CENTRAL MINDANAO UNIVERSITY

Maramag, Musuan, Bukidnon

CARROT INDUSTRY PROFILE

Province of Bukidnon

Prepared by:

JAN MICHAEL P. MERLA

September 2011

Table of Contents

Page I. INTRODUCTION Historical Trends (2000-2010) a. Product b. Area Planted c. Total Production d. Five (5) Carrot Major Producing Areas II. TECHNICAL ASPECT a. b. c. d. Carrot Varieties Cultural Practices Climatic Requirement Cost & Return per Hectare 3 3 5 10 11 11 11 14 15 17 17 17 20 21 22 24 27 28 29

III. MARKETING ASPECT a. b. c. d. e. f. General Marketing Practices Carrots Demand Carrots Supply Prices Exports & Imports Processing & Distribution

IV. INDUSTRY STRUCTURE & PERCEIVED BARRIERS TO ENTRY

V. VI.

POLICIES AFFECTING THE INDUSTRY REFERENCES

CARROT INDUSTRY PROFILE Province of Bukidnon I. INTRODUCTION According to the Carrot Museum, carrots are one of the most popular vegetables in the world. They are highly nutritious and easy to grow even for the novice. Carrot originated from Central Asia with Afghanistan as the primary center of origin. It is one of the most important vegetables commonly grown in the Philippine highlands also. The production areas are in Benguet, Mountain Province, Ifugao, Nueva Vizcaya, Cebu, Davao del Sur, Negros Oriental, and Bukidnon. Carrot, one of the best sources of beta carotene, is commonly grown in high elevation like some of the areas in Bukidnon. The province is one of the key players in vegetable production in Region 10. It produces high value vegetables for the famous food chains and restaurants in the country. Just like lettuce and other popular high value vegetables of the province, carrot is now a sunshine industry in Bukidnon. No wonder that the province is one of the top producers of carrot in the Philippines in the recent report of the Bureau of Agricultural Statistics (BAS). This material presents the carrot industry profile of the province of Bukidnon. HISTORICAL TRENDS (2000-2010) a. Product Both the wild and the cultivated carrots belong to the species Daucus carota. Wild carrot is distinguished by the name Daucus carota, Carota, whereas domesticated carrot belongs to Daucus carota, sativus. It is a biennial crop. The leaves are feather like with long petioles and they are severally divided into sections. The sheath of the petiole opens at the base. The flowers are white, small and borne in compound terminal umbels. Carrot is propagated by seeds. The thickened fleshy root is the edible portion. The shape, color and size of the root vary according to varieties Carrot comes in different colors white, yellow, orange, purple and violet. Several hundred varieties exist, but there are four main types: 1. Imperator has long roots (23-25cm), small shoulders and tapered tip; 2. Nantes has medium length roots (15cm), uniform diameter and blunt tip;

3. Danvers is large, with medium length roots (18cm), a processing type used for dicing and slicing; and 4. Chantenay is short (13cm) with large shoulders, and usually a large, distinctly colored core.

Figure 1. Main Types of Carrots

Red Core Chantenay The best tasting carrot. It is a versatile, good winter keeper, in the cellar or the ground, that is tasty raw or cooked. Becomes sweeter in storage.

Nantes Coreless Almost coreless cylindrical carrot with a brilliant orange color even through the soft core. An excellent juicer and fine freezer type.

Scarlet Nantes A sweet juicer, this bright redorange, finely-flavored carrot contains the highest number of amino acids found in nutritional research.

b.

Area Planted As shown in Table 1, the total number of area planted with carrots in the Philippines is 5,115 hectares (as of 2010). Region X has 140 hectares only of the total area planted in the country. Almost 74% of total area planted of carrots can be found in the province of Bukidnon (see Table 2). Table 1. Total Area Planted with Carrots, Philippines, 2000-2010 (in has.) 2000 3,414.00 2001 2002 2003 3,505.26 2004 3,561.63

PHILIPPINES

3,441.00 3,535.88

2006 3,585.34

2007 3,480.53

2008 4,897.65

2009 5,075.22

2010 5,080.27 5,115.20

2005

Source: Bureau of Agricultural Statistics. June 2011

Table 2. Total Area Planted with Carrots, Bukidnon & Region-10, 2000-2010 (in has.)
Region-10 NORTHERN MINDANAO Bukidnon Camiguin Lanao del Norte Misamis Occidental Misamis Oriental .. 18 4 6 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

68 40 ..

73 40 .. 24 3 6

77 41 .. 27 4 5

73.5 40

87.05 65 0.05

104.05 78 0.05 13 5 8

108 82 0.06 11 7 8

117 89 0.02 12 10 6

131.2 95 .. 13.2 16 7

140.5 105 .. 12 18.5 5 ..

140 103

25 4.5 4

14 5 3

12 20 5

.. Data not available Source: Bureau of Agricultural Statistics. June 2011

Vegetable Production Areas in Bukidnon with Carrot Crops Municipality of Lantapan The municipality has 14 barangays and a total land area of approximately 36,465 hectares. Forty percent (40%) of Lantapan lies within Mt. Kitanglad Range Natural Park. By volume, the top crops produced are broccoli, cabbage, potato, sweet pepper, squash, and carrots. These crops are produced in barangays Kaatuan, Capitan Juan, Songco, Victory, Cawayan, Basak, and Kibangay. These areas have been producing massively since the 1950s. the average size of land utilized for vegetable production by a small-scale farmer ranges from 1/8 to of a hectare. The average volume of assorted veggies delivered daily in this municipality reaches 5 metric tons. Table 3 shows the area planted and production of selected vegetables in the municipality. Table 3. Area planted to selected vegetables in Lantapan, Bukidnon Crops 2003 58.75 27.00 104.75 13.00 22.00 21.76 27.45 17.50 9.25 51.50 Area Planted in Hectares 2004 2005 2006 63.35 88.50 110.75 16.00 25.00 50.75 63.15 96.25 98.00 5.00 15.00 24.50 15.50 31.50 56.25 34.38 27.50 21.50 24.75 29.50 62.75 12.00 18.00 8.50 13.50 13.50 44.00 50.00 31.00 32.00 2007 61.50 55.50 87.83 40.10 38.00 39.25 88.01 40.75 60.10 37.80 Growth Rate 7.05 31.97 1.04 66.37 29.95 24.68 40.58 86.30 77.12 (4.89) (16.37) 8.85

