NICOLE GRACE A. SARAUSA, MBA
Faculty, Business Administration Department
College of Business and Management
Central Mindanao University
The Philippines has some of the best conditions for producing tropical crops such as bananas and pineapples. However, most of the processing, marketing, and sales occur outside of the areas where they were grown. Most of the time, an un-milled bag of rice will leave the farm after only receiving a small percentage of its total potential income (if all the additional steps in the process occurred in the same area). This difference in the price paid by consumers at the retail level versus the price received by the farmer at the farm-gate is one of the more consistent problems facing the agricultural economy of Mindanao. Most of the risks associated with farming are borne by the farmer (such as weather, pests, and fluctuations in the cost of inputs), while a greater portion of the total revenue generated is earned by other parties involved in the distribution of food prior to reaching the consumer. In addition to the loss of revenue, post-harvest losses also contribute significantly to the problem in terms of lost volumes and quality of product.
Improving this situation is more than just providing higher prices for farmers. Local investments in post-harvest infrastructure, cooperative bargaining power, and better connections to markets are needed so that farmers can receive a fairer share of the profits generated through their own production. Some co-operatives located in Bukidnon Province have already started to make progress on this issue. They have moved from merely selling raw produce directly to consumers to developing and selling semi-processed or packaged foods under their own regional labels.
Business students interested in supply chain management and agri-business development will find many real-life, unresolved case study opportunities related to agriculture and food systems available throughout Mindanao. The key to assisting farmers to become “stakeholders” rather than simply “price takers” at the farm-gate involves building stronger relationships among those who grow food and those who sell food. Building these strong ties should help maintain a greater amount of Mindanao’s agricultural wealth within the communities responsible for generating that wealth.
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