BIBLIOGRAPHY PALOAN, MARY...
BIBLIOGRAPHY
PALOAN, MARY CLAIRE A. APRIL 2007. Coordination Mechanisms
Along Cauliflower Supply Chain in Kabayan, Benguet. Benguet State University, La
Trinidad, Benguet.
Adviser: Marie Klondy T. Dagupen, PhD
ABSTRACT
This study was conducted to determine the coordination mechanisms by the
cauliflower supply chain actors along; resource sharing which encompasses operational,
tactical and strategic resource sharing; decision making style; level of control; and risk
and reward sharing. Moreover, the study aimed to identify problems encountered by the
actors along the supply chain.
The study reveals that in the operational resource sharing, suppliers provides
necessary farm inputs and farmers do all the operations in the farm. As for tactical
resource sharing doing inventories were entrusted to the farmers. For the strategic
resource sharing, farmers aimed to be competitive in the market by producing quality
cauliflower. Organic farming was mentioned by them that could contribute in producing
quality cauliflower produce.
The decisions in the production area were entrusted to the farmers while the
supplier/trader takes responsibility in marketing. Supplier/traders trust the farmer that is
why they do not necessarily visit the farm to monitor.
Natural calamities like typhoons are one of the major causes of bankruptcy by both
the farmers and suppliers. In this study, the actors share equally in the risks. As to benefit
sharing, the farmers and their respective supplier/traders have various mechanisms in
dividing their share.
Both farmers and their respective supplier/traders met problems in coordination. At
times, when the customers do not pay the traders on time, the farmers were affected
because the traders in turn delay in paying the product.
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TABLE OF CONTENTS
Page
Bibliography…………………………………………………………………
i
Abstract……………………………………………………………………...
i
Table of Contents…………………………………………………………...
iii
INTRODUCTION…………………………………………………………..
1
Rationale of the Study………………………………………………
1
Statement of the Problem……………………………………………
2
Objectives of the Study……………………………………………...
3
Importance of the Study……………………………………………..
4
Scope and Limitation of the Study…………………………………..
4
REVIEW OF LITERATURE
Supply Chain………………………………………………………..
6
Coordination Mechanism Attributes………………………………..
7
METHODOLOGY
Locale and Time of the Study……………………………………….
10
Respondents of the study……………………………………………
10
Data Collection………………………………………………………
10
Data Gathered……………………………………………………….
10
Data Analysis………………………………………………………..
12
RESULTS AND DISCUSSION
Profile of Respondents………………………………………………
13
Operational Resource Sharing………………………………………
15
iii
Tactical Resource Sharing…………………………………………..
17
Strategic Resource Sharing………………………………………….
18
Decision Making Style………………………………………………
20
Level of Control……………………………………………………..
22
Risk and Reward Sharing……………………………………………
23
Buyers of the Commodity…………………………………………...
26
Trader-Consumer Relationship……………………………………...
25
Problems Encountered by the Farmers
with their Supplier/Trader…………………………………………..
27
Problems Encountered by the Supplier/Trader
with their Clients……………………………………………………
28
SUMMARY, CONCLUSIONS AND RECOMMENDATION……………
29
Summary……………………………………………………………
29
Conclusions…………………………………………………………
31
Recommendations…………………………………………………..
31
LITERATURE CITED……………………………………………………..
32
APPENDICES……………………………………………………………...
33
Appendix A. Communication Letter……………………………….
33
Appendix B. Interview Guide for farmers……………………….....
34
Appendix C. Interview Guide for their Supplier/Traders…………..
39
iv
INTRODUCTION
Rationale
Kabayan is tagged as one of the vegetable producing municipalities in the
province of Benguet. Eighty five (85%) of the residents depend mainly on agriculture as
their means of livelihood. As such, agriculture is the focal area of economic stability in
this place. The municipality’s favorable climatic condition with a mean annual
temperature of 19.4 0C and its soil fertility paved way in growing various highland
vegetables. Thus, vegetable production or cash crop production is the center of activity of
farmers in the locality (Ancestral Domain Management Plan, 1999). Kabayan has more
than sufficient supply of vegetables that it can consume, hence, marketed to Baguio City,
La Trinidad and Bambang, Nueva Viscaya (Draft Report, 2002). Cauliflower is one of
the major crops produced by most farmers here. The Municipal Agriculture Office
(MAO) in Kabayan reported that cauliflower has a total annual produced of 8,869.50 MT
or 14.13 MT/ha. The total area planted accounts to 615.50 has (Benguet Commodity
Profile, 2006).
Supply chain actors such as suppliers, farmers, and traders, play an important role
within the chain. This is because they serve as the agent in providing service to the
ultimate consumers. According to Julian (2006), traders owe a big part in the market
activity by seeing to the personal satisfaction of human wants. Without these traders,
goods may not reach the ultimate consumers, thus, adversely affecting their standard of
living. The rapid change in trend affects consumers’ behavior nowadays. They are harder
to please. They are more demanding and sensitive. As for vegetables, they want them to
Coordination Mechani
sms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
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be sold fresh judging their quality and reliability. It is therefore a challenge to the actors
to act on this matter.
Coordination mechanism is employed along the chain. Xu and Beamon (2006),
wrote that coordination within a supply chain is a strategic response to the problems that
arise from inter-organizational dependencies within the chain.
The most common vegetable chain in Kabayan is popularly known as supply
system, where the trader provides necessary farm inputs to farmers to be used in the
cropping. At harvest, the farmers sell the output to their farm input supplier or trader-
financier as they are called.
The study was conducted to find out how these actors (farmer and their respective
farm input supplier/trader) coordinate with each other along resource sharing, decision
style, level of control and risk/reward sharing and at the same time know the problems
they encounter in this particular chain.
Statement of the Problem
Studies have been conducted related to different agricultural produce in the
province of Benguet. However, further study on the coordination mechanisms of supply
chain actors of this particular commodity had not been done and elaborated. Studying the
coordination mechanisms along cauliflower supply chain will answer the following
questions:
1. Who are the actors involved along cauliflower supply chain in Kabayan and
their characteristics?
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
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2. How do the actors coordinate with each other along resource sharing, decision
style, level of control and risk/reward sharing?
3. What are the problems encountered related to the coordination mechanisms?
4. How do they solve these problems?
Objectives of the Study
The objectives of the study were as follows:
1. To identify the actors involved in the cauliflower supply chain in Kabayan.
2. To find out the coordination mechanism of the actors along resource sharing,
decision style, level of control and risk/reward sharing.
3. To know the problems encountered by the actors along coordination
mechanism.
4. To find out how they solve these problems.
Coordination Mechanisms Along Cauliflower Supply Chain
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Importance of the Study
Studying the coordination mechanisms of the farmers and their respective farm
input supplier/trader in the supply chain is important to improve coordination.
Eventually, good coordination could help producers to produce quality cauliflowers that
would fit into the needs and wants of the customers. This study provides information to
concerned agencies for policy actions and interventions.
Scope and Limitation of the Study
Although, “supply system” is also practiced in other parts of Benguet, the study
focused in the municipality of Kabayan, Benguet. It was limited to the coordination
mechanisms of actors along the cauliflower supply chain.
Coordination Mechanisms Along Cauliflower Supply Chain
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REVIEW OF LITERATURE
Yubos (2006) wrote that vegetable farming requires a big amount of cash for the
purchase of farm inputs such as planting materials, fertilizer, pesticides and fungicide.
Unavailability of cash and poor access to financial institutions/support is one of their
constraints in production; thus, this is where agricultural farm input suppliers are of great
help to the farmers.
Traders forge production-sharing agreement with farmers. The traders provide
necessary farm inputs and cash money for use in the cropping season. At harvest, the
total produce will be sold to the trader-financer. This is called “supply system” (Figure
1). Agreements on sharing of sales out of the farm produce vary (Draft Report, 2002).
