S7.4 MAIZE VALUE/SUPPLY CHAIN AND POST HARVEST MANAGEMENT IN THE PHILIPPINES

MAIZE VALUE/SUPPLY CHAIN AND POST HARVEST MANAGEMENT IN THE PHILIPPINES

Artemio M. Salazar, IPB, UPLBCA

11th ARMW, Nanning, China November 6-11, 2011

• From the Perspective of a Biologist, not an economist.

• Will dwell more on the process than economic parameters (supply vs value)

• Clearer understanding of Philippine maize industry could only be made if we separate the yellow from the white – the flint type.

Agriculture Supply Chain in

the Philippines

Agrikulturang Pinoy or Agri-Pinoy

Set of principles and practices focused on developing Philippine resources and capabilities to meet Philippine needs

Four guiding principles of Agri-Pinoy:

o Food Security and Self-sufficiency o Sustainable agriculture and fisheries o Natural resource management o Local development

Key elements of Agri-Pinoy: o Broad-based o Partnership o Farm to Table o Sustainable Farming Systems o Resiliency

- The “Farm” represents interventions in production; from soil and water management, extension, seeds and fertilizers, post-harvest processing, credit and marketing etc. - The “Table” represents the DA’s intervention to ensure food security, safety and quality for the consumers

SCHEMATIC SUPPLY CHAIN

INPUT SUPPLIERS

GROWERS PROCESSORS DISTRIBUTORS RETAILERS CONSUMERS

SEED SUPPLIERS BREEDERS RESEARCHERS PROPAGATORS DEALERS

ABATTOIR CANNERY MILL ETC

RESTAURANT HOTELS SUPERMARKETS ETC

FARMER GROWER FISHERS PASTORALIST

WHOLESALER IMPORTER EXPORTER TRANSPORT PROVIDERS

YOU YOUR FAMILY FRIENDS & ME

Supply Chain Definitions The network of organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate consumer.

A network of connected and interdependent organizations mutually and co-operatively working together to control, manage and improve the flow of materials and information from suppliers to end-users.

Agribusiness

The sum total of all operations involved in the manufacture and distribution of farm supplies; production activities in the farm; and the storage, processing, and distribution of farm commodities and items derived from them

YELLOW MAIZE SUPPLY CHAIN

INPUT SUPPLIERS

FARMERS TRADERS/ PROCESSORS

BIG TRADERS DISTRIBUTORS

CONSUMERS

SEEDS FERTILIZERS MECHANIZATION

POST HARVEST FACILITY

PRODUCTION FARMS

FARMER


DIRECT AND ULTIMATE-

• Let us start with the end part of the chain as this will largely determine the early parts of the chain

• Yellow maize is mainly for feeds

INPUT SUPPLIERS



CONSUMERS

INPUT SUPPLIERS



CONSUMERS

National requirement of yellow corn for meat outstrips local production necessitating importation, mainly feed wheat

Feed

Wheat

Yellow

Corn

ADDRESSING THE LOGISTICS CONCERN

Excess corn production from Mindanao and Cagayan Valley used to be shipped to

greatest concentration of feedmills in Luzon & Visayas. The government had instead

intensified production in Luzon due to high transport cost from Mindanao

INPUT SUPPLIERS



CONSUMERS

The Logistics Concern

The Future:

• The demand for meat and consequently, yellow maize, will intensify.

• Uncertainty of supply of yellow maize in the world market due to the use of the grain for ethanol by the world’s biggest maize supplier, USA

• The supply and price of feedwheat could not be relied upon because of the climate change (East Europe and Australia)

• The regional trade association where Philippines is member of would bring down tariff barriers to traded goods as early as 2015. The entry of cheap meat from the outside would significantly depress the local livestock and yellow maize industries.

INPUT SUPPLIERS



CONSUMERS

The Future:

• There is a pressing need to be self sufficient for this grain!

INPUT SUPPLIERS



CONSUMERS

INPUT SUPPLIERS



CONSUMERS

The Critical Post Harvest Phase

Philippines receives on average 2,061 mm (81.1 in) of precipitation annually with most of it from June to October

Number of Tropical Cyclones by Category in the Philippine Area of Responsibility, 948 to 2007 Source: PAGASAwww.typhoon2000.com

INPUT SUPPLIERS



CONSUMERS

The harvest of the main cropping season is almost always wet.

Average Corn Production & Daily Rainfall, 1999-2002

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Corn Production 1,119,796 884,522 1,594,939 911,133

10.43%



Corn Production 1,119,796 884,522 1,594,939 911,133

10.43%



Corn Production 1,119,796 884,522 1,594,939 911,133

10.43%



Corn Production 1,119,796 884,522 1,594,939 911,133

10.43%



Corn Production 1,119,796 884,522 1,594,939 911,133

10.43%

AVERAGE MONTHLY DISTRIBUTION OF YELLOW CORN, CY 2001-2003 vs

AVERAGE MONTHLY RAINFALL FOR THE LAST THIRTY YEARS

0

50

100

150

200

250

300

350

400

450

500

550

Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

M o n t h s

Pro

du

cti

on

('0

00

mt)

0

50

100

150

200

250

300

350

Av

e. R

ain

fall (

mm

)

Rainfall Production

Post harvest is a serious concern during the wet season

INPUT SUPPLIERS



CONSUMERS

• The high amount of rainfall during the wet season (May-August) has serious implication to corn quality. Aflatoxin contamination is common in those areas with no mechanical dryer. Usually, price of maize goes down at harvest time during this season.

• The issue of Philippine maize industry is an issue of grain quality.

