Employment Generation Potential of the Rice Value Chain in

Mindanao, Philippines
Larry N. Digal1 and *Carol Q. Balgos2

1Dean, School of Management, University of the Philippines Mindanao, Mintal,

Davao City
(082) 2952750
lndigal@up.edu.ph

2Research Associate, School of Management, University of the Philippines

Mindanao, Mintal, Davao City
(082) 2952750
cqbalgos@up.edu.ph

Abstract

Rice is an important crop not only because it is a staple crop in the Philippines but it also plays an
important role in terms of employment of landless and poor farmers in Mindanao. This study aims to
examine the issues in the rice value chain with a focus on employment generation potential. It identifies
current jobs created, and the strategies to address these issues. The impact of these strategies if
implemented on employment generation is also explored. A value chain framework was used to
analyze the issues and the job creation potential of the chain. Total full time jobs generated in the rice
value chain in Mindanao is estimated at 221,796 jobs from a total area of 1,189,266 hectares. Access
to better seeds, sufficiency of irrigation, access to credit, high labor cost, and poor road conditions are
issues that affect the performance of the rice value chain from production to marketing of rice.

Keywords: Rice, jobs creation, value chain, Mindanao

INTRODUCTION
Rice is a major crop for employment generation in Mindanao region particularly in
provinces where poverty incidence and prevalence of conflict are high such as
Maguindanao, North Cotabato, and Sultan Kudarat which are the top three rice
producing provinces in Mindanao. Rice plays a critical role in the employment and
livelihood of landless and poor farmers in Mindanao not only in the production but also
in post-harvest, milling services, hauling and transport services. Labor accounts for
approximately 40% of the total investment in rice production. However, very few
focused on the employment aspect of the rice value chain and this has not been well
studied in the value chain literature.

METHODOLOGY
A case approach was used to provide a more detailed analysis of the variations of the
strands in the chain. The municipality of Mlang was chosen as the specific area for the
analysis since it has the highest volume of production in North Cotabato province,
which in turn is the rice top producer in the entire Mindanao in terms of volume and
area. A value chain framework was used to determine the jobs created in the various
nodes of the chain and to analyze the impact on the number of jobs created if issues
and opportunities in the chain are addressed.

Data used in this analysis came from primary data that were collected through key
informant interviews and focus group discussions. Secondary data used were sourced
from the Philippine government agencies mostly from provincial and municipal
agricultural offices. Two rice farmer surveys done in Mindanao particularly in North
Cotabato were also used to validate data collected from key informant interviews. They
were used to supplement analysis on labor and other aspects such as costs,
productivity and income.

FINDINGS
From the case analysis, the total jobs generated in Mlang is estimated at 4,249 jobs
based on its total area harvested of 22,868 hectares in 2014. Using the job estimation
for Mlang, the total jobs generated in the rice value chain for Mindanao is at 221,796
from a total area harvested of 1,189,266 hectares in 2014.

Constraints identified are mostly in the production node such as access to better
seeds, irrigation, access to credit, and high labor cost. Strategies developed in
addressing these issues have direct and indirect effect on jobs generation. Direct
effects are those that directly increase or decrease labor employment. While indirect
effects are those that affect labor employment via expansion in area of production as
a result to implementation of strategies. A total of 31,118 potential full time jobs will
be directly created in Mindanao and potential 5,554 jobs from indirect effects if
strategies are implemented (Table 1).

Table 1. Potential impact of recommendations on employment in Mindanao

Potential impact on employment in Mindanao
Recommendations Increase or (decrease) on jobs
Direct Indirect Total
Adequate access to better Increase in profit and
seeds 1,833 income due to:
Sufficient access to irrigation 30,231 increase in volume of
Intercropping 3,805 production
Increase organic rice higher productivity
production 1,369 increase in price
Mechanization (5,638) decrease in cost
Better road conditions from lower transport cost
farm to post-harvest facilities Increase in profit and
and market income will create need
(481) for area of expansion
Total 31,118 5,554 36,672

CONCLUSION
Rice contributes substantially in terms of job generation particularly in conflict areas
where poverty incidence is high. However, there are constraints in the chain that limit
job generation. Suggested strategies if implemented will significantly enhance job
generation potential. However, the net benefits of implementing these strategies will
have to be examined.