Philippine Business Magazine: Volume 13 No. 2 - Industry

Mindanao's Golden Crop

Mindanao growers’ off-season mango production reaps success

At a sprawling mango farm in Zamboanga City, growers from as far away as Luzon gathered under the shade of a mango tree, throwing questions at a man with a megaphone. An agronomist and farmer by profession, the speaker had just finished his lecture on how to get the best yields from mango trees.

It was the second day of the 7th National Mango Congress. Each year, mango growers, processors, and exporters from all over the country get together to share information on new farm technologies and assess market challenges. This time, the gathering was held in Mindanao, where mango farming has expanded substantially in the last decade and where the mango has emerged as a cash crop on which many farmers are staking their economic futures.

Ideal Environment

Participant to the 7th National Mango Congress are briefed on the proper fertilization and plant nutrition procedures

A major Philippine fruit crop, the mango comes a close second to bananas in economic importance to the country. Although grown nationwide, Mindanao producers have an advantage because of the unique climate in the region. Unlike Luzon and the Visayas, Mindanao is ideal for year-round mango production because most of its farms are in typhoon-free locations. Typhoons and heavy rains are two major constraints to year-round mango production. Normally, mango harvests in Luzon and the Visayas peak during summer and weaken from July to December due to unfavorable weather conditions. In Mindanao, mango growers can program their harvests throughout the year.
Capitalizing on this strength, the Mindanao Fruit Industry (Minfruit) Council, a business support organization assisted by the U.S. Agency for International Development through its Growth with Equity in Mindanao (GEM) Program, started a Mindanao-wide campaign in 2003 to encourage off-season mango production. This campaign introduced appropriate farming practices and technologies to farmers to stabilize the seasonality of mango harvests. This way, Mindanao growers would be able to supply the mangoes in those months when other regions are unable to produce. The Minfruit Council, composed of major fruit grower associations, was established in 1999.

Mindanao mangoes find their way to dining tables in Japan, Hong Kong, and China

With the new techniques and processes, at least 2,000 metric tons of off-season mangoes were harvested in the second half of 2004. The Minfruit Council reported that fresh mangoes airlifted to Manila from Davao City in that period increased by more than 65% compared to the first six months of the year. Industry sources reveal that most of the mangoes sent from Davao to Manila end up on the dining tables of homes and restaurants in Japan, Hong Kong, and China.

Benjamin Roy, Minfruit Council executive director, estimates that its off-season mango campaign has tapped at least 800 growers, covering an estimated production area of at least 1,000 hectares.

Public-Private Partnership

The support of local government units has been instrumental in the dramatic expansion of the Mindanao mango industry. Roy explains that several proactive and development-oriented LGUs helped to accelerate the growth of the mango industry in Mindanao by providing seedlings to farmers under a scheme called “Plant Now, Pay Later.” Under this arrangement, many smallholder growers were able to develop their mango farms, since the cost of planting materials was advanced by local governments. Hundreds of farmers benefited from this program in Davao, Caraga, and Northern and Central Mindanao.
The presence of processors who have established operations in key areas in Mindanao also provided a boost to mango production. To date, there are at least five mango processors in the region. Leading processed-mango exporter Profood International Corporation, a Cebu-based company, operates a multiline plant in Davao City. The Consunji-owned Sirawan Foods also runs a medium-sized processing facility in Davao. In South Cotabato, a new plant to produce mango juice and dried mango for export was created by a group of prominent agribusiness executives. Further north, in Cagayan de Oro City, new companies, such as Motherland Food Products and the Amley Food Corporation, have embarked on mango-processing operations.

All major Manila-based fresh-mango exporters have also augmented their sourcing and consolidation operations in Mindanao. For example, Diamond Star, Marsman-Pelican, DHM, and Hi-Las maintain buying stations and agent-representative offices in major cities, including Davao, General Santos, and Cagayan de Oro.

In the area of mango production, the multinational firm Dole remains the dominant player in Mindanao, where it controls hundreds of hectares in production areas through direct lease or contract-spray agreements with local mango farmers. Dole also operates a vapor heat treatment facility in Davao del Norte, the only such facility outside Metro Manila, where fresh mangoes are treated prior to shipment to such export markets as Japan, South Korea, and New Zealand.

Diversifying Markets

Hong Kong and Japan purchase more than 80% of the country’s fresh-mango exports. The dependence on these two major foreign markets is a concern to many exporters who believe that market diversification is key to the industry’s long-term growth.

To answer this concern, Dr. Hernani Golez, chief of the government-controlled National Mango Research and Development Center, reports that the government is working to implement requisite quarantine protocols to increase fresh-mango exports to potentially key markets, such as Australia and the United States. Mangoes that enter these countries must be subjected to strict phytosanitary procedures. To date, only fresh mangoes from Guimaras Island are allowed entry into these markets.

Mango exporters are also eyeing China as a market with a high potential for growth. Industry leaders believe that a large portion of fresh-mango shipments to Hong Kong finds its way to southern China. With the implementation of the Philippines-China Early Harvest Program, which virtually eliminates tariffs on fresh agricultural commodities, direct shipments of fresh mangoes to key Chinese demand centers beyond southern China are likely to grow significantly. This will present opportunities for Mindanao-based agribusiness companies supplying Cavendish bananas to major Chinese ports. If things go well, banana exporters can soon include fresh mangoes with their regular shipments.

Emerging Market Threats

Perhaps the biggest threat to the growth of fresh-mango exports is the imposition of stricter food safety standards by such major importing countries as Japan. Since early last year, the Japanese government has adopted more stringent food safety requirements, lowering pesticide residue limits of certain agrochemicals used in mango production. Japan now also requires a product traceability system for all mango shipments from the Philippines. The stricter food safety standards pose a serious threat to growers in Mindanao, where the use of agrochemicals in mango farming is widespread due to a high incidence of pests and diseases.

To help overcome this threat, several mango grower groups in Mindanao, in collaboration with the Minfruit Council, have undertaken a series of training courses for local growers and have initiated an information dissemination campaign on the judicious application of pesticides in mango production. They are also advocating the creation of an accreditation system for mango growers, along with the adoption of good agricultural practices for mango production.

Clearly, the Mindanao mango industry is determined not to let its crops of gold turn into dust.

Contributed by the Growth with Equity in Mindanao Program, a USAID-funded program implemented under the oversight of the Mindanao Economic Development Council. For more information on the GEM Program, visit www.mindanao.org