Market structure, conduct and performance of the feed corn industry in the Philippines

This study evaluated the market structure, conduct and performance of the feed corn industry in the Philippines. Data from the survey of corn industry participants from cagayan Valley, Northern, Southern and Central Mindanao, Southern Tagalog, and Central Luzon were used in the analysis. The market structure of the corn industry was imperfect based on descriptive analysis, four-firm concentration ratio (CR4), Lorenz curve, and gini-coefficient. There was a high degree of product differentiation, high level of barriers to entry and exit in the industry, and imperfect market knowledge. Results of market conduct evaluation showed that different price and product policies were used by the participants to adjust to market situations and coerce their market rivals. Market performance was evaluated using pricing and productive efficiency, profitability and progressiveness. Results showed that using the Ravallion Model and Timers' Index of Market Conne ction, there was a very weak degree of market integration between farm-to-wholesale and wholesale-to-retail levels brought about by poor and inadequate farm-to-market roads. Feed corn mills and feedmills were very much utilized. The costs and returns analysis showed that feed corn producers and traders generated minimal profits, while millers incurred losses. Market efficiency in the corn industry was hindered by high cost of inputs, unstable price out output, negative effects of weather on production and post harvest activities, high cost of transportation, unstable supply of feed corn, high cost of milling and marketing, quality deterioration during rainy seasons, seasonal operation, high cost of capital, slow accounts receivable turnover, and spoilage as a result of machine breakdown and poor quality corn. Findings of the study suggested that there is a need to improve efficiency of corn production using high yielding corn varieties and adoption of proper cultural managem ent practices to increase corn supplyupgradeport facilities and road system to reduce transportation costs, provide credit and technical assistance to corn producers, millers, traders and feedmillers, and research and development on the determination of efficient size of corn mills and feedmills.