Findings of the Livestock Report for the Strategic Agribusiness Development Plan for the Philippine Department of Agriculture. The presentation was done in Apo View Hotel, Davao City, June 10, 2009

1. Strategic Agribusiness Development Plan
Findings of Livestock Situation Report
A Collaborative Project of the
Department of Agriculture
and Japan International Cooperation
Agency
By Elmer R. Esplana & Lary Nel B. Abao
SADP Team Members
Bureau of Animal Industry
elmer.esplana@gmail.com
Presented at
Davao Region Stakeholders Consultative Workshop
Apo View Hotel, Davao City
June 10, 2009

2. Outline of Presentation
1. Objectives of the Presentation
2. Situational Report
2. Strategic Agribusiness Systems Issues and
Constraints
- Input Supply Subsystem
- Production Subsystem
- Processing Subsystem
- Marketing Subsystem
- Support and Extension Support Subsystem
3. Policy Implications and Recommendations

3. Objectives of the Presentation
The objectives of this presentation include: 1) to
give strategic agribusiness system issues and
constraints, policy implications and
recommendations, as a component of the
livestock sector in the Strategic Agribusiness
Development Plan, and 2) to validate and solicit
regional and local inputs, suggestions and
comments from the participants of the
stakeholders consultation meetings, as to the
relevance of the findings and recommendations
at regional and local level.

4. Top 20 with highest Hog and Chicken Inventory,
2008 and Average Growth Rate Per Year
from 1998-2008
Source of Basic Data: DA-BAS

5. Top 20 with highest Cattle and Carabao Inventory, 2008
and Average Growth Rate Per Year
from 1998-2008
Source of Basic Data: DA-BAS

6. Top 20 with highest Goat and Duck Inventory,
2008 and Average Growth Rate Per Year
from 1998-2008
Source of Basic Data: DA-BAS

7. The regional ranking in terms of capabilities with processing facilities
include NCR (1), Region III & IV-A (2), Region VII (3), Region XI (4)
and Regions I, X, XII (5).
NMIS Accredited Slaughterhouses, Dressing Plants, and
Meat Processing Plants, As of November 2007.
Source of Basic Data: DA-NMIS

8. Of the 23 meat cutting plants 22 are “AA” and one is “A”
Of the 47 accredited cold storage facilities, 6 are “AAA”, 41 are
“AA.”
NMIS Accredited Meat Cutting Plants and Cold Storages, as of November 2007
Source of Basic Data: DA-NMIS

9. Marketing Channel* of Live Animal, Meat and Meat Products
in the Philippines
*Revised based on BAI’s model

10. Distribution Channel of Hog Production
Live Meat and Processed Pork
Source: Interviews with industry players,
Esplana, Elmer, 2008
Note: dotted line (---) represents the flow of dressiweight or carcass weight of pork passing in the slaughtering process.

11. Local and International
Market
The local producers as generally distributing
their product in the domestic market with
small initially started export market in the
DOC PS breeders, processed and semi-
processed pork and chicken, “balut” and salted
eggs.
The share in the export market is very small
which needs to further strengthen, given the
initially established markets.

12. Strategic Agribusiness Systems Issues and
Constraints
Input Supply Subsystem
1. Genetic improvement and instability of feed ingredients supply and their
quality.
2. For cattle and carabao, there is no sufficient breeding animals. The
diffusion rate of artificial insemination is still low at four percent.
3. For goats, duck and cattle, the genetics is still a problem, particularly the
backyard raisers.
4. High tariff of imported materials (corn and soya bean, etc.).
5. Corn supply, in terms of quality and quantity, is still a problem for the
livestock and poultry industry producers.
6. There is high cost of feed ingredients (corn, feed wheat, soya bean meal,
etc.) which contribute in the pricing of livestock and poultry products.
7. Need to develop a low cost alternative inputs to feed production.

13. Strategic Agribusiness Systems Issues and
Constraints (cont)
Production Subsystem
1. Low production and negative effect of animal diseases on the production
and productivity.
2. For cattle, the production is still low compared to perceived demand.
3. There is a disease problem like hemorrhagic septicemia for both cattle
and carabao; PRRS, TGE, and cholera for hogs; diarrhea for goats; and
new castle disease for poultry.
4. For carabao, the production is low which is not sufficient to meet the
local demand.
5. There are emerging diseases and late response of BAI on the problem of
producers.
6. Inadequate imported good genetic material for dairy buffaloes and dairy
cattle and ducks for meat and egg production.

14. Strategic Agribusiness Systems Issues and
Constraints (cont)
Processing Subsystem
1. Need to develop meat processing infrastructure and
improvement of capabilities.
2. For hogs, there is lack of integrated slaughterhouses facilities
in some producing areas, especially in Pampanga, Batangas,
Rizal province and Cagayan de Oro.
3. For goat, there is no slaughterhouse facility, hence,
slaughtering is done at the backyard.
4. For chicken, there is no integrated dressing plants in some
producing areas, especially in Batangas and Rizal.
5. Meat processors are paying in longer terms to meat producers
and traders.