SUPPLIER/
TRADERS
Farm input supplies
Farmers’ produce
FARMER
Figure 1. Supply system for vegetable in Kabayan, Benguet
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
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Supply Chain
Every product has its own unique supply chain, according to Lele as cited by Batt
(2004); supply chain itself is often long and protracted, involving a large number of
market intermediaries.
In other instances, Waters (2003) describes supply chain as the series of activities
in organizations that materials move through on their journey from initial suppliers to
final customers. Supply chain exists to overcome the gaps created when suppliers are
some distance away from customers. This is a sequence of events intended to satisfy a
customer.
The new millennium features increasing numbers of world-class competitors,
domestically and internationally, that are forcing organizations to improve their internal
processes in order to stay competitive. Sophisticated customers, industrial and consumer,
no longer talk about price increases, they demand price reductions. An abundance of
competitors and choices has conditioned customers to want higher quality, faster delivery
of products and services, tailored to their individual needs at a lower total cost. If a
company cannot meet these requirements, the customer will find a source that is more
accommodating (Monczka et al., 2005).
Waters (2003) added that the simplest view of supply chain has a single product
moving through a series of organizations, each of which somehow add value to the
product. Taking one organizations’ point of view, activities in front of it-moving
materials inwards-are called upstream; those after the organization-moving materials
outwards-are called downstream. The upstream activities are divided into tiers of
suppliers. A supplier that sends a material directly to the operation is a first tier supplier;
Coordination Mechanisms Along Cauliflower Supply Chain
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one that send materials to a first tier supplier is a second tier supplier; one that sends
materials to a second tier is a third tier supplier, and so on. Customers are also divided
into tiers. One that gets a product directly from the operation is a first tier customer; one
that gets product from a first tier customer is a second tier customer; one that gets a
product from a second tier is a third tier customer, and so on to the final customer (Figure
2).
Upstream activities Downstream activities
Initial
Third
Second First First Second Third Final
supp-
tier
tier
tier tier
tier
tier
custo-
lier
supp- supp-
supp- custo- custo-
custo-
mer
lier
lier
lier mer mer
mer
ORGANI
ZATION
Figure 2. Activities in a supply chain (Waters, 2003)
Coordination Mechanism Attributes
Coordination mechanism is a set of methods used to manage interdependence
between organizations. This may be differentiated on the bases of four attributes:
resource sharing structure, decision style, level of control, and risk/reward sharing (Xu
and Beamon, 2006).
Coordination Mechanisms Along Cauliflower Supply Chain
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Resource
sharing
structure. Malone as cited by Xu and Beamon (2006) limits
consideration to information sharing. However, since there are other resources to be
shared and communicated within the context of coordination, this dimension is extended
to include all of the resources shared. This dimension is defined as resource sharing
structure, and follows the classification given in Varamaki and Vesalainen (2003):
No resource sharing.
Operational resource sharing, such as communication between operational
levels, sharing operational information such as point-of-sale (POS) data, or
pooling operational resources in group problem solving.
Tactical resource sharing, such as communication between managers in the
same function from different firms to achieve consistency or jointly
developing inventory and production plans.
Strategic resource sharing, such as forming strategic alliances, forming
strategic level meeting, jointly creating strategic plans, sharing strategic
information, or jointly investing resources to make strategic advances,
especially in the area of research and development (R&D).
Decision
style. For the decision function, there are two main styles: centralized
and decentralized. For centralized decision style, one firm has primary control. For
decentralized style, each firm makes its decision autonomously.
Level of control. Control has two levels: high and low. A high level of control
corresponds to strict monitoring and control. In this case, the coordinating firms develop
detailed and strict rules, routines, and monitoring systems to control other firms’
Coordination Mechanisms Along Cauliflower Supply Chain
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behavior, for the purpose of detecting opportunistic risk. A low level of control
corresponds to little or to no monitoring and control.
Risk/Reward
sharing. Risk/reward sharing describes the characteristics of the
selected incentive system. There are two main types of sharing methods: fair or unfair. A
fair condition occurs when one firm undertakes more risk than do other firms in the
relationship, but receives more benefits from the coordination. An unfair condition arises
when one firm undertakes less risk but enjoys greater benefits, or when one firm
undertakes greater risk with fewer benefits.
Coordination Mechanisms Along Cauliflower Supply Chain
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METHODOLOGY
Locale and Time of the Study
This study was conducted in Kabayan, Benguet and among farm input suppliers
and traders at Baguio City Hangar Market and La Trinidad Trading Post. Kabayan is
bounded by municipalities of the Benguet Province on the North by Buguias, on the
South by Bokod, on the West by Atok and partly by Kibungan specifically along the
Halsema National Road (Figure 3). Vegetables; leafy, fruit and root are the major
products of farmers in the municipality. The study was conducted from January to
February 2007.
Respondents of the Study
The respondents of the study were 60 farmers in Kabayan who were cauliflower
growers and 10 of their respective farm input suppliers who are at the same time traders
of their produce.
Data Collection
An interview guide was used by the researcher for data gathering. Personal
observation was also done in this study.
Data Gathered
The data gathered were the following: a) profile of the farmers and their
respective farm input supplier/trader; b) coordination mechanisms of these actors along
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
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Figure 3. Map of the study area
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resource sharing in terms of operational, tactical and strategy, decision style in the area of
production and marketing, level of control in terms of monitoring the operations of the
farm and risk/reward sharing; c) problems encountered related to coordination
mechanisms and; d) solutions of the problems encountered as perceived by the
respondents.
Data Analysis
The data collected were consolidated and analyzed using frequency, percentage
and mean. Data analysis and interpretation was guided by theories and principles of
supply chain from literature.
Coordination Mechanisms Along Cauliflower Supply Chain
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RESULTS AND DISCUSSION
Profile of the Respondents
This study has two types of respondents, the farmers and their respective farm
input supplier /trader. Table 1 presents the respondents’ profile according to their sex,
educational attainment, and civil status.
Sex. Most (90%) of the respondents are male. Among the farm input
supplier/trader, 60% are male and 40% are female.
Educational
attainment. Twenty (33.3%) farmers had no formal education, 18.3%
graduated from elementary and the same percentage reached high school level, 16.7 %
graduated from high school, 8.3% reached college level and 5% graduated from college.
For the supplier/trader, 30% reached college level, 20% high school level, 20% graduated
from college, 10% took a vocational course and the same percentage had no formal
education. The finding implies that most of the farmer respondents had no formal
education in contrast to the traders who had higher education.
Civil
status. Among the farmer respondents, 61.7% were married and 38.3% were
single. Likewise for the supplier/traders, 80% were married and 2 (20%) were single.
Coordination Mechanisms Along Cauliflower Supply Chain
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Table 1. Profile of the respondents
RESPONDENTS
FARMER T RADER
PROFILE
Frequency Percentage Frequency Percentage
Gender
Female
6 10
4 40
Male
54 90
6 60
TOTAL
60 100
10 100
Educational Attainment
No formal education
20 33.3
1 10
Elementary graduate
11 18.3
1 10
High school level
11 18.3
2 20
High school graduate
10 16.7
2 20
College level
5 8.3
3 30
College graduate
3 5.0
- -
Vocational
- -
1 10
TOTAL
60 100
10 100
Civil Status
Single
23 38.3
2 20
Married
37 61.7
8 80
TOTAL
60 100
10 100
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
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Operational Resource Sharing
Table 2 shows the coordination mechanisms of the actors along operational
resource sharing. This portion includes how they share regarding financing of farm
inputs, payment of labor, transportation expense, ownership of the land, and in keeping
records of sales.
Provision of farm inputs. Most (85%) of the farmer respondents said that their
supplier/trader provides necessary farm inputs needed in the operation, and only 15% of
them take equal part. The finding implies that most farmers lack money to finance their
farm.
