Private Sector Promotion (SMEDSEP) ProgramAgribusiness RoadmapDraft for Discussion | February 2009
SI R              N        SS FO            O     C FT   IS A  D RAuthors      ULydia Martinez lydia.martinez@gmail.comFlo...
Private Sector Promotion (SMEDSEP) Program        SI R            N      SS FO          O   C FT IS AAgribusiness RoadmapD...
ContentsOverview ............................................................................................................
FiguresFigure 1 4-Step Approach in Assessing Potential and Enhancing Competitiveness ... 6Figure 2 Schematic diagram of wo...
OverviewBackgroundThe National Competitiveness Council (NCC) is a public-private partnership createdthrough Executive Orde...
The Guide intended for use by local government units in developing their potentialfor agribusiness activities. It includes...
•identify convening agents        Step 1:          •hold municipal competitiveness conference   Ascertain Public-    Priva...
Step 1: Ascertain Public and Private Sector Commitment toCompetitiveness Initiative in Agribusiness through LRED   a. Iden...
Convening Agent                               CommitmentAgriculture & Fishery                    Commitment to perform as ...
o   State and Private Colleges and Universities           o   State Research Institutions   •   The members will help sync...
Identify and Make Available Financial and other Resources for the REAPossible sources of funds are:   •   Municipal funds ...
•    Given the broad range of activities in agri-business, they have been divided        into four major subsectors:      ...
Table 2 Horticulture Attributes / PillarsInfrastructure             •   Credit / Financing facility available for farmers ...
Logistics            •   Transport facilities. For example trucking for fruits and                         vegetables     ...
Crops        Based on the definition and adapting it to Philippine agriculture, agronomy        can be generally classifie...
Markets                     •   Harvest yields per hectare of 4 tons for rice and 2 tons for                              ...
•   For jatropha-biodiesel, at least 1,000 contiguous hectares                            from several out-growers        ...
Table 5 Livestock and Poultry Attributes/PillarsInfrastructure            •   Credit / Financing facility for SMEs        ...
Extension            •   Active veterinary office within the LGU with knowledgeableServices                 veterinarians ...
Table 6 Fisheries/Aquaculture Attributes/pillarsInfrastructure           •    Farm to market road                         ...
Extension               •   Fisheries and aquatic resources office within the LGUServices                •   Fishery/Aquac...
to source                                     •   Availability or nearness to supply of feeds,                            ...
Secondary data can be collected from the local, provincial, regional and    national offices of the different government a...
Table 8 Key elements of a Resource SurveyResource                                    Key elementsNatural ResourcesLand   •...
Place the Information on a Resource Map              SI R                  N            SS FO                O         C F...
2. Access to roads or markets – especially if this factor changes during    the year because of rainy seasons or if it aff...
Step 3:Value Chain Analysis by Commodity/Industry ClusterA value chain is a market-focused collaboration between different...
Industry Cluster   •      A grouping of key and supporting industries, infrastructure and institutions          that are i...
Chamber of Agriculture Fisheries and Allied Industries in Northern Mindanao) areimplementing institutions, and also the in...
o   numbers of actors                    o   volume of produce or the market shares of particular                        s...
c. The cost estimates of each stage such as in the production, primary        processing and marketing will be generated b...
Annexes     D RD      IS A        C FT         U           SS FO             SI R               O                 N31
Annex 1 Industry Cluster Framework         Economic Foundation                                                            ...
Annex 2 Mango Agro-Industrial Cluster Framework                                                 Main Raw Material         ...
Annex 3 Banana Agro-Industrial Cluster Framework   Economic Foundation                     Main Raw Material              ...
Annex 4 Rubber Agro-Industrial Cluster Framework   Economic Foundation                     Main Raw Material              ...
Agribusiness Roadmap February 2009
Agribusiness Roadmap February 2009
Agribusiness Roadmap February 2009
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Agribusiness Roadmap February 2009

  1. 1. Private Sector Promotion (SMEDSEP) ProgramAgribusiness RoadmapDraft for Discussion | February 2009
  2. 2. SI R N SS FO O C FT IS A D RAuthors ULydia Martinez lydia.martinez@gmail.comFlorence Mojica-Sevilla fmojica@uap.edu.ph DResponsibleUwe Sturmann uwe.sturmann@gtz.dePublisherThe Private Sector Promotion ProgramSMEDSEPsmedsep.ph10F German Development CenterPDCP Bank Center BuildingV A Rufino St cor L P Leviste StSalcedo Village, Makati City 1227PHILIPPINESVolker Steigerwald, Program Managervolker.steigerwald@gtz.deFebruary 2009
  3. 3. Private Sector Promotion (SMEDSEP) Program SI R N SS FO O C FT IS AAgribusiness RoadmapD R UDraft for Discussion | February 2009 D
  4. 4. ContentsOverview ................................................................................................................. 4 Background.......................................................................................................... 4 Objectives ............................................................................................................ 4Guide for LGUs in Assessing the Potential of and Enhancing the Competitiveness ofAgri-business Activities in their Locality .................................................................. 5 Step 1: Ascertain Public and Private Sector Commitment to Competitiveness Initiative in Agribusiness through LRED ................................................................ 7 Step 2: Conduct Participatory Resource Assessment or Rapid Economic SI R Assessment (REA) for Agribusiness Development ................................................. 8 N SS FO Horticulture .................................................................................................... 11 Agronomy ....................................................................................................... 13 O Livestock/Poultry ............................................................................................ 16 Fisheries and Aquaculture ............................................................................... 18 C FT Step 3:Value Chain Analysis by Commodity/Industry Cluster .............................. 26 Step 4: Formulation of Strategic Objectives for Competitiveness ........................ 30 IS AAnnexes ................................................................................................................ 31 Annex 1 Industry Cluster Framework ................................................................. 32 D R U Annex 2 Mango Agro-Industrial Cluster Framework ........................................... 33 D Annex 3 Banana Agro-Industrial Cluster Framework .......................................... 34 Annex 4 Rubber Agro-Industrial Cluster Framework .......................................... 35 Annex 5 Feed Hogs Agro-Industrial Cluster Framework ..................................... 36 Annex 6 Tuna Agro-Industrial Cluster Framework .............................................. 37 2