Tomato Broccoli Cabbage Carrot Cauliflower Sweet Pepper Squash Baguio Beans Sweet Potato White Potato Chinese Cabbage 73.75 54.75 54.75 87.75 No data Total 477.46 391.63 462.25 691.25 593.24 Source: Municipal Agriculture Office (MAO), Lantapan, 2007 Municipality of Manolo Fortich

Manolo Fortich is located in the northern foothills of Mount Kitanglad. It is one of the major watersheds of the Northern Mindanao region. The municipality is 55 kilometers from Cagayan de Oro City, the commercial center of Region-10, and 55 kilometers from the city of Malaybalay, the capital city of the province of Bukidnon. It has 22 barangays and a total land area of approximately 42,556 hectares.

About 17,126 hectares of the total land area is used for agricultural crop production but only 243 hectares are planted to vegetables. As shown in Table 2, only 1% of the total area of the municipality is planted with carrots. Baranggays Dahilayan, Lindaban, Sankayan, Mampayag, Santiago and Guilang-Guilang are the top vegetable producers in the municipality. MultiNational Companies (MNCs) such as Del Monte Philippines and the Lapanday Group of Companies occupy one-third of the municipalitys agricultural land.

Table 4. Area planted to selected vegetables in Manolo Fortich, Bukidnon Type of Crop Broccoli Carrots Lettuce Plastic Pepper Sweet Peas Tomato Source: MAO, Manolo Fortich, 2007 Municipality of Impasug-ong Impasug-ong has 13 barangays and a total land area of approximately 107,167 hectares. As of 2006, about 17,053 hectares are used for agricultural production. Major vegetable producers are concentrated in the southern most part of Impasug-ong covering the areas of Impalutao, La Fortuna, Poblacion, Cawayan, Capt. Bayong and Kibenton, Specifically in Sitio Kubayan and Intavas. These barangays are bounded by the Kitangland mountain ranges. Barangays Hagpa and Kalabugao are in the northern portion of Impasug-ong near the Pantaron mountain range. Almost all 13 barangays produce vegetables such as tomato, cabbage, Chinese cabbage (Wom Bok), squash bell pepper, and carrot. Some vegetables are grown in commercial scale while others in small plots or patches of land. Some large-scale growers rent land at P6,000 per hectare per year. Impasug-ong is also known as the home of one of Bukidnons largest lettuce suppliers, the Green Haven Farm. Other notable farms are Aldes Farms, Bukidnon Highlanders Farms and Bukidnon Plateau Gardens. The municipality is a major producer of high value temperate vegetables due to its high altitude and its year round cool climate. Assuming that there are two cropping cycles per year, total volume is projected as follows; Tomato is the leading high value vegetable with the total area of 685.75 hectares and with annual production of 34,287.5 metric tons. Irish potato ranks next planted in 128.9 hectares and with annual production of 3,867 metric tons; followed by
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Area of Production (in Has) 12 3 19 30 20 155

cabbage in 98 hectares and with 1,962.6 metric tons; carrots in 24.38 hectares and with 731.4 metric tons; and pepper in 90 hectares with 1,803.0 metric tons.

Table 5. Area planted to selected vegetables in Impasug-ong, Bukidnon Type of Crop Ampalaya Broccoli Chayote Chinese Cabbage Carrots Cauliflower Eggplant Ginger Potato Lettuce Squash Sweet Bell Pepper Sweet Peas Tomato Source: MAO, Impasug-ong, 2007 Talakag Talakag has 29 baranggays and a total land area of approximately 94,799 hectares. The vegetable production areas are in the southeastern portions of Talakag (barangays Lirongan, Miarayon, Lapot, San Miguel and Tagbak) and in Brgy. Domonirog the southern portion. The area is collectively called the Miarayon Region. Tomatoes are grown in commercial scale in the central western portions of Talakag. Major vegetables produced in the area are carrots. Tomatoes, cabbage and eggplant. Brgy. San Miguel is known for potatoes and broccoli. While most lands are private properties, some lands are rented. An increase in carrot production has been noted in 2005 due to high demand from a tuna cannery in General Santos City. Area of Production (in Has) 9 5 60 26 20 10 8 2 14 20 51 26 10 400

Table 6. Area planted to selected vegetables in Talakag, Bukidnon Type of Crop Ampalaya Asparagus Cabbage Carrots Chayote Eggplant Garlic Irish Potato Okra Onion Sweet Bell Pepper Tomato SOURCE: MAO, TALAKAG, 2007 c. Total Production Among the provinces of Region X, the province of Bukidnon (see Tables 7 & 8 ) has the highest volume of carrots production from 2000-2010, followed by Province of Lanao del Norte, Misamis Occidental, Misamis Oriental, and lastly Province of Camiguin. Table 7. Carrot Production Volume (in tons), Region-10, 2000-2004
Carrot Production Volume PHILIPPINES NORTHERN MINDANAO Bukidnon Camiguin Lanao del Norte Misamis Occidental .. 130.53 13.47 2000 34,599.80 322.4 153.41 .. 135.26 7.02 2001 33,792.88 326.68 158.4 .. 143.54 9.1 2002 34,512.28 332.74 158.15 .. 139.14 11.21 2003 34,665.80 329.67 158.3 2004 35,783.75 573.95 453.8 0.05 93.27 12.63

