Supply and Value Chain Analysis of the Dried Fish Industry in Roxas City, Capiz

A Research Paper presented to

Dr. Rowena Paz Gelvezon
University of the Philippines Professor

In Partial Fulfillment
of the Grade Requirements
of
Business Administration 173
Distribution Management

Celendro, Jericca
Ferrer, June Vincent
Labis, Hester Pearl
Muros, Jingbert Elaine
Vego, Yza Belle

24 November 2016

Table of Contents

I. Introduction ...................................................................................................................... 5

A. Industry background .................................................................................................................. 5

B. Significance of the study ............................................................................................................ 7

C. Objectives of the study .............................................................................................................. 9

II. Review of Literature ....................................................................................................... 10

III. Methodology .................................................................................................................... 21

Conceptual framework .................................................................................................................... 21

Data Sources .................................................................................................................................... 22

Study Area ..................................................................................................................................... 22
Sample selection ........................................................................................................................... 23
Sample size .................................................................................................................................... 23
Methods ........................................................................................................................................ 24
IV. Results and Discussions .................................................................................................. 25

A. Core Processes ......................................................................................................................... 25

B. Actors ....................................................................................................................................... 29

C. Product and Volume Flow ....................................................................................................... 33

D. Money Flow ............................................................................................................................. 36

E. Geographical Flow ................................................................................................................... 38

F. Knowledge and Information Flow ........................................................................................... 40

G. Governance, coordination, regulation and control ................................................................ 42

D. End Consumer Perception of the Product ............................................................................... 45

H. Relationships and linkages between supply chain actors ...................................................... 46

I. Logistics Issues ......................................................................................................................... 48

J. Costs and returns analysis ....................................................................................................... 49

2


A. External influences .................................................................................................................. 56
Support from the Government ..................................................................................................... 56
Laws, rules and regulations that affect the industry ..................................................................... 58
PESTLE Analysis ............................................................................................................................. 67
V. SWOT Analysis ............................................................................................................... 71

VI. Options for Chain upgrading ........................................................................................ 74

VII. Conclusions ..................................................................................................................... 76

VIII. Recommendations .................................................................................................. 78

IX. References........................................................................................................................ 80

X. Appendix ......................................................................................................................... 81

Appendix A .................................................................................................................................... 81
Appendix B .................................................................................................................................... 92

List of Tables
Table 1 Supply Chain Cost Analysis ....................................................................................... 54

List of Figures

Figure 1 Schematic Diagram of a Supply Chain .................................................................... 10

Figure 2 Simple supply chain. ................................................................................................ 16

Figure 3 Physical Flow of Dried Fish in Bangladesh ............................................................. 17

Figure 4 Generic Supply Chain from ...................................................................................... 21

Figure 5 Map of the Philippines with a locator pin on the study area ..................................... 22

Figure 6 Roxas CIty Map with pins on specific area of study ................................................. 22

Figure 7 Core Processes map ................................................................................................... 25

Figure 8 Map for Actors involved in each core process .......................................................... 29

Figure 9 Product Volume and Form map ................................................................................ 33

Figure 10 Map for Money Flow............................................................................................... 36

Figure 11 Map for Geographical Flow .................................................................................... 38

Figure 12 Map for Information Flow ....................................................................................... 40

Figure 13 Map for Cost and Returns Flow .............................. Error! Bookmark not defined.

4


I. Introduction

A. Industry background

For an archipelagic country, Philippines is known to possess a huge marine territory. It is known

to host vast amount of marine species; some of which are unique to the Philippines. Known as

the “Pearl of the Orient Sea”, Philippines has so many undiscovered delicacies that are of world

class. Rich with the abundance of fish in the ocean and big seas, Filipinos’ primary livelihood

falls on working along the shore and goes fishing. Thus, fishing is considered a major source of

income.

Due to fish being highly perishable, the fishermen have devised a way to lengthen its life; thus

the introduction of the dried fish industry. Drying food is the world’s oldest known preservation

method, and dried fish has a storage life of several years. The method is cheap and effective in

suitable climates; the work can be done by the fisherman and family, and the resulting product is

easily transported to market. Drying, from where the name was taken, is a method of food

preservation that works by removing water from the food. Open air drying using sun and wind

has been practiced since ancient times to preserve food. Water is usually removed by evaporation

(air drying, sun drying, smoking or wind drying). Dried fish has become a part of staple food of a

typical Filipino household.

The main focus of this paper is a specific type of dried fish Tabagak or local herring and called

tuyo in Tagalog. Tabagak is the most common type of dried fish consumed by the Filipinos for

the reason that it is considered as the “food for the masses” with its affordable price. Also, it

comprises a large percentage in the supply of dried fish in the market that can be associated to

the abundance of local herring in the marine waters of the Philippines.

5


Dried fish accounts for a considerable amount of spending from the local consumers, especially

from those living in the rural areas, not only in coastal areas but also in all the provinces of the

country. In spite of this, there has been little to no studies on the dried fish industry of the

Philippines. There is less attention given to the industry which maybe for the fact that it has been

in existence for many years and there is a mentality that the said industry will always be there for

the public. However, because of the lack of studies regarding the industry, there is also limited

knowledge about the processes and technicalities and standards used in the supply chain. There

are also remaining misconceptions about the industry as well as the actors of the supply chain.

Furthermore, because of the lack of attention given to the industry, there is complacency and

lack of improvement and innovation to the industry that it has continued to be the way it is for a

long time.

6


B. Significance of the study

This study aims to provide a supply and value chain of the dried fish industry in Roxas City,

Capiz. This study will help in identifying the core processes, actors, activities, product flow,

knowledge and information flow, geographical flow, and value-addition to the supply chain.

This study would be beneficial to the government, the consumers, and the actors itself.

The study would be beneficial to the government since it will identify the barriers and

challenges faced by the respective actors in the supply chain; and to combat this by creating

regulations and laws to protect the actors involved in the processes, such as the fishermen.

For the consumers, the study will benefit them by informing them of the value-chain

analysis, where the fish originated, where it was processed, and who were involved in the

supply chain.

For the individual actors in the supply chain the study would be beneficial to them in that it

would help them see which aspect of production they can improve on to increase quality and

reduce unnecessary wastes and costs. This study will help the Dried Fish Processor identify

critical risk factors within their organization and their suppliers; therefore, the Dried Fish

Processor can mitigate the risk effectively. They may also focus on the customer demand in

order to minimize the inventory, production, and packaging of the product thus minimizing

the risk of bottleneck, surplus of inventory, and sunken costs. Through the study, the

wholesalers and retailers can also manipulate their time and product management to better

cater to the customers’ changing needs.

7


The study is beneficial to the supply chain since it will help identify which process in the

supply chain needs further improvement; this improvement will then lead to an efficient time,

product and service management that will enable them to stay in business.

8


C. Objectives of the study

General Objective

To map out analyze the supply and value chain of the dried fish industry in Roxas City,

Capiz in order to develop recommendations and propose strategic processes to improve the

efficiency in the chain.

Specific Objectives

1. To provide maps of the core processes, actors, activities, product flow, knowledge

and information flow, geographical flow and, value addition flow of the supply chain

of the dried fish industry.

2. To examine the existing marketing system and estimate the cost, margin and profit of

producers and traders involved in the marketing chain.

3. To identify the institutional and non-institutional barriers (e.g. transportation cost/

toll/ taxation/ illegal extortion to the movement of dried fish and to identify price

exploitative market players in between producers and consumers).

4. To identify problems among the intermediaries of supply chain of dried fish, like

information flow among the actors, and the definition of quality in each core process,

and to eventually find solutions for each identified problem.

9


II. Review of Literature

Supply Chain

A supply chain, interchangeable with the term “value chain”, is defined as a sequence of

(decision making and execution) processes and (material, information and money) flows that aim

to meet final customer requirements, that take place within and between different stages along a

continuum, from production to final consumption (van der Vorst, da SIlva, & Trienekens, 2007).

The term value chain as defined by Kaplinsky (1999), and Kaplinsky and Morris (2001), refers

to the full range of activities that are required to bring a product (or a service) from conception

through the different phases of production to delivery to final consumers and disposal after use.

Further, a value chain exists when all of the actors in the chain operate in a way that maximizes

the generation of value along the chain (Department of International Development, 2008).

Figure 1 Schematic Diagram of a Supply Chain (shaded) within the total Supply Chain network
(van der Vorst, da SIlva, & Trienekens, 2007)
Figure 1 depicts a generic supply chain. It is shown within the context of what is usually referred

to as a ‘total Supply Chain network’. In such a network, each firm belongs to at least one SC; i.e.

it usually has multiple suppliers and customers. (van der Vorst, da SIlva, & Trienekens, 2007)

10


The term value chain can be defined in two perspectives; the broad approach and the narrow

approach. This study describes the term ‘value chain’ using the broad approach wherein it looks

at the complex range of activities implemented by various actors (primary producers, processors,

traders, service providers) to bring raw materials through a chain to the sale of the final product.

The ‘broad’ value chain, according to the Department of International Trade of Cambodia

(2008), starts from the production system of the raw materials and will move along the linkages

with other enterprises engaged in trading a, assembling, processing, etc.

Furthermore, the broad approach does not only look at the activities implemented by a single

enterprise. Rather, it includes all its backward and forward linkages, until the level in which he

raw materials are produced will be linked to the final consumers. This approach is what this

study will refer to exclusively.

The concept of value chain encompasses the issues of organization and coordination, the

strategies and the power relationships of the different actors in the chain. Conducting a value

chain analysis for this approach of value chain requires thorough investigation of what is going

on between the actors in a chain, what keeps these actors together, what information is shared,

and how the relationships between the actors is evolving.

Supply Chain Management

SCM has been interpreted by various researchers. Based on the relatively recent development of

the supply chain literature, it is not surprising that there has been much debate as to a specific

SCM definition. Ganeshan & Harrison (1995) has defined SCM as “a network of facilities and

distribution options that performs the functions of procurement of materials, transformation of

these materials into intermediate and finished products, and the distribution of these finished

products to customers”. According to Zigiaris (2000), the Supply Chain Management Program

11


integrates topics from manufacturing operations, purchasing, transportation, and physical

distribution into a unified program. Successful supply chain management, then, coordinates and

integrates all of these activities into a seamless process. It embraces and links all of the partners

in the chain. In addition to the departments within the organization, these partners include

vendors, carriers, third party companies, and information systems providers.

Lee & Billington (1995) stated that SCM consists of the integration activities taking place among

a network of facilities that procure raw material, transform them into intermediate goods and

then final products, & deliver products to customers through a distribution system. The overall

goal for a supply chain is to fulfill the end customers’ needs and expectations in a cost-efficient

manner (Jespersen & Skjott 2005). Supply chain always involved to improve the product flow

and minimize the cost. It helps producer as well as ultimate consumer through the improvement

of upstream/downstream flows of goods and services.

Supply Chain Management plays an important role in the competitive industries that different

firms enter in. According to Zigiaris (2000), managers these days recognize that getting products

to customers faster than the competition will improve a company's competitive position. To

remain competitive, companies must seek new solutions to important Supply Chain Management

issues such as modal analysis, supply chain management, load planning, route planning, and

distribution network design. Companies must face corporate challenges that impact Supply

Chain Management such as reengineering globalization and outsourcing.