15. Strategic Agribusiness Systems Issues and
Constraints (cont)
Marketing Subsystem
1. Poor market infrastructure development, limited market access and
market matching activities.
2. There are some livestock “oksyon” markets in selected provinces which
need to rehabilitated.
3. There is a need to establish stockyards to key cities in the Philippines like
Batangas City, Iloilo City and General Santos City.
4. There is a need to establish regional/city/municipal weighing scale center
for hogs in producing areas.
5. There is a need to improve the marketing/business intelligence and
replicate best practices from the national to regional to local government
level.
6. There is a need to improve the marketing research and socio-economic
and impact evaluation researches done by the government from supply-
driven to demand-driven approach.

16. Strategic Agribusiness Systems Issues and
Constraints (cont)
Support and Extension Support Subsystem
1. There is a need to develop support and extension services and improve
the implementation and enforcement of quality standard and food safety
policies.
2. There is a need to establish an animal diagnostic/modern feed/drug assay
laboratory in General Santos City and Iloilo City to support hog export
initiatives (for traceability and exports purposes).
3. There is a need to establish a meat laboratory in Iloilo (for traceability
and export purposes).
4. No extension support for supply chain management.
5. Lack of early warning system/ forecasting tools for eggs, duck, goat,
cattle, and carabao production.

17. Strategic Agribusiness Systems Issues and
Constraints (cont)
Support and Extension Support Subsystem
6. There is a need for the enforcement of traceability system for the
export market of meat and processed products.
7. There are only few beneficiaries of government loans which are religiously
paying their loan particularly the ACEF. There are tendencies that
government-managed loans are sometimes perceived by the beneficiaries
as dole-out.
8. There is need to develop loan program facility that is accessible to farmers
but with improved level of accountability for the other borrowers to also
avail the benefits of the loan opportunity co-equal with other borrowers.

18. Policy Implications and Recommendations
For the private sector
The new entrant/investor should develop their own firm/company’s
business model for their agribusiness chain.
The livestock sector should be able to attain a sustained
competitiveness (both local and international level) and profitability,
given the dynamic trade regime.
Cases could possibly be studied that include the integrated operation
for the hogs, broiler and cattle in the case of San Miguel Corporation
(group of companies) and Bounty Fresh Foods (group of companies)
for the broiler and partly in hogs, and other successful business models
within the different industries.

19. Policy Implications and Recommendations (cont)
For the private sector
Improvements in the meat processing facilities and processing support
infrastructure (weighting scale center, cold storage facilities, meat cutting
plants)
Identifying integrated meat processing zone in the Visayas and Mindanao
area (Iloilo, Cagayan de Oro and Davao) that would target the export market
potentials of the meat products.
Exploring the potential of investing for either backward or forward
integration, along the different segment of the supply chain through the
existing stakeholders in the industry to support employment generation.
For the cooperative type of structure, the model of LIMCOMA and SIDC are
the two good examples for the feeds-hog-processing-retailing model to
benchmark by other cooperatives.

20. Policy Implications and Recommendations (cont)
For the government
Continue to develop productivity enhancement programs that would
support to improve the competitiveness and profitability of the livestock
and poultry industry.
Improvement in the budgeting process for the different projects/programs,
monitoring of projects and programs at the national, regional and local
level.
Development of cluster models for the different livestock and poultry
industries.
There is a need for more collaborative projects/partnership between the
different levels in the government (national, regional, local), the private
sector and associations using a clustering approach.
Documentation of more best practices along the supply chain.
Pursue more researches along the supply chain that are market-driven and
customer-focused.

21. Policy Implications and Recommendations (cont)
For the government
Establishment of grades and standards for livestock and
poultry and meat products for local and international markets.
The government should further intervene to improve the
genetics of goat, cattle, buffalo and duck industries,
particularly at the backyard level.
Further improve the participatory governance with other
stakeholders in the livestock and poultry subsectors, such as
the carabao, dairy, goat and duck industries and allied
industries.
Improve and develop loan program which are accessible to
farmers but with higher level of accountability to borrowers
for sustainability purposes.

22. Policy Implications and Recommendations (cont)
For the government
Developing training system and modules for the DA-ATI that
would support in enhancing entrepreneurial skills and supply
chain management for the new investors in the livestock
agribusiness sector.
Government (DA-NMIS) should support in upgrading “AA”
accredited slaughterhouses, dressing plants and meat processing
plants to become “AAA” accreditation via loan facility of ACEF
or government bank and financial institution, to contribute in
increasing the export market of local meat and meat products.
Government should support in developing more meat cutting
plants and cold storages in strategic producing areas in the
different regions.

23. Policy Implications and Recommendations (cont)
For the industry associations/NGOs
Further strengthen the advocacy for the improvement of
different industries in the livestock sector.
Support and participation in the development of strategic
program/project for the industry competitiveness.
Participation in the research, development and extension
activities along with the private sector and government (DA
livestock agencies, academe and other research institutions).
Support in the implementation of good agriculture practice,
good manufacturing practice, food safety standards and
traceability system in the livestock and poultry agribusiness
supply chain.

25. Thank you for Listening