Area of Production (in Has) 11 400 102 473 5 26 0.5 3 123 7 27 230

Misamis Oriental 25 26 21.95 .. Data not available Source: Bureau of Agricultural Statistics. June 2011

21.02

14.2

Table 8. Carrot Production Volume (in tons), Region-10, 2005-2010

Carrot 2005 2006 2007 2008 2009 Production Volume PHILIPPINES 35,418.42 35,693.79 65,023.88 68,366.00 68,327.69 NORTHERN MINDANAO Bukidnon Camiguin Lanao del Norte Misamis Occidental 717.73 585.95 0.45 77.17 13.82 766.37 613 0.05 80.35 30.15 827.76 668 0.2 .. 89 35.98 92.7 62.41 1,200.72 1,010.00 .. 95 75.5 26.16 1,346.66 1,150.00 .. 97 76.45 26 2010 72,108.91 1,284.45 1,085.00

Misamis Oriental 40.34 42.82 34.58 35.61 .. Data not available Source: Bureau of Agricultural Statistics. June 2011

d. Five (5) Major Producing Areas Table 9 shows the Philippine provincial production of Carrots. Benguet Province has the highest volume of carrot production followed by the provinces of Mountain Province, Cebu, Negros Oriental, and Bukidnon. Table 9. Top Five (5) Carrots Producing Provinces, 2005-2010 Province Benguet Mountain Province Cebu Negros Oriental Bukidnon 2005 2006 2007 2008 2009 2010 25,795.37 25,754.84 50,936.76 52,918.80 52,617.46 57,706.04 2,034.40 2,935.83 931.33 585.95 2,098.60 2,927.31 1,093.53 613 6,193.78 2,542.23 1,163.40 668 6,790.78 2,226.04 1,659.23 1,010.00 5,838.41 3,329.33 1,604.80 1,150.00 5,127.50 2,013.25 2,502.35 1,085.00

Source: Bureau of Agricultural Statistics. June 2011

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In the world, Republic of China is considered as the Carrot production King, the US ranks among the other top nations in the production of carrots: fourth in acreage and volume, third in terms of yield (31.7 tons/ha). Russia, Japan, France and the United Kingdom are also leading producers. World wide 13.37 million tons were produced in 1990, a 30% increase over the past decade.
II.

TECHNICAL ASPECT a. Varieties Practically, all varieties in the Philippines are of the Chantenay type. Open pollinated (OP) and hybrid varieties are available commercially. Most recommended varieties to be planted for mid and high elevation areas are: 1. OP Varieties Kuroda, New Koroda OP, Nikko Kuroda, KS Kuroda, Super Kuroda, New Kuroda Guson, Kuroda Max, Kuroda Improved, Chunlong, Kuroda Selection, Kuroda Gold, Terracota, Kuroda EW 35, Royal Chantenay 2. F1 Hybrids Beniyama, S-505, Hybrid Sigma, Winter, All Season Cross, Rain Winner, Terracotta F1 For low elevation areas: 1. Kuroda strains such as EW 35 and Terracotta.

b. Cultural Practices Many Filipino carrot farmers are practicing the recommendations of the Department of Agriculture (DA) and the Philippine Council for Agriculture, Forestry and Natural Resources Research and Development (PCARRD) for carrot production.

Land Preparation Generally, Filipino farmers plowed and harrowed the land several times until a fine filth is attained. They prepare raised beds 20cm high, 0.7-0.8m wide, and 0.3m apart. They also pulverize the soil and incorporate fully decomposed chicken at 3-5 t/ha and complete fertilizer at 3-5 bags/ha one week before planting. According to PCARRD, a thorough field preparation is very necessary for the plant because it is small- seeded and usually planted direct in the field. Crops planted in a well-prepared field seem to have better well-shaped, marketable roots than plants grown in a poorly prepared soil which tends to have irregularly-shaped roots.

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Also PCARRD and DA encouraged the farmers to do the following activities in carrot production management: Crop Establishment One hectare of carrots would require 6 to 8 kg seeds. The seeds are uniformly distributed in furrows and covered with fine soil at about 2 cm thick. It may take about 2 weeks from sowing to complete the emergence of the seedlings. In low elevation areas, the best time to plant is from the last week of October up to February or during the coolest part of the year. In the highlands, planting can be done through out the year.

Nutrient Management The general fertilizer recommendation is 126 kg/ha N, 71 kg/ha P2O5, and 175 kg/ha K2O. However, fertilization should be based on soil analysis. Apply organic fertilizers such as well decomposed manure or compost at 3-5 t/ha 1-2 weeks before planting to contribute 60-100 kg NPK and micronutrients. The remaining nutrient requirement can be applied at 30 days from sowing, just after weeding and thinning. Cover the fertilizer with soil during hilling up. Tea manure and fermented plant juice (FPJ) may also be used to improve soil fertility. To prepare tea manure, soak sack of dried cow or horse manure in plastic drum (200-L capacity) of water. Soak for 5-7 days with frequent stirring. Dilute tea manure in up to 20 parts water and spray on the leavers at 1-2 weeks interval. To prepare FPJ, mix three parts chopped plant shoots or banana trunk with one part raw sugar or molasses. Ferment mixture for 5-7 days. Dilute 1 part FPJ to 20-40 parts water and drench on the plots or use as foliar fertilizer.