According to Van der Vorst, Silva and Trienekens, the supply chain does not include only the

producer and its suppliers; depending on the logistical flows it also considers processors,

transporters, warehouses, retailers, service organizations and consumers. In the definition of

SCM, a ‘business process’ can be seen as a structured, measured set of activities designed to

12


produce a specified output for a particular customer or market. Next to the logistical processes in

the supply chain, which include activities such as operations, inventory management and

distribution, we distinguish business processes such as those associated with new product

development, marketing, finance, and customer relationship management. Finally, ‘value’ is here

understood as the amount consumers are willing to pay for what a company provides. It can be

measured by the total revenue of a company. The concept of ‘value-added activity’ typically

characterizes the value created by an activity in relation to the cost of executing it. (van der

Vorst, da SIlva, & Trienekens, 2007)

In particular, SCM is the process of effectively managing the flow of materials and finished

goods from retailers to customers using the manufacturing facilities and warehouses as potential

intermediate steps (Sengupta & Turnbull, 1996). All stages involved, directly or indirectly, in

fulfilling a customer request includes manufacturers, suppliers, transporters, warehouses,

retailers, and customers for Manufacturing Industries. The main purpose of the supply chain is to

maximize overall value generated. SCM engages the management of flows between and among

stages in a supply chain to minimize total cost (Habib, 2010)

More recently, the value concept has been expanded. We now can also refer to values associated

with the so called ‘Triple P’: People, Planet and Profit (or Prosperity). So, in addition to the

financial performance, also the social and environmental dimensions are incorporated in

performance evaluation. These latter two lead to attributes that are generally associated with the

product itself, the companies producing it and the raw materials and the resources used. (van der

Vorst, da SIlva, & Trienekens, 2007)

13


Agricultural Value Chain

Supply Chain Management is not limited to private industry. It also plays an important role in

the industry level, especially, the agricultural level. Agrifood chains and networks play an

important role in providing access to markets for producers from developing countries, as well as

for local, regional and export markets. Changes in agrifood systems impact the ability of agro-

industrial enterprises to compete; small and large alike will have to innovate and reduce costs,

while being more responsive to consumer needs. (van der Vorst, da SIlva, & Trienekens, 2007)

In addition, the idea of value chain is associated with the concept of governance, which is of key

importance for the researchers interested in social or environmental facets of value chain

analysis. The establishment (or the evolution) of the value chain may put pressure on natural

resources (such as water or land) which may produce degradation of the soil, loss of biodiversity,

or pollution. Additionally, the development of value chain might affect social ties and traditional

norms. (Department of International Development, 2008)

These concerns are highly relevant to agricultural value chains because agricultural value chains

are critically dependent on environmental resources. Also, the agricultural sector is often

characterized by the prevalence of traditional social norms. Finally, due to the high incidence of

the poor in the agricultural sector, the value chain framework can be used to draw conclusions on

the participation of the poor and the potential impact of value chain development on poverty

reduction. (Department of International Development, 2008)

Generally a traditional food industry supply chain consists of the producer, processor,

wholesaler, exporter, importer, retailer and consumer. There are mainly three sets of reasons why

supply chain analysis is important and crucial now-a-days: i) division of work procedures and

competitiveness has become increasingly important iii) entry into global markets which allows

14


for sustained income growth and pulling the best out of globalization requires an understanding

of dynamic factors of the whole supply chain. (Habib, 2010)

Existing Literature on Supply Chain Analysis

There are multiple international studies on supply chain analysis of the dried fish supply chain in

different countries, particularly in Bangladesh. These studies include recommendations either on

how to improve the chain, and make it more efficient, on what the government can do to help the

actors in the chain earn better, or on how to increase the bargaining power of the minorities

involved in the chain. These readings served as guidance for the researchers to conduct a study

on the value chain of the dried fish industry in Roxas City, Capiz.

A study by Munir, Nazrul & Shamsuddoha (1996) states that in Bangladesh, 7.3 million people

live in the coastal fishing villages whose livelihood someway depends on marine fishing. Drying

of marine fish is very common in the entire coastal areas of Bangladesh and these dried fishes

have demand both in domestic and international markets though the people involved early in the

production chain (fishing and drying) add relatively high value and make little profit. In the

current supply chain, producers have no influence over supply chain management, rather they are

strongly managed and monopolized by giant traders, brokers, dealers, wholesalers and thereby,

erodes profitability and preference of primary producers. (Hossain & Masud, 2012)

In the supply chain of marine dried fish, three intermediary stakeholders are involved between

fisherman and consumers. They are processor, aratdar and wholesaler/ retailer. In long supply

chain profitability is not as high as the value added. In contrary both the profit maximization and

profit distribution are considerably higher in a short supply chain than the long supply chain. The

wholesaler or retailer in city market secure as high as 40 percent profit. In all cases, primary

producers secure less profit, only 10 to 15 percent whereas their involvement in terms of labor,

15


time etc. is the highest. The major cause of price exploitation is dadan (dadan=non institutional

money lending) that make producers bound to go for 'conditional engagement' in fish drying

business. In relation to dry fish export, the increasing non-tariff measures (NTMs) acts as critical

barrier despite having huge international market demand (Ahmed, Islam, & Shamsuddoha, 2006)

Figure 2 Simple supply chain and indication of upstream/downstream flows. (Nielsen, Jensen,

Larsen, & Clausen, 2009)

Supply chain always involved to improve the product flow and minimize the cost. It helps

producer as well as ultimate consumer through the improvement of upstream/downstream flows

of goods and services. There are a number of tools for supply chain analysis. Figure 2 shows a

Value Stream Mapping/Value Stream Analysis to describe the supply chain of dried fish in

Bangladesh.

Dried Fishes edible and preserved through removal of moisture. Fish drying as a means of

preservation has been practiced since time immemorial in this region, and dry fish is considered

as a delicacy in the menu of many people of Bangladesh (www.banglapedia.org). The basic

principle of fish drying is that the activity of the muscle enzyme and microorganism is reduced to

a minimum through drawing out the water content of the fish by sun drying in a traditional way.

Munir , Nazrul & Shamsuddoha, 2006 conducted an important research on Value Chain Analysis

in the dry fish production and marketing of Post-Harvest Fishery Products (PHFP) in the coastal

belt of Bangladesh.

16


In the supply chain of dried fish’s the researchers of the study in Bangladesh have identified

some major channel of that sector. They have defined them as the intermediaries in supply chain.

Firstly fishermen collect the fish form sea. Sometimes the fisherman himself involves in dried

fish processing. Who are not directly involved with the dried fish processing, they send their fish

to the processor or the dried fish maker, then follow some steps to process the fresh fish to the

dried fish. Finally the processor sell dried fish a third party like the aratdar (local wholesaler) etc.

Then the supply chain depends on the number of intermediaries. It may go through a huge

number of intermediaries or a few number of intermediaries to the ultimate customers. Here we

have identified a traditional and most common supply chain of dried fish’s which encompass 4/5

intermediaries from fisherman to ultimate customers. As shown in Figure 3, the researchers of

this study have included a supply chain of dried fish which was created on the basis of survey

information conducted in Kuakata and Dhaka.

Figure 3 Physical Flow of Dried Fish in Bangladesh (Ahmed, Islam, & Shamsuddoha, 2006)

17


In all channels of supply chain cost is added with the product. So price is also increasing step by

step. Firstly, fish is passing from fisher man to processor. Cost is involved with fisherman

activities. Fisherman passes it to the processor in a price which is higher than his cost. Due to

variation in types and times this price addition are may be different. So ignoring the types of fish

and amount of fish we will present our survey result on the basis of percentage. If we consider

about the shrimp then price 1kg of shrimpfish is tk. 150.Fisher man sell it to processor at taka

150-160.There is a large cost involvement in the processor activities so when processor sell it to

another party the price goes up to tk 350 /kg. Usually processor sells it higher than its cost. Then

price increase in every time when it transfer from one middle man to another middle man.

Because in very step it involves some cost. In local market 1kg shrimp is sold at taka 400-450. In

Dhaka this 1 kg shrimp is sold at tk. 500-550/kg. (Hossain & Masud, 2012)

Fisher communities living in the coastal areas were found to harvest fish from the sea and

transported to many places for marketing in the remote markets in Bangladesh and in the

international markets in Singapore, Thailand and Hong Kong. Considerable quantities of the

catch were used for making dry fish. The fishers of the coastal areas were found to be very poor

and vulnerable to a number of issues. Many of them used to go the coastal areas and even in the

relatively deep sea for fishing and became victim of natural disasters like storm. They also

become victim of the miscreants who often snatch the fisher’s nets, harvested fish, valuable

belongings and even toll their lives. Many of the fishing boats do not have proper

communication/SOS system and do not have adequate fish preservation and storage facilities. In

the lean time a number of fishers become unemployed and thus their livelihoods become

vulnerable. The labors that support fishing, fish drying, processing or marketing, everywhere in

the system of the chain work under the key people. The labors and key people were found to

work under an agreement where there is every possibility of depriving the labors, as a result, the

18


major benefit will naturally go to the richer partners. The situation not only affected the labors

but also the consumers as the system added undesired costing on the real value of the product.

(Ahmed, Islam, & Shamsuddoha, 2006)

Through the survey, the researchers of the Bangladesh study found that most of the people who

are directly involved with the collecting of fishes they are poor. Their livelihood is so terrible.

Fishermen are facing different types of problem in their practical field. In the deep sea some time

they face storm; sometime robbery occurred in their board by some robber. One of other thing is

that, in their fishing boat there is no proper communication system. Most of the cases fisher men

collect their necessary money from local dadan (non-institutional money lending) system.

Fishers have barely any choice to sell fish as per their choice but they are bound to sell to that

particular person. They are deprived and they are bound to obey the lender. That’s why its effect

exists in supply chain of dried fish’s in this area. The situation not only affect the labors but also

the consumers as the system added undesired costing on the real value of the product. Also, in

the supply chain we have examined, large no. of days consumed in stocking activities than the

production activities. It indicates that it is possible to shorten the total no of days by minimizing

the stocking time. Furthermore, backward pricing system sometimes causes a great loss to the

producer or fisherman because it only ensures the benefit of rich intermediaries in the supply

chain. There is an imbalanced profit margin ratio scenario in the supply chain intermediaries.

Basically aratdar takes the most portion of the profit. And customer deprived by the aratdar for a

long supply chain process. Lastly, the producers most of the time faces difficulty because of lack

of capital. Sometimes it leads them to stop their activity. They didn’t get any governmental

support to continue their business. (Hossain & Masud, 2012)

19


The study recommends for appropriate policy intervention for financing dry fish producers so

that they managed to escape from the vicious chain of non-institutional money lending system

and can secure more profit. This is also recommended to strengthen domestic technical

regulations or standards to overcome technical barriers to dry fish trading in international market.

Besides, there is a scope of increased competition in marketing particularly at the assembly

phase, where the level of bargaining between fishermen and middlemen is often unequal due to

financial dependency and poor access to the existing marketing system. (Shamsuddoha, 2007)

Bangladesh has great opportunity to become one of the prevalent dried fish’s producers in all

over the world. Because it has many of rivers, long sea shore area, efficient fishermen,

competent dried fish’s producer, better weather. But certain supply chain problems which we

have found exist in this area. Numerous stakeholders like producers, wholesalers, aratdars,

middlemen, retailers and finally at the top, the consumers are in the supply chain. But there are

selected financial difficulties and avoidable activities which increase ultimate product price. If

government take necessary steps to solve financial complications through different government

support, then fishermen feel safe. Transport conveniences are very much significant for the

further development of this sector. As of our value stream analysis we can realize that utmost of

cost increases by some of redundant activities. The redundant activities lessening can change

Bangladesh’s future dried fish’s future. (Hossain & Masud, 2012)

20


III. Methodology

Conceptual framework

Figure 4 Generic Supply Chain from (van der Vorst, da SIlva, & Trienekens, 2007)

The Generic Supply Chain is used as reference for the research paper. Same supply chain was used in previous studies regarding dried

fish industry in Bangladesh. The Generic Supply Chain illustrates that the products from the input supplier goes the producers then the

processors to the retailers until it reaches the end consumers.

21


Data Sources

Study Area

ROXAS CITY, CAPIZ

Figure 5 Map of the Philippines with a Figure 6 Roxas CIty Map with pins on specific area of study
locator pin on the study area

Figure 1 shows a map of the Philippines with a pin on the city of Roxas, signifying the area that

the study covers. Roxas City is situated just east of the north-central coast of Panay Island with

geographic coordinates of 11°35' N, 122°45' E. Its boundaries are: the Sibuyan Sea to the north,

the municipality of Panitan to the south, the municipality of Ivisan to the west, and the

municipality of Panay to the East.

Specifically speaking, the study was conducted in some selected coastal barangays in Roxas

City, mainly in Brgy. Dumulog, Brgy. Baybay, Brgy. Libas, and the Banica Dried Fish Market in

Brgy. Banica, Roxas City., as shown in Figure 2 above. The areas mentioned are part of the

geographical chain and their specific locations are shown in Figure 2.

