aim at using the target audience for
advertising or promotion purposes.
4. Fee-based services: Services offered to MSEs as distinct services for which they pay a fee.
Examples of these in South Cotabato are:
Traders/Assemblers/Cooperatives: rental of tractor, chipping machine, dryer, and granulator
Laboratories: soil analysis --- but uptake so far has been very low despite the relatively low fee
charged for the service.
5. Stand-alone free services.These services are provided by the Department of Agriculture,
CEMIARC, non-government organizations, and the provincial and municipal local government
units. The services comprised primarily of training and extension services.
Some of the salient opportunities for reform and improvement in the delivery of business
development services (BDS) are as follows:
1. Outreach, depth, and breadth of services are limited for both government and value chain based
providers owing to resource constraints. Users are inclined to pay for services such as rental of
63
facilities (e.g., tractors, chippers, and granulator). Resource poor households are most unlikely
to pay for training and extension services given the long tradition of heavily subsidized and free
services. Likewise, many of the smallholders who urgently need technical and business
development assistance are located in remote areas. In many cases though, intermediaries at
the community level are already providing some forms of BDS to their network of suppliers.
Given the above scenario, there is a need to complement the government and SMFI extension
services by facilitating the development of an indigenous community-based capacity to provide
services related to cassava farming and processing. The business development services system
may be built on existing trade/marketing structure to facilitate the flow of embedded services to
all actors in the chain. The challenge is how to motivate progressive farmers and intermediaries
to improve their capacities and capabilities in order to provide sufficient support to their
suppliersand peersas a means of improving both their incomes.
Strengthening of radio program on cassava farming would also further enhance the flow of
learning among VC actors especially the upstream players.
2. Established and proven technologies for cassava production for food and industrial uses
havebeen developed by various government agencies, research institutions, private corporations
and other industry stakeholders. Farmers and processors, likewise, are rich sources of
information and can assist significantly in customizing good practices according to their specific
contexts which could potentially accelerate uptake and adoption. The main weakness though is
the lack of system of technology sourcing, archiving, site-specific customization, and broadbased dissemination. Likewise, there is a need to make the information easy to comprehend so
that target users who are mostly less educated could comprehend and use them for decisionmaking.
3. The Philippines is considered as one of the most vulnerable countries to climate change.
Reducing greenhouse gas (GHG) emissions continues to be critical to avoid unmanageable
climate change, but VC actors in the South Cotabato value chain must also build their resilience
to unavoidable and ongoing climate change by managing climate-related impacts that threaten
their businesses, while planning for emerging market opportunities. To enable cassava VC
players to pursue green upgrading, they need access to technologies that are:
-
Compliant with improving efficiency and renewable capacity in terms of water and
energy use
Remove harmful chemicals from production processes
Reduce the waste footprint in the value chain
To ensure inclusion and facilitate chainwide greening, it is important to make learning and
acquisition of technology easy, affordable, and accessible. Starting points could be the
customization of FAO’s “Save and Grow” guide for cassava to the South Cotabato context and to
build on the experiences of progressive VC players who have started to incorporate sustainable
production technologies in their businesses.
4. Whether services are embedded or fee-based or even free, enterprises and most especially
smallholders are more receptive to services with immediate impact on income. Smallholders are
generally very risk adverse resulting to low buy-in and low level of new technology and practices.
It is therefore, recommended that design and delivery of services should be linked with
marketing/market access and players’ cash-flow schedules/cycles, and those demonstrations
64
should be done to orient them on the benefits of technology vis-à-vis income generation
potentials.
5. Access to drying and other postharvest facilities constitutes a main constraint among many
farmers. Given the high perishability of cassava and the rapid deterioration of quality, access to
postharvest facilities is critical. Likewise, access to postharvest facilities also provides incentives
for function upgrading and hipp addition.
65
Section 6:
ENABLING ENVIRONMENT
A. FORMAL RULES, REGULATIONS, AND POLICIES
Below are the key issues that promote and/or hinder the development of the cassava industry:
1. A strong advocacy campaign is needed to grow and sustain the increased acceptance and use of
cassava for feeds. Parallel to this is the need to improve price competitiveness of cassava vis-àvis other feed crops and other cassava producing countries.
2. One of the crops mentioned in the Biofuel Act as a possible source of biofuel is cassava. Among
others, the provisions of said Biofuel law of the Philippines include incentives to investors in
enterprises that will be involved with production, distribution and use of locally produced
biofuel. China uses cassava chips primarily for its bioethanol production. This can be an area
that Mindanao can potentially explore and promote as an investment priority.
3. The establishment of a cassava zoning plan in each of the regions will help to promote the
judicious utilization of land and facilitate the development of clusters for improved supply chain
collaboration and collaboration. Likewise, in line with the Department of Agriculture’s directive
for mainstreaming of climate change in all programs, there is a need to widely promote the
adoption of eco-efficient cassava production and processing systems.
4. PD 1960 (1985) provided for the formation of cooperatives in order to achieve economies of
scale in production, marketing and trading. Key constraints in forming viable cooperatives are
the lack of organizational and management skills and weak entrepreneurial orientation.
B. INFORMAL RULES AND SOCIO-CULTURAL NORMS
1. In facilitating the improvement of supply chain collaboration and coordination and
strengthening of horizontal collaboration, the program can leverage the positive values of
"Malasakit", " Hiya", " Utang Na Loob", " Pakiki-ayon", " MaaasahangKagalingan", "Katapatan",
''Malasakit", and "Kagitingan". The approach is to appeal to the individual and the group's higher
values and collective sense of "Pagkakaisa". It is important to facilitate the alignment of
individual and group objectives.
2. In introducing improved technologies and facilitating upgrading, the “tingi” or piecemeal
mentality may be positively harnessed. Breaking the upgrading or change process into small
steps has a number of advantages. Smaller changes are easier to plan and manage. When VC
players especially farmers look at a big change, they are easily overwhelmed by the size of it.
When things are broken down into smaller pieces, it does not look as something that is really
very difficult to do. A pause between stages gives time to re-think and re-plan. It also helps
create a sense of closure and reduces tendencies to revert to old ways.
3. Resource-poor farmers are generally risk adverse. As such, it is oftentimes important to
demonstrate the viability and benefits of the change initiative or improved technology. For
activities to be effective in resolving doubts and hesitations of farmers and other VC players,
66
these should: a) provide safe spaces for reflection and sharing; b) build relationships; and c)
develop responses based on personal experiences, abilities, and perceptions. Visits and
interactions with people exhibiting the desired behavior and demonstration farms can be very
helpful in guiding target groups toward an acceptable resolution of their doubts about the
change initiative. VC players especially farmers see information from peers who have undergone
the process as more credible than information from other sources.
67
Section 7:
CONSTRAINTS AND OPPORTUNITIES
Table 32 . Constraints and Opportunities
Opportunities
Constraints
Province
Number indicates priority ranking of
constraintas defined by players with 1 as
top constraint
INPUT PROVISION
Use of good quality planting
materials from accredited
nurseries can significantly
improve farm productivity
Recommended varieties of
cassava approved by the
National Seed Industry Council
(NSIC) are ideal for various
industrial uses because of their
potentially high root yield and
high root dry matter and starch
contents.