  5. 5. FiguresFigure 1 4-Step Approach in Assessing Potential and Enhancing Competitiveness ... 6Figure 2 Schematic diagram of working group members and their linkages. ............ 9Figure 3 Illustration of Resource Map .................................................................... 24Figure 4 Schematic Supply Chain ........................................................................... 26TablesTable 1 Convening Agent and Commitment ............................................................ 7 SI RTable 2 Horticulture Attributes / Pillars ................................................................. 12Table 3 Cereal Crops Attributes/Pillars .................................................................. 14 N SS FOTable 4 Industrial Crops Attributes/Pillars ............................................................. 15Table 5 Livestock and Poultry Attributes/Pillars ..................................................... 17 OTable 6 Fisheries/Aquaculture Attributes/pillars ................................................... 19Table 7 Other Attributes that can Provide LGUs Comparative Advantages .............. 20Table 8 Key elements of a Resource Survey ........................................................... 23 C FTTable 9 •Examples of Strategic Objectives ............................................................ 30 IS A D R U D 3
  6. 6. OverviewBackgroundThe National Competitiveness Council (NCC) is a public-private partnership createdthrough Executive Order No. 571 Series of 2006 with the primary objective ofimproving the Philippines’ standing in international ranking projects (i.e., IMD,World Economic Forum) from the bottom third to the upper third by 2010.The NCC is co-chaired by Secretary Peter Favila of the Department of Trade andIndustry and Former Ambassador Cesar Bautista. The NCC has focused its efforts onsix areas of competitiveness which are expected to bring about the intended SI Rresults, which include: N SS FO a. Transaction costs and flows b. Efficient public and private sector management O c. Infrastructure d. Energy Efficiency C FT e. Human Resource Management f. Improving access to financing for small and medium enterprises (SMEs)As part of its activities under the Efficient Public and Private Sector Management IS AWorking Group, the NCC organized the Local Government Unit (LGU) Conferencelast October 8-9, 2008, with the theme “Harnessing LGU Leadership for Sustained D R UPhilippine Competitiveness”. The objectives of the event are to: D a. Work towards a common acceptance of the concept of competitiveness as applied to LGUs; b. Showcase best practices in attaining competitiveness; and c. Forge commitment to action by the government, both national and local, and the private sector to vigorously pursue the objective of improving the competitiveness of the country in order to promote economic growth in general and local economic development in particular.ObjectivesThe GTZ Private Sector Promotion Program (SMEDSEP) is provided support to theNCC in carrying out the LGU Summit, specifically in the development of a guide forassessing LGU competitiveness in Agri-business. 4
  7. 7. The Guide intended for use by local government units in developing their potentialfor agribusiness activities. It includes a checklist of attributes of competitiveness inthe agribusiness sector, a list of guide questions and indicators to assess theirpotential in agribusiness as a whole, and an overall framework for developing thelocal agribusiness industry to steer local initiatives towards enhancing theircompetitiveness.Guide for LGUs in Assessing the Potential of and Enhancing theCompetitiveness of Agri-business Activities in their Locality SI RAgribusiness is defined as the sum total of all operations involved in themanufacture and distribution of farm supplies; production activities in the farm; N SS FOand the storage, processing, and distribution of farm commodities and itemsderived from them. OThe chain of activities includes: C FT a. supply of farm inputs, b. production of farm products, c. postharvest handling, storage, processing and transport of farm products, d. supply of packaging materials, IS A e. marketing and distribution of fresh, processed and packaged goods, and D R f. financing of various activities. UThis Guide is intended for use by local government units in assessing and Ddeveloping their potential for agribusiness activities. It includes: a. a checklist of attributes of competitiveness in the agribusiness sector b. list of guide questions and indicators to assess potentials in agribusiness as a whole c. an overall framework for developing the local agribusiness industry to steer local initiatives towards enhancing their competitiveness.The Guide suggests a 4-step approach. It is by no means prescriptive, such thatthe actual techniques and the manner in which they are used may be adjusted tosuit the local conditions. 5
  8. 8. •identify convening agents Step 1: •hold municipal competitiveness conference Ascertain Public- Private Sector Commitment •form the working group •identify and provide financial and other resources •conduct biophysical and socioeconomic survey SI R •collect secondary data Step 2: •collect primary data Participatory N •write report SS FO Resource Assessment •prepare resource map O •define area zones C FT •value chain mapping •quantify and describe value chains in detail Step 3: •economic analysis of value chain IS A Supply Chain Analysis D R U D •Based on competitiveness analysis attributes •cost •supply reliability •customer service Step 4: Formulate Strategic •quality Objectives •appropriate innovationFigure 1 4-Step Approach in Assessing Potential and Enhancing Competitiveness 6