22


Sample selection

The dried fish product was predetermined based on the dried fish product that is most commonly

produced in the area of Roxas city. In analyzing the value-added chain for dried fish, an

upstream interview approach (retailer to fisher) was used. This was selected because the

proponents have only a little knowledge of the supply chain of dried fish in Roxas City. This

approach gave the proponent clue to where the supply chain started. With the sample, one of the

objectives was to ensure that there is equal representation of each actor (retailer, wholesaler,

processor, broker and fisherfolk) in the chain. After establishing the different forms of retail

outlets dried fish and their approximate value addition factor in the chain, the sample size of the

agents were also predetermined. The respondents were randomly selected based on their

willingness to participate and availability, as of the moment, in the interview.

Sample size

The total sample in the study comprising of 50 respondents were interviewed during the month

of October 2016. The sample included retailers, wholesalers, processors, brokers and fisher folk.

The biggest market of dried fish in the Roxas city is the Banica Dried Market was chosen as the

starting point for the survey with 13 samples. At the end of the interview, the retailers were

asked to identify names of wholesalers where they usually get their supplies. Based on the names

received, 7 wholesalers were selected. The names of 12 producers or the processors with whom

they commonly trade were then interviewed. These 12 processors directed the researchers to fish

port where the transaction between the fish traders and dried fish producers happens. Only 6 fish

broker were interviewed. These brokers provided information of 12 fisher folk.

The overall total sample was equally divided per actor: 13 retailers, 13 traders (wholesaler and

fish broker) 12 producers and 12 fisher folk.

23


Methods

Data collection

Two types of questionnaires were developed for this paper. First is for the different actors

(Appendix 1): the retailers and wholesalers, the processors, the distributors and the fisher folks.

The generic information included: socio-economic data, trading information (modes of transport,

communicating with other actors of the chain, qualities of a good product), marketing

information (trading partners, weekly quantity of purchases and sold, prices achieved), expenses

information (average monthly paid for utilities, maintenance cost of equipment, rent of the place)

and value-adding activities. For fishermen, fishing practices were obtained. Second (Appendix 2)

is for the end consumers. The second questionnaire aims to measure consumer perceptions and

behavior towards dried fish. The questionnaire also enabled the researchers to gather first hand

data from actual consumers.

24


IV. Results and Discussions

A. Core Processes

Figure 7 Core Processes map

The Core Processes of the Supply Chain consist of 7 stages. It starts with the Catching of fish.

The newly-caught fish are then distributed to the different actors for Dried Fish Processing in

order to produce the final product which is Dried Fish. The Dried Fish is then available for

wholesale and retail until it reaches the end consumers.

Catching

The catching process has duration of two to three days per trip in the sea that can gather 100-300

banyeras of fish or approximately 3,800 to 12,000 kilos, with 38-40 kilos per banyera and needs

14-16 people in a crew. This process is done using a one to two motor-powered boat with GPS

locator and cellular phones for communications.

The catching of fish itself is done through trolling of the fish net in the sea. This is done

repetitively, with average of three times a day for two to three days, depending on the volume of

fish they can get each time they haul the nets out of the water, as well as the weather conditions

which is a primary consideration for each trip. After the nets are hauled out of the water and

there are sufficient amount of fish caught, the fish are then segregated and sized based on the

kind of fish and put into banyeras. These banyeras are then stored inside a bodega filled with ice

and has a capacity of 300-350 banyeras. After this process, the fish are then docked in the port

and are distributed.

25


Distribution

The distribution of fish starts at the fishing port of Libas. When the fishing vessels arrive at the

pot of Libas, the banyeras of fish are docked and separated by the type of fish. These banyeras

are then weighed, and most of the time just estimated and are then recorded by the fish dealers

and ready for bidding. The bidding process is done by the broker to the dried fish processors and

sells the fish to the best bidder. The starting bid price depends on the freshness and quality of the

fish sold.

Dried Fish Processing

The Dried Fish Processing is mostly done in Dumulog, Roxas City. The entire process can last

for three to four days, depending on the weather conditions with 30 to 80 banyeras of fish are

being processed in one cycle but this quantity is also dependent on the supply of fish and the

bidding.

After the bidding, the banyeras of fish are transported from the port to the area where it will be

processed using owned trucks or any vehicle that has the capacity to transport the bought fish,

and if the processor does not own a vehicle there are available vehicles that can be rented for Php

10.00 to Php 15.00 per banyera which also depends on where the fish will be transported. Ice is

also used to maintain the freshness of the fish until it reaches its destination.

When the fish arrives in its destination, they are soaked in salt and seawater and placed in a big

container for 24 hours with the ration of one sack of salt per 5 banyeras or 500 kilos of fish. The

seawater is taken directly from the sea and transported on site inside big containers using

tricycles or any vehicle. After 24 hours of soaking, the fish are dried under the sun for two to

26


three hours and then cleaned with fresh water. After cleaning, the fish are put on tapils, pieces of

sewn bamboo strips that look like big bilaos, and then dried under direct sunlight for two days or

more depending on the weather. The fish are also frequently flipped over to make sure that it

dries evenly. When the fish are already dried, the tapils are collected and brought to be packed

and segregated by size and quality.

There are 4 standards of quality used in this activity. First, is the TML that are large and are

considered as first class dried fish. Second, is the TM which is smaller in size than TML but is

also considered as first class dried fish. Third, is the hubad which are dried fish without the

scales. Lastly, are the rejects which did not pass the quality standards. The dried fish are

separated in crates that contain 18 kilos and kaings with up to 40 kilos of dried fish each. The

segregation of sizes can take up to approximately 6 to 7 hours. The packed/segregated fish are

then stored for delivery and/or orders. Approximately 40 boxes and crates of dried fish can be

finished in one day.

Wholesale and Retail

The wholesale and retail of dried fish already involves the level of connection and credibility the

dried fish processor has and the level of trust between the processors and its buyers. Wholesaling

of the products usually includes big bulks of order and delivery of products to different locations

outside Roxas City to Manila and other places in the Iloilo province. The buyer either places

his/her order to the owner of the processing business a week to a month prior the delivery date,

but also depends on how often that buyer orders to transacts with the business. In wholesaling

and retailing, it can either be the processors deliver the products or the buyers go to the site and

get their order.

27


With higher level of trust, the buyers simply put their orders and wait for the delivery of the

dried fish or pick up the order in cases of no delivery. But there are also cases, especially with

first time customers, when they send a representative or personally visit the site to check the

quality of the dried fish and supervise the transactions.

Product Consumption

The last stage is the Consumption stage is where the products reach a household or individual

who buys them for consumption.

28


B. Actors

Figure 8 Map for Actors involved in each core process

29


There are 7 actors involved in the whole supply chain: Fishermen, Fish Dealer, Broker, the Dried

Fish Processors, Wholesalers, Retailers and the End Consumers.

The supply chain starts with the fishermen that do the catching. These fishermen are by

companies who own bigger and more equipped boat than an ordinary fishing boat used for

individual consumption or small business. The fishermen in a crew are 14-16 men that age 18

and above, as long as they are capable of being in the sea for days and know the basics of

fishing. Most of these men are heads of their household and are breadwinners who provide for

their family. These fishermen are mostly dependent on their job but also look for extra income

when they are not at sea. Their job ends the moment they dock their caught fish in the port for

distribution.

In the distribution process, the fish dealers negotiate the price with the broker. These fish dealers

are usually employed by the company or owner of the boat. They are the individuals that interact

with the fishermen about the volume and condition of the caught fish. Also, when the fish are

being unloaded in the port, they are already talking to and looking for possible buyers of the

fresh fish. And when the products are completely unloaded, they start weighing and estimating

the volume of fish in each banyera as well as the smaller orders they had from their consumers.

They record these data and give this information to the broker.

Another actor in the distribution process is the broker. The broker manages and facilitates the

bidding of the fish to make the flow of purchase easier and also serves as a mediator in

transactions between the fish dealers and the dried fish processors. The broker is employed

through application for the position at the local government.

30


The dried fish processing has three main actors: the owner, the pakyaw, and the packer. The

owner is the individual who transact with the broker and/or the fish dealers in the port for the

wholesale of fresh fish that will be processed to be dried fish because. They are the decision-

makers and have the bargaining power of how much of fresh fish they will purchase and use for

the processing. “Pakyaw” is the term used by the locals that refers to individuals who are hired

to do most of the physical activities in the processing stage. These individuals are usually

personally hired by the owner, usually are relatives, friends, neighbours, or people who live near

the area of the dried fish processing. They are in-charge of the transporting, cleaning,

soaking/salting of the fish, drying the fish and delivering the dried fish to the packing area. After

drying the fish, it is passed to the packers. The packers are usually the wives, friends or relatives

of the pakyaws who are looking for an extra source of income and were also endorsed by the

pakyaws themselves. Their job is to segregate the dried fish in containers ready for

delivery/orders by wholesalers and retailers. They are also assigned to determine whether the

dried fish is a TM, TML, hubad or a reject. They are required to as much as possible pack and

segregate all the dried/processed products in one day so they work for 6-7 hours in one day. They

are job-order employees who are called when their service is needed.

From the dried fish processor, the products can go to the wholesalers, the retailers or directly to

the end consumers. However for large-scale processors, a big portion of their finished products

are sold to the wholesalers and are exported to outside Roxas City to Manila and other places in

the Iloilo province. These wholesalers are “suki” or loyal customers of the business who places

their order in a weekly or monthly basis, depending also on the size of business that wholesaler

or retailer has.

31


The end consumers are individuals who consume the finished product. They purchase the dried

fish from the processors, the wholesalers, or the retailers in the market. The volume of products

usually bought by these consumers is for personal or household supply.

32


C. Product and Volume Flow

Figure 9 Product Volume and Form map

33


The product flow diagram shows the transition of outputs per actor and in the supply chain, from

fresh fish to dried fish as well as the percentages of the volume of product that moves on to the

next step or process.

The product starts as a newly-caught fish by the fishermen. Only 90% of that fresh fish is then

forwarded to the fish dealers, the remaining 10% is allocated for the consumption of the

fishermen, and also serves as their portion of the catch. From the fish dealers, 100% or all of the

fresh fish is forwarded to the broker that will then facilitate the sale of the product. After the

distribution process, only estimated of 70% of that 100% of fish from the brokers is sold to the

dried fish processors because the remaining 30% is bought for personal consumption of fresh

fish for individual households or businesses like restaurants and resorts.

With that 70% of fish available for the dried fish processors, only estimated of 99% proceeds to

the drying process because the business owner gets a portion for his/her personal consumption of

fresh fish. All of that 99% then goes through to the drying process. It is also in the pakyaw that

the output form has changed from fresh fish to dried fish. After the dried fish processing stage,

the finished product is then distributed to the wholesalers, the retailers and the end consumers.

From the processors, 75% of the finished product goes to the wholesalers, 20% to the retailers,

1% directly to the end consumers, and remaining 1% allocated for the consumption of the owner

and the employees of the business. These percentages are because there is a higher volume of

orders from the wholesalers compared to the retailers, as well as they are more prioritized by the

business as they are seen to give more profit. The 1% of end consumers are usually those who

live near the site of processing or those who personally know the owner or processors and prefer

to buy directly from the source with lower price compared from the market.

34


From the 75% of dried fish available in the wholesalers, an estimation of 74% of that 75% is sold

to the retailers, 25% to the end consumer, and an estimated 1% allocated for the wholesaler’s

personal consumption. For the retailers, in the 20% from the processors and 75% from

wholesalers, 99% is sold to the end consumers, with the remaining 1% allocated for personal

consumption of the retailers.

35


D. Money Flow

Figure 10 Map for Money Flow

36


The money flow has been presented to reversely start from the perspective of the consumer. The

consumer purchases the dried fish from the retailers on cash basis. The retailers purchase their

supply of dried fish from wholesalers on cash basis. The wholesalers also purchase their supply

of dried fish from the dried fish processors on cash basis. The dried fish processors purchase the

fish to be processed from the brokers via credit. Although brokers are only mediators, the

transactions of the dried fish processors are made with them. The brokers then report the

transactions made via credit to the fish dealers. The fish being sold by the fish dealers are

purchased from the fishermen or the owner of the boat via credit. The fishermen then pay the

laborers via credit for their work during the trip.

