rice preferences, price margins and constraints of rice value chain actors in nueva ecija,...

Rice preferences, price margins and constraints of rice value chain actors in Nueva Ecija,

PhilippinesJUNGHWAN BAE

(MIGUEL)

Objectives

Activities

Findings

Summary

Outline

1.Understand how rice flows from farmers to consumers in Nueva Ecija, Philippines

2.Identify varietal preferences of farmers

3.Estimate price margins of value chain ac-tors

4.Identify constraints of value chain actors

Objectives

The rice value chain

SeedFertilizer

LaborRent

farmerPaddy trader Whole-

saler

Miller

Retailer

BUT IT IS REALLY COMPLICATED!!!

I will show the result of the trip helped me understand the value chain

Activities: IRRI

Materials.. Readings.. Reports..

Hull? Husk?160? 222?

Amylose content,

gelatinization temperature..

NFA?

Activities: Nueva Ecija

Mon.(feb. 2)

Retailers In Munoz Market

Tue.

(feb. 3)Farmers In

Brgy. San Bernadino Millers

In Brgy. San Bernadino

Retailers

In Guimba MarketWholesalers

In Guimba

Wed.(feb. 4)

Thu.(feb.5)

pasalubong

When? : 2/03/15. Tue

Where? : Brgy. San Bernardino, Guimba, Nueva Ecija

With whom? : 3 households (husband and wife)

What? How? : FGD / Individual interview

Why? Determine farmers’ varietal preferences

Understand reasons for farmers’ varietal preferences

Identify their post-harvest problems

FGD / Individual interview

FGD / Individual interview

1. The strong tendency to plant certain variety

All planted NSIC RC 222 (2013-14 DS & WS)

Because of high Yield2. Preference gap

Farmers are both rice PRODUCERS and CON-SUMERS.

The variety they grow is different from the variety they prefer to consume

FGD / Individual interview

DRY SEASON WET SEASON

THE MOST PREFERRED TOP 3 VARIETIES

NSIC RC 222(TUBIGAN 18)

∵ High Yielding

SL8(hybrid)

∵ High Yielding

NSIC RC 152

∵ High Yielding

NSIC RC 160(TUBIGAN 14)

∵ Delicious (Soft..)

SL7(hybrid)

∵ Delicious (Soft..)

NSIC RC 222(TUBIGAN 18)

∵ High Yielding

NSIC RC 222(mixed with 160)

∵ soft, increase vol., reasonable price

As a PRODUCER

As a CONSUMER

As a PRODUCER

As a CONSUMER

FGD / Individual interview

DRY SEASON WET SEASON

THE LEAST PREFERRED TOP 3 VARIETIES

NSIC RC 160(TUBIGAN 14)

∵ Low Yield

NSIC RC 222(TUBIGAN 18)

∵ Hard(after cooling)

HYBRID

∵ vulnerable to ty-phoon

NSIC RC 222(mixed with 160)

∵ soft, increase vol.Reasonable price

As PRODUCER, they prefer NSIC Rc 222 for high yield.

But as CONSUMER, they consider eating quality of the rice.

As a PRODUCER

As a CONSUMER

As a PRODUCER

As a CONSUMER

FGD / Individual interview

3. Capital problem

Paddy After Drying(14% mc) : ₱23-24/kg

Paddy Before Drying(22~24% mc) : ₱19-20/kg

1. Lack of drying facilities!

2. Farmers need to pay debts as soon as possible to minimize interest.

Why?

FGD / Individual interview

4. Income

Per ha, per season

Net income ₱50,000

GROSS

PRODUCTION

operational

COST

₱81,381

GROSS

INCOME

₱131,381

PRICE

₱19-20 / kg

Margin for 1 kg ₱7.42

110-135 CAVANS

(1 cavan = 55 Kg)

FGD / Individual interview

What else?

Famers set paddy aside for home consumption, but the

amount depends on each household.

(it varies from 22 cavans to 55 cavans according to season,

family members)

They have been producing NSIC RC 222 for a long time

because it is high yielding, but they don’t prefer this vari-

ety for home consumption. But they don’t have a choice so

they consume this variety.

Milling

He is the Capitalist!

