1. Private Sector Promotion (SMEDSEP) Program
Agribusiness Roadmap
Draft for Discussion | February 2009

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Authors
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Lydia Martinez lydia.martinez@gmail.com
Florence Mojica-Sevilla fmojica@uap.edu.ph
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Responsible
Uwe Sturmann uwe.sturmann@gtz.de
Publisher
The Private Sector Promotion Program
SMEDSEP
smedsep.ph
10F German Development Center
PDCP Bank Center Building
V A Rufino St cor L P Leviste St
Salcedo Village, Makati City 1227
PHILIPPINES
Volker Steigerwald, Program Manager
volker.steigerwald@gtz.de
February 2009

3. Private Sector Promotion (SMEDSEP) Program
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Agribusiness Roadmap
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Draft for Discussion | February 2009
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4. Contents
Overview ................................................................................................................. 4
Background.......................................................................................................... 4
Objectives ............................................................................................................ 4
Guide for LGUs in Assessing the Potential of and Enhancing the Competitiveness of
Agri-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
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Assessment (REA) for Agribusiness Development ................................................. 8
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Horticulture .................................................................................................... 11
Agronomy ....................................................................................................... 13
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Livestock/Poultry ............................................................................................ 16
Fisheries and Aquaculture ............................................................................... 18
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Step 3:Value Chain Analysis by Commodity/Industry Cluster .............................. 26
Step 4: Formulation of Strategic Objectives for Competitiveness ........................ 30
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Annexes ................................................................................................................ 31
Annex 1 Industry Cluster Framework ................................................................. 32
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Annex 2 Mango Agro-Industrial Cluster Framework ........................................... 33
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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
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5. Figures
Figure 1 4-Step Approach in Assessing Potential and Enhancing Competitiveness ... 6
Figure 2 Schematic diagram of working group members and their linkages. ............ 9
Figure 3 Illustration of Resource Map .................................................................... 24
Figure 4 Schematic Supply Chain ........................................................................... 26
Tables
Table 1 Convening Agent and Commitment ............................................................ 7
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Table 2 Horticulture Attributes / Pillars ................................................................. 12
Table 3 Cereal Crops Attributes/Pillars .................................................................. 14
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Table 4 Industrial Crops Attributes/Pillars ............................................................. 15
Table 5 Livestock and Poultry Attributes/Pillars ..................................................... 17
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Table 6 Fisheries/Aquaculture Attributes/pillars ................................................... 19
Table 7 Other Attributes that can Provide LGUs Comparative Advantages .............. 20
Table 8 Key elements of a Resource Survey ........................................................... 23
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Table 9 •Examples of Strategic Objectives ............................................................ 30
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6. Overview
Background
The National Competitiveness Council (NCC) is a public-private partnership created
through Executive Order No. 571 Series of 2006 with the primary objective of
improving 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 and
Industry and Former Ambassador Cesar Bautista. The NCC has focused its efforts on
six areas of competitiveness which are expected to bring about the intended
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results, which include:
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a. Transaction costs and flows
b. Efficient public and private sector management
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c. Infrastructure
d. Energy Efficiency
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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
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Working Group, the NCC organized the Local Government Unit (LGU) Conference
last October 8-9, 2008, with the theme “Harnessing LGU Leadership for Sustained
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Philippine Competitiveness”. The objectives of the event are to:
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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.
Objectives
The GTZ Private Sector Promotion Program (SMEDSEP) is provided support to the
NCC in carrying out the LGU Summit, specifically in the development of a guide for
assessing LGU competitiveness in Agri-business.
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7. The Guide intended for use by local government units in developing their potential
for agribusiness activities. It includes a checklist of attributes of competitiveness in
the agribusiness sector, a list of guide questions and indicators to assess their
potential in agribusiness as a whole, and an overall framework for developing the
local agribusiness industry to steer local initiatives towards enhancing their
competitiveness.
Guide for LGUs in Assessing the Potential of and Enhancing the
Competitiveness of Agri-business Activities in their Locality
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Agribusiness is defined as the sum total of all operations involved in the
manufacture and distribution of farm supplies; production activities in the farm;
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and the storage, processing, and distribution of farm commodities and items
derived from them.
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The chain of activities includes:
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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,
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e. marketing and distribution of fresh, processed and packaged goods, and
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f. financing of various activities.
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This Guide is intended for use by local government units in assessing and
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developing 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 that
the actual techniques and the manner in which they are used may be adjusted to
suit the local conditions.
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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
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•collect secondary data
Step 2: •collect primary data
Participatory
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•write report
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Resource Assessment
•prepare resource map
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•define area zones
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•value chain mapping
•quantify and describe value chains in detail
Step 3: •economic analysis of value chain
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Supply Chain Analysis
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•Based on competitiveness analysis attributes
•cost
•supply reliability
•customer service
Step 4:
Formulate Strategic •quality
Objectives •appropriate innovation
Figure 1 4-Step Approach in Assessing Potential and Enhancing Competitiveness
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9. Step 1: Ascertain Public and Private Sector Commitment to
Competitiveness 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
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and commitment among local stakeholders and agents of change. The
activity will also encourage transparency in the decision making for priorities
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in development initiatives.
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d. The expected results are:
1. Public and private sector consensus on the need to develop a
participatory Competitiveness Initiative;
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2. A high-level working group or committee that will help lay the
groundwork for future consensus on local competitiveness strategy;