All cash-based transactions in the chain are only done by the consumers, retailers, wholesalers,

and transactions of the dried fish processors with the wholesalers. All credit-based transactions

are only done by the transaction of the dried fish processors with brokers, brokers, fish dealers,

fishermen/owner of boat, and laborers.

The credit transaction between the broker and processor generally take at least 12 days and up to

30 days until it becomes fully paid by the processor. The broker then delivers the said payment to

the dealer and the dealer then also becomes able to pay the fishermen only after the said

payment. The fishermen are highly dependent on the processor's capacity to pay to the broker

which is the primary source of income by the fishermen. The longer it takes before the processor

is able to pay, the longer it is before the fishermen are able to receive payment for their due

work.

37


E. Geographical Flow

Figure 11 Map for Geographical Flow

38


Figure 11 shows the geographical flow of the dried fish industry in Roxas City. This map

includes the core process diagram and below it the places where each process occurs. This map

begins with the process of catching in the seas of Sibuyan. The Sibuyan Sea is a small sea in the

Philippines that separates the Visayas from the northern Philippine island of Luzon. It is bounded

by the island of Panay to the south, Mindoro to the west, Masbate to the east, and to the north

Marinduque and the Bicol Peninsula of Luzon Island. From this, the fresh fish caught proceeds

to the fishport in Libas, Roxas City, where the distribution process occurs.

From the fish port, the owners of processing companies buy in banyeras the fresh fish to be

delivered to fish drying farms in Brgy. Dumulog and Baybay, Roxas City. After the drying

process, the products are delivered either for export to wholesalers and retailer in areas outside

Roxas City, to end consumers who are connected to these processors, or to Brgy. Banica Dried

Fish Market where the wholesalers and retailers transact with local end consumers. Although,

since the wholesalers and retailers are not limited to selling tabagak, they don’t get their dried

fish products exclusively from Brgy. Dumulog and Baybay, Roxas City. They import products

from wholesalers or processors in Masbate and Estancia. From there, wholesalers and retailers

either export their products to areas outside Roxas City, such as Manila and Iloilo province, or

they sell them to local end consumers for consumption.

39


F. Knowledge and Information Flow

Figure 12 Map for Information Flow

40


The flow of knowledge and information diagram illustrates that there is an exchange of

information and data among the actors of the supply chain. As shown in the diagram, there is

generally a heavier flow of information from the fishermen to the end consumers compared to

vice versa which in some way is in a form of feedback to the supplier.

The sharing of information from the fishermen to the end consumers is heavily about the quality

and quantity of fish. They share the information like the kind of fish used in the processing, the

quality of the product that they sell or process, etc. However, it can be noted that there is a lighter

flow of information from the end consumers to the suppliers especially regarding the demand

and product feedback. The fishermen are not well informed about the demand of dried fish in the

market as well as how much of their catch is processed into dried fish. In general, there is little

amount of feedback done in the whole supply chain. After the product is delivered to the next

process, little to no amount of information is given as to where the product went, how much was

processed or delivered, or customer feedback about satisfaction about the product.

It can also be noted that there is lacking information shared, especially to the end consumers.

There is lacking share of information where the dried fish came from. They do know about the

quality of the product, who are the retailers, but are not well informed about the processing of the

dried fish as well as where the dried fish came from.

41


G. Governance, coordination, regulation and control

Fishermen are hired laborer by the boat owner. Their work only revolves around tasks inside the

boat. It is their duty to troll of fishnets; sort fish based on their type and size, and maintain

cleanliness and order. Materials and equipment are provided by the boat owner. Their tasks end,

the moment fishes are unloaded from boat and handed over to fish brokers. In hiring their crew,

process is simple. Existing crews, originally hired by owner, can recruit new member as long as

that person is willing, available and able to comply with skills needed to accomplish tasks.

Fish caught are measured based on number of banyeras they can fill and not by weight. A

banyera can contain approximately 38 to 45 kilograms of fish. There are no imposed quotas on

number of banyeras of fish they should be able to catch per trip. However, their wages greatly

depends on the profit gained from selling of their caught fish by the fish brokers. Their wages are

paid after creditors have paid their debts, expenses for the trip has been compensated,

maintenance expense is paid and owner’s profit share is deducted from the total sale. Other than

from their profit sharing, fishermen have another source of income. Every after their trips, they

set aside about 3-5 banyeras of fish; these are their share from their caught fish. They sell these

to fish buyers and then divide the sale among their crew members.

Boat owners are not directly involved in the chain. They are provider of vessel that the fishermen

use to catch fish. They secure necessary licenses, permits and requirements for a commercial

boat be able operate legally. Boat owners provide necessary materials and equipment for

fishermen so that they can performs their work. These equipment include boat with working

motors and equipped with navigational and tracking devices, nets and banyeras. Based on the

Department Order 156-16 series of 2016 of Department of Labor and Employment (DOLE),

other than material and equipment, owners should also provide food and potable water, and

42


work-inducing environment. Furthermore, working area should be free from harmful substances

and dangerous objects that may pose threat to well-being of workers.

Owners are liable for the well-being his employees; thus, he should secure active communication

with his employees in case there are unexpected event that will endanger his crews’ health.

Communications between them are achieved through the use of mobile phone.

As mentioned earlier, owners earn through profit sharing. His salary highly depends as well on

profit gained through selling of his fishermen’s catch. Based on interview, after expenses are

deducted from sales, one-half of profit goes to owner while the other half is divided among the

crews.

Brokers are individual who acquires license from the government to become mongers. Interested

individual applies to the government. Upon application, they are required to submit certain

document and pay fees. They earn by getting certain percentage from the sales of caught fish.

Brokers are the economic stimulus since they are the mediator between the fish suppliers

(fishermen) and fish buyers (processors). They are price setter and regulator since they initiate

the barter. In initiating the barter, brokers use method of auction. Wherein, brokers set initial

price, then buyers bid until there is a declared winner. Payment of debts of the creditors takes at

most a month before are fully paid.

Processors obtain necessary license, permits and requirements to operate their business,

examples of which are business permits, sanitary permit and license to operate, which can be

obtain from the government after required documents are submitted and processed, and fees are

paid.

43


Supplies of ingredients used in the process are acquired from different suppliers, including the

supply of fresh fish. Their production increases during summer time, because during this season

drying fish takes lesser time due to high temperature. On the other hand they experience least

production during rainy season because drying fish usually take longer time during these months.

Hiring workers can vary depending on the season. During high production season, owners hire

new workers to cater the high production rate during that certain period. Hiring for the

production dried fish are almost the same as hiring for fishermen. Past workers can recommend

interested people to the owner. These people should be able to comply with the necessary skills

needed to perform tasks assigned. All laborers are paid depending on their finished product. In

other words, all of their workers are productivity-based workers.

Since processing involves food handling, workers should observe sanitation and order all the

times. The area should also be free from any substances that may affect the quality of fish and

may cause its inedibility

Preorder are accepted especially for export product purposes. This ensures the freshness and

quality of the dried fish are delivered. Also, this encourages faster turnover rates in its inventory.

Just like processors, they obtain necessary licenses, permits and requirement for the government

to operate their store. Usually, the owner themselves handles the operation of the store and hire

other staff to assist them. Supplies of dried fish products are usually pre ordered. But in case of

tabagak product, supplies are delivered weekly, it depends upon the store owner whether to

acquire fresh supply or not. In case they take new supplies, 50% of amount due is paid upon

receiving of the product. After which, creditors are given a week or depend upon their agreement

to pay for the remaining balance.

44


Generally, the actors and their activities are independent among each other. None among the

members of the chain has more power over the other, there is no clear hierarchy among the roles

and performances of each actor given that there is no existing organization or cooperative

between the actors of the dried fish industry.

D. End Consumer Perception of the Product

Based on a Convenient Sampling conducted by the team, the following data has been found by

the team regarding the Consumer Buying Behavior towards Dried Fish Products:

1. Of the total no. of respondents, 81.3% buy Dried Fish.

2. 43.8% buy Dried Fish once a month and 25% buy Dried Fish once every 2 weeks.

3. 43.8% buy Dried Fish during Sunday and 40.6% buy Dried Fish on Saturday

4. 60% buy Dried Fish at the market

5. 81.3% have allotted budget for buying Dried Fish

6. For the factors that affect the buying decision of the consumers, the following data has

been gathered:

a) 34% strongly agree that the size of the fish affects their buying decision.

b) 63% strongly agree that the quality of product affects their buying decision.

c) 34% agree that the place of purchase affects their buying decision.

d) 50% agree that recommendations from the family affect their buying decision.

e) 31% agree that packaging affects their buying decision.

f) 34% agree that the place of origin of product affects their buying decision.

7. For the factors that consumers think are good qualities of a dried fish product, the

following data has been gathered:

45


a) 34% strongly agree that the size of fish indicates good quality of dried fish.

b) 37.5% agree that the type of fish used indicates good quality of dried fish.

c) 28% agree that shiny scales indicate good quality of dried fish.

d) 37.5% strongly agree that an intact belly indicates good quality of dried fish.

e) 50% strongly agree that the smell indicates good quality of dried fish

f) 53% strongly agree that color indicates good quality of dried fish.

g) 31.25% agree that the place of origin of dried fish indicates good quality of dried

fish.

H. Relationships and linkages between supply chain actors

The relationships between actors generally consist of persistent relationships, with spot market

relationships occurring in some instances, due to the consistency of transactions that occur

between these actors. On a horizontal relationship standpoint, there are actors in the value chain

that are not interdependent of each other but are rather competitive especially in terms of

information flow by hindering the flow of quality standards and quality production processes that

could help improve the overall performance of the value chain. Meanwhile, on a vertical

relationship standpoint, relationships between actors are strong. To further discuss the strength of

these relationships, the actors of the value chain have been divided into clusters that each have

their own vertical strength that keeps the value chain strong. The clusters are the following:

Fishermen – Dealer – Broker

In this relationship, the Dealer acts as the head of the three. More often than not, the Dealer is

actually also the owner of the ship being used by the fishermen and the fishermen are also hired

46


by the Dealer himself. The Fishermen are dependent on the Dealer especially in terms of labor

salary.

The Broker and the Dealer also work together in selling the fish caught by the Fishermen. The

Broker facilitates the selling process and negotiation with potential customers and the Dealer

waits until the Broker has finished the sale. The Broker is also dependent on the Dealer in terms

of labor salary.

Dealer – Broker – Dried Fish Processor

The Broker acts as a mediator in the transaction between the Dealer and the Dried Fish

Processor. The Dealer provides the Broker with the amount of newly-caught fish that is available

for sale. The Broker then does the negotiation with the Dried Fish Processor/s that are interested

in purchasing the fish and starts the bidding. If the bidding has achieved a certain price for a

certain amount of the fish being sold, the Broker finishes the sale with the Dried Fish Processor/s

and reports back to the Dealer.

Dried Fish Processor – Wholesaler – Retailer – End Consumer

The Dried Fish Processor, in terms of the dried fish as the product, is the main supplier of the

Wholesalers and Retailers. After processing the caught fish into dried fish, the fish is sold either

to the Wholesaler, Retailer, or even directly to the End Consumer. When the Wholesaler has the

supply, the Wholesaler may sell the products to a Retailer or directly to the End Consumer.

When the Retailer has the supply, the Retailer may only sell directly to the End Consumer.

Overall, the Dried Fish Processor, Wholesaler, and Retailer may sell directly to the End

Consumer.

47


I. Logistics Issues

Ineffective Mode of Communications Due to Poor Technology Used by Fishermen

In the Catching process when the fishermen are already in the middle of the sea waiting to finish

the catch, the fishermen communicate with the company’s owner and are given additional

instructions through cellular phones. Moreover, not all of the crew own a cellular phone and the

only contact person of inside the boat is the Captain. When in fishing waters, there is a high

chance that telecom services will not be available due to its distance from the nearest telecom

tower thereby not giving enough signals for the fishermen to make any form of communication

possible. This can affect their performance on the boat as well as the clarity of instructions in the

process. These things can result to high possibilities of wrong communications or lack thereof

that lead to inefficiency of labor.