Payment of labor. There were 71.7% farmers who said that they were responsible
in the payment of labor while 18.3% mentioned that their supplier/traders did it. Six
(10%) said that they shared equally in paying the wages of the laborer. Other farmers said
that if the area planted is small, they did all the work and thus, no need to hire a labor.
Transportation expenses. There were 56.7% farmers who said they were
responsible for paying the transport of their product, 23.3% indicated that both the farmer
and the trader took equal part, and 20% said that their supplier/trader took the
responsibility. Some farmers said that when their supplier/trader pick-up their produce
during harvest from the farm the fare is computed and deducted from the sales before
dividing their share.
Land
ownership. Most (80%) of the land planted were owned by the farmer. The
rest (20%) said that their supplier/trader provided the land. The finding implies that most
farmers have a land but due to lack of financial assistance, they depend on a supplier for
financing.
Coordination Mechanisms Along Cauliflower Supply Chain
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Keeping sales records. Most (88.3%) of the respondents said that both farmer and
their supplier/trader have their own copy of sales which serve as their future reference in
case of complaints and for the consistency of records. Only 11.7% said that they entrust it
to their supplier/trader because they do not know how to do it.
Table 2. Coordination mechanisms along operational resource sharing
COORDINATION MECHANISM
FREQUENCY
PERCENTAGE
Provision of Farm Inputs
Supplier/trader only
51
85
Farmer only
-
-
Both
9
15
TOTAL 60
100
Payment of Labor
Supplier/trader only
11
18.3
Farmer only
43
71.7
Both
6
10.0
TOTAL 60
100
Transportation Expense
Supplier/trader only
12
20.0
Farmer only
34
56.7
Both
14
23.3
TOTAL 60
100
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
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Table 2. Continued…
COORDINATION MECHANISM
FREQUENCY
PERCENTAGE
Land Ownership
Supplier/trader only
12
20
Farmer only
48
80
Both
-
-
TOTAL 60
100
Keeping Sales Records
Supplier/trader only
7
11.7
Farmer only
-
-
Each have their copy
53
88.3
TOTAL 60
100
Tactical Resource Sharing
Table 3 presents the coordination mechanisms of actors along tactical resource
sharing. This talks about the inventory and the plan for the volume of produce.
Doing
inventory. Majority (61.7%) of the farmer said inventory was entrusted to
them. This is because they are the one responsible in the farm operation. Some (15%) let
their supplier/trader do it, while 11.7% reported doing inventory with the supplier/trader.
Production
planning. Most (76.6%) of the farmers said they are not keen on the
volume of their output. They just depend on what will come out during harvest. This
implies that they are not consciously planning their production.
Coordination Mechanisms Along Cauliflower Supply Chain
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Table 3. Coordination mechanisms along tactical resource sharing
COORDINATION MECHANISM
FREQUENCY
PERCENTAGE
Doing Inventory
Supplier/trader only
9
15.0
Farmer only
37
61.7
Jointly prepared
7
11.7
Do not practice
7
11.7
TOTAL 60
100
Production Planning
Yes
14
23.3
No
46
76.6
TOTAL 60
100
Strategic Resource Sharing
The following table presents the coordination mechanisms of actors along
strategic resource sharing. This talks about competitiveness in the market.
Aiming for competitiveness in the market. Most (93.3%) of the farmers said that
they want also to be competitive like the other countries. This is by producing quality
cauliflower, which is acceptable by the customers. They added that practicing organic
farming would contribute in producing a competitive cauliflower produce.
Discussing production plans with their trader. Table 4 shows that 56.7% of the
farmers discuss production plans with their supplier/trader hoping that they would
Coordination Mechanisms Along Cauliflower Supply Chain
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suggest some techniques on how to do it and they believe that their trader is more
knowledgeable and more informed regarding this matter because they are exposed in the
market. On the other hand, some (43.3%) farmers don’t talk about this with their
supplier/traders. However, according to the farmers, suppliers don’t favor organic
farming because they believe that it is difficult and expensive.
The finding implies that actors are aware of the changing trend in the world of
competition. However, lack of financial support hinders them to go with the change that
is why they stick to their usual practice.
Table 4. Coordination mechanism along strategic resource sharing
COORDINATION MECHANISM
FREQUENCY
PERCENTAGE
Aiming for Competitiveness
Yes
56
93.3
No
4
6.7
TOTAL 60
100
Discussing Production Plans
with trader
Yes
34
56.7
No
26
43.3
TOTAL 60
100
Coordination Mechanisms Along Cauliflower Supply Chain
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Decision Making Style
Table 5 presents the decision making style of the actors in the area of production
and marketing. This portion talks about who decides for the variety to be planted, time of
planting, time of harvest and the choice of selling the commodity.
Choice of variety to be planted. Table 5 shows that majority (56.7%) of the
decision regarding the choice of variety of cauliflower were entrusted to the farmers.
According to respondents, the decision was given to them because they know what
variety is best suited to the type of soil they have. There were 26.7% who said both
farmers and supplier/traders decide and some (16.7%) said their supplier/traders make the
decision because he owns the land being planted.
Time of planting. Most (90%) of the decision were given to the farmers because
according to them, they know the best season for planting. However, farmers could plant
at any time they want provided that irrigation is available. Some (8.3%) said both farmer
and supplier/trader make the decision and 1.7% said their supplier/trader decides.
Time of harvesting the commodity. Regarding the harvest of the product most
(70%) of the respondents said their supplier/trader entrust it to them, 20% said both
farmers and their supplier/traders decides and 10% said their supplier/trader takes over.
Sometimes farmers consult first their trader before harvesting for the timing of high price.
But in most cases, farmers harvest their produce at any time as long that it is ready to be
sold.
Choice of selling the commodity. Most (96.7 %) of the decision in the choice of
selling the product were taken by the supplier/trader because they have preferred buyers
Coordination Mechanisms Along Cauliflower Supply Chain
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or ‘suki’ and they are the one responsible in case there are orders. Only 3.3% farmers said
they are the one choosing a buyer.
The finding implies that most decision in the production area was given to the
farmers while marketing the commodity was taken by their supplier/trader.
Table 5. Coordination mechanisms in decision making
COORDINATION MECHANISM
FREQUENCY
PERCENTAGE
Choice of Variety
Supplier/trader only
10
16.7
Farmer only
34
56.7
Both makes the decision
16
26.7
TOTAL 60
100
Time of Planting
Supplier/trader only
1
1.7
Farmer only
54
90
Both makes the decision
5
8.3
TOTAL 60
100
Time of Marketing
Supplier/trader only
6
10
Farmer only
42
70
Both makes the decision
12
20
TOTAL
60
100
Coordination Mechanisms Along Cauliflower Supply Chain
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Table 5. Continued…
COORDINATION MECHANISM
FREQUENCY
PERCENTAGE
Choice of Selling
Supplier/trader only
58
96.7
Farmer only
2
3.3
Both makes the decision
-
-
TOTAL 60
100
Level of Control
Table 5 presents the coordination mechanisms in the level of control which
corresponds to the monitoring of the farm operations.
Farm
visitation. There were 55% of the farmers who said that their
supplier/traders do not visit their farm because the suppliers trust them while 45% said
that their suppliers visit. Of those who visit, 25% of them visit twice, 13.3% once, 3.3%
thrice and the rest visit many times in one cropping. The suppliers who visit the farms
usually check the condition of the crop, plant needs (e.g. insecticides etc.) and the time of
harvest.
The finding implies that there is a low level of control because majority said their
supplier/trader do not monitor their farm, hence the value of trust is high.
Coordination Mechanisms Along Cauliflower Supply Chain
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Table 6. Coordination mechanism in the level of control
COORDINATION MECHANISM
FREQUENCY
PERCENTAGE
Visitation of Farm
Yes
27
45
No
33
55
TOTAL 60
100
Frequency of Visiting
Once
8
13.3
Twice
15
25.0
Thrice
2
3.3
Others
2
3.3
No answer
33
55.0
TOTAL 60
100
Risk and Reward Sharing
Table 7 presents the coordination mechanisms of the actors in terms of risk and
reward sharing in the chain. This portion discusses how do the farmers and the traders
divide risk in terms of bankruptcy due to natural calamities and spoilage of the product.