  9. 9. Step 1: Ascertain Public and Private Sector Commitment toCompetitiveness Initiative in Agribusiness through LRED a. Identify appropriate convening agents and hold a municipal competitiveness conference. b. The convening agents are ideally business people and government officials respected at the provincial and regional levels who are influential enough to attract the participation of key business and government leaders. Examples of convening agents and possible commitments are presented in Table 1 below. c. The purpose of the conference is to assess whether there is genuine interest SI R and commitment among local stakeholders and agents of change. The activity will also encourage transparency in the decision making for priorities N SS FO in development initiatives. O d. The expected results are: 1. Public and private sector consensus on the need to develop a participatory Competitiveness Initiative; C FT 2. A high-level working group or committee that will help lay the groundwork for future consensus on local competitiveness strategy; and IS A 3. An understanding that competitiveness requires the private sector to modernize its approaches and the public sector to undergo certain D R U reforms. DTable 1 Convening Agent and Commitment Convening Agent CommitmentLocal Government Unit Political will and commitment to promote agri- business developmentRegional Officers (DA, Encourage participation of key business leadersDTI, DOST) Provide needed assistance to competitiveness initiatives that will be formulatedBusiness Readiness and commitment to cooperate withPeople/Entrepreneurs other stakeholders in agri-businessChambers of Commerce Readiness and commitment to cooperate withand Industry other stakeholders in agri-business Encourage interests in agribusiness development activities in the Municipality/City/ Province among constituents and business leaders 7
  10. 10. Convening Agent CommitmentAgriculture & Fishery Commitment to perform as advisory andCouncil (AFC) consultative body towards development of the • Regional (RAFC) sector • Provincial (PAFC) Commitment to monitor agri-business projects • Municipal (MAFC) as mandated by them • City (CAFC) • Barangay (BAFC)Industry Association Readiness and commitment to cooperate with • Provincial other stakeholders in agri-business • Municipal Encourage interests in agribusiness development activities in the Municipality/City/ Province SI R among constituents and business leaders N SS FOStep 2: Conduct Participatory Resource Assessment or Rapid Economic OAssessment (REA) for Agribusiness DevelopmentResource Assessment is learning about - - C FT • local resources and assets that are primary means through which communities can effect agribusiness development outcomes, and IS A • the local people’s perspectives of the potential and current contribution to development goals. D R UForm the Working Group1 D • The Working Group is a loose association of partners from government, non- government and private sectors with a common interest in agribusiness development in the area. Possible members of the working group are: o LGU (Planning & Development Office, Program Officer, Provincial Agriculture Office, Municipal Agriculture Office) o Agriculture and Fishery Councils o Farmer Associations o Chamber of Agriculture and Food o Industry Associations1 Lundy, M. MV. Gottrett, R. Best and S. Ferris. 2007. A Participatory Guide to DevelopingPartnerships, Area Resource Assessment and Planning Together, CIAT Publication No. 356:CIAT Rural Agroenterprise Development, Good Practice Guide 2. CIAT, Cali, Columbia 8
  11. 11. o State and Private Colleges and Universities o State Research Institutions • The members will help synchronize efforts in agribusiness development and highlight synergies between the participating groups. • Often comprises of non-government organizations and representation from farmer groups, business groups, and participation of the public and other private sector. • The local government unit may be or may not be the lead organization (Figure 2). • The members of the assessment/survey team shall be selected from among SI R the members of the working group. • In most cases, the assessment/survey team would be guided and supported N SS FO technically by professional groups as those in the local universities or research institutions. O C FT IS A D R U DFigure 2 Schematic diagram of working group members and their linkages.FG = farmer groups typically clustered around a specific commodity; FA = farmers associations; BDS= business development service providers; NGO = nongovernmental organization; PA = partneragencies; Working Group = consortium of partners. 9
  12. 12. Identify and Make Available Financial and other Resources for the REAPossible sources of funds are: • Municipal funds • Private sector contribution/donation • NGO co-financing • On-going local development programs • Donor agenciesDefine the Assessment Area SI R • The first decision to be made is the assessment area limits. • The area may be defined in terms of the political boundaries, e.g., the whole N SS FO municipality, a barangay, a cluster of barangays, or particular communities. OConduct Biophysical and Socio-economic Survey of the Area • The next step is to conduct a REA to evaluate the assets and social skills C FT available for agribusiness development. Members of the Research Team could come from: o LGU (Planning and Development Office) IS A o Local Universities and Colleges o Chamber of Commerce and Industry D R U o Agriculture and Fishery Councils o Farmers Associations D o Local public and private research institutions o Industry associations • A survey organized in a checklist format is a suggested tool for this purpose. • The checklist is intended for use by the members of the Research Team in determining the potential for agribusiness development in their locality. This can provide LGUs with an indication if their locality has the “ideal attributes” to support a particular agribusiness development. Included in the below checklist are items that can be LGU owned or privately run facilities available for rent or as service provider for a fee. 10
  13. 13. • Given the broad range of activities in agri-business, they have been divided into four major subsectors: a. Horticulture b. Agronomy c. Livestock and Poultry d. Fisheries/Aquaculture • Each of the sub-sectors are defined below and the checklist of “must-haves or ideal” vis-à-vis the pillars/attributes identified as follows: a. Infrastructure b. Land inputs SI R c. Logistics d. Markets N SS FO e. Extension Services f. Business Environment O C FTHorticultureDefinition Horticulture is the art, industry and science of plant cultivation. IS A Horticulturists work and conduct research in the disciplines of plant propagation and cultivation, crop production, plant breeding and genetic D R U engineering, plant biochemistry, and plant physiology. DCrops particularly involves fruits, berries, nuts, vegetables, flowers, trees, shrubs, and turf.Requirements The unique requirements of the horticulture industry that are MUST HAVE in order for it to thrive are as follows 11