There are farmers who
specialized in production of
planting materials
Lack of access to and
availability of steady supply of
planting materials other than
the KU 50, Lakan 1, and
Rayong 5 within the proximity
of cassava farms
Lack of know-how to set-up an
effective system for rapid
multiplication and distribution
of new varieties with high yield
potential, high harvest index,
and high root starch content
Low uptake/ adoption of
nursery produced planting
materials
ZAMBOANGA PENINSULA
Zamboanga del Norte (1)
Zamboanga del Sur (1)
Zamboanga Sibugay (1)
Zamboanga City (1)
NORTHERN MINDANAO
Bukidnon (3)
Camiguin (2)
Lanao del Norte (2)
Misamis Occidental (2)
Misamis Oriental (2)
DAVAO REGION
Davao del Norte (1)
Davao del Sur (1)
Davao Oriental (1)
Compostela Valley (1)
Davao City (1)
SOCCSKSARGEN
North Cotabato (2)
Sarangani (1)
South Cotabato (1)
Sultan Kudarat (1)
CARAGA
Agusan del Norte (1)
Agusan del Sur (1)
Surigao del Norte (1)
Surigao del Sur (1)
ARMM
Basilan (1)
Lanao del Sur (1)
Maguindanao (1)
Sulu (1)
Tawi-tawi (1)
Given the vegetative propagation method used for cassava, availability of clean planting materials of
high yielding materials for propagation is crucial to improve productivity and, hence, income
generation capacity of farmers. Currently, cassava planting material are mostly multiplied at the
farm level, and its purchase is a low priority investment among resource poor farmers due to any or
all of the following reasons:
- Farmers especially smallholders do not have the capacity to pay upfront for planting materials
- High transportation and handling costs which, at times , can be higher than the cost of the
cuttings/stalk per se
68
Opportunities
Constraints
Province
top constraint
- Cassava planning materials are fairly fragile and transport of planting material over long
distances often resulted to high mortality.
- Planting materials available for commercialdistribution are of inconsistent quality making it
difficult for farmers to differentiate the benefits of using planting materials from previous
harvests vis-à-vis nursery produced materials. This also implies the lack of technical skills among
existing nurseries/multiplier farms and the weak compliance to standards.
- Lack of appreciation of cost benefit of the different varieties and use of good quality planting
materials
- High risk aversion
- Lack of steady supply of good quality planting materials. There are only a few cassava
growers/nursery operators who have the ability to rapidly mass propagate the high yielding
varieties.
The above factors have reinforced smallholders’ traditional practice to prepare planting materials
from previous harvests. However, the continuous use from the same source alters the genetic makeup of the planting material, thus lowering its capacity to germinate. Aside from declining yield, the
practice of using stalks from own farm make the crops vulnerable to pests and diseases.
Even in provinces where yields are relatively high, availability of planting materials of high yielding
varieties is a constraint. Farmers in these areas usually consider cassava as one of their main sources
of income which makes the availability of planting materials more important.
Use of organic fertilizer can
potentially lead to 33%
increase in yield in subsequent
croppings
based
on
experiences of farmers in South
Cotabato
Use of fertilizer can help
farmers incrementally reduce
the use of synthetic fertilizer in
subsequent croppings and, as
such, cut down production cost
There are existing producers of
organic fertilizer and an
abundance of supply of agriwaste materials that can be
used for organic fertilizer
production
High cost (financial and
environment) of chemical
fertilizer
Limited supply of organic
fertilizer
appropriate
for
cassava farming
Low use of fertilizer/ Lack of
willingness to spend on
fertilizer/Low
purchasing
capacity
ZAMBOANGA PENINSULA
Zamboanga City (2)
NORTHERN MINDANAO
Bukidnon (4)
Camiguin (3)
Lanao del Norte (3)
DAVAO REGION
Davao del Norte (3)
Davao del Sur (3)
Davao Oriental (3)
Davao City (3)
SOCCSKSARGEN
North Cotabato (3)
Sarangani (2)
South Cotabato (2)
Sultan Kudarat (2)
CARAGA
Agusan del Sur (2)
69
Opportunities
Constraints
Province
top constraint
Surigao del Sur (2)
ARMM
Basilan (5)
Lanao del Sur (4)
Maguindanao (4)
Sulu (5)
Tawi-tawi (5)
Farmers apply fertilizer but not necessarily in the adequate amounts or in the right proportion of N,
P, and K especially among smallholders. Application of fertilizer is of varying intensities determined
mainly by their access to resources and not necessary related to soil nutrient requirements.
Cassava generates marginal income under a low input production system but income (returns) can
more than double with the proper use of fertilizers. An emerging good practice that some farmers in
South Cotabato are doing is the gradual transition to organic cassava farming.
The high prices of chemical inputs make it almost impossible for farmers to access fertilizers. In areas
like Lanao del Sur, farmers have to source fertilizer outside of the province due to cost consideration.
On the other hand, there is an abundance of agri-waste materials that can be made into organic
fertilizer. In areas where organic fertilizer is already commercially distributed, main issues of farmers
are the lack of consistency in quality and appropriateness of fertilizer to cassava.
FARMING
Adoption of good agronomic
practices can contribute to
yield intensification and
improve productivity
SMFI has technical persons that
can help in capacity building of
potential
community-based
trainors.
Existing cooperatives, traders
and assemblers who own
facilities and provide services
to farmers can be further
developed to provide a range
of extension and advisory
services
Assemblers and cooperatives
who have been trained in
quality standards compliance
and market requirements can
potentially
influence
smallholders to adopt good
practices
Limited outreach of existing
providers
Lack of know-how among
providers
on
sustainable
farming
practices/
Good
Agricultural Practices
Low adoption/ uptake of
improved technology and
practices
(Sustainable
Farming/GAP)
ZAMBOANGA PENINSULA
Zamboanga City (3)
NORTHERN MINDANAO
Bukidnon (7)
Camiguin (5)
Lanao del Norte (5)
DAVAO REGION
Davao del Norte (2)
Davao del Sur (2)
Davao Oriental (2)
Davao City (2)
SOCCSKSARGEN
North Cotabato (6)
Sarangani (6)
South Cotabato (6)
Sultan Kudarat (6)
CARAGA
Agusan del Sur (6)
Surigao del Sur (6)
70
Opportunities
Constraints
Province
top constraint
ARMM
Basilan (2)
Lanao del Sur (2)
Maguindanao (2)
Sulu (2)
Tawi-tawi (2)
Smallholdersespecially those who are not members of cooperatives generally continue to practice
production patterns they inherited from their family and they do not feel the need to change. The
introduction of innovative methods is normally resisted, if not even completely rejected.
Quality standards and practices that work are not formally documented but rather based on gut feel
and years of experience. Lack of well-defined standards and documentation of good practices result
in poor consistency.
Farmers generally have not conscientiously implemented an environmental management system in
their farms. Soil erosion control and fertility maintenance are now widely recognized as critical to
sustainable income generation from cassava. Implementation of GAP and sustainable farming
practices will require changing the informal norms on how farmers typically managed their farms.A
campaign for the adoption of simplified low cost Gap for cassava farming must be initiated to
immediately resolve issues on production that affect quality and yield, the productivity and
profitability of cassava farms.
Outreach, depth, and breadth of extension services are limited for both government and value chain
based providers owing to resource constraints. Farmers are inclined to pay for services such as
rental of facilities (e.g., tractors, chippers, and granulator). Resource poor households are most
unlikely to pay for training and extension services due to financial capacity issues and low
appreciation of benefits. Likewise, many of the smallholders who urgently need technical and
business development assistance are located in remote areas. In many cases though, intermediaries
at the community level are already providing some forms of embedded extension services to their
network of suppliers. The current pool of providers, however, also need further capacity building
assistance especially in relation to sustainable farming practices in order for them to pass on the
know-how to their peers. Smallholders need permanent access to providers to continuously improve
their cultivation techniques and technology toimprove productivity.
