WORKING PAPER
DEPARTMENT OF AGRICULTURE AND JAPAN INTERNATIONAL COOPERATION AGENCY
Formulation Team on the Drafting of the Strategic Agribusiness Development Plan
COMMODITY SITUATION REPORT: PAPAYA
TABLE OF CONTENTS I.
OVERVIEW…………………………………………………..……….………………..
A.
Background ………………………….…………………...……….………….….
B.
1 1
Contribution to the Economy………………………….……………… ………………………….……………….…..….... 1
SITUATIONAL ANALYSIS ………………………….…………………….…..…..….... 2
II.
Production ………………………….……………………………….…..….…....
A.
1
.
2
World Production………………………….…………………..…..…..….…. 2 a. Major Producing Countries ………………..………………….………... 2 b.
2
.
Productivity and Competitiveness…………………….…..…………….. 3
Domestic Production……………………………………………….………... 4 a. Major Producing Provinces ………………..……………….…..…...….. 4
B.
b.
Volume, Area planted and Productivity…………………….…..…...….. 5
c.
Value of Production ………………………………...…….…..…………. 5
Supply and demand ……………………………………………….…..…..……..
7 7
1
.
Supply ……………………………………………..………….…..….….…...
2
.
Demand ………………………….………………………………….. ………………………….…………………………………...…....…. 8 a.
World Demand(Exports)
b. Domestic Demand
………………………….……...……...…..….
8 9
LIST OF FIGURES Figure
Page
Percentage Share of Papaya to Total Value of Agricultural Crops and Gross Value Output, 1998-2008. ........................
2
2
Papaya Top Producing Provinces (MT), 2008
..............
4
3
Production (MT), Area (Ha) and Yield (MT/Ha) of Papaya, Philippines 1998 – 2008
.............
6
............
7
Philippine Share of Papaya to World Export Quantity (MT), 1998-2007
.............
9
Philippine Share of Papaya to World Export Value (in ‘000 $), 1998-2007
.............
10
Philippines’ Top Export Markets of Fresh Papaya (MT), 1998-2008
............. .............
10
1
……………………………….................................
…………………………….....
…………………………………................................
4
Value of Production (in Million Pesos) of Papaya, at Constant prices, 1998-2008.
……………………………………………......
5
…………...……............................................................................... …………
6
…………………………………………………………………...... …………………………………………………………………......
7
………………………………………………..................................
8
Philippines’ Top Export M arkets arkets of Dried Papaya (MT), 1998-2006
11
LIST OF TABLES
Table
1
Page
World Production of Papaya (MT) by Top Producing Countries, 1998-2007
……………………………………………………….. ………………………………………………………..
3
2
Yield of Papaya by Top Producing Countries (Hg/Ha), 2007
3
3
Volume of Papaya Production (MT), by Top Producing Provinces, Provinces, 1998-2008
5
4
Supply and Utilization of Papaya (in MT), 1998-2008
8
5
Producers’ Price of Papaya of Top Producing Countries (US$/MT), 1998-2006
18
Issues/Gaps and Recommendations for Input Supply and Farm Production Subsystem of Papaya Industry
24
Issues/Gaps and Recommendations for Postharvest, Processing Subsystem, Marketing, and Support Subsystem of Papaya Indusry I ndusry
25
……………… ………………
…………………………………………………………………..
……………………...
…………………………………………………………………… ……………………………………………………………………
6
……………………………………………….
7
……………………..
LIST OF ANNEXES
Page
Table
1
Value of Production in Agriculture by Type of Valuation, Sub-sector, 1998 – 2008
27
Updated average production costs and returns of papaya (in pesos per hectare), Philippines 1998-2008
28
……………………………………………………..
2
……………………………...
I. OVERVIEW
A. Background Papaya (Carica papaya ) is one of the very popular tropical fruits belonging to the cactus group of plants. It is a large tree-like plant, the single stem growing from 5 to 10 meters tall, with spirally arranged leaves confined to the top of the trunk. The lower trunk is conspicuously scarred where leaves and fruit were borne. The leaves are large, 50-70 cm diameter, deeply palmately lobed with seven lobes. The fruit is cylindrically long, pear shaped or round, it is orange-to-orange-red, sweet and juicy when ripe (BPI, 2009).
