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S7.4 MAIZE VALUE/SUPPLY CHAIN AND POST HARVEST MANAGEMENT IN THE PHILIPPINES
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S7.4 MAIZE VALUE/SUPPLY CHAIN AND POST HARVEST MANAGEMENT IN THE PHILIPPINES

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Presentacion de 11th Asian Maize Conference which took place in Beijing, China from November 7 – 11, 2011.

Presentacion de 11th Asian Maize Conference which took place in Beijing, China from November 7 – 11, 2011.

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  • 1. MAIZE VALUE/SUPPLY CHAIN AND POST HARVEST MANAGEMENT IN THE PHILIPPINES Artemio M. Salazar, IPB, UPLBCA 11th ARMW, Nanning, China November 6-11, 2011• From the Perspective of a Biologist, not an economist.• Will dwell more on the process than economic parameters (supply vs value)• Clearer understanding of Philippine maize industry could only be made if we separate the yellow from the white – the flint type.
  • 2. Agriculture Supply Chain in the Philippines
  • 3. Agrikulturang Pinoy or Agri-Pinoy Set of principles and practices focused on developing Philippine resources and capabilities to meet Philippine needs Four guiding principles of Agri-Pinoy: o Food Security and Self-sufficiency o The “Farm” represents interventions in production; from soil - Sustainable agriculture and fisheries and water management, extension, seeds and fertilizers, post- o Natural resource management o Local development and marketing etc. harvest processing, credit - The “Table” represents the DA’s intervention to ensure food Key elements of Agri-Pinoy: the consumers security, safety and quality for o Broad-based o Partnership o Farm to Table o Sustainable Farming Systems o Resiliency
  • 4. SCHEMATIC SUPPLY CHAINSEED SUPPLIERS ABATTOIR RESTAURANT Supply Chain DefinitionsBREEDERSRESEARCHERS CANNERY HOTELS MILL SUPERMARKETSPROPAGATORS ETC ETCDEALERS The network of organizations that are involved, through upstream and Agribusiness linkages, in the different processes and activities that produce downstream value in the form of products and services in the hands of the ultimate consumer. total of all operations involved in the manufacture and distribution The sum INPUT of farm supplies;GROWERS SUPPLIERS PROCESSORS DISTRIBUTORS RETAILERS CONSUMERS production activities in the farm; and the storage, processing, and distributionof connected and interdependent organizations mutually and  A network of farm commodities and items derived from them co-operatively working together to control, manage and improve the flow of materials and information from suppliers to end-users. WHOLESALER YOU FARMER IMPORTER YOUR FAMILY GROWER EXPORTER FRIENDS FISHERS TRANSPORT & PASTORALIST PROVIDERS ME
  • 5. YELLOW MAIZE SUPPLY CHAINSEEDS POST HARVESTFERTILIZERS FACILITY PRODUCTION FARMSMECHANIZATION INPUT TRADERS/ BIG TRADERS FARMERS CONSUMERS SUPPLIERS PROCESSORS DISTRIBUTORS WHOLESALER IMPORTER DIRECT AND FARMER EXPORTER ULTIMATE- TRANSPORT PROVIDERS
  • 6. INPUT TRADERS/ BIG TRADERS FARMERS CONSUMERS SUPPLIERS PROCESSORS DISTRIBUTORS• Let us start with the end part of the chain as this will largely determine the early parts of the chain• Yellow maize is mainly for feeds
  • 7. INPUT TRADERS/ BIG TRADERS FARMERS CONSUMERSSUPPLIERS PROCESSORS DISTRIBUTORS Feed Yellow Wheat Corn National requirement of yellow corn for meat outstrips local production necessitating importation, mainly feed wheat
  • 8. INPUT TRADERS/ BIG TRADERS FARMERS CONSUMERS SUPPLIERS PROCESSORS DISTRIBUTORSThe ADDRESSING THE LOGISTICS CONCERNLogisticsConcern Excess corn production from Mindanao and Cagayan Valley used to be shipped to greatest concentration of feedmills in Luzon & Visayas. The government had instead intensified production in Luzon due to high transport cost from Mindanao
  • 9. INPUT TRADERS/ BIG TRADERS FARMERS CONSUMERSSUPPLIERS PROCESSORS DISTRIBUTORSThe Future:• The demand for meat and consequently, yellow maize, will intensify.• Uncertainty of supply of yellow maize in the world market due to the use of the grain for ethanol by the world’s biggest maize supplier, USA• The supply and price of feedwheat could not be relied upon because of the climate change (East Europe and Australia)• The regional trade association where Philippines is member of would bring down tariff barriers to traded goods as early as 2015. The entry of cheap meat from the outside would significantly depress the local livestock and yellow maize industries.