PROCESSING
On-farm processing of tubers
into chips using mobile
mechanical chipper. On-site
chips production can reduce
transactions cost for all players
involved
Low value addition among
smallholders
High transportation cost for
fresh tubers
ZAMBOANGA PENINSULA
Zamboanga City (6)
NORTHERN MINDANAO
Bukidnon (2)
Camiguin (6)
Lanao del Norte (6)
DAVAO REGION
Davao del Norte (7)
Davao del Sur (7)
71
Opportunities
Constraints
Province
top constraint
Davao Oriental (7)
Davao City (7)
SOCCSKSARGEN
North Cotabato (4)
Sarangani (4)
South Cotabato (4)
Sultan Kudarat (4)
CARAGA
Agusan del Sur (5)
Surigao del Sur (5)
6Fresh tubers have low value/bulk ratio and are perishable. Due to its bulkiness, transportation costs
comprise a significant percentage in the marketing cost. To avoid losses from root deterioration and
to minimize transport costs, chipping should ideally occur close to the production areas. While
chipping can be done manually, it is time-consuming and labour intensive and has significant
implications on price competitiveness and the ability to transform tubers into chips at the fastest
possible time to avoid quality deterioration. Mechanical chippers are often not available to most low
income cassava farmers.
Growing demand for chips and
granules
(feedmills)
may
motivate
cooperatives
to
operate
common
service
facilities.
Buyers prefer to buy chips and
granules. China requires chips.
Lack of access to postharvest
facilities
Lack of capacity to comply with
ZAMBOANGA PENINSULA
Zamboanga City (4)
NORTHERN MINDANAO
Bukidnon (1)
Camiguin (4)
Lanao del Norte (4)
DAVAO REGION
Davao del Norte (4)
Davao del Sur (4)
Davao Oriental (4)
Davao City (4)
SOCCSKSARGEN
North Cotabato (1)
Sarangani (5)
South Cotabato (5)
Sultan Kudarat (5)
CARAGA
Agusan del Sur (4)
Surigao del Sur (4)
Drying of cassava chips during the rainy season has always been a challenge for processors and
72
Opportunities
Constraints
Province
top constraint
farmers. To date, processorsand farmers rely on solar drying. Likewise, many of the solar dryers
available in cassava producing areas are also used for other crops. As such, farmers make do with
makeshift dryers who are prone to contamination to soil, dust, and other extraneous matters in
addition to longer drying time. Chips must be protected from contamination and should be dried as
quickly as possible to avoid mold growth. Chips with molds are rejected.
The majorities of losses during storage of chips are caused by exposure to rain, insects, rats, termites,
and mold. Losses from these traditional and makeshift storage facilities are very high, both in terms
of quantity and quality.
Many of the farmers and provinces who can potentially participate in the feed supply chain are
constrained by lack of postharvest facilities. Without postharvest facilities, opportunities for value
addition is low. Likewise, transport cost of fresh tubers is high making it financially unviable for
farmers to deliver to buying stations and/or feed mills.
Animal feed is generally more vulnerable to quality problems, notably problems of microbial and
mycotoxin contamination arising from poor handling and drying during primary processing. The
market demands good quality cassava chips, free from any contamination. Many of the quality
problems and resulting price discounts faced by processors can be traced to non-conformance to
Good Manufacturing Practices and constraints related to drying of cassava chips especially during
the rainy season.
Growing livestock industry in
areas/ Growers looking for
alternative low cost good
quality halal feeds
Difficulties to meet price
structure of feed mills currently
purchasing cassava due to
remoteness of areas from
delivery stations/factories
ARMM
Basilan (3)
Lanao del Sur (5)
Maguindanao (5)
Sulu (3)
Tawi-tawi (3)
Low value addition and danger
of oversupply of cassava due to
lack of external trade
There was an attempt in the past to explore the viability of producing chips and granules for SMFI.
Financial analysis though showed that cost structure would make it difficult for venture to be a viable
proposition for SMFI and the farmers. On the other hand, the three island provinces and ARMM as a
whole do not have a feed milling facility in the area. The island provinces, however, have ample
production of cassava and other raw materials needed for village level halal feed production. This
would mitigate risks of oversupply of cassava, lower the cost of livestock raising, and enable the
areas to take advantage of the huge market opportunities for halal products.
Growing demand for cassava
grates among Muslim
communities in the Philippines,
Sabah, and Malaysia
Lack of access to GMP and
Halal compliant processing
facilities
Short shelf life of products
Cassava food products can
potentially be positioned as
healthy/ gluten-free food which
ARMM
Basilan (4)
Lanao del Sur (6)
Maguindanao (6)
Sulu (3)
Tawi-tawi (3)
Low level of product
development/ Weak branding
73
Opportunities
Constraints
Province
top constraint
has a growing demand both in
local and export market
Traditional processing methods are oftentimes inefficient with low turnover, and generally do not
comply with food safety standards. Finished product safety is not guaranteed due to non- availability
of standards and limited to no access to GMP and halal compliant facilities. Poor packaging and
storage contribute to quality deterioration. Likewise, there has been limited investment in product
development to make the products attractive to a wider market segments. Although products enjoy
a high demand, markets are generally confined within the localities and neighboring
municipalities/provinces. Without GMP certification, processors cannot be granted a License to
Operate which is needed to sell to institutional markets. Failure to adequately develop production
and marketing systems for cassava-based Muslim delicacies has for many years limited the
contribution of this processing sector to economic growth and poverty reduction.
MARKETING
Good roads can reduce cost of
transactions
PLGUs/MLGUs lack financial
capacity to construct and/or
upgrade roads
ZAMBOANGA PENINSULA
Zamboanga City (5)
NORTHERN MINDANAO
Bukidnon (5)
Camiguin (1)
Lanao del Norte (1)
DAVAO REGION
Davao del Norte (5)
Davao del Sur (5)
Davao Oriental (5)
Davao City (5)
SOCCSKSARGEN
North Cotabato (5)
Sarangani (3)
South Cotabato (3)
Sultan Kudarat (3)
CARAGA
Agusan del Sur (3)
Surigao del Sur (3)
ARMM
Lanao del Sur (3)
Maguindanao (3)
A significant number of farms are located in areas where roads are unpaved and, oftentimes, narrow
for trucks to pass. There is a significant difference in the cost of moving goods in rural areas on dirt
roads as opposed to on paved roads. This difference is usually reflected back on the price received by
74
Opportunities
Constraints
Province
top constraint
farmers. Likewise, road conditions and, consequently, the high transport costs, provide disincentives
for traders to source from these areas. This limits the options of farmers to a few traders and forces
them to be price takers.
Mindanao can potentially have
whole year round production of
cassava products and avoid
production gluts resulting to
low prices
Weak supply chain planning
and cooperation
ZAMBOANGA PENINSULA
Zamboanga City (5)
NORTHERN MINDANAO
Bukidnon (6)
Camiguin (7)
Lanao del Norte (7)
DAVAO REGION
Davao del Norte (6)
Davao del Sur (6)
Davao Oriental (6)
Davao City (6)
SOCCSKSARGEN
North Cotabato (7)
Sarangani (7)
South Cotabato (7)
Sultan Kudarat (7)
CARAGA
Agusan del Sur (7)
Surigao del Sur (7)
ARMM
Basilan (6)
Lanao del Sur (7)
Maguindanao (7)
Sulu (6)
Tawi-tawi (6)
Processors are usually faced with issues of high supply during harvest season prompting them to
work in shifts and no to limited supply during planting season which results to underutilization of
capacity. Similarly, assemblers have problems in storage and granulation during harvest season.
Farmers. On the other hand, earns income from cassava on an annual basis. These issues stem from
uncoordinated production planning and the lack of demonstration on how year round production can
potentially be undertaken.
