Researchers from the University of the Philippines (UP) Mindanao upheld the needs of smallholder farmers as being among the key factors towards achieving inclusive value chains in coffee and other crops, via research papers presented at the 2024 Global Agribusiness Management and Entrepreneurship (GAME) Conference, which was held in Manila on October 24-25, 2024.
Research papers on the value chain—the study of activities through which a product moves from production to consumption and the profits made along the way—were presented by the co-authors from the UP Mindanao School of Management (SOM) and their collaborators. The photo above shows the SOM presenters (left-right), including Research Associate Dave Laurence de la Cruz, BS Agribusiness Economics graduate Ma. Angela Salazar, assistant professors Shemiah Placencia, Thaddeus Acuna, and Roxanne Aguinaldo, associate professor Ligaya Leal, and university researcher Marilou Montiflor.
There were five SOM-led papers produced under the research program “Agribusiness-led Inclusive Value Chain Development for Smallholder Farming Systems in the Philippines” (IVC Philippines), which is funded by the Australian Center for International Agricultural Research (ACIAR), with Sultan Kudarat coffee farmers are the case study focus.
The first paper “Understanding Inclusion in Value Chains” showed that Sultan Kudarat Province coffee farmers’ inclusion in the value chain may be realized by building equitable conditions for participation at the farmer and farmer-organization level. These conditions include access to better prices and postharvest facilities, the capability to choose where to sell their coffee beans, and their direct participation in business transactions. These conditions can contribute to a better quality of coffee beans.
The second paper, “Organization as an Inclusive Innovation Platform” focused on farmers’ associations in the Sultan Kudarat municipalities of Lebak and Kalamansig. The research showed that capability-building among members is key to building an inclusive platform, which is the association. Through the association, farmers learn to take action and become agents for change.
The third paper, “The Farmer-Trader Relationship,” asked whether this relationship is a binding factor in creating an inclusive coffee value chain in the municipalities of Kalamansig and Lebac. The research showed that the farmers’ important resources are cash, time, and personal and family health. The farmers’ management of these key resources reveals an interdependent relationship with the trader making it a critical factor in the chain.
The fourth paper, “Challenges and Opportunities for an Emerging Community-based Coffee Enterprise,” focused on an enterprise formed by a coffee farmers association to access government assistance and consolidate their produce to achieve major buyers’ volume and quality specifications. They experienced challenges such as the lack of working capital and the heavy rains and landslides affecting coffee bean production. Their opportunities were linking with a cooperative for market arrangements and joining a network of coffee farmers to address their challenges. They are building their member’s competencies and are recruiting more members.
The fifth research paper, “Income and Expenditures of Coffee Farming Households in Kalamansig and Lebak” showed that coffee farmers’ household and farming expenses in 2021 and 2024 were higher than their income despite increased coffee prices. During off season months, coffee farmers seek income from other sources. Otherwise, they resort to borrowing, where repayment is expected from the next harvest. Ironically, the smallholder farmers cannot afford the value-added and upscaled versions of their coffee products.
Aside from SOM-led papers, there were an additional three co-authored papers which were presented by IVC Philippines’ Filipino and Australian collaborators.
The paper “Enabling Inclusive Value Chains: Enhancing Resilience and Sustainability,” showed that inclusive value chains are increasingly defined as a series of practices among the chain actors who seek to make connections across shared interests over time. These practices include fairness, agency or the capability to take action and be effective, and voice or the ability to be heard and to have influence. So, interventions can adopt these principles to improve value chain resilience and increase smallholder farming communities’ capabilities.
Another paper, “A Systems Approach to Monitoring, Evaluation, and Learning (MEL)” showed that efforts to improve inclusion need to go beyond the agribusiness aspects to consider the broader system. These were the community and their farming, the societal and physical environment, and the institutional landscape. In this research, the team combined MEL with integrative research methods to form an integrated MEL for developing practical tools, principles, and processes to guide the design and implementation of inclusive value chain interventions by practitioners and researchers in this project and beyond.
Lastly, the paper “Improving Smallholder Participation in the Vegetable Value Chain in Sudlon, Cebu City” showed that this sector experienced low productivity, high cost of production, market instability, and limited financial support, exacerbated by COVID-19. The research discovered the need for targeted support and training for farmers and greater recognition of traders’ roles in the value chain. The findings suggest that enhancing inclusivity in the value chain could significantly improve the profitability and livelihood sustainability of smallholder farming in the region.
In addition to IVC Philippines project, the Department of Science and Technology-Philippine Council for Agriculture Aquatic and Natural Resources Research and Development (PCAARRD)- funded project on “Enhancing the Value Chain Project Designs for Coffee, Cacao, and Cavendish Banana Towards a Development of an Agri Aqua Value Chain Laboratory in UP Mindanao” also contributed two papers with SOM authors/co-authors in GAME conference.
One, the paper “Willingness to Adopt Industry 4.0 Technologies among Coffee or Cacao-based Farmers and MSMEs in Mindanao,” by UP Mindanao authors, introduced the Fourth Industrial Revolution (FIRE), which has influenced agriculture globally. However, in the Philippines, it was observed that the agricultural sector’s uptake of these technologies is low, despite the introduction of artificial intelligence, smart farms, the Internet of Things, and precision agriculture, among others. This is true for important crops such as coffee and cacao. The studies concluded that efforts must be intensified to remedy the institutional and capability impediments to promote digitalization among players in the coffee and cacao sectors, including medium, small, and micro-enterprises.
Two, the paper “Assessing the Dynamics of the Coffee Value Chain in Davao del Sur: An Agent-based Modeling Approach” had authors from SOM and the mathematics discipline. They learned that coffee production involves multiple factors influenced by various players, such as producers’ market choices, buyers’ pricing strategies, and loan providers’ willingness to lend. Trust, risk, and transaction cost are the driving forces behind these players’ decisions. Through an Agent-Based Model (ABM), the findings show that coffee producers may benefit more by adopting a risk-seeking approach to secure better prices. However, this may include foregoing current market demand and delayed repayment of their loans. Moreover, cooperatives and markets benefit greatly if smallholder farmer-producer-suppliers demonstrate higher levels of trust, which often results in market demand being met. These findings highlight the need for smallholder farmers to access better markets, finances, and primary processing facilities.
Finally, the paper “The Effect of World Fertilizer Prices on Southeast Asian Rice Markets Before and During the COVID-19 Pandemic,” was culled out from an undergraduate thesis. It studied how prices of rice were affected by fluctuations in the supply of global commodities like rice and urea fertilizer. The study showed that the Philippines imports rice and urea fertilizer, while Thailand and Vietnam have invested in research, technology, and infrastructure for these commodities. The onset of the pandemic resulted in a shortage of urea imports to the Philippines, which caused an increase in the price of rice. In Thailand and Vietnam, however, the price of rice remained stable due to their investments in rice and urea, which may also be commendable for the Philippines.
The 4th GAME Conference was organized by University of the Philippines Los Baños Department of Agribusiness Management and Entrepreneurship in partnership with DOST-PCAARRD.
These studies address the sustainable development goals of no poverty, zero hunger, decent work and economic growth, reduced inequality, and responsible consumption and production.
#SDG1NoPoverty #SDG2ZeroHunger #SDG4QualityEducation #SDG8DecentWorkEconomicGrowth #SDG10ReducedInequalities #SDG12ResponsibleConsumptionAndProduction