  • 10. INPUT TRADERS/ BIG TRADERS FARMERS CONSUMERSSUPPLIERS PROCESSORS DISTRIBUTORSThe Future:• There is a pressing need to be self sufficient for this grain!
  • 11. INPUT TRADERS/ BIG TRADERS FARMERS CONSUMERSSUPPLIERS PROCESSORS DISTRIBUTORS The Critical Post Harvest PhasePhilippines receives on average 2,061 mm (81.1 in) of precipitation annuallywith most of it from June to October
  • 12. INPUT TRADERS/ BIG TRADERS FARMERS CONSUMERS SUPPLIERS PROCESSORS DISTRIBUTORSNumber of Tropical Cyclones by Category in the Philippine Area ofResponsibility, 948 to 2007 Source: PAGASAwww.typhoon2000.com The harvest of the main cropping season is almost always wet.
  • 13. INPUT TRADERS/ BIG TRADERS FARMERS CONSUMERSSUPPLIERS PROCESSORS DISTRIBUTORS AVERAGE MONTHLY DISTRIBUTION OF YELLOW CORN, CY 2001-2003 vs AVERAGE MONTHLY RAINFALL FOR THE LAST THIRTY YEARS 550 350 500 300 450 Ave. Rainfall (mm) Production (000 mt) 400 250 350 200 300 250 150 200 150 100 100 50 50 0 0 Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec M onths Rainfall ProductionPost harvest is a serious concern during the wet season
  • 14. INPUT TRADERS/ BIG TRADERS FARMERS CONSUMERS SUPPLIERS PROCESSORS DISTRIBUTORS• The high amount of rainfall during the wet season (May-August) has serious implication to corn quality. Aflatoxin contamination is common in those areas with no mechanical dryer. Usually, price of maize goes down at harvest time during this season.• The issue of Philippine maize industry is an issue of grain quality.• Multi-purpose drying pavements for solar drying have been provided but they are not enough when harvest is plenty and rainy period is extended. Big mechanical dryers are very expensive. One encouraging development is the investment of the private sector in this matter.
  • 15. These are found in Bukidnon- thebiggest maize producing provincein Mindanao. Maize in cobs arebought from the farmers. Thefacility takes care of the drying andshelling. These guys then sell tothe big feedmillers or use themthemselves.
  • 16. A bigger one was established in Isabela – the biggest maize producingprovince in Luzon. This is accordingly the biggest post harvest facilityin Southeast Asia. Capacity is 200K tons cobs with 60,000 ton capacitysilos. Two more will be established by the company.
  • 17. INPUT TRADERS/ BIG TRADERS FARMERS CONSUMERS SUPPLIERS PROCESSORS DISTRIBUTORS• The effect of such facility was felt at once during wet season harvest in Isabela. Instead of going down, the price of maize went up by 30%. There was a 4-km line of trucks waiting for their corn harvest to be processed.• The government is doing its part in providing smaller and therefore less expensive post harvest facility to small farmer cooperatives
  • 18. INPUT TRADERS/ BIG TRADERS FARMERS CONSUMERS SUPPLIERS PROCESSORS DISTRIBUTORSThe Future ?• This is one area where the country is making headway. It started with just one company. Two more are coming in and hopefully more will participate.• Expanding processing and storage capacity for at least one season of harvest will stabilize the supply and price of yellow maize in the country
  • 19. INPUT TRADERS/ BIG TRADERS FARMERS CONSUMERS SUPPLIERS PROCESSORS DISTRIBUTORSThe Production Phase• Average yield is 3.63 tons/ha (official data) planted in 1.16 M has. Operational figure is 5 tons/ha to be profitable. About 90% of the area is planted to hybrids. The three big multinationals are here-Pioneer, Monsanto and Syngenta. Bioseeds is also getting strong . There are also some locals• The percentage planted to GMOs - Bt and RR, marketed by the multinationals, is expanding.• There is not much concern about GMOs as we are not exporting corn nor meat• There is an on-going Site Specific Nutrient Management Program by the Dept of Agriculture in collaboration with IPNI• Planting and harvesting are basically manual
  • 20. INPUT TRADERS/ BIG TRADERS FARMERS CONSUMERS SUPPLIERS PROCESSORS DISTRIBUTORSThe Production PhaseChallenges:• Drought tolerance because 95% is rainfed. Freak drought occurs even during the wet season especially in Luzon• Abiotic stresses like water logging especially during early dry season cropping, acidity due to nature of the soil (like in Bukidnon and portions also of Cagayan Valley)• Disease resistance because most of the areas are continuously planted to corn. Condition is generally warm and humid. Need for close monitoring of disease, insect and rodent outbreaks• Financing
  • 21. INPUT TRADERS/ BIG TRADERS FARMERS CONSUMERS SUPPLIERS PROCESSORS DISTRIBUTORSThe Future?• More gains in yield and stability are expected with strong participation of the different seed companies especially the multinationals• Stability traits would cover biotic and abiotic stresses• As in the past, the public sector R&D has not been competing with the private sector. It keeps updated however in latest technologies as support to capability building of locals employed in the different seed companies.