and
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3. An understanding that competitiveness requires the private sector to
modernize its approaches and the public sector to undergo certain
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reforms.
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Table 1 Convening Agent and Commitment
Convening Agent Commitment
Local Government Unit Political will and commitment to promote agri-
business development
Regional Officers (DA, Encourage participation of key business leaders
DTI, DOST) Provide needed assistance to competitiveness
initiatives that will be formulated
Business Readiness and commitment to cooperate with
People/Entrepreneurs other stakeholders in agri-business
Chambers of Commerce Readiness and commitment to cooperate with
and Industry other stakeholders in agri-business
Encourage interests in agribusiness development
activities in the Municipality/City/ Province
among constituents and business leaders
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10. Convening Agent Commitment
Agriculture & Fishery Commitment to perform as advisory and
Council (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
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among constituents and business leaders
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Step 2: Conduct Participatory Resource Assessment or Rapid Economic
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Assessment (REA) for Agribusiness Development
Resource Assessment is learning about - -
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• local resources and assets that are primary means through which
communities can effect agribusiness development outcomes, and
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• the local people’s perspectives of the potential and current contribution to
development goals.
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Form the Working Group1
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• 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 Associations
1 Lundy, M. MV. Gottrett, R. Best and S. Ferris. 2007. A Participatory Guide to Developing
Partnerships, Area Resource Assessment and Planning Together, CIAT Publication No. 356:
CIAT Rural Agroenterprise Development, Good Practice Guide 2. CIAT, Cali, Columbia
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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
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the members of the working group.
• In most cases, the assessment/survey team would be guided and supported
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technically by professional groups as those in the local universities or
research institutions.
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Figure 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 = partner
agencies; Working Group = consortium of partners.
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12. Identify and Make Available Financial and other Resources for the REA
Possible sources of funds are:
• Municipal funds
• Private sector contribution/donation
• NGO co-financing
• On-going local development programs
• Donor agencies
Define the Assessment Area
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• 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
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municipality, a barangay, a cluster of barangays, or particular communities.
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Conduct Biophysical and Socio-economic Survey of the Area
• The next step is to conduct a REA to evaluate the assets and social skills
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available for agribusiness development. Members of the Research Team
could come from:
o LGU (Planning and Development Office)
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o Local Universities and Colleges
o Chamber of Commerce and Industry
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o Agriculture and Fishery Councils
o Farmers Associations
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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.
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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
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c. Logistics
d. Markets
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e. Extension Services
f. Business Environment
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Horticulture
Definition
Horticulture is the art, industry and science of plant cultivation.
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Horticulturists work and conduct research in the disciplines of plant
propagation and cultivation, crop production, plant breeding and genetic
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engineering, plant biochemistry, and plant physiology.
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Crops
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
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14. Table 2 Horticulture Attributes / Pillars
Infrastructure • 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-
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supply situation)
• Access to local/international ports, airports
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Land inputs Horticultural crops have varied characteristics and thus, the
requirements in terms of land size, elevation, soil, temperature
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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;
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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.
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• Soil requirements: e.g. well-drained clay loam or lighter
soil texture for mango; well-drained, loamy soil for
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banana; very deep, well drained soil preferably sandy loam
for carrots, rich heavy loamy soils for cauliflower; some
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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 crops
Others • Access to the right seeds/planting materials (through
accredited nurseries or established private seed companies)
• Pest and disease management program
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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, shipping
Markets • 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
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• Access to processing companies
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Extension • Presence of knowledgeable agriculturists/ agricultural
Services SS FO technicians working under the MAO or PAO
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• Availability of updated modern technologies
• Access to tri-media IEC materials
• Access to agri R&D firms and SUCs
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LGU Business • One-stop shop agribusiness center
Environment • Established clear-cut and coherent business policy
• Investment incentives (tax holiday, etc.)
• Organized farmers’ groups/associations
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• Comprehensive land use plan
• Security of land tenure
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Agronomy
Definition
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.
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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.
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Table 3 Cereal Crops Attributes/Pillars
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Infrastructure • Credit facility available for farmers and SMEs
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• Irrigation facilities
• Production facilities (tractor, seeder, harvester, combine)
• Farm to market road
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• 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)
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Land inputs • For rice, soil types with slowly permeable sub-soil with
clay or plow pan
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• Relatively level land but gently sloping toward drainage
canal
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• 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)
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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 stations
Extension Presence of knowledgeable agriculturists/ agricultural
Services technicians under the MAO and PAO
Availability of updated modern technologies
Access to tri-media IEC materials
Access to agri R&D firms and SUCs
LGU Business One-stop shop agribusiness center
Environment Established clear-cut and coherent business policy
Investment incentives (tax holiday, etc.)
Organized farmers’ groups/associations
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Comprehensive land use plan
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Security of land tenure
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Table 4 Industrial Crops Attributes/Pillars
Infrastructure • Credit facility for farmer groups
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• Irrigation facilities
• Production facilities (tractor)
• Farm to market road
• Processing facilities (drier, mill, refinery)
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• For biofuel feed stocks, extraction plant and biofuel plant
• ICT (to access farm vs. market price movements,
