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VALUE CHAIN ANALYSIS OF CORN

(IN-TRANSITION TO ORGANIC) IN REGION 02

MARY EVALYN ROSE G. ROMERO

ABSTRACT

This study was conducted to explore the value chain of corn (in-transition to organic) in Region 02. Specifically, the study aimed to (1) map the core processes along the value chain, (2) determine the key players and their roles in the chain, (4) identify opportunities and challenges along the chain, and (5) determine the key players’ awareness of organic agriculture. Focus group discussion (FGD), key informant interviews (KII), and the survey method were used to gather data needed in the study. Three distinct value chains were identified and mapped in the study. These are the value chain of green corn, the value chain of corn grains milled for food and the value chain of corn grains as raw material in producing cornick.

In the value chain of green corn, the largest value added was created at the level of green corn farmers. Processors/retailers ranked second in terms of value creation while trader - wholesalers contributed the lowest share to value creation.

In the value chain of corn grains for food, the largest value added was created at the level of the retailers. Farmer practitioners ranked second in terms of value creation whereas village corn millers contributed the lowest share to value creation.

In the value chain of corn grains as raw material in processing cornick, the largest value added was created by cornick processors. Retailers ranked second in terms of value creation. Corn grain traders ranked third in terms of value creation. Corn farmers contributed the lowest share to value creation.

In the input subsystem, seed producers and organic fertilizer manufacturers were hampered by high cost of production. Organic fertilizer manufacturers were further impeded by the scarcity of substrates or raw materials for producing organic fertilizer and inadequate technical training. However, the growing number of farmers participating in organic farming and the rising demand for organic meat were viewed as promising opportunities among organic input suppliers.

In production, corn farmers are constrained by: (1) the laborious nature of natural farming methods, (2) the high cost of farm labor, (3) lesser yield relative to conventional farms, (4) the rigorous documentation requirements for certification and accreditation. In marketing, farmer - practitioners were constrained by: (1) the lack of developed distribution and marketing outlets for organic/chemical free green corn and corn grains, and (2) the absence of price premiums. In spite of these obstacles, corn farmers continue to adopt natural farming methods because of tremendous government support and the growing awareness on the benefits of natural farming.

Traders were hampered by: (1) limited and unstable supply of organic or chemical free corn, and (2) the absence of second or third level certification among farmers which makes it difficult to enter the niche market for organically grown or chemical free green corn or corn grains where prices are higher. However, traders are stimulated by the presence of few or absence of competitors and growing consumer awareness on the benefits of consuming organic products.

Processors/retailers are constrained by the inability of consumers to distinguish chemical free form conventional products. In the processing of cornick in-organic additives are used. Village millers were constrained by the increasing cost for repairs and maintenance, and the rising cost of fuel and electricity. However, processors and retailers were encouraged by the growing consumer awareness on the benefits of consuming organic products.

Consumers were constrained by: (1) the absence of accessible accredited market outlets, (2) quality uncertainty; (3) higher prices, (4) the limited supply of organic or chemical free and conventional green corn. Nevertheless, the increasing number of farmers practicing organic farming could mean safer and healthier food to households.