Water Management Carrot needs a lot of moisture during the first 30 days of growth. Irregular watering leads to cracking and forking. Water every 5-7 days or as needed. Put mulch after planting and water the beds. Mulch with rice straws or any other mulching materials to minimize weed growth and moisture loss. After two weeks or after the seeds have germinated, remove the mulch and put mulch between rows. Thinning and Hilling Up Thinning is done to provide enough space to the growing roots. Start thinning at 30 days after sowing, at a spacing of 10cm between plants. Hill up immediately after thinning to cover the side dressed fertilizer. Second weeding and hilling up is done 45 days after the first weeding.

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Pest Management Pests 1. Cutworm Spray with biological insecticide such as Bacillus thuringiensis (Bt) and Nuclear Polyhedrosis Virus (NPV) following the recommended rates. If needed, spray with inseticide like fipronil, fevalerate, permethrin, or other registered chemicals following the recommended rates. 2. Mole Cricket Use biological sprays such as Bt and NPV. Spray with pesticides such as diazinon following the recommended rates. Use carbofuran following the recommended rates, as a last resort. 3. Slugs Spread rice hull ash or slug pellets around the plots just to cover the soil 4. Aphids Spray with hot pepper extract (100g macerated hot pepper / 16L water). If needed, spray carbaryl or malathion following the recommended rates. 5. Armyworm Spray with Bt following the recommended rates. Maintain populations of ground beetles and tachinid flies. Spread ash baits along the field borders. If needed, spray recommended pesticide such as carbaryl, fenvalerate, or malathion following the recommended rates.

Diseases 1. Powdery Mildew Spray sulfur based fungicides or mancozeb following the recommended rates 2. Bacterial Soft Rot Avoid injury to the roots during harvest and remove the infected roots. 3. Root-knot Practice crop rotation with non-host crops like corn. Plant marigold by broadcasting the seeds in between seasons. Plow under the marigold plants at land preparation. Marigold may also be intercropped along borders and alleys. 4. Alternaria blight

13

Use resistant or tolerant varieties such as Terracotta and S-505. If infection is severe, spray appropriate fungicides such as mancozeb and chlorothalonil following the recommended rates.

Harvest Management Carrots can be harvested 2-3 months after sowing, depending on the variety used. Harvest the carrots if the leaves turn yellowish and the roots are big enough. Loosen the soil using a spading fork then pull the carrot roots carefully. Remove split roots. Haul the roots to the packing house immediately after harvest. Yields are usually 20-30 t/ha under favorable and good management. Postharvest Handling Cut the leaves 5-8cm from the shoulder. Wash the roots and air-dry. Sort and classify according to size and appearance. Roots that are cracked, deformed, and forked are considered non-marketable, but can still be cooked or processed Uses, Processing and Utilization Carrot is used in many preparations. It can be a principal ingredient of a dish like carrot salads. It gives attractive appearance and color to pickles. It is excellent for garnishing and very rich in vitamins (carotene). Carrots may be prepared in glass jars as follows: 1. Select small young and tender carrots. Remove tops and scrub. 2. Boil enough water to cover for 5-10 minutes. Plunge in cold water. 3. Slip off skins and scrape if necessary. Cut into cubes or slice as desired. Pack in sterile jars. 4. Add tsp salt per pint jar. Fill with boiling water. Half seal bottles. 5. Sterilize pint jars using pressure cooker at 10 lbs for 20 minutes. Seal completely. Cool.

c. Climatic and Soil Requirements Carrot grows best in high elevation areas 1,000 m above sea level. Under such conditions, carrots are more succulent and less fibrous, with smother texture and deeper color. Roots attain optimal color when air temperature is 1521 C, but colors deepen rapidly in this temperature range about three weeks before harvest. Temperature below 10 C and above 30 C reduce quality and yield of carrots.

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Carrot can be planted in low and mid elevation areas, but only during the coolest months. Otherwise, the roots will be fibrous, lighter in color, and deformed. Carrots grows best in deep sandy loam soil rich in organic matter with pH ranging from 5.5 to 6.8.

c.

Cost and Return Analysis per Hectare

Table 10. Carrot Production Cost and Return Analysis per Hectare, 2000-2003
Source: BAS, June 2011

2000 27,692 1,444 5,484 728 4,756 3,157 1,794 1,363 9,101 82 2,079 1,021 892 906 3,526 16 16 19,273 11,687 749 2,467 4,370 46,981 166,214 161,458 161,442 142,169 3.03 4.64 10,135 16.4

2001 28,870 1,444 6,531 867 5,664 3,288 1,869 1,419 9,101 82 2,079 1,021 892 906 3,526 11 11 20,682 11,933 824 4,829 3,096 49,563 114,120 85,250 85,239 64,557 1.3 5.05 9,821 11.62

2002 29,498 1,438 6,442 855 5,587 3,334 1,895 1,439 9,597 83 2,147 1,038 920 922 3,577 11 11 19,319 12,322 906 3,008 3,083 48,828 113,050 83,552 83,541 64,222 1.32 5 9,771 11.57

2003 32,865 2,203 8,050 1,068 6,982 3,342 1,900 1,442 10,078 84 2,477 1,074 1,012 943 3,604 17 17 24,271 12,940 997 5,610 4,724 57,153 175,350 142,485 142,468 118,197 2.07 5.78 9,890 17.73