It was also noticed that most fishing boats made of wood used low technology in communicating

with the Philippine Coast Guard. They used old models of radio transceivers that the other line is

barely audible or understandable. Their communication with the Philippine Coast Guard is

crucial because they depend on the PCG’s advice on whether they can go out at sea or not, and

this issue puts the lives of the fishermen at risk especially in times when it becomes perilous for

them to go out to sea due to sudden changes in the weather considering that it usually takes three

to four days before the fishermen finish their work at sea.

48


J. Costs and returns analysis

Figure 13 Value Addition Flow

49


II. COSTS REVENUES PROFITS `MARGIN

UNIT
ADDED % ADDED UNIT UNIT % TOTAL UNIT % RETAIL
VC ACTOR TOTAL
UNIT COST COST PRICE PROFIT PROFITS MARGIN PRICE
COST
Fishers/Brokers 19.10 - 51.83% 104.26 85.16 69% 104.26 65%
Processors 111.59 7.33 19.89% 140.00 28.41 23% 35.74 22%
Retailers 150.42 10.42 28.28% 160.00 9.58 8% 20.00 13%
36.85 100% 123.15 100% 160.00 100%
(in pesos)

Min Max Average

Number of banyera per trip 100 300 200
Number of Kilos per banyera 38 45 41.5
Price per banyera 1900 3000 2450

Number of kilos dried fish produce per banyera 23 24 23.5

fresh fish to dried fish ratio (kg) 1.77

Number of kilos per kaing 40
Number of kilos of tabagak ordered weekly 100 300 200
Estimated number of kilos ordered per day (based on weekly order) 28.57

Data gathered used in computing the marginal cost

50


Econ Cost (in pesos)

Average
Total Cost Life Per Kilo
Qty Measurement Unit Price Per Per Per
(in pesos) (year Per Year Per Trip of Dried
(in pesos) Day Banyera Kilo
) Fish
1,100,00
Bangka 1 unit 5,500,000 5,500,000 5 0 3,013 12,054.79 60.27 1.45 2.56
Net 7 roll 13,000.00 91,000 1 91,000 249.32 997.26 4.99 0.12 0.21
Banyera 300 pieces 950 285,000 10 28,500 78.08 312.33 1.56 0.04 0.07
Shovel 3 pieces 350 1,050 1 1,050 2.88 11.51 0.06 0.00 0.00
Ropes 3 rolls 10,000 30,000 5 6,000 16.44 65.75 0.33 0.01 0.01
Rice 1 sack 1,675 1,675 8.38 0.20 0.36
Gasul 2 tank 510 1,020 5.10 0.12 0.22
Krudo drums
(Gasoline) 10 (200L) 3700 37,000 185.00 4.46 7.87
Motor Oil 1 Pail (20L) 3000 3,000 15.00 0.36 0.64
Ice 50 blocks 270 13,500 67.50 1.63 2.87
Food assorted 2,000 10.00 0.24 0.43
jugs (5
Drinking Water 4 Gallon) 35 140 0.70 0.02 0.03
40
Labor % of Profit 30000 12,000 60.00 1.45 2.55
20
Maintenance % of Profit 30000 6,000 30.00 0.72 1.28
Subtotal 381.68 9.20 16.24

Total 448.88 10.82 19.10

Cost schedule for catching

51


Total Cost (in pesos)

Average Econ
Measure Cost
Qty Unit Price life Per Per Per Kilo of
ment (in Per Year Per Batch Per Kilo
(in pesos) (year) Day Banyera Dried Fish
pesos)
Rent Monthly 10,000 333.33 1,000.00 9.52 0.23 0.41
Water monthly 800 26.67 80.00 0.76 0.02 0.03
Electricity monthly 300 10.00 30.00 0.29 0.01 0.01
Strainers 10 pieces 150 1,500 10 150.00 0.41 1.23 0.01 0.00 0.00
knife 5 pieces 100 500 5 100.00 0.27 0.82 0.01 0.00 0.00
2,692.31.0
Motorcycle 1 unit 35,000 35,000 13 0 7.38 22.13 0.21 0.01 0.01
Kapil 400 pieces 60 1 60.00 0.16 0.49 0.00 0.00 0.00
Water Jug 70 pieces 70 5 14.00 0.04 0.12 0.00 0.00 0.00
Total 0.26 0.46
Fixed Cost for Processors

Econ Cost
Measureme Average Total
Qty life Per Per Per Per Kilo of
nt Price Cost Per Year Per Kilo
(year) Day Batch Banyera Dried Fish
Fresh Fish 2,450.00 59.04 104.26
Salt 50.00 1.20 2.13
kaing Per piece 60.00 0.85 1.50
Diesel 2 Liter 40.00 80.00 80.00 0.76 0.02 0.03
Vehicle rent 15.00 0.36 0.64
Labor
Fish Drying
process 40.00 0.96 1.70

Packers Per Kaing 35.00 0.50 0.88

Total 62.93 111.13
Variable cost for Processors

52


Econ life Cost (in pesos)

Quantity Measurement Average Price Total Cost
(year) Per Year Per Day Per Kilo of Dried Fish
Utilities
Electricity 1250 41.67 1.46
Rent 3100 103.33 3.62
Water 650 21.67 0.76
Freezer 1 Unit 15000 15000 16 937.5 2.57 0.09
Digital Weighing scale 1 unit 3000 3000 10 300 0.82 0.03
staple 2 pieces 75 150 10 15 0.04 0.00
Labor 1 monthly 3000 100.00 3.50
Total 9.45
Fixed cost for retailer
Cost (in pesos)
Average Price Total Cost
Per Kilo of Dried Fish
Variable
Dried fish 140 140 140.00
Plastic 95 95 0.95
Staple wire 20 20 0.02
Total 140.97

Variable cost for retailer

53


Table 1 Supply Chain Cost Analysis

COSTS REVENUES PROFITS `

UNIT TOTAL ADDED % ADDED UNIT PRICE UNIT PROFIT % TOTAL UNIT MARGIN % RETAIL
COST UNIT COST COST PROFITS PRICE

30.26 - 61% 117.65 87.39 51% 117.65 53%

130.47 12.82 26% 200.00 69.53 41% 82.35 37%

206.40 6.40 13% 220.00 13.60 8% 20.00 9%

49.48
100% 170.52 100% 220.00 100%

54


This table shows the calculation of marketing margin of Dried Fish Industry. The following are

assumptions used by the researchers in computing for the values presented:

1. All caught fish are assumed to be tabagak.

2. All caught fish are sold to a single processor.
3. Most of the figures used in computing for the cost is the average amount spent.

As can be observe from the table, costs and margin is unequally shared in the value chain.

Among the actors, the first actor earns the most profit despite their relatively low expenses

compared to the retailers. However, this high value does not really equate to wages received by

fishermen. In fact, they received the least shares when profit are divided among stakeholders

despite their high expense compared to the brokers’ and boat owners’, who earns relatively high

profit than fishermen. If fishermen were to sell their catch and owns their boat, their unit margin

may have stayed the same but enjoyed a higher amount of pay.

55


A. External influences

Support from the Government

Assistance to small scale fishermen.

The Philippine government launched a major investment programme to improve

agricultural and fisheries production as part of long term plans to increase rural incomes

and boost social development in the country’s poorest region.

The government targeted low income communities that will help with infrastructure

reconstruction costs to support the rebuilding of fishing and farming communities affected

by Typhoon Haiyan.

Financial support for the investment scheme include a $500 million loan from the World

Bank and other international credits. Apart from loans to small scale fishermen to buy

fishing equipment. The facilities built include fish landing centres and all weather roads in

rural areas to enable fishery products and agricultural goods to be transported to local

markets.

Landing centers.

The Department of Agriculture Bureau of Fisheries and Aquatic Resources (BFAR)

announced plans to build 252 community fish landing centres in strategic locations across

the country to improve socio-economic conditions in low income fishing communities.

Each landing center cost Php 2.85 million to construct, the community fish landing centers

house the post-harvest equipment and facilities to keep fish and fishery products in good

condition. This enables the fishermen to sell their catch at a higher price compared to using

56


a traditional fish landing station that many fishermen use. local consumers also benefit

from these landing centers since it provides them better access to safe fishery products.

Once the landing centers are constructed, it will be operated by local government units and

later transferred to local fishermen’s cooperatives to run.

Information collection.

To support the development of small scale fishing communities the government requires

more information to be collected about fishermen, fishing boats, fishing equipment, and

aquaculture facilities so progress can be monitored and the right assistance may be

provided.

To improve information collection, BFAR has launched a smartphone application in

cooperation with the Philippine mobile phone operator, Smart Communications Inc., to fast

track the bureau’s national programme to register municipal or small scale fishing boats

and their fishing gear. BFAR has also launched a national programme to register municipal

or small scale fishermen as part of wider measures to monitor the fishing industry in

different localities and promote sustainable fisheries development.

As incentive for municipalities to collect and file their data promptly, the Bureau is

offering grants worth Php 2 million each to the first 100 municipalities to complete and file

their fishermen database entries to invest in local fishery-related developments.

57


Laws, rules and regulations that affect the industry

Laws regarding the rights of fishermen.

Department Order No. 156-16 (Series of 2016)

Rules and Regulations Governing the Working and Living Conditions of Fishers on Board
Fishing Vessels Engaged In Commercial Fishing Operations

Rule V. Compensation Scheme

Section 1. Policy - Fishers shall receive minimum wages. Productivity-improvement

measures shall be introduced to ensure decent working standards for fishers and decent

living standards for their families.

Section 2. Compensation Scheme - The compensation scheme for the fishing industry

shall be consistent with the two-tiered wage policy that ensures minimum wage,

mandatory wage-related benefits to fishers and encourages the voluntary adoption and

implementation of productivity and/or performance-based pay.

The criteria/formula for the implementation of productivity and/or performance-based pay

shall be mutually determined by the fishing vessel owners and fishers upon agreement of

the adoption of the same.

a. Fishers in small-scale commercial fishing operation

The recommended compensation scheme shall be implemented at the start of the third

year of effectivity of these Rules.

58


b. Fishers in medium-scale commercial fishing operation

Fishing vessel owners shall ensure that fishers in medium-scale commercial fishing

operations shall receive applicable daily rate, considering the duration of actual work,

which shall not be less than the applicable minimum wage for the non-agricultural sector

prescribed by the appropriate RTWPB having jurisdiction over the fishing vessel’s port of

registration and wage-related benefits and productivity or performance-based pay pursuant

to the succeeding Section.

c. Fishers in large-scale commercial fishing operation

Fishing vessel owners shall ensure that fishers receive daily minimum wage for the non-

agricultural sector prescribed by the appropriate RTWPB having jurisdiction over the

fishing vessel’s port of registration and wage-related benefits and productivity or

performance-based pay pursuant to the succeeding Section.

Section 3. Two-Tiered Compensation Scheme.

The compensation scheme for master or captains and fishers in medium and large scale

commercial fishing operations shall be composed of minimum wage and wage-related

benefits and productivity or performance-based pay, to wit:

a. Minimum Wage and Wage-Related Benefits

Wages and/or shares of master or captains and fishers shall not be less than the applicable

daily minimum wage for the non-agricultural sector prescribed by the appropriate RTWPB

having jurisdiction over the fishing vessel’s port of registration.

59


b. Productivity or Performance-Based Pay

For medium and large-scale fishing operations, fishers and fishing vessel owners are

encouraged to mutually agree and adopt a productivity of performance-based incentive

scheme on top of the applicable minimum wage, which may take into consideration

business and individual fisher’s performance, productivity, accident safety and prevention,

cost-savings and attainment of quota/targets.

The grant of productivity or performance-based pay shall not diminish existing gain

sharing arrangements, other forms of bonus and incentive being given to fishers and those

provided under collective bargaining agreement.

Section 5. Payment of Wages. - Unless there is an agreement to the contrary, the wages

of fishers shall be paid in cash every after two weeks or at intervals not exceeding

sixteen (16) days. Provided, however, that no fishing vessel owners shall make payment

with less frequency than once a month. Fishing vessel owners shall ensure that fishers

working on board fishing vessels are given means to transmit all or part of their wages,

including advances, to their families at no cost.