75
Section 8:
COMPETITIVENESS DIRECTIONS
A. COMPETITIVENESS VISION
Demand of cassava for industrial uses and, to some extent, food depends on the relative prices and
supply of corn and other suitable crops. Hence, the growth of the cassava industry in Mindanao and
the realization of its potential to contribute significantly to the improvement of living conditions of
communities in marginal/fragile ecosystem hinges on putting in place a system that will sufficiently
meet the requirements of price, quality, and reliability of supply of tubers and its intermediate
products for industries such as the feed, starch, and the traditional food sectors. This means the
need for increased production base, higher productivity, improved product quality, and efficient
supply chain. One of the key challenges is to transform cassava farmers into entrepreneurs from a
largely low input economic activity geared for subsistence to one that is market-driven and
profitable. Similarly, there is the parallel need to facilitate the commercial upgrading of the
traditional cassava food processing industry to ensure that it remains a viable and growing market
for tubers and to build its capacity to penetrate the growing Halal Food Market.
Within the next five years, the cassava subsector will focus on building its capacity and capability to
meet the needs of the domestic market. Development directions for ARMM will be geared more
towards building its capacity to supply HALAL certified food products and livestock feed.
Figure 16. Synthesis of Cassava Value Chain Competitiveness Vision in Mindanao
76
Figure 17. Synthesis of Cassava Value Chain Competitiveness Vision in ARMM
The following are the specific industry changes required to boost the competitiveness of the cassava
subsector parallel to enhancing its contribution to the food security status of its producers and
consumers:
-
Improved supply, access, and use of good quality planting materials, cost-efficient fertilizer
and other inputs,
-
Improved flow and quality of embedded extension services and adoption of sustainable
farming practices
-
Increase in number of cassava producing areas with access to GMP compliant postharvest
facilities to ensure consistent production of high quality chips and granules and enable
farmers to engage in value addition
-
Availability and access to improved processing technologies, product development services,
and GMP and Halal compliant common service facilities for cassava-based food production
to facilitate upgrading of existing enterprises and transform farmers into entrepreneurs
through collective enterprises
-
Establishment of halal village level feed milling facilities in ARMM to promote judicious
utilization of cassava and mitigate risks of oversupply parallel to reducing cost of livestock
production and to lay the groundwork for production of halal certified meat products
-
Improved farm to market roads
77
-
Improved production planning and supply chain coordination
B. PRIORITY CONSTRAINTS/OPPORTUNITIES AND INTERVENTIONS
Drawing on findings from the end markets and value chain analysis and the required industry
changes identified by VC actors and stakeholders, below are the proposed intervention strategies
and approaches to improve market competitiveness of the Mindanao cassava industry while
promoting broad-based growth and climate change resilience. Prioritization of interventions for
each of the regions in Mindanao is presented in Annexes 1 to 6 while specific approaches for each
province are indicated in Table 34.
INPUT PROVISION
1. Development of local capacity for production of foundation seeds and its multiplication and the
commercial distribution of planting materials
Figure 18. Sample Intervention Model to Facilitate Farmers’ Access to Good Quality Planting
Materials
Cassava will remain a competitive industrial crop only if farmers obtain high yields at low production
costs by the use of high yielding varieties and good production practices. To facilitate the wider
diffusion of good varieties, there is a need to develop reliable capacity for multiplication and
commercial distribution of planting materials with the following characteristics: i) high yield
78
potential, in terms of dry matter and starch; ii) early harvestability ; iii) high resistance to pests and
diseases; and iv) adapted to the grasslands/acidic and infertile soil. This will involve enhancing local
capacities to produce planting materials in sufficient quantities according to local demands and
quality standards as well as distributing this on time and at affordable prices. Advantages of
community-based production system include its accessibility, cost-effectiveness, and suitability to
farmers’ needs and local agro-ecological conditions.
High yielding cultivars will contribute to higher productivity and, consequently, lower production
cost and improve price competitiveness of cassava vis-à-vis other feed grains. A high root dry matter
content will result to reduction in processing cost. Varieties with shorter culture period will increase
the opportunities for crop rotation and, consequently, more efficient land use and improvement of
soil fertility as well as reduced soil erosion. High resistance to pests and diseases will contribute to
increased yields and lower expenses for pesticides.
It is also anticipated that pressure on land will increasingly push cassava into more fragile
ecosystems. As such, availability of cassava varieties adapted to the grasslands/acidic and infertile
soil is important.
To ensure sustainable access to quality seed and necessary technical assistance, it is necessary to
build an intervention model that assists to develop markets for good quality planting materials and
encourages farmers to adopt better cultivation methods suited to their local conditions.
Development of a vibrant market usually requires both demand and supply side interventions.
The following are the proposed interventions to build reliable supply of planting materials:
a) Set-up and/or upgrading of existing multiplication farms/nurseries. Upgrading of existing
multiplication farms will be primarily geared towards helping them diversify into the
propagation of improved high yielding varieties, comply with accreditation requirements, and
establishment of effective system for rapid multiplication. Availability of planting materials
within the proximity of cassava farms is crucial given that cuttings are very prone to drying out
which compromises germination rates and to reduce transport costs.
b) Development of financial product for interested investors in nursery operations in collaboration
with MFIs/banks. Work with MFIs/banks in the development of financial product for interested
investors in nursery operations.
c) Dissemination of success stories and business models to attract private sector investment.
People are more likely to invest when they see a successful model and when they do not have to
start from scratch. This also builds on the “me-too” mentality.
Given that farmers are generally not used to purchasing planting materials, interventions are needed
to create effective demand. The development of effective demand for nursery produced planting
materials underlines the need to put more focus on raising understanding on the benefit and
availability of new and improved cassava varieties. Below are some of the demand sides
interventions that project can implement:
a) Implementation of voucher program or Plant Now – Pay Later scheme and other similar tools or
mechanisms to stimulate first time purchase and lower risk aversion. This intervention can be
targeted to farmers who have never purchased cassava planting materials from nurseries in
his/her entire years of farming. In a voucher program, a targeted farmer is given a voucher
which he/she can exchange for planting materials from project supported and accredited
79
providers. The providers in turn redeem the vouchers for cash payment from the project. The
voucher can be for a certain percentage of the cost of planting materials and farmer has to pay
for the remaining balance directly to providers. In some cases, vouchers can serve as production
credit, with repayment expected at some later date. The voucher can also be effective in
encouraging nurseries to invest in upgrading to qualify for accreditation. It can also assist newly
set-up nurseries to build up clientele and stabilize their cash flow. Voucher programs generally
include: i) a mechanism for targeting recipients and distribution of vouchers including
monitoring of outcomes and impact at farmers’ level; ii) a system for accreditation of nurseries
or providers; and ii) a mechanism for managing the cash redemption of vouchers.
b) Support in the development of business models appropriate to purchasing abilities of farmer
clients and its operationalization. Paying the true cost of inputs helps farmers to correctly
budget their production costs. In addition, farmers tend to undervalue free inputs, so charging a
price will encourage farmers to value these goods appropriately. Project, however, should assist
nurseries in the development of payment schemes that would be aligned to the cash flow of
farmers.
c) Establishment of demonstration farms as venue for learning and to showcase benefits of using
good quality planting materials. Following the “to see is to believe” mentality prevalent among
many farmers, farmer assessment and understanding of cassava planting material performance
is most effective via on-farm evaluation where the latter can see the physiological make-up of
the plant through assessing the stock (source of cutting), leaf, and root development. To
stimulate farmers to use new and improved varieties, it is also oftentimes necessary to buy
down perceived risks.
d) Development of capacity of nursery operators to provide technical assistance to farmer-clients.
This is a means of buying down risks of farmers and, at the same time, building their confidence
on the products. By helping their clients to succeed, the nurseries are laying the groundwork in
building the markets for their planting materials.