CASH COSTS ..Seeds/Planting Materials ..Fertilizers ....Fertilizers Organic ....Fertilizers Inorganic ..Pesticides ....Pesticides : Liquid ....Pesticides : Solid ..Hired Labor ..Land Tax ....Animal and Machine ..Transport of Inputs ..Interest on Crop Loan ..Food Expense ..Repairs NON-CASH COSTS ..Seeds/Planting Materials Paid in Kind IMPUTED COSTS ..Operator and Family Labor ..Depreciation ..Interest on Operating Capital ..Rental Value of Owned Land ALL COSTS GROSS RETURNS RETURNS ABOVE CASH COST RETURNS ABOVE CASH AND NON-CASH COSTS NET RETURNS NET PROFIT-COST RATIO Cost Per Kilogram in Pesos Yield Per Hectare in Kilograms Farmgate Price in Pesos Per Kilogram

15

.. Data not available

Table 10. Carrot Production Cost and Return Analysis per Hectare, 2004-2009
2004 CASH COSTS ..Seeds/Planting Materials ..Fertilizers ....Fertilizers Organic ....Fertilizers Inorganic ..Pesticides ....Pesticides : Liquid ....Pesticides : Solid ..Hired Labor ..Land Tax ....Animal and Machine ..Transport of Inputs ..Interest on Crop Loan ..Food Expense ..Repairs NON-CASH COSTS ..Seeds/Planting Materials Paid in Kind IMPUTED COSTS ..Operator and Family Labor ..Depreciation ..Interest on Operating Capital ..Rental Value of Owned Land ALL COSTS GROSS RETURNS RETURNS ABOVE CASH COST RETURNS ABOVE CASH AND NON-CASH COSTS NET RETURNS NET PROFIT-COST RATIO Cost Per Kilogram in Pesos Yield Per Hectare in Kilograms Farmgate Price in Pesos Per Kilogram 36,764 2,141 10,893 1,446 9,447 3,354 1,907 1,447 10,510 84 2,583 1,210 1,113 1,002 3,875 16 16 23,485 13,494 1,097 4,304 4,591 60,266 170,215 133,451 133,435 109,950 1.82 6.1 9,879 17.23 2005 40,854 2,081 13,549 1,799 11,750 3,372 1,917 1,455 11,121 85 2,733 1,432 1,224 1,087 4,169 16 16 24,768 14,279 1,206 4,820 4,463 65,638 165,473 124,619 124,603 99,835 1.52 6.64 9,879 16.75 2006 41,792 2,259 13,460 1,787 11,673 3,050 1,734 1,316 11,589 86 2,848 1,614 1,346 1,148 4,392 17 17 25,908 14,880 1,327 4,857 4,844 67,717 186,418 144,626 144,609 118,701 1.75 6.6 10,254 18.18 2007 43,205 1,972 14,282 1,896 12,386 3,036 1,726 1,310 12,046 87 2,960 1,622 1,481 1,186 4,533 15 15 26,168 15,466 1,460 5,014 4,228 69,388 210,690 167,485 167,470 141,302 2.04 5.23 13,276 15.87 2008R 55,992 2,424 24,298 3,619 20,679 3,148 1,790 1,358 13,137 88 3,228 1,795 1,629 1,347 4,898 18 18 30,552 16,867 1,606 6,881 5,198 86,562 262,819 206,827 206,809 176,257 2.04 6.43 13,471 19.51 2009P 50,762 3,051 17,893 2,665 15,228 2,980 1,694 1,286 13,356 88 3,282 1,710 1,792 1,427 5,185 23 23 31,421 17,149 1,766 5,965 6,541 82,206 329,780 279,018 278,995 247,574 3.01 6.12 13,433 24.55

b/ - Less than 1 peso R - Revised as of September 2010

16

P - Preliminary data
Source: BAS, June 2011

III.

MARKETING ASPECT a. General Marketing Practices Carrots and other vegetable products of the province of Bukidnon and the rest of the provinces of Region 10 are shipped mainly to wet markets in Manila and in other major cities of Visayas and Mindanao such as Cebu, Iloilo, Bacolod, Zamboanga, Davao, Butuan and Palawan. The presence of regular flights and trips of boats and buses plying these areas warrant convenient flow of these commodities. Refrigerated vans of CRYO, likewise, enable shipment of highly perishable leafy vegetables like lettuce. As shown in the existing carrot and other vegetable distribution channels diagram (Figure 7) in the province of Bukidnon and other provinces of Region10, it is noted that the consolidators are vital in the distribution process. Consolidators are the ones who gather or consolidate vegetables from different sources/ farmers for distribution to wholesalers. The last level of traders then distribute these vegetables by land, sea and air to other provinces in Mindanao and Visayas and other major cities such as Cebu and Metro Manila. With the present distribution channel, the probability of loss due to spoilage of vegetables is high due to the long distribution process. The presence of a farm produce terminal market or a trading post will address the problem on high incidence of spoilage. This idea came about during one of the workshops with the vegetable industry stakeholders.

b. Carrot Demand Increasing consumption of vegetables due to growing urban population and demand for healthy food Consumption of carrot and other vegetables in the Philippines is increasing due to growing population particularly in the urban areas and expanding demand for healthy foods such as vegetables. Considering the vegetable consumption estimate of the Food and Nutrition Research Institute (FNRI) in 1993 of about 39 kilos of vegetables per year per person, one expects the increase in consumption to be coming from the urban population. A survey conducted by Concepcion (2005) showed that vegetable consumption per person in the cities of Davao, Cagayan de Oro and General Santos in 2004 was about 87 kilos which is 123% more than the average consumption estimate in 1993. Urban consumption of vegetables appears to be increasing as more
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consumers become health conscious. Disaggregating population into urban and rural and using the FNRI estimate of per capita vegetable consumption reveals this trend. Urban consumption of vegetables is estimated to be increasing at 4.42% compared to only 0.2% in the rural areas based on data from 1980 to 2003 (Figure 2).