  14. 14. Table 2 Horticulture Attributes / PillarsInfrastructure • Credit / Financing facility available for farmers and SMEs • Irrigation facilities • Production facilities (e.g. tractor) • Farm to market road • Cold chain / Storage and distribution facilities (e.g. freezers, refrigerators, coolers, cold rooms, refrigerated vans) for highly perishable fruits and vegetables • Processing facilities (e.g. canning, drying). For example canning facility for toll processing of preserved fruits • ICT (to access farm vs. market price movements, demand- SI R supply situation) • Access to local/international ports, airports N SS FOLand inputs Horticultural crops have varied characteristics and thus, the requirements in terms of land size, elevation, soil, temperature O and topography depend mainly on the type and variety of crop • Land size: also depends on the market to be served. Can be small patches of land for backyard/home production; C FT relatively big areas for commercial production • Elevation: for fruits, specifically, mango, the ideal elevation is lower than 400 meters above sea level. Higher elevation delays fruit maturity. IS A • Soil requirements: e.g. well-drained clay loam or lighter soil texture for mango; well-drained, loamy soil for D R U banana; very deep, well drained soil preferably sandy loam for carrots, rich heavy loamy soils for cauliflower; some D vegetables (e.g. lettuce, tomato, etc.) can also be grown using soil-less technologies (e.g. hydroponics) • Temperature: e.g. semi-temperate vegetable varieties like cauliflower, broccoli, cabbage, carrots, lettuce thrive in relatively cool highland climate (e.g. Mt. Province, Tagaytay, Bukidnon); others like squash, eggplant, ampalaya, okra, sitao require relatively normal or warm weather • Topography: relatively flat to rolling terrain for most cropsOthers • Access to the right seeds/planting materials (through accredited nurseries or established private seed companies) • Pest and disease management program 12
  15. 15. Logistics • Transport facilities. For example trucking for fruits and vegetables • Warehousing facilities • Cold chain for highly perishable fruits and vegetables • Packaging facilities • Handling facilities (truck scale, conveyor, forklift) • Access to international ports, shippingMarkets • Volume and quality requirements vary depending on the market served / type of buyer • Key factors: cost, quality and supply reliability • Access to local buyers • Access to exporters SI R • Access to processing companies NExtension • Presence of knowledgeable agriculturists/ agriculturalServices SS FO technicians working under the MAO or PAO O • Availability of updated modern technologies • Access to tri-media IEC materials • Access to agri R&D firms and SUCs C FTLGU Business • One-stop shop agribusiness centerEnvironment • Established clear-cut and coherent business policy • Investment incentives (tax holiday, etc.) • Organized farmers’ groups/associations IS A • Comprehensive land use plan • Security of land tenure D R U DAgronomyDefinition Agronomy is the science and technology of using plants for food, fuel, feed, and fiber. Agronomy encompasses work in the areas of plant genetics, plant physiology, meteorology, and soil science. Agronomy is the application of a combination of sciences like biology, chemistry, ecology, earth science, and genetics. It involves many issues including producing food, creating healthier food, managing environmental impact of agriculture, and creating energy from plants. 13
  16. 16. Crops Based on the definition and adapting it to Philippine agriculture, agronomy can be generally classified into cereal crops and industrial crops. Cereal crops include rice and corn while industrial crops are composed of coconut, oil palm, sugarcane, rubber, coffee, cacao, abaca, root crops (cassava), and jatropha.Requirements The requirements of the agronomic crops that can indicate comparative advantage for an area include climate, good infrastructure, etc. SI RTable 3 Cereal Crops Attributes/Pillars N SS FOInfrastructure • Credit facility available for farmers and SMEs O • Irrigation facilities • Production facilities (tractor, seeder, harvester, combine) • Farm to market road C FT • Processing facilities (thresher, sheller, drier, mill). For example mechanical drier facility accessible for a fee • ICT (to access farm vs. market price movements, demand-supply situation) IS ALand inputs • For rice, soil types with slowly permeable sub-soil with clay or plow pan D R U • Relatively level land but gently sloping toward drainage canal D • Temperature, solar radiation, and wind considered at different growth phases • For rice, evenly distributed rainfall of 200-300 mm per month is enough • For corn, well drained soil with a texture of silt loam; high moisture holding capacity and high amount of organic matter. The optimum soil pH is from 6.0 to 7.0. • Corn requires a rainfall of not less than 200 mm.Logistics • Transport facilities. For example trucking services for rice and corn • Warehousing facilities. For example common warehousing facility for palay storage. • Handling facilities (truck scale, conveyor, forklift) 14
  17. 17. Markets • Harvest yields per hectare of 4 tons for rice and 2 tons for white corn and 4 tons for yellow corn • Access to buying stationsExtension Presence of knowledgeable agriculturists/ agriculturalServices technicians under the MAO and PAO Availability of updated modern technologies Access to tri-media IEC materials Access to agri R&D firms and SUCsLGU Business One-stop shop agribusiness centerEnvironment Established clear-cut and coherent business policy Investment incentives (tax holiday, etc.) Organized farmers’ groups/associations SI R Comprehensive land use plan N Security of land tenure SS FO OTable 4 Industrial Crops Attributes/PillarsInfrastructure • Credit facility for farmer groups C FT • Irrigation facilities • Production facilities (tractor) • Farm to market road • Processing facilities (drier, mill, refinery) IS A • For biofuel feed stocks, extraction plant and biofuel plant • ICT (to access farm vs. market price movements, D R U demand-supply situation for both local and global)Land inputs Industrial crops need large areas since these are usually D plantation crops. Small areas of out-growers are consolidated to support requirements of processing facilities • For sugarcane-ethanol, at least 7,500 hectares or as small as 10 hectares for out-grower sugar production • Widely adapted to a wide range of tropical and semi- tropical climate, soils and cultural conditions • For oil palm, 3 hectares for out-grower oil production • Grows well in warm climates at altitudes less than 1,600 feet above sea level • For coconut, 3 hectares for copra production • Thrives in most soil types although perceived to grow well in beach sand types 15