2. Strengthening of local supply chains of organic fertilizer and development of effective demand
Use of organic fertilizers and bio-pesticides is less costly, environmentally friendly, and reduces the
hazard inherent in the application of synthetic agrochemicals. The proposed intervention strategy
involves the establishment and/or strengthening of local capacity to commercially produce and
distribute organic fertilizer and the promotion of the effective and judicious use of fertilizer so that
farmers can get the optimal benefits from the use of these inputs. The set-up or strengthening of
organic fertilizer enterprises has three main objectives, namely:
a) To produce premium quality organic fertilizer specifically for cassava using waste materials and
at a cost affordable to smallholder;
b) To contribute to solid waste management and reduction of greenhouse gases from landfills
through composting of farm wastes;
c) To provide income generation opportunities for farming households through participation in the
venture as co-owners of the business, waste collectors, workers, and retailers.
It is critical that empowering farmers in basic principles of cassava nutrition and management
underpins demand creation interventions. Fertilizer use alone does not increase crop yields; it must
be used properly. Promotion of fertilizer use must be complemented with extension services to
80
ensure that fertilizers have the correct formulation to meet local soil needs, are applied in the
correct amount and at the optimal point in the planting cycle, and are used alongside
complementary inputs such as improved seed. Without proper application, fertilizer use can actually
decrease profitability by creating a significant added cost without a corresponding increase in crop
yields. As such, in addition to assisting fertilizer producers to scale up their production capacities,
they must also be capacitated to deliver advisory services to their farmer clients. It may also be
possible to integrate soil testing services with fertilizer distribution. Fertilizer demand must be
promoted with an integrated approach to increasing the profitable use of fertilizer by
farmersthrough extension services, and linking farmers to output markets.
Demand for fertilizer may be stimulated through the following approaches: i) demo farms
highlighting organic fertilizer use and appropriate crop and soil management; ii) point-of-sale
knowledge transfer; iii) voucher programs; and iv) tri-media dissemination of emerging good
practices and success stories.
FAR it is critical that empowering farmers in basic principles of cassava nutrition and management
underpins demand creation interventions. Fertilizer use alone does not increase crop yields; it must
be used properly. Promotion of fertilizer use must be complemented with extension services to
ensure that fertilizers have the correct formulation to meet local soil needs, are applied in the
correct amount and at the optimal point in the planting cycle, and are used alongside
complementary inputs such as improved seed. Without proper application, fertilizer use can actually
decrease profitability by creating a significant added cost without a corresponding increase in crop
yields. As such, in addition to assisting fertilizer producers to scale up their production capacities,
they must also be capacitated to deliver advisory services to their farmer clients. It may also be
possible to integrate soil testing services with fertilizer distribution. Fertilizer demand must be
promoted with an integrated approach to increasing the profitable use of fertilizer by
farmersthrough extension services, and linking farmers to output markets.
Demand for fertilizer may be stimulated through the following approaches: i) demo farms
highlighting organic fertilizer use and appropriate crop and soil management; ii) point-of-sale
knowledge transfer; iii) voucher programs; and iv) tri-media dissemination of emerging good
practices and success stories.
FARMING
3. Strengthening of existing providers of embedded services and/or development of embedded
models to transfer the needed skills, know-how, and information to enable farmers to adopt
sustainable production practices and improve productivity
Agriculture has significant environmental dimension. Different agricultural practices can either harm
or contribute to aspects of the environment such as biodiversity, the climate, soil, and water.
Cassava farmers are both affected by and contribute to climate change and environmental
degradation. Sustainable farming practices and GAP can turn these challenges into areas for growth.
To facilitate access of farmers to extension services, a pluralistic extension system is proposed to
match competencies and structures with particular market segments or target groups. Diversity of
extension provision, from government extension officers to community-based and value chain-based
providers (e.g., traders, lead farmers, cooperatives), will give farmers greater choice of sources of
information, knowledge, and skills to support the long-term sustainability of their farming. Working
with a wide range of providers will also translate into higher outreach and having a wide variety of
services developed in the market from which farmers can choose.
81
Capacity building of potential providers (e.g. progressive farmers within the community) of
extension services may include support in the establishment of demonstration plots that can also be
used as venues for learning. Demonstration plots that mirror the conditions that farmers actually
face can be powerful tools to initiate and incentivize change.
To minimize risk of abandonment of change process by the players, it is important to start with quick
wins and uses a building block approach. New technologies and agronomic packages must be
designed to fit the agro-ecological environment as well as farmers’ resource mix, risk profiles, and
scale of operation. Likewise, the participation of key players (from farmers to buyers) in the
development of modules can foster ownership and ensure its relevance and appropriateness to local
context and market requirements.
PROCESSING
4.
Development of mobile peeling, chipping, and drying system around cluster of farms (in remote
areas)
In view of its limited shelf life and bulkiness, cassava processing should occur close to the production
areas. Another approach is to speed up processing by bringing the processing facilities to the farm in
the form of mobile mechanical chipper and peeler. This would result to lower transportation cost,
better quality production, and greater share of the margin in the chain among farmers. Peeled
cassava chips command a higher price in the domestic market.
5. Establishment of GMP compliant common service facilities for chipping, drying, granulation,
and warehousing
The intervention strategy is aimed at enabling farmers and their cooperatives to engage in the
production of high quality chips and granules. Availability and access to processing facilities within
the proximity of cassava farming areas will also reduce hauling and transport costs of farmers and
buyers and risks of quality deterioration.
This will entail the establishment of GMP compliant common service facilitiesand a pool of local
providers to provide hands-on training and mentoring to users of the CSF. The common service
facilities may also be operated under a toll processing scheme where farmers or neighboring coops
retain ownership of their chips or granules and pay for the use of the facilities and the services.
6. Development of local capacity to commercially produce low cost high quality halal feeds
This intervention strategy is aimed at developing a new market for cassava in Tawi-tawi, Sulu, and
Basilan by addressing the need for halal feeds for the growing livestock subsector in these areas. This
is in anticipation of increased production of cassava at lower per unit cost as a result of the
productivity enhancement measures that will be implemented. Likewise, this can potentially
catalyze ARMM’s entry into the halal world market in the medium term.
The viability of this strategy has to be further studied and an inventory has to be made on potential
feed ingredients that can be sourced from the region. Cassava usually comprises only 20% of the
feed formulation and other ingredients are needed to ensure that feeds met the nutrition
requirements.
82
7. Commercialization of existing cassava grates based products that have been proven to be
saleable
This strategy involves the modernization and commercial upgrading of the processes and equipment
as a means of improving shelf life, product quality, and price competitiveness while still retaining the
traditional attributes of the food products crucial to consumer acceptance. This can be carried out
through the establishment of a Halal and GMP compliant toll processing cum training facility.
Branding and market development support will also be crucial. ARMM can also potentially expand
into the production of cassava based processed snack food targeting both the halal and healthy food
markets.
MARKETING
8. Upgrading to farm-to-market roads
This will involve upgrading of farm-to-market roads which would facilitate access to inputs and
output markets. The bulky, low-value, and perishable nature of the crop requires an efficient
transportation network for trade to be viable.
9. Improvement of coordination and production planning between cassava farmers and processors
There is a need to design a cassava supply management system to coordinate production,
harvesting, and collection of cassava to enable plants to reach 80% to 100% capacity utilization.
Below are the proposed intervention approaches:
a) Technical and financial support in the development and piloting of information system on
market demand forecast and corresponding cassava supply requirements which will help
farmers determine appropriate farm maintenance system and harvest schedules
b) Technical and financial assistance in the mapping cassava production areas and its planting and
harvest schedules including projected yield as basis in forging advance lot purchase agreements
between intermediaries and farmers with price index calculations transparent to all parties
concerned.
c) Technical assistance in the development and promotion of modular farming among farmers to
ensure year round production and harvest
Behavior change interventions may also be necessary to facilitate adoption of modular farming and
in the promotion of improved supply chain governance. The formation of cassava clusters would
also help in improving supply chain coordination.