Vegetable Consumption in the Philippines 19802003

Vegetable consumption 4000000 3000000 2000000 1000000 0 1980 1992 1995 1983 1986 1989 1998 2001 total vegetable consumption rural vegetable consumption urban vegetable consumption

Year

Figure 2. Increasing vegetable consumption (Source: National Statistics Office) Expanding demand for quality and processed vegetables due to increasing income Increasing incomes of Filipinos also contribute to increase in demand particularly for high quality and processed vegetables. As Filipinos increase their income and more dual income households exist, demand for convenience will grow. More Filipinos will shop from supermarkets, consume ready-to-eat and processed foods and eat in fastfood outlets. A survey made by Concepcion and Digal (2004) showed that the area devoted by supermarkets for fresh vegetables has increased over time. Data also indicated grocery sales which include food in modern distribution outlets such as supermarkets increased by 22% from 2005 to 2006 (Table 11). In addition, fastfood outlets and other institutional markets such as hotels have responded to this opportunity by increasing demand for high quality vegetables and healthy foods. They offer products that require the use of fresh or processed vegetables such as salads.
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Table 11. Retail Market Indicators, 2004-2006 Year Retail market indicators
Retail sales (USD mn) 38,319 43,718 50,103 Retail sales / capita (USD) 444 Grocery retail sales ( USD mn) 24,172 27,284 30,948 Grocery retail sales / capita ( USD) 280 Modern grocery distribution, total sales (USD mn) 8,946 Modern grocery distribution, total sales /capita (USD) Modern grocery distribution,Grocery sales (USD mn) Modern grocery distribution,Grocery sales/capita(USD)
Source: Planet Retail

Growth rates (%) 2006 2004-05 2005-06

14 12 13 11 10 8 11 8 15 12 13 11 17 15 22 20

2004

2005

498

560

311

346

9,813 11,520 112 129

104 7,552 88

8,382 10,198 95 114

Consumption of carrot and other vegetables in the Philippines has steadily increased over time. However, the increase of about 1.6% per year (from 1990-2005) exceeds the annual growth of domestic production of 1.5% resulting in a deficit of about 408,000 metric tons per year (Figure 2). Thus, it is not surprising to see imports increasing over time to fill up this gap. Despite this, the country managed to export vegetables of 35,000 metric tons per year during this period, albeit the growth rate for exports of 8% per year is lower than that of imports of 11% per year (Figure 3).

V egetable Consumption and Production in the Philippines (1990-2005)

6,000.00 5,000.00 4,000.00 3,000.00 2,000.00 1,000.00 0.00 -1,000.00 1990 -2,000.00

1992

1994

1996

1998 Year

2000

2002

2004

C onsumption

Production

Surplus/(D eficit)

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Figure 3. Consumption and production of vegetables in the Philippines,1990-2005 (FAO Statistics, 2007). Imported vegetables are posing increasing threats to Philippine vegetable growers (Macabasco, 2004). Imports of vegetables have grown sevenfold since 1996 to 2002. This is due mainly to the reduction of tariff rates and the changing market dynamics of the vegetable supply chain. Imported vegetables are said to be cheaper by 30-50% compared to some of the locally produced ones. They are better packed and generally of better quality. These attributes make them more attractive to the institutional markets and the supermarkets that cater to the high-end consumer markets.

c. Carrot Supply Table 12 shows the gross supply of carrots of the country from year 2000 to 2009 and also its utilization. The supply is continuously increasing and so with the utilization of carrots. Table 12. Carrots Supply and Utilization Accounts, Philippines (in tons) YEAR 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 SU Gross Supply 34,657 33,825 35,159 36,013 36,137 35,440 35,695 65,026 68,372 68,465 UT Feeds and Waste 2,773 2,706 2,813 2,881 2,887 2,835 2,856 5,202 5,470 5,477 UT Total Net Food Disposable 31,884 31,119 32,346 33,132 33,199 32,605 32,839 59,824 62,902 62,988 UT Per Capita kg/yr 0.42 0.4 0.41 0.41 0.4 0.38 0.38 0.68 0.7 0.68 UT Per Capita gm/day 1.15 1.1 1.12 1.12 1.1 1.04 1.04 1.86 1.92 1.86

Source : BAS, June 2011 SU Supply UT - Utilization

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d. Price The price of carrot and other vegetables is very volatile. Prices go up when supply from major suppliers is low due to poor harvest or bad weather. Tables 13, 14, & 15 show the farm gate, wholesale and retail price of carrot in Bukidnon and Region-10, respectively. Table 13. Carrot Farm Gate Price, Bukidnon & Region 10, 2000-2010 (per kilo)
2000 NORTHERN MINDANAO Bukidnon Camiguin Lanao del Norte Misamis Occidental Misamis Oriental 2001 2002 2003 2004 2005 2006 2007 2008

2009 26.71 .. .. .. 26.71 ..

2010 26.7 .. .. .. 26.7 ..

22.73 .. .. .. 22.73 ..

18.28 .. .. .. 18.28 ..

13.28 .. .. .. 13.28 ..

14.03 13.79 .. .. 15.43 ..

14.11 13.38 .. .. 19.09 ..

22.27 11.27 .. .. 24.15 ..

22.53 .. .. .. 22.53 ..

18.6 .. .. .. 18.6 ..

20.53 .. .. .. 20.53 ..