Unless otherwise agreed upon or stipulated in the employee agreements, productivity or

performance-based incentive shall be given to the fishers on the succeeding pay

immediately following the completion of every fishing trip.

Section 6. Transparency in Fisher’s Pay. - To ensure fairness, the basis of fishers’

productivity or performance-based incentive shall be properly agreed upon. Fishing

vessel owners shall maintain payrolls and provide fishers with payslips. Moreover,

payments for fishers or their family’s advances shall be properly documented.

60


Rule IX. Social Protection

Section 1. Social Protection Benefits. - Without prejudice to established company

policy, or collective bargaining agreement, or other applicable employment agreement,

fishers shall be entitled to coverage for social welfare benefits provided by Pag-IBIG,

PhilHealth, SSS, Employees’ Compensation Program and other applicable laws.

In the absence of social security coverage, medical, and hospitalization costs of work-

related injuries, illness and sickness of fishers shall be shouldered by fishing vessel

owners.

Philippine National Standards on Dried Fish

The standard on Dried, Salted Fish is also part of the ethnic food products, since this

product requires more validations through national and regional public consultations. The

standard developed aims to lead to consistencies in the fair and objective evaluation of the

quality and safety of dried salted fish products. This will also contribute to industry market

acceptance of the said product.

This standard prescribes quality and safety requirements and specification for all

commercial dried, salted fish in the country. It shall apply to those engaged in the

manufacture, labeling, repacking, trade, exportation, importation and distribution of the

above products.

61


General Guidelines:

Technical specifications

· Raw material

The fish shall be fresh, and wholesome, fit for human consumption. Salt shall be of food

grade quality and meets the purity requirements of standards for iodized salt as per R.A.

No. 8172 “An Act Promoting Salt Iodization Nationwide and for Related Purposes.”

· Manufacturing process

GMP – The product shall be prepared in accordance with the Bureau of Food and Drug’s

AO 153 s. 2004,Revised Guidelines on Current Good Manufacturing Practice in

Manufacturing, Packing, Repacking or Holding Food and the Recommended Code of

Practice for Dried Fish.

Food additives – Food additives, when used, shall be in accordance with the current

regulations of the Bureau of Food and Drugs and may include the following: sorbic acid or

its calcium, sodium or potassium salts maybe used as preservative at the PNS/BFAD

04:20064 maximum level of 200 mg/kg of the final product, singly or in combination,

expressed as sorbic acid.

· Packaging and labelling

An Individual retail or bulk container shall contain only one species of fish, which are

relatively uniform in size. The product shall be packed in suitable hygienic containers that

will maintain its quality during storage and transport.

62


Labelling of retail packages/container – Each retail container shall be labeled and marked

with the information in accordance with current BFAD Labeling Regulation.

Labelling of Non-retail, Bulk Containers – The name of the product, lot identification code

and the name and address of the manufacturer or packer shall appear in the container.

However, the name and address of the manufacturer may be replaced by identification

marks provided that such mark is clearly identified with accompanying documents.

· Finished product

Product Presentation – The products shall be presented as split/filleted dried fish, with or

without backbone; or whole dried fish, in its original form, which has not been cut and may

or may not have been eviscerated, and with scales intact with all parts intact.

The final product shall conform to the current physico-chemical requirements in the list of

Physico-chemical Requirements of Dried , Salted Fish provided by BFAD. These

requirements may change subject to availability of new findings.

The product shall be free from any objectionable odor, color, and flavor; and, any evidence

of insect infestation and mold growth.

· Quality assurance/Control

Sampling of lots for physico-chemical examination of the products shall be in accordance

with sampling plans based on FAO/WHO Codex Alimentarius Commission Sampling

Plans for Pre-packaged Foods (AQL=6.5). A sample lot (N) shall be the quantity of the

product under similar conditions. A sample unit shall be the primary container where the

63


product is in bulk; while the individual fish is the sample unit for retail packaged products.

(see AnnexD - FAO/WHO Alimentarius)

The product shall be considered defective when it there is presence in the sample unit of

any matter which: has not been derived from the list of species of finfishes utilized in the

production of dried whole fish; does not pose a threat to human health and can be

recognized either without magnification or is present at a level determined by any method

including magnification that indicates non-compliance with good manufacturing and

sanitation practices.

Defective Product:

• Loose scales

• Presence of liver and blood stains, and traces of internal organs (for dried, salted,

split/filleted fish)

• Bursting of bellies (for dried, salted, whole fish)

• Excessive cracks and crumbling texture

• Detaching of fish parts. C.2.6 Excessive salt crystals appearing on more than 50% of

the fish surface

64


Physico-chemical requirements of dried, salted fish

Characteristic Requirement

Water activity (aw), maximum 0.78 (range), at 25°C .78

Salt content
(percent Sodium chloride (NaCl), recommended level) Not less than 12.0*

Histamine content
(ppm edible portion, maximum) 200

*Salt content may vary provided that the prescribed water activity is not exceeded

Roxas City as the Seafood Capital of the Philippines

Roxas City is not only known for the fresh sea foods, but also for the dried variety – tuyo,

pinakas, dried pusit, boneless dilis, hibi, etc. On our way to Olutayan Island, we took the

boat at the Banica Wharf, a small pier about five minute drive from the Roxas City

Plaza. I was there early so I had time to look around.

There are stalls and stalls of dried sea foods (primarily dried fish) lining both sides of the

street leading up to the wharf. Most of the goods sold here come from either Capiz or

nearby Masbate. They take pride in their dried fish which are always “fresh” – not the

“bilasa” fish unsold in the wet market and re-cycled as dried fish. These are fish freshly

caught from Sibuyan Sea and immediately sun-dried to perfection.

65


National Market Code for the Philippines

Sec.19 Sale of Marine Products. - Only fresh, live and wholesome fish and marine

products or dried, salted, smoked, or fermented fish and marine products which are safe

for consumption shall be sold. Fish and other marine products caught in radioactive zones

as well as in areas contaminated by toxic substances or high in mercury count as

determined by the Department of Health (DOH) in coordination with the Bureau of

Fisheries and Aquatic Resources (BFAR) and the Food and Drug Administration (FDA),

shall be condemned and shall not be allowed for sale.

SECTION 20. Protection and preservation of foods. – All kinds of foods which require

no further cooking shall be wrapped, covered or enclosed in containers to preserve their

freshness and prevent contamination.

Business Registration Requirements for Dried Fish Businesses:

1 .Business Name Registration

Department of Trade and Industry (DTI)

DTI Office in the province where the business is located

Website: www.bnrs.dti.gov.ph for online registration

Validity: 5 Years

2. Mayor’s Permit

Municipality or city where the business is located

Validity: 1 Year

3. Tax Identification Number

BIR Regional or District Office where the business is located

66


4. BFAD Certificate

BFAD Office in the province where the business is located

Validity: 1 Year

PESTLE Analysis

POLITICAL:

Airport regulations in transporting dried fish (threat)

When transporting dried fish to the U.S., you need to wrap it in paper and vacuum seal it.

The Transportation Security Administration (TSA) also does not allow any exotic food to

be checked-in, but instead be hand carried. This is to avoid setting off security alarms. This

process might discourage consumers from purchasing dried fish as “pasalubong” as it

might inconvenience them.

ECONOMIC:

Low Average catches affect fishermen’s income (threat)

The fishermen’s income is already considerably low, in the occasions that their catch

volumes for the week is lower than average, they will have a lesser income. This is

considered a threat since it might hinder other individuals from seeking employment as

fishermen.

Natural Disasters (threat)

Natural disasters have a significant impact on the fishing industry. In natural disasters such

as typhoons, the fishermen are less likely to go out to sea, their catch would lessen, and

after the typhoon, the fishermen would not immediately start fishing.

67


SOCIOLOGICAL:

Dried Fish Popularity (opportunity)

Dried fish is considered to be the favorite food of the Filipino masses. Dried fish is a staple

in any Filipino household, this is because it is easily stored, it is inexpensive, it won’t spoil

easily, and it is accessible. Dried fish is also a key ingredient in many dishes and it is still

enjoyed as a standalone dish to be eaten with rice by many Filipinos. It was also once

considered to be the food of the poor, but in recent years it is being enjoyed by people of

all social classes.

Acceptance of Low Quality Fish (threat)

On our ocular visits and interviews, the dried fish processors do not reject any dried fish

that they have produced. Instead, they sell the fish at a lower price and label it differently.

Lack of awareness on food safety, hygiene, certificate (opportunity and threat)

There are no strict implementations on workplace sanitation in the dried fish industry;

based on our site visit and interviews, the site is not regularly checked by government

officials and there doesn’t seem to be any sanitary regulations the processors need to

adhere to.

68


TECHNOLOGICAL:

Multi-commodity solar tunnel drier (opportunity and threat)

Currently, the dried fish processors do not use any complicated technology, however, there

are many technologies being developed that will aid the dried fish processors. For example,

the Multi-commodity solar tunnel drier (MCSTD) by reducing drying time by up to 25%

and improve overall quality since the fish being dried will not be exposed to air. It is an

opportunity since a significant amount of dried fish processors has a vast array of

technologies to help improve their operations. However, it is still considered a threat; this

is because of the rapid technological improvement, there would be a need to continually

update the technology and that is expensive. Moreover, for the small scale processors,

these technologies would be hard to purchase considering its cost.

LEGAL:

Food safety & Quality standards(opportunity)

Considered an opportunity since it would assure the consumers that the product they are

purchasing is safe to eat. They would prefer dried fish products that have an assurance that

it is safe to eat over those products that have no food safety assurance.

Philippine Standards (opportunity)

This would assure consumers that every dried fish product in the market has passed

Philippine standards. This would also set a concrete standard for the dried fish industry.

Moreover, this lets the business ensure safety, nutrition, quality, and value of their product.

69


ENVIRONMENT:

Weather Conditions (threat)

The current dried fish industry is heavily reliant on natural fish drying, meaning they

depend too much on the weather conditions, when it happens to rain, dried fish production

would cease since they have no other means of drying fish. Being heavily reliant on the

weather and manual processes means that the processors would have an unpredictable

production of goods and production would come to a halt when the weather is not suitable

for production.

Pollution (threat)

Water pollution is a growing concern for the fishing industry as whole, high levels of

pollution would affect fish quality and render the fish unsuitable for consumption.

70


V. SWOT Analysis

Strengths

Strong partnerships between multiple clusters of actors within the value chain

There are certain clusters of actors within the value chain that have stronger relationships with

each other than with other actors. This strengthens their performance as actors within the value

chain thereby improving the overall flow of the value chain. This may be due to special

transactions between these actors or strong relationships may been formed within these clusters.

The dried fish industry in Roxas City has established its exporting capacity

Roxas City is well-known as a supplier of dried fish to numerous targets. Being able to export

into different provinces around the Philippines and even internationally, the dried fish industry

has established its exporting capacity to meet the demand of local and international buyers.

Weaknesses

Information flow is individualistic

For Processors, the standard of quality and the things to improve in the processing of the dried

fish is kept as a secret from the other processors. This is due to the thinking that if they were the

only ones who knew about it, they would have the competitive advantage over their competitors.

This hinders the growth of other actors which also affects the overall flow of the value chain in

the end.

71


Fishermen are highly dependent on the actual sales of processors, wholesalers, and

retailers due to their credit-based transactions

Fishermen only get paid of their labor by the fish dealers after the processors, wholesalers, and

retailers pay their credit if they get enough revenues from their sale. Fishermen have to wait until

these actors are able to pay and therefore become very dependent on their performance for them

to be able to receive their due payment.

Opportunities

Roxas City is still known nation-wide as the Seafood Capital of the Philippines

Roxas City prides itself as the Seafood Capital of the Philippines. This tells a lot about Roxas

City’s export capacity and competence in the bamboo industry. This becomes leverage for the

seafood industry in Roxas City to be branded as having excellent players in the seafood industry

and can positively contribute to the brand equity of these players as well.