Grown almost throughout the country, papaya serves as a backyard and a plantation crop. It is also grown under the multiple cropping system, usually with coffee, coconut, and pineapple. Several varieties of papaya are grown in the country. These are Solo, Solo, Cavite special, Legaspi special, Morado, and the Sinta hybrid. The varieties of papaya are distinguished through their contrasting characteristics such as short (dwarf) versus tall stature, green versus purple petiole, yellow versus red flesh, and small versus large fruits (PCARRD, 1984) . Papaya has wide variety of uses. Ripe papaya is eaten fresh as breakfast and dessert fruit. It is made into fruit salad or juice and can be processed as jelly, marmalade, candies, and crystallized fruits. Green fruits are pickled or cooked as vegetable. Flowers and young young leaves may also be eaten. Papain extracted from green mature fruits has industrial uses (for
Figure 1. Percentage share of papaya to total value of agricultural crops and agricultural output, 1998-2008. (Source: BAS, 2009)
Table 1. World production of papaya (MT) by top producing countries, 1998-2007.
(Source: FAO, 2009)
b) Productivity and competitiveness. competitiveness. The country‟s yield has shown a strong edge among the other top producing countries such as Nigeria, India, and the Democratic Republic of Congo. In 2007, the Philippines is seventh among the major producing countries with the highest yield or average land productivity. However, it should be noted that the
2. Domestic Production
a) Major Producing Provinces. Papaya Hawaiian or solo papaya is the major variety produced in the country. In 2008, 2 percent (48,792 MT) of papaya‟s national production is produced in South Cotabato, the major producer in the country. This is 7 percent higher than the production of the next major producer, Misamis Oriental (35,727 MT). In the same year, other major producing provinces such as Davao del Sur, North Cotabato, and Quezon has contributed 7.6 percent, 4.5 percent, and 3.2 percent, respectively, to the country‟s papaya production.
Table 3. Volume of papaya production (MT), by top producing provinces, 1998-2008.
(Source: BAS, 2009)
b) Volume, area planted and productivity. The gradual increase in area planted to papaya is accompanied by a significant growth in its production and yield (Figure 3). A closer look on the average growth rate of production and yield (6 percent and 4 percent, respectively) vis-à-vis the average growth rate of area (2 percent), exhibits a greater value and opportunity to improve the sector‟s level of productivity and competitiveness, especially through area expansion.
Figure 4. Value of production (in Million Pesos) of papaya, at constant prices, 1998-2008. (Source: BAS, 2009)
Table 4. Supply and utilization of papaya (in MT), 1998-2008.
Note: SU- Supply Utilization
(Source: BAS, 2009)
UT – Utilization
Meanwhile, data of the export market for dried papaya in 2007 and 2008 is not available. Figure 8 shows the top export market for dried papaya from 1998 to 2006. In 2006, 53 percent of the total exported dried papaya was shipped to Hongkong. It is also notable that the country has uninterrupted exports of dried papaya in Australia during 1998-2006.
b) Domestic demand. As mentioned earlier, total production is more than enough to meet the domestic demand. Based on the supply and utilization account (Table 4), an average of 92 percent of the gross supply (1998-2008) is available for food consumption. In addition, per capita consumption is increasing at an average of 4 percent. This implies an increasing demand for papaya due to the shift of people to a more modern yet healthy lifestyle.
Figure 6. Philippine share of papaya to world export value (in „000 $), 1998-2007. (Source: FAO, 2009)
Figure 8. Phili ppines‟ ppines‟ top export markets of dried papaya (MT), 1998-2006. (Source: DA-BAS, 2009)
C. Value-Chain System
The papaya industry involves many players. A brief overview of its value chain system is shown in Figure 9.
c) Agricultural Machinery. Machine, tools, and equipment rentals have minimal share (an average of 1 percent) to all production costs. Further, from 1998 to 2008, its share is gradually decreasing at an average of 5 percent (Annex 2).
d) Labor. Hired labor and operator/family labor are also major cost drivers. Their average shares to the production cost are 24 percent and 6 percent, respectively. Even so, their shares are also gradually cut at an average of 0.6 (hired labor) and 0.2 (operator/family labor) percentages (Figure 10).
2. Farm Production Subsystem
The Philippine papaya production, except for the export variety Solo, is widely dispersed and mostly run on a backyard scale. The cultural requirements include land preparation, planting, water management, weed control, fertilization, and pest and disease management (PCARRD, 1984).
