Philippine E-Journals

Lettuce Supply Chains and Marketing Margins inBenguet, Philippines

Maria Luz D. Fang-asan | Marie Klondydagupen | Larry N. Digal

 

Abstract:

Understanding value chains requires knowledge of the needs of customersand how these needs are met by different suppliers of marketing or valueadding services. The need for these marketing services and costs of supplying these are reflected in marketing margins or the difference in the prices of thevarious marketing levels in the chain. This study analyzed lettuce supply chainsin Benguet and mapped 3 chains, including the value-adding activities andthe governance mechanisms such as contracts and payment terms that existin the chain. Some new roles have emerged due to recent developments in themarket. Some wholesalers became “commissioners” and “disposers,” and someindividuals played dual roles along the chain. A few farmers became “disposers,”and a few “disposers” eventually became farmers. Marketing margins were alsocomputed for a sample chain including the cost of value-adding activities toshow a more accurate distribution of benefits across key actors in the chain.Higher gross margins were due to higher costs of providing marketing services,which indicates a competitive market. There are opportunities in the lettucechains to respond to increasing demand for salad vegetables. While lettuceproducers and other actors in the chain respond to these market requirementssuch as producing new lettuce varieties, there are issues that need to be addressed to improve efficiency and performance of the chain.