The reward is the benefit they get which is the net from the sales of the product.
Risk sharing in bankruptcy. There were 66.7% farmers who said that they share
equally with their suppliers in the risk and some (33.3%) said all the risks were given to
Coordination Mechanisms Along Cauliflower Supply Chain
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them. As to the bankruptcy due to typhoon, the costs of input supplied are on the farmer
and deducted from the sales of next cropping.
Sharing of net benefit. The different mechanisms of the actors for sharing benefits
are the following:
a) Deduct all farm inputs supplied in the operation then divide the net equally as
reported by 28.3% of the respondents.
b) Do not deduct farm input expenses; they simply divide the sales at equal
proportion. The respondents here noted that if their supplier owns the land, 10%
would be deducted first before dividing them equally as mentioned by 25% of the
respondents.
c) Deduct farm input expenses then from the net 65% goes to the farmer and
35% to their supplier/trader as reported by 20% of the respondents.
d) Deduct farm input expenses then 85% goes to the farmer and 15% to their
supplier/trader as reported by 13.3% of the respondents.
e) Deduct farm input expenses then 90% goes to the farmer and 10% to their
supplier/trader as mentioned by 8.3% of the respondents.
f) Deduct farm input expenses then 60% goes to the farmer and 40% to their
supplier/trader as reported by 5% of the respondents.
We noticed that there was a higher percentage where both farmers and their
supplier/trader share equally in the risk encountered. On the other hand, division of
benefits between the partners varies.
Coordination Mechanisms Along Cauliflower Supply Chain
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Table 7. Coordination mechanisms in risk and reward sharing
COORDINATION MECHANISM
FREQUENCY
PERCENTAGE
Sharing of Risk
Supplier/trader only
-
-
Farmer only
20
33.3
Both
40
66.7
TOTAL 60
100
Sharing of Net Benefit
1. Deduct farm input expenses then
50%-F, 50%- S/T
17
28.3
2. Do not deduct farm input
expense then, 50%-F, 50%-S/T
15
25.0
3. Deduct farm input expenses then
65%-F, 35%-S/T
12
20.0
4. Deduct farm input expenses then
85%-F, 15%-S/T
8
13.3
5. Deduct farm input expenses then
90%-F, 10%-S/T
5
8.3
6. Deduct farm input expenses then
60%-F, 40%-S/T
3
5.0
TOTAL 60
100
Buyers of the Commodity
All the supplier/traders respondents said that they sell the cauliflower to
individuals and institution (Table 8). This is because all of these supplier-traders were
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
26
wholesalers-retailers of the said commodity. Individual buyers as observed by the traders
were passers-by where they usually buy goods for household consumption, while
institutional buyers were the owner of restaurants, Divisoria trader and Korean schools.
Table 8. Cauliflower buyers of suppliers-traders
BUYERS FREQUENCY
PERCENTAGE
Individual buyers only
-
-
Institutional buyers only
-
-
Both
10
100
TOTAL 10
100
Trader-Consumer Relationship
Table 9 also presents that most of the clients of the traders were preferred buyers
or ‘suki’. According to the traders, if you are engaged in a business, you need to develop
a good relationship with your customers because they are the life of your business.
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
27
Table 9. Relationship between the traders with their consumers
RELATIONSHIP FREQUENCY
PERCENTAGE
Relative
-
-
‘Suki’
10
10
TOTAL 10
100
Problems Encountered by Farmers with
their Supplier/Trader
Farmer respondents said that they enjoy some benefits from their supplier who
provides job for them. Furthermore, the relationship is advantageous to farmers who lack
money for his farm operations, the crops were financially secured and they do not worry
about searching for a trader to sell their product. However, the farmers also encounter
some problems with their suppliers.
As reflected in Table 10, majority (58.3%) of the problems encountered by
farmers was delayed delivery of farm inputs by the supplier. Other problems mentioned
were: supplier cannot provide all the necessary inputs needed for maintenance (16.7%)
and delayed payment of product from the trader due to delayed payment from their
clients too (8.3%). The rest (16.7%) did not mention any problem. To remedy for the
delayed delivery of farm inputs, the farmers borrow from other farmers or just wait.
.
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
28
Table 10. Problems encountered by farmers with their supplier/traders
PROBLEMS FREQUENCY
PERCENTAGE
1. Delayed delivery of farm inputs
35
58.3
2. Suppliers cannot provide all inputs
needed for maintenance
10
16.7
3. Delayed payment of product
5
8.3
4. No answer
10
16.7
TOTAL 60
100
Problems Encountered by Traders with
their Clients
All the trader respondents cited similar problems. For restaurants, most problems
encountered were difficulty in collecting debts. Another is the punctuality in delivering
their order otherwise, if the traders are late, their customer will shift to another source
that is more accommodating. Other problems mentioned were customers buy on
consignment basis, and that their customers are demanding in the sense that they want a
quality cauliflower at low price or ‘barat’ as the traders call it.
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
29
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
Summary
This study was conducted to determine the coordination mechanisms of the
cauliflower supply chain actors in Kabayan, Benguet. A total of 60 farmers were selected
at random in the said municipality and 10 of their respective suppliers at the same time
traders at the Baguio City Hangar Market and at the La Trinidad Trading Post. An
interview guide was used to collect the needed information. The information was
consolidated, tabulated and analyzed using frequency tables and percentage.
Most of the respondents were male. Majority of both farmer respondents and their
respective suppliers/trader were married. There was a higher percentage among the
farmers who had no formal education. As for supplier-traders, higher percentage had
reached college level.
Regarding resource sharing in terms of operation, farm input supplies were
provided by the supplier, payment of labor as well transportation expenses were the
responsibility of the farmers. Majority of the land used were owned by the farmers. In
keeping records of sales, each actor has duplicate copy that serves as their future
reference in case of complaints and for consistency of records. As for tactical resource
sharing, doing inventories were entrusted to the farmers. Farmers did not consciously
plan their production. For the strategic resource sharing, farmers aimed to be competitive
in the market by producing quality cauliflower. Organic farming was mentioned by
farmers that could probably contribute to competitiveness. However, they said that they
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
30
cannot practice organic farming due to lack of financing and the difficulty in doing this.
Suppliers did not favor nor agreed with them too.
When it comes to decision-making, farmers usually decide the choice of variety to
be planted and the time of planting. Their farm input supplier-trader takes responsibility
in marketing the commodity.
Along the level of control with regards to the monitoring of farm, majority said
that their supplier do not visit their farm. They entrusted the crop to the farmers.
For risk, majority had a fair division because both the farmers and their supplier
have equal share. However, in the styles of sharing the benefit or net income the
agreement between the actors vary.
Most problems encountered by the farmer with their supplier were delayed
delivery of farm inputs by their supplier/trader. Another problem met was the delayed
payment of the product.
Though farmers encounter problems with their supplier, they mentioned that they
also gained benefits from them such as; their supplier/traders provide job to them,
advantage to farmers who lack money farm operations, crops were financially secured,
and the farmer do not worry about selling their products.
Difficulty in collecting debts from their clients was the usual problem of the
traders. Other problems encountered were punctuality in delivering orders to a particular
restaurant and the costumers’ demand where they want a quality product at a low price.
Customers also want to buy on consignment basis.
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
31
Conclusions
Based on the results of the study, the following conclusions were drawn:
1. In resource sharing the supplier provided financial input while the farmer did
the farm operation. Both actors worked together on a particular task.
2. Majority of the decisions in the area of production was taken by the farmer and
marketing the product by their respective trader.
3. Majority of the farm operations were not monitored by their supplier. This is
because they trusted the farmers.
4. The farmers and suppliers have fair risk sharing while sharing in benefits
varies.
