Analysing the factors affecting the profitability of vegetable farmer clusters in Southern Philippines
2015
Ebarle, E. J. N. | Sarmiento, J. M. P. | Aguinaldo, R. T. | Concepcion, S. B. | Montiflor, M. O. | Real, R. R. | Bacus, R. H.
Despite much government support, smallholder farmers still face different issues and problems in their operations. They receive low income mainly due to poor access to markets, microfinance and technological knowhow. Nonetheless, numerous studies reveal that forming small groups or clusters have resulted in increased profitability. Clustering has provided opportunities for smallholder farmers to access institutional markets, forge linkages with buyers, acquire finance and avail themselves of free or discounted inputs. Studies have also shown that clustering helps improve their negotiation, bargaining and entrepreneurial skills. This paper analyses the factors affecting the profitability of vegetable farmers who were involved in clustering. A survey of 61 farmers was conducted in Bukidnon, South Cotabato and Davao City. Pooling the data across provinces, the study utilized heteroscedasticity-corrected generalized least squares regression to account for non-constant variance with the aid of GRETL software. Results suggest that production cost, volume, price, South Cotabato farmers farming experience, ownership of land and clustering positively affected farm profit, while a negative effect was observed for marketing cost. This strengthens the claim that clustering is an effective means to improve yields, prices and to gain access to assured markets. This paper suggests that clustering be continued and ways found to take advantage of the factors that positively affect profits.
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