Supply Chain Improvement for the Banana (Saba) Industry in Cagayan Valley: An Evaluation Research

Donnie  C. Bacud,

Supply Chain Improvement for the Banana (Saba) Industry in Cagayan Valley: An Evaluation Research

Abstract:

The study was conducted to provide an overview of the banana industry, develop the supply chain maps for saba in Region II, analyze the performance of the supply chain, identify areas for improvement in the supply chain, and recommend specific policies and programs and projects to improve the industry. The study showed that banana supply chain in Region II (Cagayan Valley) is characterized by its being heavily dependent on canvassers. Canvassers practically do not spend a single centavo and uses only their network and transactional ability; therefore they are what we call the “necessary evil” in the supply chain. Saba (banana) marketing in the region does not follow a standard quality specifications and quantity is based on manual counting of saba fingers. This marketing practice, which they coined “karate system” sometimes results in confusion and miscommunication among chain players. From the farm it takes saba two to three days to reach the end user passing through two to five intermediaries. Marketing margin ranges from 20 percent to 150 percent depending on the scope of responsibility taken by the intermediary and operating cost. Transportation problems such as poor farm to market road, increasing cost of fuel, “kotong”, traffic due to landslide and road constructions, high tax, and other fees. Foremost in banana farmer’s complain is the incidence of Banana Bunchy Top Virus (BBTV). “Bugtok” also has affected the quality of saba as revealed by a trader from Divisoria. The main reason why BBTV and “bugtok” are prevalent in the region is the poor cultural management practices of banana farmers in the region. Saba supply chain inefficiencies are caused by the prevalence of diseases and poor marketing practices. To manage these inefficiencies, the following steps should be adopted: (a) establish a standard measurement and classification system, (b) organize farmers into clusters, and (c) conduct trainings and seminars on disease eradication and prevention.