Demand on fish continues to gradually increase incrementally

The U.N. report says that fisheries and aquaculture produced 174 million tons of fish in 2012, 11

million tons more than in 2010. The increase in production matches a growing demand: Fish

consumption has risen from an annual average of 22 pounds per person in the 1960s to nearly

double that in 2012. This means that demand for fish fish will steadily grow and possible

consumers for the commodity have little chances of going down. Especially in the export arena,

there is a lot of potential for the fish industry in Roxas City.

72


Fish is still considered important in the people’s diets

Fish is a great source of protein which is an essential nutrient in the human diet. It helps

strengthen the muscles and the physical performance of the human body. Demand for fish will

steadily grow due to the nutrition that it gives to consumers.

Threats

Lack of adequate government support

Although the government have laws and policies targeted in the seafood industry and regulate

the activities that lie under it, proper implementation of these laws are not executed well. Due to

insufficient monitoring, these laws are often ignored and proper corrective measures are not done

by the government which can improve the value chain and make it sustainable.

Climate Change can affect the future supply of fish available for catching and

processing

A 2015 study from WWF finds that climate change is one of the main reasons for the decline of

marine species in the last 30 years. 3 billion people rely on fish as their major source of protein.

Climate Change brings with ocean acidification, limited ability of some species to thrive in

certain habitats, extreme unpredictable weather, and rising sea levels. All of these affect the

future supply of fish available for catching and processing as caused by the effects of Climate

Change.

73


Growing demand for fish threatens sustainability of aquaculture and fishing

In 2012, about 30 percent of fishing was being done in an unsustainable way from the world’s

oceans and waterways. That was the highest percentage of unsustainability in fishing the U.N.

has found since 1974. If unsustainable methods of fishing will be done in Roxas City without

regulation from the government, the supply of fish may be threatened and the overall value chain

of the dried fish industry might face difficult challenges in finding the supply for the growing

local and global demand.

VI. Options for Chain upgrading

Flow of Information

One main issue of the supply chain is the flow of information. There is lack of sharing of

information between the actors in the chain. There is lack of communication between actors and

each is only concerned with their own tasks, and is neither aware nor concerned where their

product goes afterwards. The fishermen are not aware of the demands of dried fish in the market.

Their work is limited only in catching fish and do not engage or are not involved in the process

of drying fish. The standards used by the actors specifically the processors and the retailers and

wholesalers are different from the standards issued by the Philippine government. There is a

need for information dissemination and educating the actors of the chain of these accepted

standards. Also, there is a problem with the organization of the industry itself because of lack of

central body or organization that regulates the activities in the supply chain. This has caused

problems like the lack of linkages of each actor or process.

74


Lack of Technology

The current problems in the lack and wrong communications are also because of the lack of

appropriate gadgets and technology that can help improve the supply chain. The process can be

upgraded through improved technology. The Department of Science and Technology (DOST) is

a government institution that provides support for technological improvements in the country.

The DOST might be able to provide these fishermen with the walkie-talkies in order to equip

them with advanced technology that could help solve their problem. With right government

intervention and help from private sectors, miscommunication may be avoided. Also, there is an

existing technology called Multi-commodity solar tunnel drier (MCSTD) that reduces drying

time by up to 25 percent and improve the overall quality of the product since the fish will not be

exposed to air.

75


VII. Conclusions

The supply chain of the dried fish industry of Roxas City, Capiz is functional and efficient in

terms of processing and delivering the products as well as making sure that there is enough

supply available in the market. However it is also safe to say that the supply chain can still be

improved further and cater to the needs and issues encountered by the actors of the chain.

Firstly, there is an evident weakness in the sharing of information among the actors. Those who

have access to whatever little information they can get do not usually share it with others which

can be associated with the competition for profit experienced by each actor of the chain.

Secondly, the dried fish industry is dependent on the traditional practices of processing the dried

fish. There is lack of appropriate facilities and technology necessary in the process. There is high

dependence on the weather especially in the catching and processing stages of the chain.

Thirdly, the fisher folks are the most marginalized actors or the chain. They get the lowest share

in profit and are paid late for their labors.

Also, the supply chain itself tolerates individualistic activities and goals of its actors because of

its inability to strengthen the linkages and relationships of the actors in the chain. Furthermore,

there is not enough support and monitoring from the government that regulates and oversees the

activities of the actors in the chain.

Another issue observed in the supply chain is the inconsistency of standards used. The standards

used by the actors of the chain are different from the Philippine National Standards (PNS) issued

by the Philippine government. There is a difference in when it comes to determining the quality

of the dried fish that should be available in the market. It is stated in the PNS, defective products

76


are those that have loose scales, have liver and blood stains, have bursting bellies, excessive

cracks and crumbles, and those that have detaching fish parts. Furthermore, PNS also issued the

standard physic-chemical requirements for the dried fish. However, these standards are not use

by the actors of the chain: the defective products, as stated in the PNS, are still sold in the

market, and there is no exact measurement used by the processors during the process of fish

drying.

Furthermore, as described in the Money Flow diagram, the transactions done by the consumers,

retailers, wholesalers and transactions between the processors and the wholesalers are cash-

based. However transactions by the processors with the brokers, brokers to fish dealers and fish

dealers to the fishermen are credit-based. For the credit-based transactions there is slow return in

money, especially for the fishermen since they have to wait for the credits from the dried

processors be paid to the brokers then to the fish dealers before they can be paid for their work

which can be five to seven days. Even if they get a small portion of the caught fish for their own

use, these portions are still not enough to suffice the five to seven days lag time before getting

their money.

Lastly, the supply of dried fish in the market is very dependent on the supply of fish caught. The

number of fish processed in a day also affects the income of the processors since their salary is

dependent on how much work they have done for the day.

Also, the processing stage is dependent on the weather. The processors use the natural heat of the

sun to make dried fish. There will be no dried fish when it is rainy and therefore means that there

is no income from this industry for the processors during rainy season.

77


VIII. Recommendations

The dried fish industry in the Philippines has been in existence for a very long time, even before

the colonial period. It has been in the culture of the Filipinos and the dried fish is one of the

staple foods for an average Filipino household. It has been long recognized as one of the primary

and additional source of income for the small fishermen and the people living in coastal areas in

general. Because of this, there are regulations and policies observed in the country to look after

the welfare of this industry. However, there are several improvements that can be done to make

the industry and the supply chain better.

Firstly, we recommend that there should be stronger government intervention in terms of

disseminating information and educating the member of the supply chain. Because of the

existing problem where there is a difference between the standards used by the members of the

supply chain and the standards issued by the Philippine government, there are issues regarding

which standards should be followed. There should be an affirmative action coming from the

government not only to correct the common misconceptions and wrong practices but also to

inform about the accepted ways or standards. Furthermore, aside from properly disseminating

information, the government should also be able to follow up and monitor these businesses.

Currently, there are mechanisms like permits and annual check-ups from the local government,

but these things are not enough monitoring for a developing industry such as the dried fish

industry. This is important not only to ensure quality but also the sanitation of the products

forwarded to the end consumers.

Aside from government intervention, in order to answer the problem of the differences in

standards as well as the lack of organization and weak sharing of information between the actors,

the industry should have a cooperative that will organize both the private and public sectors and

78


oversee and regulate the activities in the chain. The cooperative will allow the supply chain to

transfer a reasonable amount of power to a group of people which the actors have chosen to

regulate their activities and implement necessary policies. With this, it will help strengthen the

relationship as well as the communication between actors. It will then be easier to implement

policies and ensure that the policies will be followed.

There should also be a better and stronger support to the local businesses both from the state and

the cooperative. The dried fish industry has been in existence for a long time, yet there are little

improvements especially on the practices of the actors in the supply chain. There should be

assistance for the continued innovation of the industry practices through introducing modern

ways or processes or of new technology that can be used to make the chain more effective and

efficient.

Secondly, the fisher folks should have increased bargaining power. This can be done by

strengthening the linkages between the actors and having the cooperative for the industry.

Because their salary or income is highly dependent on the amount for which their caught fish is

sold, they should have a say or be involved in the bargaining of the price for the fish. This is with

the principle that they aside from the market price of fish, things like the weather conditions, the

quantity of the catch and the effort for catching fish in general should be considered. This is also

for the benefit that even if their salary is received late, at least the amount is substantial enough

to cover for their needs and expenses. Through stringent monitoring and properly implementing

the policies which are fair and favorable for everyone in the cooperative, these benefits will be

delivered. Also, this is be a way of regulating and protecting legal and civil rights of each actor

in the chain.

79


IX. References

Ahmed, D., Islam, P., & Shamsuddoha, M. (2006). Value Chain Analysis in the Dry Fish
Production and Marketing of Post Harvest Fishery Products (PHFP) in the Coastal Belt of
Bangladesh. Bangladesh: Bangladesh FIsheries Research Forum.
Department of International Development. (2008, December). Making Value Chains Work
Better for the Poor: A Toolbook or Practitioners of the Value Chain Analysis. Cambodia:
Agricultural Development International.
Habib, D. (2010). Supply Chain Management for Academia - An Integrated Tertiary Educational
Supply Chain Management (ITESCM). Germany: Lambert Academic Publishing.
Hossain, M., & Masud, A. (2012). Value Stream Analysis of Dried Fish's Supply Chain in
Bangladesh. Bangladesh.
Nielsen, J., Jensen, T. K., Larsen, E., & Clausen, J. (2009). A report on The fishing industry
toward supply chain modeling.
Sengupta, S., & Turnbull, J. (1996). Seamless Optimization of the Entire Supply Chain. IIE
Solutions.
Shamsuddoha, M. (2007). Supply and Value Chain Analysis in the Marketing of Marine Dried
Fish in Bangladesh and Non Tariff Measures (NTMs) in International Trading.
Bangladesh.
van der Vorst, J. G., da SIlva, C. A., & Trienekens, J. H. (2007). Agro-industrial Supply Chain
Management: Concepts and Applications. Rome: Food and Agriculture Organization of
the United Nations.
The Philippine Star. (2002, December 27). Pinoy balikbayans told not to bring daing, salted eggs
back to the US. Retrieved from Philstar.com:
http://www.philstar.com/headlines/189403/pinoy-balikbayans-told-not-bring-daing-
salted-eggs-back-us
The Fish Site. (2013, January 29). Government Suggests Using Solar Tunnel Driers to Preserve
Fish. Retrieved from thefishsite.com:
http://www.thefishsite.com/fishnews/19345/government-suggests-using-solar-tunnel-
driers-to-preserve-fish/
The Fish Site. (2015, October 22). Philippines steps up assistance to small scale fishermen.
Retrieved from thefishsite.com: http://www.worldfishing.net/news101/regional-
focus/philippines-steps-up-assistance-to-small-scale-fishermen#sthash.clCi9G7h.dpuf

80


Part II. The flow of products

X. Appendix
1. How long, in hours, does the catching of fish take?
Appendix A- Questionnaire for Actors
Core process: Catching 2. Do you use specific technology when catching? Specify.
Part I. The main actors involved in the process and the activities of each
actor
1. How many fishermen are involved?
3. What is your output form passed to the next process?

2. What are the specific activities done by the fishermen? (storing,

transportation, etc)
4. What is the average number of fish per kilo caught daily?

3. What are the equipment used for each activity?

5. How are products transported from one actor to another? (modes of
transportation)
4. What specific skills are needed for each activity?

6. Does the government intervene in the flow of products?

5. What are the factors that affect your capacity to catch? (internal
factors, materials, health etc.)
Part III. To map out the flow of information

6. What are the factors that affect how much fish you are able to catch? 1. What are the characteristics of a good quality fish?
(external factors, weather etc.)

2. What is your standard of quantity?

7. Do you get assistance from the government? Specify.

3. How do you share information with your buyers?

81


4. What are the products requirements that you need to comply before Part IV. The Volume of Products
the product moves on to the next activity?
1. How much, in kilos, is your average catch per day?

5. Do you know where your product goes? Specify.

2. How much, in kilos, do you allocate for personal consumption?

6. Do you have quotas? Specify.

3. How much, in kilos, of your catch is used for the next process?

7. Do you work together or do you compete with your fellow

fishermen? 4. What is the average number of products sold in a day (in kilos)?