Recommendations
Based on the conclusions, the following recommendations are made:
1. In decision making, both farmers and their respective suppliers/traders should
jointly plan in both areas of production and marketing to improve product and
service quality.
2. More researches should be done to look into how farmers, traders and other
members of the supply chain would all benefit from the relationship.
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
32
LITERATURE CITED
ANCESTRAL DOMAIN MANAGEMENT PLAN. 1999. Kabayan, Benguet. Book II
Pp. 199, 208,351.
BATT, P.J. 2004. Agriproduct Supply Chain Management in Developing Countries.
Edited by G.I. Johnson and P.J. Hofman. P. 27.
BENGUET COMMODITY PROFILE. 2006. Office of Provincial Agriculturist (OPAG).
Province of Benguet
DRAFT REPORT. Comprehensive Land Use Plan and Zoning Ordinance. 2002.
Kabayan, Benguet. P. 79.
JULIAN, J.D. 2006. Consumers Choice of Market Outlets for Grocery Items in La
Trinidad, Benguet. BS Thesis. BSU, La Trinidad, Benguet. P. 1
MONCZKA, R., R. TRENT, and R. HANDFIELD. 2005. Purchasing & Supply Chain
Management. Mason, Ohio: Southwestern Copyright 2005. Pp. 4-5.
VARAMAKI, E. and J. VESALAINEN. 2003. Modeling Different Types of Multilateral
Co-operation between SME’s. Pp. 27-47.
WATERS, D. 2003. Logistics: An Introduction to Supply Chain Management. New
York: Palgrave Mac Millan, Copyright Donald Waters 2003. Pp. 7, 8-9, 17.
XU, L. and B.M BEAMON. 2006. The Journal of Supply Chain Management. February
2006. Pp. 4-5.
YUBOS N.P. 2006. A Documentation of Traders, Input Suppliers and Farmers’ Input-
Supply Relationships in Madaymen, Kibungan, Benguet. BS Thesis. Benguet
State University. P. 1.
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
33
APPENDICES
Appendix A. Communication Letter
Benguet State University
COLLEGE OF AGRICULTURE
La Trinidad, Benguet
January 2007
Sir/Madam:
The undersigned is a fourth year Bachelor of Science in Agribusiness (BSAB)
student majoring in Enterprise Management. I am presently conducting a research
entitled “Coordination Mechanisms along Cauliflower Supply Chain in Kabayan,
Benguet” in partial fulfillment for the requirement of the course.
In this regard, may I ask a portion of your precious time to answer all the
questions to complete the research undertaking. Rest assured that all information you will
give will be treated with outmost confidentiality.
Thank you very much for your support.
Respectfully yours,
Mary Claire A. Paloan
Researcher
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
34
Appendix B. Interview Guide for Farmers
I. General Information:
1. Name (optional) __________________________________Gender :____( F) ____ (M)
2. Highest Educational Attainment
____ No formal education
____ Elementary graduate
____High school level
____ High school graduate
____ College level
____ College graduate
____Vocational
3. Civil Status ____single
____married
II. Coordination Mechanisms Attributes
A. Resource Sharing
1. Operational resource sharing
a. Who is responsible in financing your inputs?
____supplier-trader
____farmer
____ both take equal part
b. Who take charge in paying labor in the operation (e.g. weeding, cultivation,
etc.)?
____supplier-trader
____farmer
____ both take equal part
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
35
c. Who is responsible in the transportation expense in marketing your product?
____supplier-trader
____farmer
____ both take equal part
d. Who owns the land to be planted with?
____supplier-trader
____farmer
e. Who keeps records of sales?
____supplier-trader
____farmer
____each actor has their own records
2. Tactical resource sharing
a. Who does the inventory?
____supplier-trader
____farmer
____jointly prepared by the actors
b. Do you jointly plan for the volume of output to be produced?
( ) yes ( ) no
3. Strategic resource sharing
a. Do you have any plan of being competitive in the market?
( ) yes ( ) no
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
36
If yes, what are they?
________________________________________________________________________
________________________________________________________________________
b. Do you discuss this with your partner?
( ) yes ( ) no
Why?
________________________________________________________________________
B. Decision Making
1. Production area
a. Who decides for the variety of cauliflower to be planted?
____supplier-trader
____farmer
____both
actors
b. Who decides when to plant?
____supplier-trader
____farmer
____both
actors
2. Marketing area
a. In marketing your output, who decides when to harvest your product?
____supplier-trader
____farmer
____both
actors
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
37
b. Who decides where to sell your product?
____supplier-trader
____farmer
____both
actors
C. Level of Control
a. Do your supplier-trader visits your farm?
( ) yes ( ) no
If yes, what particular aspect do they visit?
________________________________________________________________________
________________________________________________________________________
c. How often?
____once
____twice
____thrice
____others
(please
specify)_____________________
D. Risk and Reward Sharing
a. Who takes responsibility when you encounter bankruptcy due to natural
calamities (typhoon, earthquake) and spoilage?
____supplier-trader
____farmer
____both
actors
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
38
b. How is the benefit divided?
________________________________________________________________________
________________________________________________________________________
III. Problems Encountered
1. What are the problems you encounter related to coordination mechanisms along the
cauliflower supply chain?
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
2. How do you solve these problems?
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
39
Appendix C. Interview Guide Questionnaire for their Supplier/Trader
IV. General Information
1. Name (optional) __________________________ Gender :____(F)____(M)
2. Highest Educational Attainment
____ No formal education
____ Elementary graduate
____High school level
____ High school graduate
____ College level
____ College graduate
____Vocational
3. Civil Status ____single
____married
4. Who are your clients?
____individual
buyers
____institutional
buyers
____both individual and institutional
5. What is you relation to your clients?
____relative
____’suki’or preferred buyers
6. What are the problems you have encountered with your clients?
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
PALOAN, MARY CLAIRE A. APRIL 2007. Coordination Mechanisms
Along Cauliflower Supply Chain in Kabayan, Benguet. Benguet State University, La
Trinidad, Benguet.
Adviser: Marie Klondy T. Dagupen, PhD
ABSTRACT
This study was conducted to determine the coordination mechanisms by the
cauliflower supply chain actors along; resource sharing which encompasses operational,
tactical and strategic resource sharing; decision making style; level of control; and risk
and reward sharing. Moreover, the study aimed to identify problems encountered by the
actors along the supply chain.
The study reveals that in the operational resource sharing, suppliers provides
necessary farm inputs and farmers do all the operations in the farm. As for tactical
resource sharing doing inventories were entrusted to the farmers. For the strategic
resource sharing, farmers aimed to be competitive in the market by producing quality
cauliflower. Organic farming was mentioned by them that could contribute in producing
quality cauliflower produce.
The decisions in the production area were entrusted to the farmers while the
supplier/trader takes responsibility in marketing. Supplier/traders trust the farmer that is
why they do not necessarily visit the farm to monitor.
Natural calamities like typhoons are one of the major causes of bankruptcy by both
the farmers and suppliers. In this study, the actors share equally in the risks. As to benefit
sharing, the farmers and their respective supplier/traders have various mechanisms in
dividing their share.
Both farmers and their respective supplier/traders met problems in coordination. At
times, when the customers do not pay the traders on time, the farmers were affected
because the traders in turn delay in paying the product.
ii
TABLE OF CONTENTS
Page
Bibliography…………………………………………………………………
i
Abstract……………………………………………………………………...
i
Table of Contents…………………………………………………………...
iii
INTRODUCTION…………………………………………………………..
1
Rationale of the Study………………………………………………
1
Statement of the Problem……………………………………………
2
Objectives of the Study……………………………………………...
3
Importance of the Study……………………………………………..
4
Scope and Limitation of the Study…………………………………..
4
REVIEW OF LITERATURE
Supply Chain………………………………………………………..
6
Coordination Mechanism Attributes………………………………..