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demand-supply situation for both local and global)
Land inputs Industrial crops need large areas since these are usually
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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
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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 hills
Logistics • Transport facilities
• Warehousing facilities
• Handling facilities (truck scale, conveyor, forklift)
• Access to international ports, shipping
Markets • 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
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• Access to mills and processing facilities
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• Access to international markets
ExtensionSS FO • Presence of knowledgeable agriculturists/ agricultural
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Services technicians under the MAO or PAO
• Availability of updated modern production and processing
technologies
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• Availability of by-products and waste material utilization
technologies
• Access to tri-media IEC materials
• Access to agri R&D firms and SUCs
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LGU Business • One-stop shop agribusiness center
Environment • Established clear-cut and coherent business policy
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• Investment incentives (tax holiday, etc.)
• Organized farmers’ groups/associations
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• Comprehensive land use plan
• Security of land tenure
Livestock/Poultry
Livestock is the term used to refer (singularly or plurally) to a domesticated animal
intentionally raised for subsistence or for profit. It includes domestic animals, such
as 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.
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19. Table 5 Livestock and Poultry Attributes/Pillars
Infrastructure • 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
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• Warehousing facilities. For example, for feeds storage
• Available inter-island transport system
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freezers, refrigerators, coolers, cold rooms, refrigerated
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vans)
• Processing facilities (e.g. smoking, canning)
• ICT (to access farm vs. market price movements, demand-
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supply situation)
• Access to local/international ports, airports
Land inputs • Available land preferably far (10km radius) from housing
communities
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• Cooler areas for breeding farms (14-24 C)
• Flat areas for livestock and poultry raising
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• With zoning under local government regulatory powers
Logistics • Transport facilities. For example trucking services for live
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swine transport
• Cold chain. For example refrigerated van for transport of
slaughtered animals
• Handling facilities (truck scale, conveyor, forklift)
• Access to international ports, shipping
Markets • 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
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20. Extension • Active veterinary office within the LGU with knowledgeable
Services 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
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Definition
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Fisheries refers to all activities relating to the act or business of fishing,
culturing, preserving, processing, marketing, developing, conserving and
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managing aquatic resources and fishery areas, including the privilege to fish
or take aquatic resource thereof. The major fish species caught in the
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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
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fish and other fishery species in fresh, brackish and marine areas. The major
domestic commodities produced are seaweeds, milkfish, tilapia, shrimp,
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oysters and mussels in extensive, semi-intensive and intensive culture
systems in ponds, pens, cages and open coastal waters.
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21. Table 6 Fisheries/Aquaculture Attributes/pillars
Infrastructure • 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
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• Laboratory services (fish quality control)
• Maintenance shop
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•
ICT
Credit facilities
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Inputs • Power/water supply
• Quality raw material inputs (ships, boats, fishing gears,
fingerlings, skilled labor, etc.)
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• 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
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deposits of organic matter of about 16% & pH from 7 to 9
• For cage culture, water protected from strong wind action
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and water current with good circulation, dissolved oxygen
concentration on the water is at least 3ppm with
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temperature range from 20oC to 30oC and pH level from
6.8 to 8
Logistics • Transportation facilities
• Cold storage facilities
• Warehousing facilities
• Hauling and handling equipment
• Access to international airport and port
Markets • 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
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22. Extension • Fisheries and aquatic resources office within the LGU
Services • Fishery/Aquaculture technicians
• Modern fishing, fish processing and aquaculture
technologies
• Access to tri-media IEC materials
• Access to fisheries/aquaculture R&D firms and SUCs
LGU Business • One-stop shop agribusiness center
Environment • Established clear-cut and coherent business policy
• Investment incentives (tax holiday, etc.)
• Organized farmers’ groups/associations
• Comprehensive land use plan
• Security of land tenure
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There are other attributes that can provide comparative advantage for LGUs as
follows:
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Table 7 Other Attributes that can Provide LGUs Comparative Advantages
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• Technology and R&D • Indigenous/Homegrown techniques
Capability • Existing production systems
• Globally sourced technology
• Available information systems and
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processes
• Human Resources • Available manpower for labor requirement
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• Quality
• Quantity
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• 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
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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
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• •
• Packaging and processing supplies
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• Distribution Stations
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Communities
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• Location of • Location of different ethnic groups, or other
communities and their defined social groups, and their
relative populations identification
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• Land tenure structure • farmers who are owners, day laborers or
share croppers
• Level of social • do farmer groups exist, do they work
organization collectively
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• Level of business • do business groups exist, do they work
organization collectively)
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With 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. 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. Table 8 Key elements of a Resource Survey
Resource Key elements
Natural Resources
Land
• 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
Climate
Productive 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 them
Communities
• 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. Place the Information on a Resource Map
SI R
N
SS FO
O
C FT
Figure 3 Illustration of Resource Map 2
IS A
Define 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. 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 require
D 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. Step 3:Value Chain Analysis by Commodity/Industry Cluster
A value chain is a market-focused collaboration between different businesses that
work 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).
D
Figure 4 Schematic Supply Chain
An agri-business development plan must work within a framework wherein the
value chain is the core. A major tool is the industry cluster (Annex Figure 4). An
industry cluster is a strategic framework that provides a cohesive and integrated
approach for analyzing industrial development and competitiveness. A cluster is a
grouping of key and support industries, infrastructure and institutions that are
inter-linked and interdependent. It emphasizes the importance of support
industries, institutions and the links between such industries and the leading firms
(Porter 1990).
26

