Analyzing Marketing Margins and Their Implications in Improving Performance of Small-Scale Producers in the Calamansi Chain in Region XI, Southern Philippines

Abstract

Due to its wide range of uses and profitability, calamansi or calamondin (Citrofortunella microcarpa) is considered a high-value crop of the Philippines. But while there are many studies on the various uses of calamansi parts and technologies developed to help farmers, there is a dearth of studies on the structure and operation of the calamansi marketing chain and analysis of marketing margins of producers and other intermediaries. The present study aimed to examine marketing margins to understand the marketing system of the calamansi industry in Region XI, Southern Philippines, and identify opportunities, challenges, and solutions to improve the chain. A price transmission model was estimated using secondary data and supplemented by calculation of net margins for farmers, wholesalers, processors, and retailers using primary data collected from key informants. Results show that farm, wholesale, and fuel prices significantly explained changes in selling or retail prices. Price transmission elasticity is higher from farm to wholesale than from farm to retail, which implies that changes in farm prices are reflected more in wholesale than retail prices. Farmers received better margins even though calamansi is always subjected to seasonality of prices. Processors and wholesalers also earned positive net margins, but some retailers incurred negative net margins because of incidence of shrinkage/wastage. Given that this occurs very rarely, and with better management, retailers can still expect to gain positive net margins. Major actors in the chain may benefit by effectively managing costs, particularly post-production and wastage costs. A package of assistance that includes technology improvement, access to market, and credit is necessary to help farmers, as well as intermediaries, enhance productivity and manage costs to improve their performance in the chain.