An economic analysis of grape production in Cebu and General Santos, Philippines

Abstract

The aims of this study are to make a micro-level analysis of the economics of grape-growing in two areas in the Philippines and to examine the structure of the industry and cultural practices employed. Following an introductory chapter, Chapter 2 describes the survey which was conducted in Cebu and General Santos. The data from this survey is suitable for the estimation of a production function and for making sample inferences about the population. Chapter 3 gives a detailed description of the variables used in the regression analysis, including the probable strength and weaknesses of measurements used and the rationale behind the inclusion of such regressors. In Chapter 4, the effects on yield of various factors were examined. Age, fertilizer and labour show significant relationships with yield, such relationships being linear for age, an increasing marginal product for fertilizer, and a diminishing marginal product for labour. The results show a wide scope for improving profitability through a more efficient allocation of resources. Certain cultural and management practices unique to Philippine growers are examined in Chapter 5, identifying the efficiencies and inefficiencies of these practices. Such practices, although common among local growers are, as yet, unsubstantiated by empirical research. Chapter 6 deals with the economic structure, institutional factors and profitability of grape-growing. Establishment and maintenance costs are estimated, different aspects of the industry are examined, and various problems identified. The profitability calculations made indicate high returns to investment in grape growing although initial investment is large. Since it may be desirable to conduct a similar survey two or three years hence, a proposed sampling design is incorporated in this study and is included as Chapter 7. Using available data, it is possible to design a more sophisticated and efficient sampling plan, i.e., optimum allocation of sample sizes to each strata. The final chapter draws together the important points that emerged from the study. Also, research priorities are listed.