83
Table 33. Summary of Constraints/Opportunities and Interventions
For ranking and prioritization of intervention strategy per province, please see Annexes 1 to 6.
Opportunities/Constraints
Province
Intervention Strategy and Approach
Who Can Do It?
Public
Private
INPUT PROVISION
Lack of access to and availability
of steady supply of planting
materials other than the KU 50,
Lakan 1, and Rayong 5 within
the proximity of cassava farms
Lack of know-how to set-up an
effective system for rapid
multiplication and distribution of
new varieties with high yield
potential, high harvest index, and
high root starch content
Low uptake/ adoption of nursery
produced planting materials
Opportunities
Use of good quality planting
materials
from
accredited
nurseries
can
significantly
improve farm productivity
Recommended
varieties
of
cassava approved by the National
Seed Industry Council
Interventions 1 to 8 for all
regions/provinces
ZAMBOANGA PENINSULA
Zamboanga del Norte
Zamboanga del Sur
Zamboanga Sibugay
Zamboanga City
NORTHERN MINDANAO
Bukidnon
Camiguin
Lanao del Norte
Misamis Occidental
Misamis Oriental
DAVAO REGION
Davao del Norte
Davao del Sur
Davao Oriental
Compostela Valley
Davao City
SOCCSKSARGEN
North Cotabato
Sarangani
South Cotabato
Sultan Kudarat
CARAGA
Agusan del Norte
Agusan del Sur
Development of local capacity for production of
foundation seeds and its multiplication and the
commercial distribution of planting materials
(1) Set-up and/or upgrading assistance to
multiplication farms/nurseries todiversify into
the propagation of improved high yielding
varieties,
comply
with
accreditation
requirements, and establishment of effective
system for rapid multiplication.
(2) Support in the development of business
models appropriate to purchasing abilities of
farmer clients and its operationalization
(3) Implementation of voucher program or Plant
Now – Pay Later scheme and other similar
tool or mechanism to stimulate first time
purchase and lower risk aversion
(4) Set-up of demonstration farms to showcase
benefits of using planting materials from
nurseries
DA/PRDP
Financial and
technical
assistance
MLGU/PLGU
Land and equity
Technical and
monitoring support
Implementation of
voucher system or
similar mechanism
BPI
Technical
assistance
R and D
Farmers/ Coops
Nursery operator
and multiplication
farms
Provider of
extension services
Media
Dissemination of
success stories
and emerging
good practices
Feedmills/
Assemblers
Promotion and
technology
support
MFIs/Bank
Financial services
(5) Development of capacity of nursery
operators/ multiplication farms to deliver
84
Province
Who Can Do It?
Public
(NSIC) are ideal for various
industrial uses because of their
potentially high root yield and
high root dry matter and starch
contents.
There
are
farmers
who
specialized in production of
planting materials
High
cost
environment)
fertilizer
(financial
and
of
chemical
Limited supply of organic
fertilizer appropriate for cassava
farming
Low use of fertilizer/ Lack of
willingness
to
spend
on
fertilizer/Low purchasing capacity
Opportunities
Use of organic fertilizer can
potentially lead to 33% increase
in yield in subsequent croppings.
Surigao del Norte
Surigao del Sur
ARMM
Basilan
Lanao del Sur
Maguindanao
Sulu
Tawi-tawi
technical advice to farmer clients
(6) Behaviour change interventions directed to
farmers
(7) Dissemination of success stories and business
models to attract private sector investment
(8) Work with MFIs/banks in the development of
financial product for interested investors in
nursery operations
regions/provinces
Strengthening of local supply chains of organic
fertilizer and development of effective demand
ZAMBOANGA PENINSULA
Zamboanga del Norte
Zamboanga del Sur
Zamboanga Sibugay
Zamboanga City
(1) Set-up and/or upgrading of existing organic
fertilizer including assistance to comply
with accreditation requirements
NORTHERN MINDANAO
Bukidnon
Camiguin
Lanao del Norte
Misamis Occidental
Misamis Oriental
DAVAO REGION
Davao del Norte
Davao del Sur
Davao Oriental
Compostela Valley
Private
(2) Implementation of voucher program, Plant
Now – Pay Later or similar market-based
mechanisms to stimulate purchase and use
of fertilizer and buy down risks
(3) Development of capacity to provide
technical advice to farmer clients including
soil testing and analysis
(4) Set-up demo farms to showcase benefits
DA/PRDP
Technical and
financial support
PLGU/MLGU
Waste collection
support
Land equity
Technical
assistance
Implementation of
voucher program
or similar
mechanism
Fertilizer
enterprises/coops
Producers
Providers of
extension services
Media
Dissemination of
info and success
stories
Banks/MFI
Financial services
Assemblers
Promotion among
suppliers
85
Province
Who Can Do It?
Public
Davao City
By using organic fertilizer, they
are able to incrementally reduce
the use of synthetic fertilizer in
subsequent croppings.
There are existing producers of
organic fertilizer and an
abundance of supply of agriwaste materials that can be used
for organic fertilizer production
SOCCSKSARGEN
North Cotabato
Sarangani
South Cotabato
Sultan Kudarat
CARAGA
Agusan del Norte
Agusan del Sur
Surigao del Norte
Surigao del Sur
Private
and effective use of fertilizer
(5) Documentation and dissemination
of
emerging good practices to attract new
investors
(6) Foster linkages with financial services
providers
ARMM
Basilan
Lanao del Sur
Maguindanao
Sulu
Tawi-tawi
FARMING
Limited outreach
providers
of
existing
Lack of know-how among
providers on sustainable farming
practices/ Good Agricultural
Practices
Low
adoption/
uptake
of
regions/provinces
ZAMBOANGA PENINSULA
Zamboanga del Norte
Zamboanga del Sur
Zamboanga Sibugay
Zamboanga City
NORTHERN MINDANAO
Bukidnon
Camiguin
Strengthening of existing providers of embedded
services and/or development of embedded
models to transfer the needed skills, know-how,
and information to enable farmers to adopt
sustainable production practices and improve
productivity
(1) Build up capacity of potential and existing
providers to better understand sustainable
DA/PRDP
Technical and
financial support
BAFPS
Technical
assistance
PLGU/MLGU
Feed Mills
Technical support
Cooperatives
Base for delivery
of training
Media
Info dissemination
86
Province
Who Can Do It?
Public
improved
technology
and
practices
(Sustainable
Farming/GAP)
Opportunities
Adoption of good agronomic
practices can contribute to yield
intensification and improve
productivitity
SMFI has technical persons that
can help in capacity building of
potential
community-based
trainors.
Existing cooperatives, traders and
assemblers who own facilities
and provide services to farmers
can be further developed to
provide a range of extension and
advisory services
Assemblers and cooperatives
who have been trained in quality
standards compliance and market
requirements can potentially
influence smallholders to adopt
Lanao del Norte
Misamis Occidental
Misamis Oriental
farming principles and its adaptation to
local context
DAVAO REGION
Davao del Norte
Davao del Sur
Davao Oriental
Compostela Valley
Davao City
(2) Support participative development (with
feedmills, intermediaries,
farmers) of
modules on sustainable farming practices
to ensure alignment with priorities of
players, learning aptitude of farmers, and
promote ownership of technology
SOCCSKSARGEN
North Cotabato
Sarangani
South Cotabato
Sultan Kudarat
CARAGA
Agusan del Norte
Agusan del Sur
Surigao del Norte
Surigao del Sur
ARMM
Basilan
Lanao del Sur
Maguindanao
Sulu
Tawi-tawi
Private
Technical
assistance
Organization and
coordination
(3) Technical assistance in the development of
training approaches that allow quick wins
to motivate and sustain adoption
(4) Conduct of competitions to motivate
adoption, stimulate innovation, and
facilitate identification of emerging good
practices as basis for regular updating of
modules
87
Province
Who Can Do It?
