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https://hdl.handle.net/10419/339210 Year of Publication:
2026
Series/Report no.:
PIDS Discussion Paper Series No. 2026-02
Publisher:
Philippine Institute for Development Studies (PIDS), Quezon City
Abstract:
This study provides a comprehensive examination of the economic, structural, and sustainability dimensions of the coffee value chain in Region X (Northern Mindanao), with emphasis on the provinces of Bukidnon and Misamis Oriental two areas recognized as emerging centers for both Robusta and Arabica production in the Philippines. This research reflects the increasing importance of coffee in the national agenda as highlighted in the Philippine Coffee Industry Roadmap, as well as the growing interest in specialty coffee, value- added processing or postharvest processing and climate-resilient agricultural livelihoods among upland farmers. A mixedmethods design was employed to capture the multifaceted nature of the value chain and the diverse experiences of industry actors. Quantitative data were gathered from 150 coffee farmers through structured surveys, while qualitative insights were obtained through key informant interviews and focus group discussions with cooperative leaders, traders, processors, and local government representatives. These primary data were complemented by secondary data from the Philippine Statistics Authority (PSA), the Department of Agriculture (DA), and selected studies from the Philippine Institute for Development Studies (PIDS). Porter's Value Chain Framework was used to analyze both primary activities input procurement, farm production, postharvest handling, processing, marketing and support functions such as extension services, financing, training, infrastructure, and governance. Profitability assessments were carried out using standard farm-management indicators, specifically Return on Investment (ROI) and Return on Sales (ROS), to determine the economic viability of various coffee product forms. The findings indicate that value addition is the most decisive driver of farmer profitability. ROI increases substantially when producers engage in drying, hulling, and quality upgrading rather than selling cherries immediately after harvest. Profitability for fresh cherries ranged from 55-60%, whereas dried parchment and hulled beans generated ROI values between 85-95%. Arabica green beans posted the highest overall profitability (ROI 95%, ROS 40%), reflecting the premium potential of high-altitude Arabica from Bukidnon. Robusta, particularly when processed into dried or hulled form, also yielded competitive returns, illustrating its continuing commercial relevance in Region X. However, economic gains are moderated by persistent structural constraints, including limited access to certified seedlings, weak and inconsistent drying infrastructure, inadequate mechanization, low cooperative participation, and the continuing dominance of trader-driven markets with limited transparency. SWOT and TOWS analyses reveal several opportunities for upgrading, including regional branding initiatives, digital traceability systems, farmer clustering, and cooperative consolidation. At the same time, risks remain, particularly climate variability, aging and unproductive trees, and price volatility in both domestic and international markets. The study concludes that improving postharvest systems, strengthening extension and technical services, and establishing unified regional governance mechanisms are essential to enhancing the competitiveness and sustainability of the Region X coffee value chain. These recommendations align closely with the Philippine Coffee Roadmap's objectives of improving productivity, quality, and long-term resilience across the sector.
Subjects:
coffee value chain
economic analysis
smallholder farmers
sustainability
value-addition
economic analysis
smallholder farmers
sustainability
value-addition
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Document Type:
Working Paper
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