Economic incentives and comparative advantage of cutflower production in the Philippines
1993
Espanto, L.H.
Results showed that only dendrobium production in Laguna [Philippines] and rose production in Cebu and Davao were positively protected, mainly due to the low prices of domestically produced flowers attributed to their low quality compared with imported ones and the relatively small volume and substandard quality of exports that could not meet/affect international market demand and thus, raise domestic producer prices. These would, in theory, indicate a penalty to cutflower producers. But on a positive note, this situation could provide challenges and opportunities to domestic producers toward greater competitiveness against imported ones, and similarly, exporters are challenged to exert more efforts to increase volume of production for export as well as improve the quality of flowers to compete in the international market. The effect of the 1986 trade liberalization which included the elimination of quantitative restrictions on imported fertilizers and pesticides, and the recent reduction of tariff rates and elimination of value-added tax, have resulted to implicit tariff rates that do not greatly penalize cutflower producers on their use of these agricultural inputs. Private profitability analyses revealed that all cutflower types except anthurium and heliconia production in Negros Occidental and Laguna, respectively, and anthurium production in Benguet, received positive net returns both at the farm and wholesale levels, while social profitability estimates showed that production of all cutflower types in all provinces were efficient in saving or earning foreign exchange, indications of financial profitabilities and foreign trade competitiveness
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