  • 22. WHITE MAIZE SUPPLY CHAINSEEDS POST HARVESTFERTILIZERS FACILITYMECHANIZATION INPUT TRADERS/ BIG TRADERS FARMERS CONSUMERS SUPPLIERS PROCESSORS DISTRIBUTORS WHOLESALER IMPORTER DIRECT FARMER EXPORTER TRANSPORT PROVIDERS
  • 23. INPUT TRADERS/ BIG TRADERS FARMERS CONSUMERS SUPPLIERS PROCESSORS DISTRIBUTORS• White maize, the flint/denty type, is mainly for food.• Most of the white corn produced by the marginal corn farmers are consumed at the household level.• Some quantity is shipped for food purposes in identified corn eating areas like Cebu. White maize there comes from Mindanao, mainly Bukidnon.• White maize for food is mostly in the South.• We have been self sufficient in white maize
  • 24. INPUT TRADERS/ BIG TRADERS FARMERS CONSUMERSSUPPLIERS PROCESSORS DISTRIBUTORS• White maize, the flint/denty type, is mainly for food.• The yield of white maize is 1.16 tons/ha planted in 1.34 M has.• Most of the white corn produced by the marginal corn farmers are consumed at the household level.• Some quantity is shipped for food purposes in identified corn eating areas like Cebu. White maize there comes from Mindanao, mainly Bukidnon.• White maize for food is mostly in the South.• We have been self sufficient in white maize
  • 25. CORN: DOMESTIC PRODUCTION, 2001-2010 8.00 7.03 7.00 6.38 6.00 4.51 5.00 Million MT 4.72 4.00 4.21 3.00 2.62 2.32 2.00 2.17 1.89 1.00 - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Combined White YellowSource: BAS AAGR ≈3.85% ≈1.65% ≈5.46%
  • 26. INPUT TRADERS/ BIG TRADERS FARMERS CONSUMERSSUPPLIERS PROCESSORS DISTRIBUTORS• There are very few seed companies working on white maize hybrid basically because of lack of market. White corn farmers are usually poor• Seeds are of the open-pollinated type either native varieties or open-pollinated cultivars. The farmers , marginal at that, could not afford to buy hybrid seeds or fertilizers. Various sorts of biotic and abiotic stresses including low level of inputs.• Native varieties are mostly early maturing, low yielding, tolerant to stresses but of good (eating) quality. The public sector R&D is working more on this.
  • 27. INPUT TRADERS/ BIG TRADERS FARMERS CONSUMERS SUPPLIERS PROCESSORS DISTRIBUTORSThe Future• There is a sizable rural population in the uplands dependent on maize• To improve their status, market should be developed to enhance their productivity• The government is now considering white corn as part of its food security plan thru food diversity approach. Rice importation is only 10% of national requirement which can be readily provided by white maize. The government is launching the Corn for Health program based on white QPM. It has promotional, production and quality assurance components.• The plan is to provide the different regions with foundation seeds. They will then produce the registered seeds for distribution to the provinces and municipalities and finally to the farmers.
  • 28. Summary• Developments in the yellow maize industry point towards positive growth with greater private sector participation• There is far greater challenge in white maize. The more farmers there need more help.
  • 29. Thank you!