7
METHODOLOGY
Locale and Time of the Study……………………………………….
10
Respondents of the study……………………………………………
10
Data Collection………………………………………………………
10
Data Gathered……………………………………………………….
10
Data Analysis………………………………………………………..
12
RESULTS AND DISCUSSION
Profile of Respondents………………………………………………
13
Operational Resource Sharing………………………………………
15
iii
Tactical Resource Sharing…………………………………………..
17
Strategic Resource Sharing………………………………………….
18
Decision Making Style………………………………………………
20
Level of Control……………………………………………………..
22
Risk and Reward Sharing……………………………………………
23
Buyers of the Commodity…………………………………………...
26
Trader-Consumer Relationship……………………………………...
25
Problems Encountered by the Farmers
with their Supplier/Trader…………………………………………..
27
Problems Encountered by the Supplier/Trader
with their Clients……………………………………………………
28
SUMMARY, CONCLUSIONS AND RECOMMENDATION……………
29
Summary……………………………………………………………
29
Conclusions…………………………………………………………
31
Recommendations…………………………………………………..
31
LITERATURE CITED……………………………………………………..
32
APPENDICES……………………………………………………………...
33
Appendix A. Communication Letter……………………………….
33
Appendix B. Interview Guide for farmers……………………….....
34
Appendix C. Interview Guide for their Supplier/Traders…………..
39
iv
INTRODUCTION
Rationale
Kabayan is tagged as one of the vegetable producing municipalities in the
province of Benguet. Eighty five (85%) of the residents depend mainly on agriculture as
their means of livelihood. As such, agriculture is the focal area of economic stability in
this place. The municipality’s favorable climatic condition with a mean annual
temperature of 19.4 0C and its soil fertility paved way in growing various highland
vegetables. Thus, vegetable production or cash crop production is the center of activity of
farmers in the locality (Ancestral Domain Management Plan, 1999). Kabayan has more
than sufficient supply of vegetables that it can consume, hence, marketed to Baguio City,
La Trinidad and Bambang, Nueva Viscaya (Draft Report, 2002). Cauliflower is one of
the major crops produced by most farmers here. The Municipal Agriculture Office
(MAO) in Kabayan reported that cauliflower has a total annual produced of 8,869.50 MT
or 14.13 MT/ha. The total area planted accounts to 615.50 has (Benguet Commodity
Profile, 2006).
Supply chain actors such as suppliers, farmers, and traders, play an important role
within the chain. This is because they serve as the agent in providing service to the
ultimate consumers. According to Julian (2006), traders owe a big part in the market
activity by seeing to the personal satisfaction of human wants. Without these traders,
goods may not reach the ultimate consumers, thus, adversely affecting their standard of
living. The rapid change in trend affects consumers’ behavior nowadays. They are harder
to please. They are more demanding and sensitive. As for vegetables, they want them to
Coordination Mechani
sms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
2
be sold fresh judging their quality and reliability. It is therefore a challenge to the actors
to act on this matter.
Coordination mechanism is employed along the chain. Xu and Beamon (2006),
wrote that coordination within a supply chain is a strategic response to the problems that
arise from inter-organizational dependencies within the chain.
The most common vegetable chain in Kabayan is popularly known as supply
system, where the trader provides necessary farm inputs to farmers to be used in the
cropping. At harvest, the farmers sell the output to their farm input supplier or trader-
financier as they are called.
The study was conducted to find out how these actors (farmer and their respective
farm input supplier/trader) coordinate with each other along resource sharing, decision
style, level of control and risk/reward sharing and at the same time know the problems
they encounter in this particular chain.
Statement of the Problem
Studies have been conducted related to different agricultural produce in the
province of Benguet. However, further study on the coordination mechanisms of supply
chain actors of this particular commodity had not been done and elaborated. Studying the
coordination mechanisms along cauliflower supply chain will answer the following
questions:
1. Who are the actors involved along cauliflower supply chain in Kabayan and
their characteristics?
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
3
2. How do the actors coordinate with each other along resource sharing, decision
style, level of control and risk/reward sharing?
3. What are the problems encountered related to the coordination mechanisms?
4. How do they solve these problems?
Objectives of the Study
The objectives of the study were as follows:
1. To identify the actors involved in the cauliflower supply chain in Kabayan.
2. To find out the coordination mechanism of the actors along resource sharing,
decision style, level of control and risk/reward sharing.
3. To know the problems encountered by the actors along coordination
mechanism.
4. To find out how they solve these problems.
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
4
Importance of the Study
Studying the coordination mechanisms of the farmers and their respective farm
input supplier/trader in the supply chain is important to improve coordination.
Eventually, good coordination could help producers to produce quality cauliflowers that
would fit into the needs and wants of the customers. This study provides information to
concerned agencies for policy actions and interventions.
Scope and Limitation of the Study
Although, “supply system” is also practiced in other parts of Benguet, the study
focused in the municipality of Kabayan, Benguet. It was limited to the coordination
mechanisms of actors along the cauliflower supply chain.
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
5
REVIEW OF LITERATURE
Yubos (2006) wrote that vegetable farming requires a big amount of cash for the
purchase of farm inputs such as planting materials, fertilizer, pesticides and fungicide.
Unavailability of cash and poor access to financial institutions/support is one of their
constraints in production; thus, this is where agricultural farm input suppliers are of great
help to the farmers.
Traders forge production-sharing agreement with farmers. The traders provide
necessary farm inputs and cash money for use in the cropping season. At harvest, the
total produce will be sold to the trader-financer. This is called “supply system” (Figure
1). Agreements on sharing of sales out of the farm produce vary (Draft Report, 2002).
SUPPLIER/
TRADERS
Farm input supplies
Farmers’ produce
FARMER
Figure 1. Supply system for vegetable in Kabayan, Benguet
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
6
Supply Chain
Every product has its own unique supply chain, according to Lele as cited by Batt
(2004); supply chain itself is often long and protracted, involving a large number of
market intermediaries.
In other instances, Waters (2003) describes supply chain as the series of activities
in organizations that materials move through on their journey from initial suppliers to
final customers. Supply chain exists to overcome the gaps created when suppliers are
some distance away from customers. This is a sequence of events intended to satisfy a
customer.
The new millennium features increasing numbers of world-class competitors,
domestically and internationally, that are forcing organizations to improve their internal
processes in order to stay competitive. Sophisticated customers, industrial and consumer,
no longer talk about price increases, they demand price reductions. An abundance of
competitors and choices has conditioned customers to want higher quality, faster delivery
of products and services, tailored to their individual needs at a lower total cost. If a
company cannot meet these requirements, the customer will find a source that is more
accommodating (Monczka et al., 2005).
Waters (2003) added that the simplest view of supply chain has a single product
moving through a series of organizations, each of which somehow add value to the
product. Taking one organizations’ point of view, activities in front of it-moving
materials inwards-are called upstream; those after the organization-moving materials
outwards-are called downstream. The upstream activities are divided into tiers of
suppliers. A supplier that sends a material directly to the operation is a first tier supplier;
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
7
one that send materials to a first tier supplier is a second tier supplier; one that sends
materials to a second tier is a third tier supplier, and so on. Customers are also divided
into tiers. One that gets a product directly from the operation is a first tier customer; one
that gets product from a first tier customer is a second tier customer; one that gets a
product from a second tier is a third tier customer, and so on to the final customer (Figure
2).
Upstream activities Downstream activities
Initial
Third
Second First First Second Third Final
supp-
tier
tier
tier tier
tier
tier
custo-
lier
supp- supp-
supp- custo- custo-
custo-
mer
lier
lier
lier mer mer
mer
ORGANI
ZATION
Figure 2. Activities in a supply chain (Waters, 2003)
Coordination Mechanism Attributes
Coordination mechanism is a set of methods used to manage interdependence
between organizations. This may be differentiated on the bases of four attributes:
resource sharing structure, decision style, level of control, and risk/reward sharing (Xu
and Beamon, 2006).