3. Postharvest Postharvest Subsystem
Papaya generally starts to flower after 5 months from seedling and the first harvest is obtained 4 to 5 months later. The productive lifespan of papaya gradually ends on the 3rd or 4th year. As the tree matures, production also slackens. The yield of well-managed papaya plantation is 35 to 40 tons per hectare (BPI, __). a) Packing. A good method of packing is to place the fruits in single layer in a rectangular wood container lined with dried banana leaves or shredded newsprint to protect the fruit against the normal hazards of transport and handling. b) Storing. Ripe papayas may be stored at 8.3C and partially ripe ones at 11.9C. At these temperatures, the fruit can be kept for 3 weeks. To avoid chilling injury, which is manifested by impaired ripening, do not store less mature fruit below 7.1C.
4. Processing Subsystem. The major forms of processed papaya in the Philippines are dried papaya and canned tropical mixed fruit cocktail containing papaya cubes, pineapple, nata de coco and palm, among others. There are three major companies engaged in canned fruit cocktails- Dole Philippines Inc., Del Monte Philippines, Inc., and T‟Boli Agro Industrial, Inc. (TADI). These companies enter in contract growing or marketing arrangements of papaya with selected producers using preferred cultivars of the companies. Dried papaya is also processed and marketed by large and medium size companies including T‟Boli Agro and Orient Food Inc., among others.
Figure 11, 12 and 13 show the geographical flow and market channels for papaya in Misamis Oriental, Cavite, and Aklan. Supplies of papaya in Misamis Oriental came mainly from the municipality of Tagoloan and barangays Talusan, Poblacion, Lubia, Claveria, Linggangao and San Isidro of Balingasag. Major outlets were Balingasag, Agora and Carmen markets in Cagayan de Oro City. Papayas were sold to Bugo and Tagoloan in Cagayan de Oro City. Other outlets included Iloilo, Cebu, Bacolod and Metro Manila cities The outlets of papaya farmers in Misamis Oriental were interregional assembler-large distributors, processors and other farmers. The fruits were distributed further by large distributors to processors, buyers outside the province and to retailers.
The farmers sold papaya to the agent and/or buyers outside the province (BOP) at the supply area and to the assembler-distributors in the trading centers. The agent distributed the collected/procured fruits to assembler-distributors, institutional buyers and BOP. Traders‟ outlets were processors, BOP and co-traders. Retailers sourced their products from small distributors.
Figure 13. Geographic flow and marketing channels of papaya in Aklan, 2001.
D. Prices
1. World Prices
The Philippines is one of the top producing countries with low producer price. From 1998-2006, the average producer‟s price was US$132.72. This is lower than the top 3 producing countries such as Brazil, Mexico and Nigeria. If the production will continuously increase, the lower producer price could be one of the advantages of the country to expand its export market.
Table 5. Producers‟ price of papaya of top producing countries (US$/MT), 1998-2006.
Figure 14. Prices of hawaiian papaya, 1998-2008. (Source: BAS, 2009)
As depicted in Papaya Hawaiian price ratios (Figure 16), wholesalers have greater advantage over the farmers and retailers.
prevailing price plus mark-up, and all other costs such as transportation, food, etc. Depending on the supply levels of the producing provinces, where trading occurs, the quoted price may vary. On the day of the trader‟s procurement of stocks, this price will be the benchmark of the buying prices in the provincial trading center or farm. Note however, that wholesale buying price of papaya may tend to lower due to the availability of substitute of competitor fruits. Metro Manila traders, who also go to the trading center or production area, sell some of these substitutes.
Wholesale Market Provincial assembler. Price of papaya in wholesale market tends to have minimal variation. In fact, medium distributors, medium to small distributors, and traders from provinces, who are sourcing their commodity from the same trading center or production area, tend to have similar wholesale selling prices. In addition, traders who are based in the same market may have procured papaya stocks together since they are relatives of friends (kumpadre).
Although sizes of sorted papaya vary, traders who are transacting with their regular buyers (suki) (suki) may tend to give discounts other than the prevailing price.
Retail Market
E. SWOT Analysis
SWOT identified for the papaya industry is as follows (NAFC-DA, 2002): Strengths •
•
•
•
Suitable agro-climatic conditions for production Fast growing crop and year round production Versatile crop with varied uses Advantageous geographical position of the Philippines relative to export markets like Japan, Korea, Taiwan, Hong Kong and China. The transit time for fresh papaya to reach these markets is shirt, hence, facilitating its distribution at the shorttes possible tinme in its fresh state.