  18. 18. • For jatropha-biodiesel, at least 1,000 contiguous hectares from several out-growers • Soil types may be loamy or sandy, rich or marginal • Idle flatland or rolling hillsLogistics • Transport facilities • Warehousing facilities • Handling facilities (truck scale, conveyor, forklift) • Access to international ports, shippingMarkets • Harvest yields per hectare of 900-1,000 kg copra for coconut; 20 tons fresh fruit bunches for oil palm; 70 tons cane for sugarcane SI R • Access to mills and processing facilities N • Access to international marketsExtensionSS FO • Presence of knowledgeable agriculturists/ agricultural OServices technicians under the MAO or PAO • Availability of updated modern production and processing technologies C FT • Availability of by-products and waste material utilization technologies • Access to tri-media IEC materials • Access to agri R&D firms and SUCs IS ALGU Business • One-stop shop agribusiness centerEnvironment • Established clear-cut and coherent business policy D R U • Investment incentives (tax holiday, etc.) • Organized farmers’ groups/associations D • Comprehensive land use plan • Security of land tenureLivestock/PoultryLivestock is the term used to refer (singularly or plurally) to a domesticated animalintentionally raised for subsistence or for profit. It includes domestic animals, suchas swine, cattle, carabao, goat or horses, raised for home use or for profit,especially on a farm.Poultry on the other hand are domestic fowls, such as chickens, ducks, or geese,turkeys, pigeons and ostrich for meat or eggs. 16
  19. 19. Table 5 Livestock and Poultry Attributes/PillarsInfrastructure • Credit / Financing facility for SMEs • Access to good roads, bridges, FMRs • Efficient transport system • Drainage and sewerage system • Water treatment facility • Potable water supply • Telecommunication • Power and Fuel • Slaughterhouse for hogs and cattle • Access to Animal Laboratory SI R • Warehousing facilities. For example, for feeds storage • Available inter-island transport system N SS FO • Cold chain / Storage and distribution facilities (e.g. freezers, refrigerators, coolers, cold rooms, refrigerated O vans) • Processing facilities (e.g. smoking, canning) • ICT (to access farm vs. market price movements, demand- C FT supply situation) • Access to local/international ports, airportsLand inputs • Available land preferably far (10km radius) from housing communities IS A • Cooler areas for breeding farms (14-24 C) • Flat areas for livestock and poultry raising D R U • With zoning under local government regulatory powersLogistics • Transport facilities. For example trucking services for live D swine transport • Cold chain. For example refrigerated van for transport of slaughtered animals • Handling facilities (truck scale, conveyor, forklift) • Access to international ports, shippingMarkets • Volume and quality requirements vary depending on the market served / type of buyer • Key factors: cost, quality and supply reliability • Access to local buyers • Access to meat exporters • Access to meat processing companies • Public markets, terminal markets • Market information system 17
  20. 20. Extension • Active veterinary office within the LGU with knowledgeableServices veterinarians and animal technicians • Availability of private veterinary clinics and services in the locality • Access to tri-media IEC materials • Access to R&D firms and SUCs • With available modern technology which can achieve the desired technical parameters (i.e. for hog • ADG (kg) 0.505: FCR (birth to finish, kg) 2.5: PSSY 18)Fisheries and Aquaculture SI RDefinition N SS FO Fisheries refers to all activities relating to the act or business of fishing, culturing, preserving, processing, marketing, developing, conserving and O managing aquatic resources and fishery areas, including the privilege to fish or take aquatic resource thereof. The major fish species caught in the C FT Philippines are roundscad, indian sardines, frigate tuna, yellowfin tuna, skipjack and big-eyed scad. Aquaculture is fishery operations involving all forms of raising and culturing IS A fish and other fishery species in fresh, brackish and marine areas. The major domestic commodities produced are seaweeds, milkfish, tilapia, shrimp, D R U oysters and mussels in extensive, semi-intensive and intensive culture systems in ponds, pens, cages and open coastal waters. D 18
  21. 21. Table 6 Fisheries/Aquaculture Attributes/pillarsInfrastructure • Farm to market road • Landing wharf • Net/Fishing gear mending yard • Freezer facilities • Fish market • Fish processing area • Drying facilities (seaweeds) • Ice plant/Ice making facilities • Fuel depot facilities • Wastewater treatment plant SI R • Laboratory services (fish quality control) • Maintenance shop N SS FO • • ICT Credit facilities OInputs • Power/water supply • Quality raw material inputs (ships, boats, fishing gears, fingerlings, skilled labor, etc.) C FT • Prime land ready for lease • Area for commercial and industrial fishery based industries • Flat terrain for fish farming • For pond culture, clay, clay loam and sandy loam soils with IS A deposits of organic matter of about 16% & pH from 7 to 9 • For cage culture, water protected from strong wind action D R U and water current with good circulation, dissolved oxygen concentration on the water is at least 3ppm with D temperature range from 20oC to 30oC and pH level from 6.8 to 8Logistics • Transportation facilities • Cold storage facilities • Warehousing facilities • Hauling and handling equipment • Access to international airport and portMarkets • Harvest yields per ha per yr of > 3 tons (pond culture) or > 1.5 tons/crop yr (9 m2 cage culture) for milkfish; > 5 tons (pond culture) or > 20 tons ( 10x10x5 to 12x12x8 cage culture) for tilapia; > 46 tons for seaweeds; > 0.5 ton for tiger prawn • Access to international fish and fisheries products trade • Access to drying and processing facilities 19
  22. 22. Extension • Fisheries and aquatic resources office within the LGUServices • Fishery/Aquaculture technicians • Modern fishing, fish processing and aquaculture technologies • Access to tri-media IEC materials • Access to fisheries/aquaculture R&D firms and SUCsLGU Business • One-stop shop agribusiness centerEnvironment • Established clear-cut and coherent business policy • Investment incentives (tax holiday, etc.) • Organized farmers’ groups/associations • Comprehensive land use plan • Security of land tenure SI R N SS FOThere are other attributes that can provide comparative advantage for LGUs asfollows: OTable 7 Other Attributes that can Provide LGUs Comparative Advantages C FT • Technology and R&D • Indigenous/Homegrown techniques Capability • Existing production systems • Globally sourced technology • Available information systems and IS A processes • Human Resources • Available manpower for labor requirement D R U • Quality • Quantity D • Responsiveness • Critical Business • Available Repair and Maintenance Service Support Services • Education and Training Services • R&D Services • Availability of major • wholesale sorting and packing facilities businesses with • processing firms agricultural links • export firms, etc.Support services • Raw material input • Availability of input suppliers supply • Available Planting materials (seeds, seedlings) or nearness to supply of raw materials • Fish fry supply and source • Available animal breed supply or nearness 20