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 firms
The 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
O
Tier 1: Core Companies
C FT
• The dominant companies within the industry. (Analysis will follow the
supply/value chain approach)
IS A
Tier 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 or
feeds, biologics, for animals), processing supplies, packaging, machinery and
equipment, utilities, etc. The related and allied industries and services include
banking and finance, research and development, education and training,
industry/trade association as well as government and non-government institutions
that can affect the cluster performance.
Industry associations and institutions are key elements in a cluster. Industry
associations (e.g. National Federation of Hog Farmers in the Hog Industry, and
27

30. Chamber of Agriculture Fisheries and Allied Industries in Northern Mindanao) are
implementing institutions, and also the investors. In the public sector, the
Department of Agriculture and its agencies implements sectoral policies, support
services and regulation, the Department of Public Works and Highways is charged
with construction and maintenance of national roads, the Maritime Industry
Authority sets shipping rates, the Philippine Ports Authority sets shipping rates and
regulates the ports, the Land Transportation and Franchising Board for land freight
rates and regulation, Department of Trade and Industry for foreign trade and
incentives, etc.
SI R
Tier 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 FT
Cluster analysis enables the missing capacities within the cluster structure to be
addressed and the building of competitive advantage through the provision of
IS A
superior economic foundations. The competitiveness of an industry cluster
depends not only on the industry itself but also equally important, what is
D R
U
happening or what will happen to the supplier industries, support and related
industries as well as the institutions that influence them. Industry cluster
D
framework 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 map
3 Value links Manual, First Edition
28

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 information
D 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. 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:
O
Table 9 •Examples of Strategic Objectives
Value Chain Segment / Competitiveness Strategic Objective
C FT
Function Attribute
a. Input Supply
Example: Cost Decrease cost of feeds by 10%
next year (2009)
IS A
b. b. Production
Example: Supply Reliability Increase hog production by 20%
D R
U
next year (2009)
c. c. Processing
D
d. d. Marketing
e. e. Logistics
f. f. Consumption
30

33. Annexes
D RD
IS A
C FT
U
SS FO
SI R
O
N
31

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. 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. 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. 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