Source : BAS, March 2011 .. Data is not available

Table 14. Carrot Wholesale Price, Bukidnon & Region 10, 2000-2010 (per kilo)
2000 NORTHERN MINDANAO Bukidnon Camiguin Lanao del Norte Misamis Occidental Misamis Oriental 20.26 .. .. .. .. 20.26 2001 19.47 .. .. .. .. 19.47 2002 18.84 .. .. .. .. 18.84 2003 21.72 .. .. .. .. 21.72 2004 21.04 .. .. .. .. 21.04 2005 20.95 .. .. .. .. 20.95 2006 21.82 .. .. .. .. 21.82 2007 27.06 .. .. .. .. 27.06 2008 29.88 .. .. .. .. 29.88 2009 27.66 .. .. .. .. 27.66 2010 32.49 .. .. .. .. 32.49

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Source : BAS, June 2011 Data is not available

Table 15. Carrot Retail Price, Bukidnon & Region 10, 2000-2010 (per kilo)
2000
NORTHER N MINDANAO Bukidnon

2001 27.4 23.61

2002 26.95 29.36 32.28 20.08 31.13 25.68

2003 27.9 24.49 33.18 24.21 32.71 28.19

2004 32.03 31.53 35.31 26.29 37.77 31.45

2005 31.61 30.74 43.44 26.51 36.41 27.93

2006 34.96 30.81 45.28 30 38.01 34.71

2007 37.14 31.21 47.03 33.64 40.21 37.69

2008 43.76 38.66 49.07 40.54 49.39 43.55

2009 43.28 42.57 48.91 34.48 49.35 42.31

2010 47.11 41.47 59.44 42.6 58.62 40.13

29.58 24.56

33.1 31 Camiguin Lanao del 27.6 21.89 Norte Misamis 33.97 31.04 Occidental Misamis 28.66 28.75 Oriental Source : BAS, June 2011

e. Exports & Imports Export The top three destinations of vegetable exports by regional blocks are Japan, Australasia, Oceania followed by the ASEAN block and then the Americas. The top ports of loading of Philippine exports are NAIA, Dadiangas/Gen. San City/South Cotabato and Davao City. Table 16 shows the quantity and value of Philippine agricultural export. The Bureau of Agricultural Statistics (BAS) has no data of carrots exported from Region-10, specifically from the province of Bukidnon. Table 16. Quantity and Value of Philippine Agricultural Export ITEM Carrots, dried, whole, cut, sliced, broken or in powder, but not further prepared Carrots, prepared or preserved otherwise than by vinegar or acetic acid, frozen Source: BAS 2007 Quantity Value (kg) (USD) 2008 Quantity Value (kg) (USD) 2009 Quantity Value (Kg) (USD)

10,000

40,434

11,071

45,368

4,500

12,600

90

134

The above data shows the Philippine agricultural export, in the past years in year 2007 the quantity (Kg) of export carrots, dried, whole, cut, sliced, broken or in powder, but not further prepared is10,000 (kg) which has
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a value of 40,434 US $, in year 2008 it increased 11,071 kg which has a value of 45,368 US $ and in year 2009 the quantity of exported carrots, dried, whole, cut, sliced, broken or in powder, but not further prepared decrease to 4,500 kg which has a value of 12,600 US $. and the quantity of exported carrots, prepared or preserved otherwise than by vinegar or acetic acid, frozen 90 kg which has a value of 134 US $, and it only exported in year 2007.

Import Table 17. Quantity of Philippine Agricultural Import (in kg) 2005 Carrots, Fresh/Chilled Carrots, dried, whole, cut, sliced, broken or in powder, but not further prepared Carrots, prepared or preserved otherwise than by vinegar or acetic acid, frozen Source: BAS 21,628 2006 839 2007 1,699 2008 6,197 2009 137,197

20,183

67,912

51,807

9,660

59,900

10,500

Table 18. Value (US $) Philippine Agricultural Product Import 2005 Carrots, Fresh/Chilled Carrots, dried, whole, cut, sliced, broken or in powder, but not further prepared Carrots, prepared or preserved otherwise than by vinegar or acetic acid, frozen Source: BAS 12,467 2006 617 2007 1,241 2008 3,987 2009 15,614

70,836

126,586

123,923

31,592

63,519

6,053

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The above table shows the quantity and value of Philippine Import coming from different countries. The Bureau of Agricultural Statistics (BAS) has no data of carrots imported by Region-10, specifically the province of Bukidnon. In year 2005 the quantity (kg) carrots, fresh/chilled 21,628 which has the value of 12467 US $ , carrots, dried, whole, cut, sliced, broken or in powder, but not further prepared 20,183 kg which has a value of 70,836 US $, in year 2006 the quantity of imported carrots, fresh/chilled decreased to 839 kg which has value 617 US $, and the quantity of import carrots, dried, whole, cut, sliced, broken or in powder, but not further prepared increased to 617,912 kg which has a value 126,586 US $, from year 2007 the quantity of imported carrots, fresh/chilled every year increased up to 2009 also the value, and the carrots, dried, whole, cut, sliced, broken or in powder, but not further prepared are decreased from 2007 to 2008 and it will increased again in year 2009. And in year 2007 Philippine are imported 10,500 kg carrots, prepared or preserved otherwise than by vinegar or acetic acid, frozen which has a value of 6,053 US $. f. Processing and Distribution

Processing The Philippines has the highest four-firm concentration ratio in Asia with approximately 28% of the total sales in the processing sector accounted for by the top 4 firms in the sector (Roy 2006) (Figure 5). Although not disaggregated by industry (i.e., vegetable processing is lumped with the Philippine food processing sector as a whole), the four-firm concentration ratio was recorded at 72% in 1994 from 64% in 1978, an increase of about 39% (NSO, 1994, NSO, 1978, Digal 2001).

