Muscovado sugar production and marketing in selected areas of the Philippines: a value chain analysis

In the context of reducing poverty among sugar farmers, the production and marketing of muscovado sugar is considered an entry point for increasing farm income. The favorable retail price of the commodity in the domestic market creates a pull-up effect on the farmgate price that is beneficial to the farmers. In addition, the demand for the product is growing worldwide as the number of health foods consumers increases. This budding market niche presents an opportunity to the Philippine muscovado sugar farmers and other related industries. Despite the positive, supply has not caught up with the demand both in the domestic and world market. This study was conducted to analyze the production and marketing dynamics in Antique, Negros Occidental and Sultan Kudarat, the three largest suppliers of muscovado sugar in the country. The expected economic benefits from muscovado production are not equally shared among farmers within the selected study areas. Antique farmers have lower farm productivity and receive lower farm gate prices compared to farmers in Negros Occidental and Sultan Kudarat. Sugar processing continues to be a backyard operation where health, sanitation and air pollution is rarely addressed. Organic farming remains to be praticed only by a few sugarcane farmers. Because market niche already exists for muscovado sugar, farmers tend to continue using the conventional farming method over organic farming unless the whole market niche begin to clamour for organically produced sugarcane. Only exporters have become sensitive to the market for organically certified muscovado sugar because these are the segment of traders who are in touch with markets requiring organically grown products. Local traders do not discriminate over organically grown sugar. The farm to market linkage is highly organized wherein each stakeholder has clearly defined functions and that market information flows freely. Vertical integration is more pronounced in Antique than in Negros and Sultan Kudarat. Although farm-market integration within a cluster is existent, intercluster linkaging is limited. Farm production costs differ among the three clusters included in the study which is indicative that farming methods vary among the clusters. The Philippines is less efficient in employing its resources to produce sugarcane than other selected muscovado-producing countries, namely, Brazil, Colombia, India, Indonesia and Thailand except for Mauritius. Ceteris paribus, production efficiency enables a country to sell its product at a lower cost and at the same time receive a normal profit.