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
8
Resource
sharing
structure. Malone as cited by Xu and Beamon (2006) limits
consideration to information sharing. However, since there are other resources to be
shared and communicated within the context of coordination, this dimension is extended
to include all of the resources shared. This dimension is defined as resource sharing
structure, and follows the classification given in Varamaki and Vesalainen (2003):
No resource sharing.
Operational resource sharing, such as communication between operational
levels, sharing operational information such as point-of-sale (POS) data, or
pooling operational resources in group problem solving.
Tactical resource sharing, such as communication between managers in the
same function from different firms to achieve consistency or jointly
developing inventory and production plans.
Strategic resource sharing, such as forming strategic alliances, forming
strategic level meeting, jointly creating strategic plans, sharing strategic
information, or jointly investing resources to make strategic advances,
especially in the area of research and development (R&D).
Decision
style. For the decision function, there are two main styles: centralized
and decentralized. For centralized decision style, one firm has primary control. For
decentralized style, each firm makes its decision autonomously.
Level of control. Control has two levels: high and low. A high level of control
corresponds to strict monitoring and control. In this case, the coordinating firms develop
detailed and strict rules, routines, and monitoring systems to control other firms’
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
9
behavior, for the purpose of detecting opportunistic risk. A low level of control
corresponds to little or to no monitoring and control.
Risk/Reward
sharing. Risk/reward sharing describes the characteristics of the
selected incentive system. There are two main types of sharing methods: fair or unfair. A
fair condition occurs when one firm undertakes more risk than do other firms in the
relationship, but receives more benefits from the coordination. An unfair condition arises
when one firm undertakes less risk but enjoys greater benefits, or when one firm
undertakes greater risk with fewer benefits.
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
10
METHODOLOGY
Locale and Time of the Study
This study was conducted in Kabayan, Benguet and among farm input suppliers
and traders at Baguio City Hangar Market and La Trinidad Trading Post. Kabayan is
bounded by municipalities of the Benguet Province on the North by Buguias, on the
South by Bokod, on the West by Atok and partly by Kibungan specifically along the
Halsema National Road (Figure 3). Vegetables; leafy, fruit and root are the major
products of farmers in the municipality. The study was conducted from January to
February 2007.
Respondents of the Study
The respondents of the study were 60 farmers in Kabayan who were cauliflower
growers and 10 of their respective farm input suppliers who are at the same time traders
of their produce.
Data Collection
An interview guide was used by the researcher for data gathering. Personal
observation was also done in this study.
Data Gathered
The data gathered were the following: a) profile of the farmers and their
respective farm input supplier/trader; b) coordination mechanisms of these actors along
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
11
Figure 3. Map of the study area
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
12
resource sharing in terms of operational, tactical and strategy, decision style in the area of
production and marketing, level of control in terms of monitoring the operations of the
farm and risk/reward sharing; c) problems encountered related to coordination
mechanisms and; d) solutions of the problems encountered as perceived by the
respondents.
Data Analysis
The data collected were consolidated and analyzed using frequency, percentage
and mean. Data analysis and interpretation was guided by theories and principles of
supply chain from literature.
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
13
RESULTS AND DISCUSSION
Profile of the Respondents
This study has two types of respondents, the farmers and their respective farm
input supplier /trader. Table 1 presents the respondents’ profile according to their sex,
educational attainment, and civil status.
Sex. Most (90%) of the respondents are male. Among the farm input
supplier/trader, 60% are male and 40% are female.
Educational
attainment. Twenty (33.3%) farmers had no formal education, 18.3%
graduated from elementary and the same percentage reached high school level, 16.7 %
graduated from high school, 8.3% reached college level and 5% graduated from college.
For the supplier/trader, 30% reached college level, 20% high school level, 20% graduated
from college, 10% took a vocational course and the same percentage had no formal
education. The finding implies that most of the farmer respondents had no formal
education in contrast to the traders who had higher education.
Civil
status. Among the farmer respondents, 61.7% were married and 38.3% were
single. Likewise for the supplier/traders, 80% were married and 2 (20%) were single.
Coordination Mechanisms Along Cauliflower Supply Chain
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Table 1. Profile of the respondents
RESPONDENTS
FARMER T RADER
PROFILE
Frequency Percentage Frequency Percentage
Gender
Female
6 10
4 40
Male
54 90
6 60
TOTAL
60 100
10 100
Educational Attainment
No formal education
20 33.3
1 10
Elementary graduate
11 18.3
1 10
High school level
11 18.3
2 20
High school graduate
10 16.7
2 20
College level
5 8.3
3 30
College graduate
3 5.0
- -
Vocational
- -
1 10
TOTAL
60 100
10 100
Civil Status
Single
23 38.3
2 20
Married
37 61.7
8 80
TOTAL
60 100
10 100
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
15
Operational Resource Sharing
Table 2 shows the coordination mechanisms of the actors along operational
resource sharing. This portion includes how they share regarding financing of farm
inputs, payment of labor, transportation expense, ownership of the land, and in keeping
records of sales.
Provision of farm inputs. Most (85%) of the farmer respondents said that their
supplier/trader provides necessary farm inputs needed in the operation, and only 15% of
them take equal part. The finding implies that most farmers lack money to finance their
farm.
Payment of labor. There were 71.7% farmers who said that they were responsible
in the payment of labor while 18.3% mentioned that their supplier/traders did it. Six
(10%) said that they shared equally in paying the wages of the laborer. Other farmers said
that if the area planted is small, they did all the work and thus, no need to hire a labor.
Transportation expenses. There were 56.7% farmers who said they were
responsible for paying the transport of their product, 23.3% indicated that both the farmer
and the trader took equal part, and 20% said that their supplier/trader took the
responsibility. Some farmers said that when their supplier/trader pick-up their produce
during harvest from the farm the fare is computed and deducted from the sales before
dividing their share.
Land
ownership. Most (80%) of the land planted were owned by the farmer. The
rest (20%) said that their supplier/trader provided the land. The finding implies that most
farmers have a land but due to lack of financial assistance, they depend on a supplier for
financing.
Coordination Mechanisms Along Cauliflower Supply Chain
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16
Keeping sales records. Most (88.3%) of the respondents said that both farmer and
their supplier/trader have their own copy of sales which serve as their future reference in
case of complaints and for the consistency of records. Only 11.7% said that they entrust it
to their supplier/trader because they do not know how to do it.
Table 2. Coordination mechanisms along operational resource sharing
COORDINATION MECHANISM
FREQUENCY
PERCENTAGE
Provision of Farm Inputs
Supplier/trader only
51
85
Farmer only
-
-
Both
9
15
TOTAL 60
100
Payment of Labor
Supplier/trader only
11
18.3
Farmer only
43
71.7
Both
6
10.0
TOTAL 60
100
Transportation Expense
Supplier/trader only
12
20.0
Farmer only
34
56.7
Both
14
23.3
TOTAL 60
100
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
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Table 2. Continued…
COORDINATION MECHANISM
FREQUENCY
PERCENTAGE
Land Ownership
Supplier/trader only
12
20
Farmer only
48
80
Both
-
-
TOTAL 60
100
Keeping Sales Records
Supplier/trader only
7
11.7
Farmer only
-
-
Each have their copy
53
88.3
TOTAL 60
100
Tactical Resource Sharing
Table 3 presents the coordination mechanisms of actors along tactical resource
sharing. This talks about the inventory and the plan for the volume of produce.
Doing
inventory. Majority (61.7%) of the farmer said inventory was entrusted to
them. This is because they are the one responsible in the farm operation. Some (15%) let
their supplier/trader do it, while 11.7% reported doing inventory with the supplier/trader.
Production
planning. Most (76.6%) of the farmers said they are not keen on the
volume of their output. They just depend on what will come out during harvest. This
implies that they are not consciously planning their production.