  23. 23. to source • Availability or nearness to supply of feeds, fertilizer, pesticides, flower inducer, animal health products • Primary processing • Available supply of ingredients and other supply additives • Available processing technology • Nearness to machinery & spare parts supply source • Nearness to source of packaging supplies • Available utilities Secondary Processing Processing and storage equipment source SI R • • • Packaging and processing supplies N • Distribution Stations SS FOCommunities O • Location of • Location of different ethnic groups, or other communities and their defined social groups, and their relative populations identification C FT • Land tenure structure • farmers who are owners, day laborers or share croppers • Level of social • do farmer groups exist, do they work organization collectively IS A • Level of business • do business groups exist, do they work organization collectively) D R UWith sound development management, especially with the following elements: • Accountability • with public officials answerable for D government behavior, and responsive to the public from which their authority is derived • Participation • involvement of citizens in the development process • Predictability • fair and consistent application of laws and implementation of government policies • Transparency • availability of information to the general public and clarity about government rules, regulations, and decisions • The survey should start with collection of secondary data as needed in the REA, then proceed to collect primary data to fill the information gaps. 21
  24. 24. Secondary data can be collected from the local, provincial, regional and national offices of the different government agencies as follows: o Municipal, provincial, regional and national offices of the government agencies Department of Public Works and Highways (DPWH) Department of Agriculture(DA) Department of Environment and Natural Resources Department of Trade and Industry Department of Agrarian Reform National Economic Development Authority SI R Department of Transportation and Communications Department of Finance N SS FO o On-going donor projects O Primary data can be sourced from value chain participants through: o Key informants interview C FT o Focus groups discussion o Interview of key business people, local administrators, and lead NGOs IS A• To make the survey a rapid process, use key informants and focus groups to gather information.D R U• This is in addition to routine visits to major employers, local administrators, lead NGOs. D• The study should be accomplished within two weeks of fieldwork and two to three weeks of documentation of findings.• The report is typically between 15 to 30 pages, written in a simple style with a focus on information useful for the subsequent agroenterprise development.• The resource survey should include key elements as presented in Table 8 22
  25. 25. Table 8 Key elements of a Resource SurveyResource Key elementsNatural ResourcesLand • General Topography altitudes: steep, less sloping flat areas arable land land use • Productivity Good Medium, and Poor soils SI R • Water sources (rainfall; rivers, streams, springs, dams and their flows throughout the year) N • SS FO ClimateProductive resources Seasons (wet and dry) O • Roads paved, improved/gravel, dirt and their respective usability during the year • Infrastructure electricity, phone coverage, IT infra, potable C FT water, irrigation, storage facilities • Major businesses with wholesale sorting and packing facilities, agricultural links processing firms, export firms, etc. IS A • Support services input suppliers, internet cafes, machinery suppliers, banks and other financial institutions, D R U educational institutions, research and development institutions, etc. D • Transport for produce frequency, costs and quality • Markets area’s produce including location or roads leading to themCommunities • Location of communities Location of different ethnic groups, or other and their relative defined social groups, and their identification populations • Land tenure structure farmers who are owners, day laborers or share croppers • Level of social do farmer groups exist, do they work collectively organization • Level of business do business groups exist, do they work organization collectively) 23
  26. 26. Place the Information on a Resource Map SI R N SS FO O C FTFigure 3 Illustration of Resource Map 2 IS ADefine Zones for the Area (Municipality) D R Zoning is important for prioritizing interventions for competitiveness. The U • resource map can be overlaid on the existing. D • Use the following criteria for zoning: 1. Agroecosystem – if this has implications on crops or potential economic activities in a zone. Agroecosystem is land used for crops, pasture, and livestock; the adjacent uncultivated land that supports other vegetation and wildlife; and the associated atmosphere, the underlying soils, groundwater, and drainage networks. (US Environmental Protection Agency)2 Source: Ferries, S.; Best, R.; Lundy, M.; Ostertag, C.; Gottred, M.; Wandschneider, T. 2006.Strategy Paper for Agroenterprise Development: Good Practice Guide 1). CIAT: Cali,Colombia 24
  27. 27. 2. Access to roads or markets – especially if this factor changes during the year because of rainy seasons or if it affects the product that can be taken to the market. 3. Land tenure - is an important consideration as it greatly influences the type of crops planted and the possibility of introducing new ones. Forms of land tenure: Landowner Leaseholder Tenant SI R Share cropper N SS FO 4. Access to water and how it fluctuates during the year can be a means of distinguishing between areas with good, regular, or poor access. O Irrigation should also be included here. Modes of access to water: C FT Primary Secondary Tertiary IS A 5. Productive orientation zones already producing for markets requireD R U different strategies than those oriented towards household consumption or food security. D Productive orientation zones are areas already producing agricultural products for a particular market (e.g. municipal trader, provincial trader, regional trader, spot trader, local processor, urban center market). 6. Types of existing production systems. The presence of a particular crop (e.g., sugar cane) will significantly affect a zone’s economic dynamics. 25
  28. 28. Step 3:Value Chain Analysis by Commodity/Industry ClusterA value chain is a market-focused collaboration between different businesses thatwork together to produce and market the products. SCHEMATIC SUPPLY CHAIN Seed supplier Abbatoir Restaurant Breeder Cannery Supermarket Researcher Mill, etc. Hotel, etc. Propagator, etc. SI R N SS FO INPUT SUPPLIERS GROWERS/ PRODUCERS PROCESSORS DISTRIBUTORS RETAILERS CONSUMERS O C FT Farmer Wholesaler You and me Grower Importer Grazier Exporter Pastoralist Transport company, etc. IS A D R U SOURCE: New Industrial Development Program (NIDP) – MADE IN AUSTRALIA, Number 1, Series 3, AFFA (2003). DFigure 4 Schematic Supply ChainAn agri-business development plan must work within a framework wherein thevalue chain is the core. A major tool is the industry cluster (Annex Figure 4). Anindustry cluster is a strategic framework that provides a cohesive and integratedapproach for analyzing industrial development and competitiveness. A cluster is agrouping of key and support industries, infrastructure and institutions that areinter-linked and interdependent. It emphasizes the importance of supportindustries, institutions and the links between such industries and the leading firms(Porter 1990). 26