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50 45 40 35 30
Figure 5. Concentration ratio in Processing The concentration ratio in the retail sector (i.e., supermarkets) as measured by the National Statistics Office appears to be low at 1.1% in 1994 since this is computed based on the sales of the top four individual supermarkets divided by the total sales supermarkets in the country. However, supermarket chains are treated as one unit, the concentration ratio would be higher. Data from Planet retail (2005) showed that the market share of 181 stores of the SM group accounts for 12% of total supermarket retail sales (Table 19). Table 19. Top 5 Grocery Retailers in 2005 Company No. of Stores Sales Area (sq.m) Average Sales Area (sq. m) Retail Banner Sales Market Share (%)
25

ge

2005 (USD mn) SM Group Mercury Drug Robinsons Rustan SHV Makro Sub Total Other Total
Source: Planet Retail

181 438,250 510 153,000 224 287,600 183 214,348 16 134,400 1,114 1,227,598

2,421 300 1,284 1,171 8,400

1,163 879 562 449 332 3,385 6,428 9,813

11.9 9.0 5.7 4.6 3.4 34.5 65.5 100

Distribution About seventy five (75%) of vegetables continue to be sold in traditional chain where traders dominate and bulk of the produce is sold in so-called wet markets. On the other hand, the modern chain which includes supermarkets, fastfood chains, hotels and restaurants, accounts for twenty five percent (25%). This share is expected to increase as consumers demand for convenience and ready-to-cook vegetable packages.

Figure 6. Traditional Chain vs Modern Chain

Figure 7. Existing Marketing Distribution Channel of Carrots & Other Vegetables

Farmer/Grower Northern Mindanao

Consolidators

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Compradors

Last Level Traders Divisoria Buyers Cagayan de Oro City

By Land Wholesaler-Retailer Cagayan de Oro City/ Other Provinces in Mindanao

By Sea/Air

By Sea/Air Wholesaler-Retailer Cebu/ Other Provinces in Visayas

Retailer/Supermarket Cagayan de Oro City/ Other Provinces in Mindanao

Retailer/Supermarket Cagayan de Oro City/ Other Provinces in Mindanao

Institutional Buyer Cagayan de Oro City/ Other Provinces in Mindanao

METRO MANILA

Institutional Buyer Cebu/ Other Provinces in Visayas

Divisoria

Balintawak

Q-Mart

Others/ Institutional Buyers

Reference: Northern Mindanao Vegetable Producers Association Inc.

I.

INDUSTRY STRUCTURE & PERCEIVED BARRIERS TO ENTRY Industry Structure In the industry structure, the supplier, buyers and new entrants affect the intensity of rivalry in the industry. The following are the perceived specific barriers to entry.

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 Economies of Scale Access to Distribution Capital Requirements Importance of volume to supplier Buyer Volume Impact on Quality/Performance Economies of Scale In the industry, entrants can be affected by the critical volume of production because of some existing distribution requirements, like minimum volume of shipment on reefer vans. This will translate to the production volume requirement problems. Access to Distribution The existing distribution requirements like the cold chain can affect the new entrants of the industry in terms of requirements of the channel. Access to Existing Networks of the Industry. New entrants should access to existing networks to have the necessary information. These information ranges from technical, marketing and production requirements. Capital Requirements Small vegetable growers in the region need sufficient capital requirement to sustain production. The growers in the region had experienced losses due to lack of financing. This usually happen during the vegetative stage to harvesting stage where vital inputs are needed.

Importance of Volume to supplier Volume to suppliers poses hindrance to new entrants especially if this is critical in their operation. As discussed in the economies of scale, volume really matters in the industry. Buyer Volume

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Buyer volume in the other hand could hinder new entrants especially if these are large entities and larger volume requirements. Impact on Quality/Performance Quality and performance must be consistent. Mostly suppliers can not meet requirements on these consistencies.

II.

POLICIES AFFECTING THE INDUSTRY In general, due to the Cabotage Law transportation cost of Mindanao produce to its major markets in the National Capital Region and major Cities in the Visayas the country is expensive. Vegetables coming from Mindanao cost 15% higher than then the vegetables coming from other parts of Luzon, assuming that all factors of production both in Northern Mindanao and Luzon are equal. Thus, producers in the region face stiff competition with that of Luzon producers.

VI. REFERENCES Bureau of Agricultural Statistics (countrySTAT),www.bas.gov.ph. Carrot Museum, www.carrotmuseum.co.uk.

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Concepcion, S. and Digal, L. (2004). Upstream and Downstream Linkage: the Case of Vegetable and Mango Industries in the Philippines, Regoverning Markets Program Country Report. Digal, Larry (2005), Quality Grading in the Food Chain: The Case of Vegetables in Southern Philippines. Journal of International Food and Agribusiness Marketing, Vol 17 (1). Digal, Larry (2001), Analysis of the Philippine Retail Food Industry Journal of Philippine Development, Vol XVIII,2 FAO Statistics (Faostat), www.fao.org. Macabasco, Ditas (2004), A Closer Look at Philippine Vegetable Imports, Agrifood Trade Service, http://www.agr.gc.ca. Mindanao Road Map Presentation (2005), Department of Agriculture. Planet Retail Philippine Country report (2005). www.planetretail.com Production guide on Carrot. Department Of Agriculture RFU-10. Northern Mindanao Integrated Agricultural Research Center. Brochure Package of Technology of Different Vegetable Crops: Technology Generation and Dissemination for the Growth and Development of Vegetable Industry.2005.DA-RFU 4A& Bureau of Agricultural Research, Diliman Quezon City. Roy, Davesh (2005). International Food and Policy Research Institutes work on Modern Marketing Channels, June 13th, 2006, Indian Institute of Management Ahmedabad University of the Philippines in Mindanao and Australian Center for International Agricultural Research ACIAR, Improving the Efficiency of the Agribusiness Supply Chain and Quality Management for Small Agricultural Producers in Mindanao ASEM 2000/101, unpublished research documents, 2004. Vegetable Industry Profile (2008), Department of Trade Industry.

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