Public
Private
good practices
PROCESSING
Low value addition among
smallholders
High transportation cost for fresh
tubers
Opportunities
On-farm processing of tubers into
chips using mobile mechanical
chipper. On-site chips production
can reduce transactions cost for
all players involved
Interventions 1 to 4 for
regions/provinces indicated
below
Development of mobile peeling, chipping, and
drying system around cluster of farms (in remote
areas)
DA/PRDP
Technical and
financial support
ZAMBOANGA PENINSULA
Zamboanga del Norte
Zamboanga del Sur
Zamboanga Sibugay
Zamboanga City
(1) Development and set-up
of mobile
mechanical peeler, chipper, and dryer
rental services
PLGU/MLGU
Equity
Technical support
and monitoring
NORTHERN MINDANAO
Bukidnon
Camiguin
Lanao del Norte
Misamis Occidental
Misamis Oriental
DAVAO REGION
Davao del Norte
Davao del Sur
Davao Oriental
Compostela Valley
Davao City
Cooperatives
Equity
Operators/
Providers
(2) Technical assistance in the development of
system and its operationalization
(3) Development of core group of mentors on
Good Manufacturing Practices (chipping
and drying) --- services embedded with
rental of mobile peeler and chipper
(4) Promotion of use of facilities among
farmers
SOCCSKSARGEN
North Cotabato
Sarangani
South Cotabato
Sultan Kudarat
CARAGA
88
Province
Who Can Do It?
Public
Private
Agusan del Norte
Agusan del Sur
Surigao del Norte
Surigao del Sur
Lack of access to postharvest
facilities
Lack of capacity to comply with
Opportunity
Growing demand for chips and
granules
(feedmills)
may
motivate cooperatives to operate
common service facilities.
regions/provinces listed
below
ZAMBOANGA PENINSULA
Zamboanga del Norte
Zamboanga del Sur
Zamboanga Sibugay
Zamboanga City
NORTHERN MINDANAO
Bukidnon
Camiguin
Lanao del Norte
Misamis Occidental
Misamis Oriental
DAVAO REGION
Davao del Norte
Davao del Sur
Davao Oriental
Compostela Valley
Davao City
Establishment of GMP compliant common
service
facilities
for chipping,
drying,
granulation, and warehousing
DA/PRDP
Technical and
financial support
(1) Set-up of common service facilities
PLGU/MLGU
Equity
Technical support
and monitoring
(2) Technical assistance in customization of
existing GMP modules on chipping, drying,
and storage in collaboration with key VC
Players
(3) Development of a core group of local
experts to provide hands-on training and
mentoring to users of postharvest facilities
as embedded service of CSF
Cooperatives
Equity
Operators/
Providers
BFAD/DOST
Technical
assistance
SOCCSKSARGEN
North Cotabato
Sarangani
South Cotabato
Sultan Kudarat
89
Province
Who Can Do It?
Public
Private
CARAGA
Agusan del Norte
Agusan del Sur
Surigao del Norte
Surigao del Sur
Difficulties to meet price
structure of feed mills currently
purchasing cassava due to
remoteness of areas from
delivery stations/factories
Low value addition and danger of
oversupply of cassava due to lack
of external trade
provinces listed below
ARMM
Basilan
Lanao del Sur
Maguindanao
Sulu
Tawi-tawi
Development of local capacity to commercially
produce low cost high quality halal feeds
DA/PRDP
Technical and
financial support
Cooperatives
Equity
Operators
(1) Establishment of village level feed mill
(2) Support planting of crops needed for feeds
other than cassava
Opportunity
(3) Training and capacity building on feed
formulation, manufacturing, and business
management
Growing livestock industry in
areas/ Growers looking for
alternative low cost good quality
halal feeds
(4) Implementation of voucher program or
similar schemes to facilitate development
of client base and encourage locals to
patronize feed mill
PLGU/MLGU
Equity
Technical support
and monitoring
BAI/DOST/LDC
Technical
assistance
DTI
Promotion
(5) Market development support
Lack of access to GMP and Halal
compliant processing facilities
Short shelf life of products
Low level of product
provinces listed below
ARMM
Basilan
Lanao del Sur
Commercialization of existing cassava grates
based products that have been proven to be
saleable
DA/PRDP
Technical and
financial support
(1) Establishment
PLGU/MLGU
of
GMP/HACCP/Halal
Cooperatives
Equity
Operators
90
Province
Who Can Do It?
Public
development/ Weak branding
Opportunities
Maguindanao
Sulu
Tawi-tawi
compliant common service facilities (can be
toll processing)
(2) Development of core group of trainors on
GMP/HACCP/Halal and cassava grates
production
Growing demand for cassava
grates among Muslim
communities in the Philippines,
Sabah, and Malaysia
(3) Support in the further development of
productions including R and D on how to
extend shelf life
Cassava food products can
potentially be positioned as
healthy/ gluten-free food which
has a growing demand both in
local and export market
Private
Equity
Technical support
and monitoring
BFAD/DOST
Technical
assistance
DTI
Product and
market
development
(4) Branding and market development support
MARKETING
PLGUs/MLGUs lack financial
capacity to construct and/or
upgrade roads
ZAMBOANGA PENINSULA
Zamboanga del Norte
Zamboanga del Sur
Zamboanga Sibugay
Zamboanga City
Opportunity
Good roads can reduce cost of
transactions
NORTHERN MINDANAO
Bukidnon
Camiguin
Lanao del Norte
Misamis Occidental
Misamis Oriental
DAVAO REGION
Davao del Norte
Upgrading to farm-to-market roads
(1) Cost contribution to road construction
DA/PRDP
Technical and
financial support
PLGU/MLGU
Equity
Technical support
and monitoring
DPWH
Project
implementation
91
Province
Who Can Do It?
Public
Private
Davao del Sur
Davao Oriental
Compostela Valley
Davao City
SOCCSKSARGEN
North Cotabato
Sarangani
South Cotabato
Sultan Kudarat
CARAGA
Agusan del Norte
Agusan del Sur
Surigao del Norte
Surigao del Sur
ARMM
Lanao del Sur
Maguindanao
Weak supply chain planning and
cooperation
regions/provinces listed
below
Opportunity
ZAMBOANGA PENINSULA
Zamboanga del Norte
Zamboanga del Sur
Zamboanga Sibugay
Zamboanga City
Mindanao can potentially have
whole year round production of
cassava products and avoid
production gluts resulting to low
prices
NORTHERN MINDANAO
Bukidnon
Camiguin
Improvement of coordination and production
planning between cassava farmers and
processors
DA/PRDP
Technical and
financial support
Feed Mills
Provision of data
Technical support
(1) Technical and financial support in the
development and piloting of information
system on market demand forecast and
corresponding cassava supply requirements
which will help farmers determine
appropriate farm maintenance system and
harvest schedules
PLGU/MLGU
Management and
operationalization
of info system
Mapping of
cassava areas
Market linkage
Cooperatives
Dissemination of
information
Provision of data
Promotion among
members
92
Province
Who Can Do It?
Public
Lanao del Norte
Misamis Occidental
Misamis Oriental
DAVAO REGION
Davao del Norte
Davao del Sur
Davao Oriental
Compostela Valley
Davao City
(2) Technical and financial assistance in the
mapping cassava production areas and its
planting and harvest schedules including
projected yield as basis in forging advance
lot
purchase
agreements
between
intermediaries and farmers with price index
calculations transparent to all parties
concerned.