Milling

Service fee : 2 pesos / kg(for milled rice)

Almost all are farmers (90%)

50% for LOCAL, 50% from OTHER VILLAGES (= SUKI)

20%For

Opera-tor

₱0.4/kg

30%For

Diesel

₱0.6/kg

50%For

Owner

₱1/kg

Customers :

Small mill (only service provider)

Owned by a farmer with 10ha, with hired operator

MILLER

Milling

1 cavan of

paddy

Recovery can reach up to 70% according to the

varieties, drying conditions (usually 50~60%)

Low marketability

(Fuel for cooking, mulching to prevent the

evaporation of the onion farm)

Milled rice

Husk / others

Bran

Brewer

50%

31%

18%

1%

High profitability (For piggery)

₱7/kg -> ₱12/kg (1 month later)

For Feeding chickens

What is your problem?

SKIN PROBLEM

(ITCHINESS)

OPERATOR

‘If I have enough money,

I would have gotten my own mill..

Because it would give me more income’

RESPIRATORY PROBLEM

(HARD TO BREATHE)

Milling

Wholesaling

Whole-saler

2 Wholesalers in Guimba (wholesaler and retailer)

They are the richest actor I met in Nueva Ecija(Retail shop, warehouse, truck..)

2 pesos / kg

when wholesaling

When retailing

PROFIT

1 pesos / kg

Customer compositionTrading volume

15~30 cavans of milled rice/day

Consumer (50%)

Retailer (50%)

100%Wet paddy

Wholesaling

AGENT(BROKER)Intermediary between

Wholesalers/paddy trader and Farmers

78%Dry paddy

46.8%(MAX.52%)Milled rice

Buying paddy : ₱28,500 (₱ 19/

kg)

Agent fee : ₱150 (₱ 0.1/kg)

Delivering (labor) : ₱30 (₱ 1/ca-

van)

Drying paddy : ₱120 (₱ 4/cavan)

Their income for 1 day by wholesaling

₱2,572 / day

Wholesaling

30 cavans(wet paddy)

15 cavans (milled rice)

23.4 cavans(dry paddy)

Milling : ₱2,340Delivering (labor) : ₱23 (₱ 1/cavan)

Selling milled rice : ₱33,750(average selling price per kilo: ₱ 45)

Wholesaling

CREDIT TRANSACTIONS

They don’t get paid

Delayed payments

What is your problem?

WHOLESALER/paddy trader

THREAT OF THE IMPORTED RICE

RETAILING

Total 8 retailers (3 from Munoz, 5 from Guimba market)

SCALE

Retailer

Small retailer

Big re-tailer

Only selling rice

With wholesalingSelling other items

Sell 2 cavans/day

Low cost-> high profit

2 pesos / kg

High

Low

PROFIT

Sell 10 cavans/day

High cost-> Low profit

1 pesos / kg

Type of retailer

Scale, Profit, and Type of retailer are different

RETAILING

LOW PRICE HIGH PRICE

DOUBLE DIAMOND, ANGELIKA, JAS-MINE, 160. 216

NO LABEL!(Rambol) LABEL

PRICE

RUMBLE(REGULAR MILLED RICE

35 38~40

LONG GRAIN160,216, DOBLE DIAMOND, ANGELIKA, JASMINE

42 48

27 32

NFA RICE

RUMBLE(WELL MILLED RICE

38 45

Many broken grains

PROPERTY

Whole grain

Not translucent Translucent

Has impurities Little/no impurities

Not uniform Uniform size and shape

LOW PRICE HIGH PRICE

NFA Rice₱27/kg

NSIC RC 160₱46/kg

RETAILING

NFA rice

If you want to sell NFA rice,you need license!

1 consumer is allowed to buy maximum 5kg at one time!

Best seller rice!

I don’t sell NFA rice anymore!

‘I have to go, and wait for getting the rice, and bring it by myself.. It

is a waste of time!!’

NFA MONITORING

NFA officers check the present condition of the NFA rice

EVERYDAY!

Because it is CHEAP!!(₱ 27, ₱ 32)

LICENSE/REGULATION

RETAILING

Retailers pay high price to buy long grain rice,

but they are cheated by suppliers and they get

lower quality rice.

Retailer

What is your problem?

RETAILERS who are also wholesalers hire CLAS-

SIFIERS to identify the right quality.

So they are not swindled.

Small retailers are more prone to buying the low-quality rice

Limitations..

My findings are indicative of what happens in Nueva Ecija but does not represent the general sit-uation in the area.

The small number of the value chain actors interviewed

What I learned..

Got balanced viewpoint: Different perspectives

I achieved what I wanted to know!

Rice value chain

Price margins

Problems

Before Coming to the IRRI…

STUDENT

Agricultural economics

Swimming, baseball, outdoor sports..

28(26) years old

Before Coming to the IRRI…

IRRI???

But what I realized..

But what I realized..

Thank you