8. What are the sanitary measures you observe?

5. When is the demand for fish high? (month, day, time)

9. Rate from 1 to 5 (1 as the lowest and 5 as the highest)

a) How informed are you about the different grades or classes of 6. When is the demand for fish low? (month, day, time)
product?
b) How much information do you share with your buyers?
c) What is the level of influence do you have in product pricing?
d) How informed are you about the level of the product demand?
e) How much capacity do you have to keep up with the demand?

82


Part V. The Geographical Flow of the Product or Service

1. Where do you sell your product? Core Process: Distribution

Part I. To identify and map out the main actors involved in the process
2. Where do your products go? and the activities of each actor

1) How many distributors are involved?

3. From which marine areas do you fish? Do you have “territories”?

2) What are the specific activities done by the distributors? (storing,
transportation, etc.)
Part VI. The Value at Different Levels of the Value Chain

1. What is the selling price of the fish per kilogram?

3) What are the equipment used for each activity?

2. How much do you spend per activity? (Storing, transportation, etc.)

a. fixed cost 4) What specific skills are needed for each activity?

b. variable cost 5) What are the factors that affect your capacity to be a distributor?
(internal factors, materials, health etc.)

3. What are the costs per equipment?

a. Acquisition costs 6) What are the factors that affect how much fish you are able to
distribute? (external factors, weather etc.)

b. Maintenance costs
7) Do you get assistance from the government? Specify

c. Depreciation

4. What were your initial investments (material and monetary)?

83


Part II. To map out the flow of products 4) What are the products requirements that you need to comply before
the product moves on to the next activity?
1) How long, in hours, does the distribution of fish take?

5) Do you know where your product goes? Specify.

2) Do you use specific technology during distribution? Specify.

6) Do you have quotas? Specify.

3) What is your output form passed to the next process?

7) Do you work together or do you compete with your fellow

4) What is the average number of fish per kilo distributed daily?
distributors?

5) How are products transported from one actor to another? (modes of 8) What are the sanitary measures you observe?
transportation)

9) Rate from 1 to 5 (1 as the lowest and 5 as the highest)

6) Does the government intervene in the distribution of products? a) How informed are you about the different grades of product?
b) How much information do you share with your buyers?
c) What is the level of influence do you have in product pricing
Part III. To map out the flow of information d) How informed are you about the level of the product demand?
e) How much capacity do you have to keep up with the demand?
1) What are the characteristics of a good quality fish?

2) What is your standard of quantity?

3) How do you share information with your buyers and suppliers?

84


Part IV. To map out the volume of products Part IV. To map out the value at different levels of the value chain

1) How much, in kilos, is your average supply of products per day? 1) What is the selling price of the fish per kilogram?

2) How much, in kilos, do you allocate for personal consumption? 2) How much do you spend per activity? (storing, transportation, etc.)

3) How much, in kilos, is distributed to the next process? Are there 3) What are the costs per equipment?
products returned to the processors? a) Acquisition costs

4) What is the average number of products sold in a day (in kilos)? b) Maintenance costs

5) When is the demand for fish high? (month, day, time) c) Depreciation

6) When is the demand for fish low? (month, day, time) 4) What were your investments (material and monetary)?

Part V. To map out the geographical flow of the product or service

1) Where does the distribution take place?

2) To whom are your products distributed to?

3) How much space is needed for the process?

85


Core process: Dried Fish Processing Part II. The flow of products

Part I. the main actors involved in the process and the activities of each 1. How long, in hours, does the process take?

1. How many producers are involved in the dried fish processing?

2. Do the processors use specific technology when processing? If yes,

what is/are the technology?
2. What are the specific activities done by each processor?

3. What is the form of your finished products passed to the next

3. What are the equipment used for each activity?
process?

4. What specific skills are needed for each activity?

4. What is the average measure of fish per kilo being processed daily?

5. What are the factors that affect your capacity to process the fish?
(internal factors, materials, health etc.) 5. How are products transported from one actor to another?
a. What are the factors that make processing easier for you?

6. Does the government intervene in the production flow?

b. What are the factors that make processing more difficult for you?

Part III. the flow of information

6. What are the factors that affect how much fish you are able to 1. What is your description of a good quality dried fish?
process? (external factors, weather etc.)

2. What is your standard of quantity?

7. Do you get assistance from the government? Specify.

3. What is the medium used in sharing information?

86


4. What are the product requirements that each actor needs to comply
before the product moves on to the next activity?
4. What is the average number of products, in kilos, sold in a day?

5. Do you have quotas? Specify.

5. When is the demand for your product high? (month, day, time)

6. Do you know where your product goes? Specify.

6. When is the demand for your process low? (month, day, time)

7. Do you work together or do you compete with your fellow

7. How much of the product, in kilos, is exported?
processors?

8. What are the sanitary measures you observe?

Part V. the geographical flow of the product or service

9. Rate from 1 to 5 (1 as lowest and 5 as highest) 1. Where is the fish drying process located?
a. How informed are you about the different grades of product?
b. What is the level of influence you have in product pricing?
c. How much information do you share information with your 2. Where is each activity within the process executed?
buyers/supplier?
d. How informed are you of the level of the product demand?
e. How much capacity do you have to keep up with the demand? 3. Where do your products go?
Part IV. the volume of products

1. How much, in kilos, is produced in one cycle? 4. How much space is needed for the process?

2. How many kilos of your product is allocated for personal

consumption? 5. Do you own the land where you process your products?

3. How much of your output product, in kilos, is used for the next
process?

87


Part VI. the value at different levels of the value chain 3) What are the equipment used for each activity?

1. What is the selling price of the processed fish per kilogram?

4) What specific skills are needed for each activity?

2. How much do you spend per activity?

5) What are the factors that affect your capacity to sell the products?
(internal factors, materials, health etc.)
3. What are the costs per equipment?
a. Acquisition costs
6) What are the factors that affect how much finished products you are
able to sell? (external factors, weather etc.)
b. Maintenance costs

7) Do you get assistance from the government? Specify.

c. Depreciation

Part II. To map out the flow of products

4. What were your initial investments? 1) How long, in hours, do you operate in a day?

2) Do the sellers use specific technology when selling? Specify.

Core Process: Wholesale/Retail

Part I. To identify and map out the main actors involved in the process
and the activities of each actor 3) What is the form of your finished products passed to the next
process?
1) How many wholesalers/retailers are involved in the dried fish
selling?
4) What is the average measure of fish per kilo sold daily?

2) What are the specific activities done by each wholesaler/retailer?

5) How are products transported from one actor to another?

Part III. To map out the flow of information

88


1) What is your description of a good quality dried fish? Part IV. To map out the volume of products

1) What percentage of products can be sold? Are there any “reject”

2) What is your standard of quantity? products that cannot be sold?

3) How do you share information with your buyers and suppliers? 2) How many kilos of your product is allocated for personal
consumption?

4) What are the product requirements that each actor needs to comply
before the product moves on to the next activity? 3) How much of your output product, in kilos, is used for the next
process?

5) Do you have quotas? Specify.

4) What is the average number of products, in kilos, sold in a day?

6) Do you know where your product goes? Specify.

5) When is the demand for your product high? (month, day, time)

7) Do you work together or do you compete with your fellow vendors?

6) When is the demand for your process low? (month, day, time)

8) What are the sanitary measures you observe?

7) How much of the product, in kilos, is exported?

9) Rate from 1 to 5 (with 1 as lowest and 5 as highest)

a) How informed are you about the different grades of product? Part V. To map out the geographical flow of the product or service
b) How much information do you share with your buyers? 1) Where does the selling occur?
c) What is the level of influence do you have in product pricing?
d) How informed are you about the level of the product demand?
e) How much capacity do you have to keep up with the demand?
2) Where do your products go (for export and domestic)? (location)

3) How much space is needed for the selling process?

89


Classification questions
1. Name:______________________________
4) Do you own the land where you sell your products? 2. Role in the Supply/Value Chain
__ Producer
__ Distributor
__ Dried Fish Processor
Part VI. To map out the value at different levels of the value chain __ Wholesaler
__ Retailer
1) What is the selling price of the dried fish per kilogram?
__others ______________________________________
3. How long have you been in the business?
2) How much do you spend to complete a transaction?
__Less than one year
__1-3 years
__4-6 years
3) What are the costs per equipment? __7-10 years
a) Acquisition costs
__10 years or longer
4. How much is your daily income?
b) Maintenance costs __less than 500
__500 to 1000
__1000 to 3000
c) Depreciation
__3000 to 5000
__5000 to 10000
4) What were your investments (material and monetary)?
__10000 and above
5. Are you a member of an organization?
__Yes. Please specify ___________________
__ No. Why not? ______________________________
6. Do you avail any type of assistance from the
government?
__Yes. Please specify ___________________
__ No. Why not? ______________________________

90


7. Respondent’s highest Educational Attainment

__Post Graduate/ Master’s Degree/ Doctorate
__College Graduate
__College Undergraduate
__High School Graduate
__High School Undergraduate
__Elementary Graduate
__Elementary Undergraduate
__No Educational Attainment

91


Appendix B- Questionnaire for Consumers How often do you buy?

Once a month Once every two weeks Once a week Twice
Name (optional): a week
________________________________________ 3-6 times a week Everyday Others, specify
Address (optional):
___________________
____________________________________________________
___
Which day/s of the week do you usually buy dried fish?
Age: _____ Sex: Male Female
Sunday Monday Tuesday Wednesday
Civil status:
Thursday Friday Saturday
Single Married Widowed
Where? ____________________
Number of household members including you:
__________________
Do you have allotted budget for buying dried fish? Yes No
If yes, how much? _________
Educational attainment:
Elementary Highschool undergraduate Highschool graduate
What kind of dried fish do you usually buy?
College Undergraduate College Graduate Post Graduate ________________________
Vocational No Schooling How much dried fish do you usually buy? (in kilos)
__________________
Monthly Income:
Less than 10,000 10,001 – 50,000 50,001– 100,000
100,001 – 150,000 150,001 – 2000,000 More than 200,000 Rate from 1-5, 5 being highly affects and 1least likely to affect
your buying decision
Religion:
Roman Catholic Iglesia ni Cristo Baptist Protestant Strongl
Born Again Adventist Islam Others, please specify: y Disagre Neutra Agre Strongl
________ Disagre e l e y Agree
e
Employment status: Price 1 2 3 4 5
unemployed employed, type of work: __________ Quality of
1 2 3 4 5
Product
Do you buy dried fish? Place of
1 2 3 4 5
Yes No Purchase
Recommendatio 1 2 3 4 5

92


ns from family
Packaging 1 2 3 4 5
Place of origin
1 2 3 4 5
of product

What is a good quality of dried fish for you? Rate from 1-5, 5 as
important 1 not important
Very Very
Unimporta Neutra Importa
Unimporta Importa
nt l nt
nt nt
Size
of 1 2 3 4 5
Fish
Type
of
1 2 3 4 5
fish
used
Shiny
Scale 1 2 3 4 5
s
Intact
1 2 3 4 5
Belly
Smell 1 2 3 4 5

93


Appendix C- Sample Calculations for Product Flow
12,000 kilos of fresh fish is caught by the fishermen
11,400 kilos (12,000 kilos x 95%) is forwarded to the fish dealers
And 600 kilos (12,000 kilos x 5%) portion of the fishermen
11,400 kilos (100%) is available for bidding by the broker
7,980 kilos (11,400 kilos x 70%) is sold to dried fish processors
And 3,420 kilos (11,400 kilos x 30%) for personal other uses
7,900 kilos (7,980 x 99%) is used for dried fish processing
7,900 kilos (100%) becomes dried fish or finished product
5,925 kilos (7,900 kilos x 75%) go to the wholesalers
1,580 kilos (7,900 kilos x 20%) go to retailers
316 kilos (7,900 kilos x 4%) go to end consumers
79 kilos (7,900 kilos x 1%) for personal consumption
4,385 kilos (5,925 kilos x 74%) go to retailers
1,481 kilos (5,925 kilos x 25%) go to end consumers
60 kilos (5,925 kilos x 1%0 for personal consumption
5,965 kilos (1,580 kilos plus 4,385 kilos) total available for end consumers
5,900 kilos (5,965 kilos x 99%) dried fish go to end consumers
65 kilos (5,965 kilos x 1%) for personal consumption

94


95