  29. 29. Industry Cluster • A grouping of key and supporting industries, infrastructure and institutions that are inter-linked and interdependent. • defined by vertical, horizontal and connective relationships • emphasizes the importance of the supporting industries and institutions as well as links between them and the key leading firmsThe major components that constitute an industry cluster are: Tier 1 Component: Core Companies SI R Tier 2 Component: Related and Supporting Industries and Services N SS FO Tier 3 Component: Foundation Providers OTier 1: Core Companies C FT • The dominant companies within the industry. (Analysis will follow the supply/value chain approach) IS ATier 2: Related and Supporting Industries D R U • Firms that provide immediate goods or raw materials and services to the core D companies. • Suppliers of machinery and equipment, packaging materials, animal feeds, insecticides, industrial chemicals, containers, etc. • Service providers such as transportation, marketing and consultancy services.The supplier industries provide raw materials (e.g. seeds, fertilizer for crops orfeeds, biologics, for animals), processing supplies, packaging, machinery andequipment, utilities, etc. The related and allied industries and services includebanking and finance, research and development, education and training,industry/trade association as well as government and non-government institutionsthat can affect the cluster performance.Industry associations and institutions are key elements in a cluster. Industryassociations (e.g. National Federation of Hog Farmers in the Hog Industry, and 27
  30. 30. Chamber of Agriculture Fisheries and Allied Industries in Northern Mindanao) areimplementing institutions, and also the investors. In the public sector, theDepartment of Agriculture and its agencies implements sectoral policies, supportservices and regulation, the Department of Public Works and Highways is chargedwith construction and maintenance of national roads, the Maritime IndustryAuthority sets shipping rates, the Philippine Ports Authority sets shipping rates andregulates the ports, the Land Transportation and Franchising Board for land freightrates and regulation, Department of Trade and Industry for foreign trade andincentives, etc. SI RTier 3: Foundation Providers N • SS FO The regulatory environment and the infrastructure that support the industry. O Regulatory environment consists of the set of regulations that govern the industry which includes the business and industry rules and regulations and industrial relations. C FTCluster analysis enables the missing capacities within the cluster structure to beaddressed and the building of competitive advantage through the provision of IS Asuperior economic foundations. The competitiveness of an industry clusterdepends not only on the industry itself but also equally important, what is D R Uhappening or what will happen to the supplier industries, support and relatedindustries as well as the institutions that influence them. Industry cluster Dframework and examples are presented in Annex Figure 4. a. Value chain analysis is undertaken as follows 3 : 1) Value chain mapping • Draw a visual representation of the value chain system • Identify business operations (functions), chain operators and their linkages, as well as the chain supporters within the value chain • Chain maps are the core of any value chain analysis. 2) Quantify and describe the value chain in detail • ・Attaching numbers to the basic chain map3 Value links Manual, First Edition 28
  31. 31. o numbers of actors o volume of produce or the market shares of particular segments in the chain o specific chain analyses “zoom in” on any relevant aspect, including characteristics of particular actors services political, institutional and legal framework conditions enabling or hindering chain development. SI R 3) Economic analysis of value chains • assessment of chain performance in terms of economic N SS FO efficiency determine the value added along the stages of the value O o chain o determine the cost of production and, to the extent C FT possible, o estimate income of operators. • Determine the transaction costs IS A o Doing business o Collecting informationD R U o Enforcing contracts • “Benchmark” the economic performance of a value chain D o Compare the value of important parameters with those of competing chains in other areas or similar industries).her countries or similar industries. o An enterprise gains competitive advantage by performing strategically important activities more cheaply or better than its competitors.b. The process will also include identification of issues and challenges in the supply/value chain that will shape the agribusiness outcomes desired which will be considered in the planning process. 29
  32. 32. c. The cost estimates of each stage such as in the production, primary processing and marketing will be generated based on the consultation with the key industry players of the agribusiness supply chain. d. This step could also make use of the Value Chain Analysis Manual developed by GTZ. This could serve as the LGU reference in conducting value chain promotion of the identified agribusiness products to focus on.Step 4: Formulation of Strategic Objectives for Competitiveness • Strategic objectives are written statements that describe an intended SI R outcome. They clearly describe measurable targets of achievement. • Examples of strategic objectives by value chain segment/function based on N SS FO competitiveness attributes are as follows: OTable 9 •Examples of Strategic Objectives Value Chain Segment / Competitiveness Strategic Objective C FT Function Attributea. Input SupplyExample: Cost Decrease cost of feeds by 10% next year (2009) IS Ab. b. ProductionExample: Supply Reliability Increase hog production by 20% D R U next year (2009)c. c. Processing Dd. d. Marketinge. e. Logisticsf. f. Consumption 30
  33. 33. Annexes D RD IS A C FT U SS FO SI R O N31