SOCCSKSARGEN
North Cotabato
Sarangani
South Cotabato
Sultan Kudarat
(3) Technical assistance in the development
and promotion of modular farming among
farmers to ensure year round production
and harvest
CARAGA
Agusan del Norte
Agusan del Sur
Surigao del Norte
Surigao del Sur
(4) Behavior change interventions
Private
ARMM
Basilan
Lanao del Sur
Maguindanao
Sulu
Tawi-tawi
93
Section 9:
RECOMMENDATIONS AND CONCLUSIONS
1. Cassava is sold in markets where raw product substitution can readily occur (especially in feeds
and starch). Cassava will have to meet and surpass the rates of improvement in efficiency
achieved by the major grain crops (e.g., corn) in order to sustain a competitive edge. This will
require special attention in three areas:
a) Improvement of the farming system through use of high yielding varieties with high starch
content and adoption of GAP and sustainable farming practices to reduce the cost of raw
materials while maintaining reasonable profit margins for farmers
b) Improvement of processing efficiency and product quality including compliance to Good
Manufacturing Practices
c) Upgrading of road and transportation network to reduce cost of transaction and improve
accessibility.
To lay the groundwork for the achievement of above directions, it is recommended that the
industry pursues the cluster development approach. The advantages that would accrue from a
cluster development approach include improvement in production efficiency and greater
opportunities for smallholders to be linked to growth markets.
2. The typical response to bridge the demand supply gap has been to increase the area under
cassava cultivation but yield (productivity) has remained low in many areas in Mindanao. This
has led to higher production cost. Increasing area under cassava cultivation is not sustainable
more so with the growing scarcity of fertile lands. A more sustainable approach would be to
promote yield intensification through improved productivity. Farmers in South Cotabato and
Bukidnon have shown that yields as high as 60 MT is possible.
3. Proximity to markets incentivizes product and process upgrading. Without a guaranteed market,
farmers are generally hesitant to invest in upgrading. SMFI has feedmills and/or toll processors
in all regions except ARMM and CARAGA. Likewise, key chips and granule producers in
Mindanao are in areas with growing numbers of feed mills. One of the key constraints of
CARAGA, to date, is their distance from SMFI buying stations. To attract assemblers to operate
in the area and to cover delivery cost to Cagayan de Oro, it is necessary to increase production
volume. CARAGA can also look into back loading arrangements with SMFI and BMEG. CARAGA
can, perhaps, also promote the use of cassava to the 4 feed mills in the area.
4.
The huge demand for halal food products in the world market is an opportunity that ARMM can
potentially anchor its development directions for the next coming years. Commercial
production and distribution of Halal processed cassava snack foods and animal feeds are some
of the product opportunities that the region can explore. The pursuit of bigger and more
lucrative markets can provide incentives for modernizing the cassava industry in the region.
5.
The following are the proposed priority value chains for each of the regions in Mindanao:
94
Table 34. Proposed Value Chain Focus for Regions in Mindanao
Region
Value Chain Focus
Zamboanga Peninsula
Chips and granules industry in all provinces
Cassava grates and delicacies in Zamboanga City with a focus on
halal food products
Strengthening of chain for industrial uses of cassava (plywood glue)
Northern Mindanao
Chips and granules industry in Bukidnon, Misamis Oriental, and
Misamis Occidental
Starch industry in Bukidnon and Misamis Oriental
Cassava grates and delicacies in Lanao del Norte with a focus on
halal food producs
Local delicacies in Camiguin for tourist market
Davao Region
Soccsksargen
Cassava grates and delicacies
Caraga
Chips and granules industry in all provinces; explore development of
chain for industrial uses of cassava (glue, etc.)
Local delicacies
ARMM
Cassava grates and delicacies
Development of cassava-based village level feed production
95
ANNEXES
96
Annex 1: Zamboanga Peninsula
Ranking and Prioritization of intervention Strategy per Province
Specific intervention approaches per province are indicated in Table .
Ranking and Prioritization: Zamboanga Peninsula
Intervention Strategy
ZDN
ZDS
Sibugay
ZC
Development of local capacity for
production of foundation seeds and its
multiplication
and
the
commercial
distribution of planting materials
1
1
1
1
Strengthening of local supply chains of
organic fertilizer and development of
effective demand
2
2
2
2
Strengthening of existing providers of
embedded services and/or development of
embedded models to transfer the needed
skills, know-how, and information to enable
farmers to adopt sustainable production
practices and improve productivity
3
7
3
3
Development of mobile peeling, chipping,
and drying system around cluster of farms
(in remote areas)
6
8
6
6
service facilities for chipping, drying,
4
6
4
4
5
5
5
5
Improvement
of
coordination
and
production planning between cassava
farmers and processors
8
3
8
8
Development of local capacity to
commercially produce low cost high quality
halal feeds
Commercialization of existing cassava
grates based products that have been
proven to be saleable
97
Annex 2: Northern Mindanao
Specific intervention approaches per province are indicated in Table
Ranking and Prioritization: Northern Mindanao
Mis Or
Lanao
Bukidnon
Mis Occ
Camiguin
multiplication and the commercial
2
2
3
2
2
effective demand
3
3
4
3
3
embedded services and/or development
of embedded models to transfer the
needed skills, know-how, and information
to enable farmers to adopt sustainable
production practices and improve
productivity
5
5
7
5
5
(in remote areas)
6
6
2
6
6
4
4
1
4
4
1
1
5
1
1
Improvement of coordination and
7
7
6
7
7
commercially produce low cost high
quality halal feeds
98
Annex 3: Davao Region
Specific intervention approaches per province are indicated in Table .
Ranking and Prioritization: Davao Region
Davao del
Norte
Davao del
Sur
Davao City
Davao
Oriental
Compostela
1
1
1
1
1
effective demand
3
3
3
3
3
needed skills, know-how, and information
to enable farmers to adopt sustainable
production practices and improve
productivity
2
2
2
2
2
(in remote areas)
7
7
7
7
7
4
4
4
4
4
5
5
5
5
5
6
6
6
6
6
quality halal feeds
99
Annex 4: SOCCSKSARGEN
Ranking and Prioritization: SOCCSKSARGEN
South
Cotabato
North
Cotabato
Sarangani
Sultan
Kudarat
1
2
1
1
effective demand
2
3
2
2
6
6
6
6
(in remote areas)
4
4
4
4
5
1
5
5
3
5
3
3
7
7
7
7
halal feeds
100
Annex 5: CARAGA
Ranking and Prioritization: CARAGA
Agusan del
Norte
Agusan del
Sur
Surigao del
Norte
Surigao del
Sur
1
1
1
1
effective demand
2
2
2
2
6
6
6
6
(in remote areas)
5
5
5
5
4
4
4
4
3
3
3
3
7
7
7
7
halal feeds
101
Annex 6: ARMM
Ranking and Prioritization: ARMM
Lanao del
Sur
Basilan
Sulu
Tawi-tawi
Maguindanao
1
1
1
1
1
effective demand
4
5
5
5
4
needed skills, know-how, and
information to enable farmers to adopt
sustainable production practices and
improve productivity
2
2
2
2
2
quality halal feeds
5
3
4
4
5
6
4
3
3
6
3
7
Development of mobile peeling,
chipping, and drying system around
cluster of farms (in remote areas)
Establishment of GMP compliant
common service facilities for chipping,
drying, granulation, and warehousing
3
6
6
6
7
102

Cassava Chips and Granules - Philippine Rural Development Project

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November 23, 2013|Saturday|2:00 PM