• Multi-purpose drying pavements for solar drying have been provided but they are not enough when harvest is plenty and rainy period is extended. Big mechanical dryers are very expensive. One encouraging development is the investment of the private sector in this matter.

INPUT SUPPLIERS



CONSUMERS

These are found in Bukidnon- the

biggest maize producing province

in Mindanao. Maize in cobs are

bought from the farmers. The

facility takes care of the drying and

shelling. These guys then sell to

the big feedmillers or use them

themselves.

A bigger one was established in Isabela – the biggest maize producing province in Luzon. This is accordingly the biggest post harvest facility in Southeast Asia. Capacity is 200K tons cobs with 60,000 ton capacity silos. Two more will be established by the company.

INPUT SUPPLIERS



CONSUMERS

• The effect of such facility was felt at once during wet season harvest in Isabela. Instead of going down, the price of maize went up by 30%. There was a 4-km line of trucks waiting for their corn harvest to be processed.

• The government is doing its part in providing smaller and therefore less expensive post harvest facility to small farmer cooperatives

The Future ?

• This is one area where the country is making headway. It started with just one company. Two more are coming in and hopefully more will participate.

• Expanding processing and storage capacity for at least one season of harvest will stabilize the supply and price of yellow maize in the country

INPUT SUPPLIERS



CONSUMERS

The Production Phase

• Average yield is 3.63 tons/ha (official data) planted in 1.16 M has. Operational figure is 5 tons/ha to be profitable. About 90% of the area is planted to hybrids. The three big multinationals are here-Pioneer, Monsanto and Syngenta. Bioseeds is also getting strong . There are also some locals

• The percentage planted to GMOs - Bt and RR, marketed by the multinationals, is expanding.

• There is not much concern about GMOs as we are not exporting corn nor meat

• There is an on-going Site Specific Nutrient Management Program by the Dept of Agriculture in collaboration with IPNI

• Planting and harvesting are basically manual

INPUT SUPPLIERS



CONSUMERS

The Production Phase

Challenges:

• Drought tolerance because 95% is rainfed. Freak drought occurs even during the wet season especially in Luzon

• Abiotic stresses like water logging especially during early dry season cropping, acidity due to nature of the soil (like in Bukidnon and portions also of Cagayan Valley)

• Disease resistance because most of the areas are continuously planted to corn. Condition is generally warm and humid. Need for close monitoring of disease, insect and rodent outbreaks

• Financing

INPUT SUPPLIERS



CONSUMERS

The Future?

• More gains in yield and stability are expected with strong participation of the different seed companies especially the multinationals

• Stability traits would cover biotic and abiotic stresses

• As in the past, the public sector R&D has not been competing with the private sector. It keeps updated however in latest technologies as support to capability building of locals employed in the different seed companies.

INPUT SUPPLIERS



CONSUMERS

WHITE MAIZE SUPPLY CHAIN

INPUT SUPPLIERS



CONSUMERS

SEEDS FERTILIZERS MECHANIZATION

POST HARVEST FACILITY

FARMER


DIRECT

• White maize, the flint/denty type, is mainly for food.

• Most of the white corn produced by the marginal corn farmers are consumed at the household level.

• Some quantity is shipped for food purposes in identified corn eating areas like Cebu. White maize there comes from Mindanao, mainly Bukidnon.

• White maize for food is mostly in the South.

• We have been self sufficient in white maize

INPUT SUPPLIERS



CONSUMERS

• White maize, the flint/denty type, is mainly for food.

• The yield of white maize is 1.16 tons/ha planted in 1.34 M has.

• Most of the white corn produced by the marginal corn farmers are consumed at the household level.

• Some quantity is shipped for food purposes in identified corn eating areas like Cebu. White maize there comes from Mindanao, mainly Bukidnon.

• White maize for food is mostly in the South.

• We have been self sufficient in white maize

INPUT SUPPLIERS



CONSUMERS

CORN: DOMESTIC PRODUCTION, 2001-2010

Source: BAS AAGR ≈3.85% ≈1.65% ≈5.46%

4.51

7.03

6.38

1.89

2.32

2.17

2.62

4.72 4.21

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Mil

lio

n M

T

Combined White Yellow

• There are very few seed companies working on white maize hybrid basically because of lack of market. White corn farmers are usually poor

• Seeds are of the open-pollinated type either native varieties or open-pollinated cultivars. The farmers , marginal at that, could not afford to buy hybrid seeds or fertilizers. Various sorts of biotic and abiotic stresses including low level of inputs.

• Native varieties are mostly early maturing, low yielding, tolerant to stresses but of good (eating) quality. The public sector R&D is working more on this.

INPUT SUPPLIERS



CONSUMERS

The Future

• There is a sizable rural population in the uplands dependent on maize

• To improve their status, market should be developed to enhance their productivity

• The government is now considering white corn as part of its food security plan thru food diversity approach. Rice importation is only 10% of national requirement which can be readily provided by white maize. The government is launching the Corn for Health program based on white QPM. It has promotional, production and quality assurance components.

• The plan is to provide the different regions with foundation seeds. They will then produce the registered seeds for distribution to the provinces and municipalities and finally to the farmers.

INPUT SUPPLIERS



CONSUMERS

Summary

• Developments in the yellow maize industry point towards positive growth with greater private sector participation

• There is far greater challenge in white maize. The more farmers there need more help.

Thank you!

Education

S7.4 MAIZE VALUE/SUPPLY CHAIN AND POST HARVEST MANAGEMENT IN THE PHILIPPINES