Exchange Cost and Supply Chain Management: The Case of Export Mango and Small-hold Banana Marketing in the Phili

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Exchange Cost and Supply Chain Management: The Case of Export Mango and Small-hold Banana Marketing in the Philippines A.P. Aquino, E.O. Chestnut and R.B. Daite PCARRD-DOST, The Philippines International Workshop on "Circumstances and Challenges in the World Markets for Fruits and Tropical Products" Guangzhou, China, 29-30 November 2007

Introduction A bunch of issues goes up against the horticultural promoting in the Philippines Low esteem expansion, shameful item taking care of, lacking post-reap offices, poor foundation, and wasteful advertising data stream are some of these issues. Coordinations related cures are the standard medicine yet they miss the mark in enhancing the proficiency of the production network.

Introduction There is a need to outline these issues and arrangements in light of rising improvements in new institutional financial aspects (NIE) and microeconomics of rural promoting. That edge is the Supply Chain Management (SCM) approach.

This paper… Focuses on the relationship between Transactions Cost Economics and Supply Chain Management. Highlights the human and institutional measurement of the present coordinations centered production network talk and exact works. Contextual analyses: Philippine fare mango and little hold banana showcasing

Sections SECTION I: The Philippine Tropical Fruit Industry: An Overview SECTION II: Supply Chain Management and Transaction Cost Economics: The Concept SECTION III: Supply Chain Management Issues Related to Philippine Fruits: The Case of Export Mango and Small-hold Banana SECTION IV: Coordinated Supply Chain: An Option to Minimize Transaction Cost Conclusion

The Philippine Tropical Fruit Industry Tropical natural products contribute to a great extent to the Philippine economy: Banana, pineapple, and mango are among the top yields as far as zone, amount, and estimation of creation Also among the nation's top farming fares as far as volume and esteem The nation likewise figures well in the universal exchange of major tropical organic products; esp. in world exchange banana, pineapple, and mango

The Philippine Tropical Fruit Industry Table 1. Farming harvest regions, 2003-2005. ITEM 2003 2004 2005 in '000 ha % of TOTAL in '000 ha % of TOTAL in '000 ha % of TOTAL CROPS 11,930.0 100 12,231.0 100 12,034.2 100 PALAY 4,006.4 33.6 4,126.6 33.7 4,074.4 33.8 CORN 2,409.8 20.2 2,527.1 20.7 2,441.8 20.3 COCONUT 3,216.5 27.0 3,258.6 26.6 3,243.3 27.0 BANANA 408.0 3.4 414.5 3.4 417.8 3.5 PINEAPPLE 47.7 0.4 48.2 0.4 49.2 0.4 MANGO 155.9 1.3 158.9 1.3 164.1 1.4 OTHERS 1, 685.7 14.1 1,697.1 14.6 1,643.6 13.6

The Philippine Tropical Fruit Industry Table 2. Agrarian Production by kind of harvest, Philippines 2003-2005 (amount in thousand metric tons; esteem in million pesos at current costs) CROP 2003 2004 2005 QUANTITY VALUE QUANTITY VALUE QUANTITY VALUE TOTAL 71,311.9 330,702.3 75,150.7 383,803.1 73,725.9 409,506.8 PALAY 13,499.9 117,989.0 14,496.8 136,994.6 14,603.0 155,668.1 CORN 4,615.6 32,540.2 5,413.4 47,204.8 5,253.2 40,291.7 COCONUT 14,294.2 39,023.2 14,366.2 51,718.2 14,824.6 52,775.5 BANANA 5,369.0 30,066.2 5,631.2 35,476.9 6,298.2 43,520.8 PINEAPPLE 1,698.0 10,510.3 1,759.8 8,869.4 1,788.2 9,334.5 MANGO 1,006.2 14,660.0 967.5 16,137.6 984.3 16,647.7 OTHERS 30,829.0 85,913.4 32,515.8 87,401.6 29,974.4 91,268.5

The Philippine Tropical Fruit Industry Table 3.a Volume of top horticultural fares, Philippines, 2003-2005 ITEM 2003 2004 2005 VOLUME OF TOP EXPORTS ('000 MT) Coconut Oil (Crude and Refined) 1,186.36 959.40 1,152.32 Banana, fresh 1,829.38 1,797.34 2,024.32 Pineapple & Products 500.53 527.56 536.72 Desiccated Coconut 106.80 105.83 125.54 Mango, fresh 35.78 33.66 31.27 SOURCE: Bureau of Agricultural Statistics, Philippines

The Philippine Tropical Fruit Industry Table 3.b Value of top rural fares, Philippines, 2003-2005 ITEM 2003 2004 2005 VOLUME OF TOTAL AGRICULTURAL EXPORTS (FOB in Million $) 2,311.02 2,506.70 2,691.19 VALUE OF TOP EXPORTS (FOB in Million $) Coconut Oil 504.86 577.79 657.22 Banana, fresh 333.00 326.40 362.58 Pineapple & Products 169.18 176.65 204.28 Desiccated Coconut 95.74 99.74 127.14 Mango, fresh 31.01 28.74 26.63 SOURCE: Bureau of Agricultural Statistics, Philippines

The Philippine Tropical Fruit Industry Table 4. Percent share of chose Philippine fares in world market, 2004 COMMODITY TRADE Philippine World Philippines Share VOLUME OF TOTAL EXPORTS ('000 MT) Coconut Oil 2,032.53 959.40 47.20 Banana, fresh 16,262.61 1,797.34 11.05 Pineapple & Pineapple Products 3,532.25 527.56 14.94 Mango, fresh 908.44 33.66 3.71 SOURCE: Bureau of Agricultural Statistics, Philippines