Weaknesses •
•
•
Diseases and pest, especially the ringspot virus (RSVP) that limit the productivity of papaya plants Poor adoption of technologies that would otherwise enhance the productivity of plants and quality of fruits Inefficiency of distribution system brought about by poor infrastructure, inefficient information system and lack of postharvest facilties
F. Problem Tree Analysis
Figure 17. Problem tree analysis of papaya industry.
23
III.SUMMARY, III. SUMMARY, ISSUES AND RECOMMENDATIONS
The industry trends have shown that papaya production is increasing both in quantity (6%) and area (2%) from 1998 to 2008. It is interesting to note that a gradual increase in the area is accompanied by a significant growth in yield (4%). Aside from the strong edge of the industry‟s productivity, it has also been one of the top producing countries with a low producer price. This gives a greater opportunity for the industry to expand its potential markets abroad. Summary of constraints and required actions for each subsystem of papaya industry are presented in the following tables.
Table 6. Issues/gaps and recommendations for input supply and farm production subsystem of papaya industry. Input Supply
Issues/Gaps Certified Seeds and seedlings are not readily accessible to growers due to limited availability and high price Prospective growers do not have adequate knowledge in raising seedlings
Recommendation Intensify seed production. Train farmers on how to do it properly Conduct training on seedling production
Table 7. Issues/gaps and recommendations for post harvest, processing subsystem of papaya industry, marketing, and support subsystem. Post harvest
Issues/Gaps Poor access and adoption of improved, advanced packages of postharvest technologies Low awareness on proper postharvest handling
Processing Poor quality of planting material due to anthracnose and stem end rot infestation causing reduced recovery rate High cost of sugar compared to other countries cost of fuel/electricity incurred during High syruping High cost of packaging materials Lack of awareness of importing country standards
Recommendation Conduct massive training on postharvest handling technologies Establish post harvest clinic to address postharvest-related concerns in the area Conduct capability building
Conduct extensive IPM training
Tariff reduction comparable with countries
to other
levels Asian
Compilation/Updating of importing country standards and dissemination of these information to processors
IV. REFERENCES
Bureau of Agricultural Statistics, Department of Agriculture (1992). Marketing and Information Needs Assessment for Davao City. Technical Report. Bureau of Agricultural Statistics, Department of Agriculture (2003). Marketing Costs Structure for Papaya. Series No. 4. Bureau of Agricultural Statistics, Department of Agriculture (
).
Bureau of Plant Industry, Department of Agriculture. Production Guide on Papaya. Retrieved on August 2009 from www.bpi.da.gov.ph. Ginintuang Masaganang Ani-High Value Commercial Crops (GMA-HVCC), Department of Agriculture. A Guide to Papaya growing and Marketing. Retrieved on September 2009 from www.hvcc.da,gov.ph. Herradura, L.E. Management of papaya ringspot virus (PRSV) in Southern Mindanao. BagoOshiro, Davao City: Department of Agriculture-Bureau of Plant Industry/Davao NationalCrops R&D Center, 2003. – (PCARRD-funded; completed). National Agriculture and Fishery Council, Department of Agriculture (2002). Strategic Action Planning: Other Fruits – Papaya. National Academy of Science and Technology, Department of Science and Technology. (2008). Philippine Agriculture 2020: A Strategy for Poverty Reduction, Food Security,
V. ANNEXES
Annex 1. Value of Production in Agriculture by T ype of Valuation, Sub-sector, 1998 – 1998 – 2008. 2008.