  34. 34. Annex 1 Industry Cluster Framework Economic Foundation Supplier Industries Secondary/Tertiary Processing  Main Raw Material  Input Supply System Primary Processing  Supply System Technology and R&D  Example Supply System Downstream Processing Technology capability Seeds/ Breeds/ Fry Processing Technology Processing Storage Equipment Indigenous/homegrown Feeds, Fertilizer Machinery and Spare Parts Packaging and Processing Supplies Globally Sourced Information  Animal Health Products Packaging and Processing Supplies Distribution Stations Systems and Processes Production Technology Utilities Utilities SI R Natural Endowments Land Resources N SS FO Water Resources Climate/Weather Environment Upstream Logistics Focal Logistics Downstream Logistics Market O Physical  Domestic  Infrastructure Distribution Energy Transport Handling  Main Raw  Handling,  Secondary  C FT Communication and  Primary  Processed  Material  Transport  and Tertiary  Transport  Processing Product,  Export Supplies and Storage Processing Human Resources System Storage  Quality  Handling  Quantity and  Availability and  Shipping Responsiveness Domestic Business Policy &  Environment  IS A By‐Products and Waste  D R Utilization U Capital Resources and  Financing D Industry Cluster Framework* Investment R&D Services Education/Training  Machinery Repair and  Industry/Trade  Marketing and  Banking Private Sector Services Maintenance Associations Distribution Services Private Sector DOST CHED Mango Industry  Private Sector Private Banks DA SCUs Other critical business  Association DA Rural Banks  SCUs DA Exporters DPWH support services PhilFOODEX, Infomap, etc. LGU Consulting Services PPA Private Sector MARINA  Related and Allied Industries and Systems Bureau of Customs *Adapted from the World Bank / MADECOR Model on the Study of Restructuring Agro‐Industries in Indonesia (2001) 32
  35. 35. Annex 2 Mango Agro-Industrial Cluster Framework Main Raw Material  Primary Processing  Secondary/Tertiary Processing  Economic Foundation Input Supply System Supply System Supply System (Factor Endowment) Planting Materials Additives Downstream Processing Technology Flower Inducer Processing Technology Processing Storage Equipment Technology and R&D  Fertilizer/Chemicals Machinery and Spare Parts Packaging and Processing Supplies capability Packaging and Processing Supplies Distribution Stations Indigenous/homegrown Utilities Supplier Industries SI R Globally Sourced Information  Systems and Processes Natural Endowments N SS FO Land Resources Water Resources Upstream Logistics Focal Logistics Downstream Logistics Market Climate/Weather Primary  Secondary and  O Environment Processing Tertiary  Processing Physical  Main Raw  Domestic  Infrastructure Material  Energy Distribution Supplies  •Drief C FT Transport Fresh  Buying  Communication (Fresh  Mango  Station /  •Frozen Export Mango) Handling,  •Puree Handling  Packing  Processed  Transport  •Nectar/  Human Resources and  House /  Product,  and Storage Juice Quality  Commercial  Transport  Marketing  Storage  •Other by‐ Quantity Producers System Centers products  Handling  Domestic Availability and  Responsiveness Business Policy &  IS A Small/  Backyard and  Shipping D R U Environment  Hot Water Treatment (HWT) / Vapor Heat  Treatment (VHT) (Japan / South Korea) Capital Resources and  D Financing Mango Agro‐Industrial  Cluster Framework Investment R&D Services Education/Training  Machinery Repair and  Industry/Trade  Marketing and  Banking Private Sector Services Maintenance Associations Distribution Services Private Sector DOST CHED Mango Industry  Private Sector Private Banks DA SCUs Other critical business  Association DA Rural Banks  SCUs DA Exporters DPWH support services PhilFOODEX, Infomap, etc. LGU Consulting Services PPA Private Sector MARINA  Related and Allied Industries and Systems Bureau of Customs 33
  36. 36. Annex 3 Banana Agro-Industrial Cluster Framework Economic Foundation Main Raw Material  Supplier Industries Secondary/Tertiary Processing  (Factor Endowment) Input Supply System Supply System Planting Materials Primary Processing  Downstream Processing Technology Fertilizer/Chemicals Supply System Processing Storage Equipment Technology and R&D  Tissue Culture Laboratories Processing Technology Packaging and Processing Supplies capability Packaging Materials Packaging and Processing Supplies Distribution Stations Indigenous/homegrown Water (Irrigation and Washing) Utilities Utilities SI R Globally Sourced Information  Systems and Processes Natural Endowments N SS FO Land Resources Water Resources Climate/Weather Upstream Logistics Focal Logistics Downstream Logistics Market Primary  Secondary and  O Environment Processing Tertiary  Processing Physical  Infrastructure Energy C FT Transport Main Raw  Domestic  Communication Material  Distribution Export Supplies  •Banana  Fresh  Buying  Human Resources (Fresh  Chips Banana  Station /  Quality  Bananas) Handling,  •Puree Handling  Packing  Processed  Quantity Transport  •Powder/  Domestic and  House /  Availability and  Responsiveness Business Policy &  IS A Commercial  Producers Small/  Transport  System Marketing  Centers and Storage Flour •Other by‐ products  Product,  Storage  Handling  and  D R Backyard Shipping U Environment  Capital Resources and  D Financing Banana Agro‐Industrial  Cluster Framework Investment R&D Services Education/Training  Machinery Repair and  Industry/Trade  Marketing and  Banking Private Sector Services Maintenance Associations Distribution Services Private Sector DOST CHED Banana Industry  Private Sector Private Banks DA SCUs Other critical business  Association DA Rural Banks  SCUs DA Exporters DPWH support services PhilFOODEX, Infomap, etc. LGU Consulting Services PPA Private Sector MARINA  Related and Allied Industries and Systems Bureau of Customs 34
  37. 37. Annex 4 Rubber Agro-Industrial Cluster Framework Economic Foundation Main Raw Material  Primary Processing  Secondary/Tertiary Processing  (Factor Endowment) Input Supply System Supply System Supply System Planting Materials Processing Technology Downstream Processing Technology Technology and R&D  Fertilizer/Chemicals Buying Stations Processing Storage Equipment capability Farm tools and equipment Packaging and Processing Supplies Packaging and Processing Supplies Indigenous/homegrown Utilities Utilities Globally Sourced Information  Supplier Industries SI R Systems and Processes Natural Endowments N SS FO Land Resources Water Resources Climate/Weather Upstream Logistics Focal Logistics Downstream Logistics Market Environment Primary  Secondary and  O Processing Tertiary  Processing Physical  Infrastructure Energy Transport C FT Domestic  Communication Main Raw  •Crumb  Distribution Export Material  rubber Human Resources Supplies Raw Rubber  •Crepe 1, 2 Raw Rubber  Quality  Handling  •2x brown Buying  Handling,  Processed  Quantity and  •SPR 20, 5 Domestic Stations Transport  Product,  Availability and  Transport  •Rubber  Responsiveness Business Policy &  IS A Small  Growers System and Storage boots and  working  shoes Storage  Handling  and  Shipping D R Environment  Capital Resources and  Financing U Core Industries Rubber Agro‐Industrial  D Cluster Framework Investment R&D Services Education/Training  Machinery Repair and  Industry/Trade  Marketing and  Banking Private Sector Services Maintenance Associations Distribution Services Private Sector CMU CMU PRIA Private Sector Private Banks DA FARBECO Other critical business  URPPA DPWH Rural Banks  DA FARBECO LGU support services Others PPA Consulting Services MARINA  Private Sector Bureau of Customs Related and Allied Industries and Systems *Adapted from the World Bank / MADECOR Model on the Study of Restructuring Agro‐Industries in Indonesia (2001) 35

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