Value of production
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
144
151
163
171
171
175
179
196
211
220
245
184
Agricultural crops
110,733
129,268
120,249
124,047
126,035
129,250
136,181
137,305
143,699
151,560
157,543
133,261
Total agricultural ouput
224,172
245,874
242,318
253,131
262,788
272,011
286,245
292,581
304,000
318,068
330,396
275,599
Papaya
2008
Average
27
Annex 2. Updated average production costs and returns of papaya (in pesos per hectare), Philippines 1998-2 008. ITEM
1998
CASH COST 41,846 Fertilizer Organic 82 Inorganic 9,593 Foliar 1,521 Soil ameliorants 7 Pesticides 4,329 Solid 2,245 Liquid 2,084 Other material inputs 3 Hired labor 12,179 Land tax 261 Rentals: Land 3,208 Machine, tools, equipment 679 Fuel and oil 3,081 Transport of inputs 2,105 Irrigation fee 78 Interest on crop loan 2,128 Food expenses 912 Repairs 731 Landlord's share 37 Wages for overseer 69 Electric bill 208 Others (straw twine, sacks, bamboo 635 poles, nylon strings)
1999
2000
2001
2002
2003
2004
2005
2006
2007R
2008P
50,948
53,406
57,295
57,951
64,016
73,797
84,335
86,124
89,416
103,537
74 11,144 1,365 6 4,837 2,508 2,329 3 19,542 264
80 11,995 1,468 6 4,981 2,582 2,399 3 19,762 267
95 14,286 1,748 7 5,187 2,689 2,498 6 19,770 270
94 14,090 1,725 7 5,261 2,727 2,534 6 20,379 273
117 17,609 2,155 9 5,272 2,733 2,539 7 21,400 276
158 23,827 2,917 12 5,292 2,743 2,549 9 22,316 279
196 29,637 3,627 15 5,280 2,737 2,543 11 23,614 282
195 29,440 3,604 15 5,035 2,610 2,425 11 24,609 285
207 31,240 3,824 16 4,790 2,483 2,307 12 25,578 288
371 39,701 6,862 29 4,615 2,392 2,223 22 25,895 291
2,305 729 3,347 2,247 56 2,341 953 745 27 74 216 673
2,217 736 3,910 2,580 54 2,575 967 774 26 75 230 700
2,183 736 4,297 2,879 53 2,833 1,012 819 26 75 265 748
1,978 760 4,301 2,908 48 3,116 1,033 831 24 77 270 770
2,091 787 4,731 3,009 51 3,428 1,056 837 25 80 279 797
2,317 821 5,360 3,391 57 3,771 1,122 900 28 83 293 844
2,737 869 6,302 4,013 67 4,148 1,195 968 33 88 344 909
2,274 906 6,857 4,523 56 4,563 1,262 1,020 27 92 383 967
1,956 942 7,083 4,546 48 5,019 1,303 1,053 23 96 398 994
1,688 954 8,289 5,031 41 5,521 1,480 1,138 20 97 403 1,089 28
ITEM
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007R
2008P
NON-CASH COST Hired labor (paid in kind) Landlord's share Harvester's share
199 21 136 42
167 34 98 35
165 34 94 37
165 34 93 38
152 35 84 33
160 36 89 35
176 38 99 39
205 40 117 48
183 42 97 44
167 44 83 40
155 45 72 38
IMPUTED COST Operator/family labor Depreciation Interest on operating capital Rental value of owned land
13,641 3,177 3,673 4,434 2,357
16,922 5,274 4,040 5,915 1,693
17,523 5,324 4,444 6,127 1,628
18,392 5,326 4,888 6,576 1,602
18,978 5,499 5,377 6,650 1,452
20,676 5,775 5,915 7,451 1,535
22,955 6,022 6,507 8,725 1,701
25,522 6,373 7,158 9,981 2,010
26,250 6,641 7,874 10,065 1,670
27,508 6,903 8,661 10,507 1,437
30,154 6,988 9,527 12,399 1,240
ALL COSTS
55,686
68,037
71,094
75,852
77,081
84,852
96,928
110,062
112,557
117,091
133,846
GROSS RETURNS RETURNS ABOVE CASH COSTS RETURNS ABOVE CASH & NON--CASH COSTS NET RETURNS
97,481 55,635
82,265 31,317
90,262 36,856
93,769 36,474
81,614 23,663
87,267 23,251
97,921 24,124
120,133 35,798
109,036 22,912
99,709 10,293
95,289 (8,248)
55,436 41,795
31,150 14,228
36,691 19,168
36,309 17,917
23,511 4,533
23,091 2,415 2,415
23,948 993
35,593 10,071
22,729 (3,521)
10,126 (17,382)
(8,403) (38,557)
0.75
0.21
0.27
0.24
0.06
0.03
0.01
0.09
(0.03)
(0.15)
(0.29)
5.19 10,724 9.09
5.40 12,598 6.53
4.95 14,373 6.28
5.00 15,173 6.18
5.29 14,574 5.60
5.76 14,741 5.92
6.49 14,927 6.56
7.10 15,501 7.75
6.65 16,931 6.44
6.51 17,998 5.54
6.71 19,935 4.78
NET PROFIT- COST RATIO Cost per kilogram (P) Yield per hectare(kg) Farmgate price (peso/kg)
R-revised Estimates P-Preliminary Estimates (Source: BAS, 2009) 29