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
18
Table 3. Coordination mechanisms along tactical resource sharing
COORDINATION MECHANISM
FREQUENCY
PERCENTAGE
Doing Inventory
Supplier/trader only
9
15.0
Farmer only
37
61.7
Jointly prepared
7
11.7
Do not practice
7
11.7
TOTAL 60
100
Production Planning
Yes
14
23.3
No
46
76.6
TOTAL 60
100
Strategic Resource Sharing
The following table presents the coordination mechanisms of actors along
strategic resource sharing. This talks about competitiveness in the market.
Aiming for competitiveness in the market. Most (93.3%) of the farmers said that
they want also to be competitive like the other countries. This is by producing quality
cauliflower, which is acceptable by the customers. They added that practicing organic
farming would contribute in producing a competitive cauliflower produce.
Discussing production plans with their trader. Table 4 shows that 56.7% of the
farmers discuss production plans with their supplier/trader hoping that they would
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
19
suggest some techniques on how to do it and they believe that their trader is more
knowledgeable and more informed regarding this matter because they are exposed in the
market. On the other hand, some (43.3%) farmers don’t talk about this with their
supplier/traders. However, according to the farmers, suppliers don’t favor organic
farming because they believe that it is difficult and expensive.
The finding implies that actors are aware of the changing trend in the world of
competition. However, lack of financial support hinders them to go with the change that
is why they stick to their usual practice.
Table 4. Coordination mechanism along strategic resource sharing
COORDINATION MECHANISM
FREQUENCY
PERCENTAGE
Aiming for Competitiveness
Yes
56
93.3
No
4
6.7
TOTAL 60
100
Discussing Production Plans
with trader
Yes
34
56.7
No
26
43.3
TOTAL 60
100
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
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Decision Making Style
Table 5 presents the decision making style of the actors in the area of production
and marketing. This portion talks about who decides for the variety to be planted, time of
planting, time of harvest and the choice of selling the commodity.
Choice of variety to be planted. Table 5 shows that majority (56.7%) of the
decision regarding the choice of variety of cauliflower were entrusted to the farmers.
According to respondents, the decision was given to them because they know what
variety is best suited to the type of soil they have. There were 26.7% who said both
farmers and supplier/traders decide and some (16.7%) said their supplier/traders make the
decision because he owns the land being planted.
Time of planting. Most (90%) of the decision were given to the farmers because
according to them, they know the best season for planting. However, farmers could plant
at any time they want provided that irrigation is available. Some (8.3%) said both farmer
and supplier/trader make the decision and 1.7% said their supplier/trader decides.
Time of harvesting the commodity. Regarding the harvest of the product most
(70%) of the respondents said their supplier/trader entrust it to them, 20% said both
farmers and their supplier/traders decides and 10% said their supplier/trader takes over.
Sometimes farmers consult first their trader before harvesting for the timing of high price.
But in most cases, farmers harvest their produce at any time as long that it is ready to be
sold.
Choice of selling the commodity. Most (96.7 %) of the decision in the choice of
selling the product were taken by the supplier/trader because they have preferred buyers
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
21
or ‘suki’ and they are the one responsible in case there are orders. Only 3.3% farmers said
they are the one choosing a buyer.
The finding implies that most decision in the production area was given to the
farmers while marketing the commodity was taken by their supplier/trader.
Table 5. Coordination mechanisms in decision making
COORDINATION MECHANISM
FREQUENCY
PERCENTAGE
Choice of Variety
Supplier/trader only
10
16.7
Farmer only
34
56.7
Both makes the decision
16
26.7
TOTAL 60
100
Time of Planting
Supplier/trader only
1
1.7
Farmer only
54
90
Both makes the decision
5
8.3
TOTAL 60
100
Time of Marketing
Supplier/trader only
6
10
Farmer only
42
70
Both makes the decision
12
20
TOTAL
60
100
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
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Table 5. Continued…
COORDINATION MECHANISM
FREQUENCY
PERCENTAGE
Choice of Selling
Supplier/trader only
58
96.7
Farmer only
2
3.3
Both makes the decision
-
-
TOTAL 60
100
Level of Control
Table 5 presents the coordination mechanisms in the level of control which
corresponds to the monitoring of the farm operations.
Farm
visitation. There were 55% of the farmers who said that their
supplier/traders do not visit their farm because the suppliers trust them while 45% said
that their suppliers visit. Of those who visit, 25% of them visit twice, 13.3% once, 3.3%
thrice and the rest visit many times in one cropping. The suppliers who visit the farms
usually check the condition of the crop, plant needs (e.g. insecticides etc.) and the time of
harvest.
The finding implies that there is a low level of control because majority said their
supplier/trader do not monitor their farm, hence the value of trust is high.
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
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Table 6. Coordination mechanism in the level of control
COORDINATION MECHANISM
FREQUENCY
PERCENTAGE
Visitation of Farm
Yes
27
45
No
33
55
TOTAL 60
100
Frequency of Visiting
Once
8
13.3
Twice
15
25.0
Thrice
2
3.3
Others
2
3.3
No answer
33
55.0
TOTAL 60
100
Risk and Reward Sharing
Table 7 presents the coordination mechanisms of the actors in terms of risk and
reward sharing in the chain. This portion discusses how do the farmers and the traders
divide risk in terms of bankruptcy due to natural calamities and spoilage of the product.
The reward is the benefit they get which is the net from the sales of the product.
Risk sharing in bankruptcy. There were 66.7% farmers who said that they share
equally with their suppliers in the risk and some (33.3%) said all the risks were given to
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
24
them. As to the bankruptcy due to typhoon, the costs of input supplied are on the farmer
and deducted from the sales of next cropping.
Sharing of net benefit. The different mechanisms of the actors for sharing benefits
are the following:
a) Deduct all farm inputs supplied in the operation then divide the net equally as
reported by 28.3% of the respondents.
b) Do not deduct farm input expenses; they simply divide the sales at equal
proportion. The respondents here noted that if their supplier owns the land, 10%
would be deducted first before dividing them equally as mentioned by 25% of the
respondents.
c) Deduct farm input expenses then from the net 65% goes to the farmer and
35% to their supplier/trader as reported by 20% of the respondents.
d) Deduct farm input expenses then 85% goes to the farmer and 15% to their
supplier/trader as reported by 13.3% of the respondents.
e) Deduct farm input expenses then 90% goes to the farmer and 10% to their
supplier/trader as mentioned by 8.3% of the respondents.
f) Deduct farm input expenses then 60% goes to the farmer and 40% to their
supplier/trader as reported by 5% of the respondents.
We noticed that there was a higher percentage where both farmers and their
supplier/trader share equally in the risk encountered. On the other hand, division of
benefits between the partners varies.
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
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Table 7. Coordination mechanisms in risk and reward sharing
COORDINATION MECHANISM
FREQUENCY
PERCENTAGE
Sharing of Risk
Supplier/trader only
-
-
Farmer only
20
33.3
Both
40
66.7
TOTAL 60
100
Sharing of Net Benefit
1. Deduct farm input expenses then
50%-F, 50%- S/T
17
28.3
2. Do not deduct farm input
expense then, 50%-F, 50%-S/T
15
25.0
3. Deduct farm input expenses then
65%-F, 35%-S/T
12
20.0
4. Deduct farm input expenses then
85%-F, 15%-S/T
8
13.3
5. Deduct farm input expenses then
90%-F, 10%-S/T
5
8.3
6. Deduct farm input expenses then
60%-F, 40%-S/T
3
5.0
TOTAL 60
100
Buyers of the Commodity
All the supplier/traders respondents said that they sell the cauliflower to
individuals and institution (Table 8). This is because all of these supplier-traders were
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
26
wholesalers-retailers of the said commodity. Individual buyers as observed by the traders
were passers-by where they usually buy goods for household consumption, while
institutional buyers were the owner of restaurants, Divisoria trader and Korean schools.
Table 8. Cauliflower buyers of suppliers-traders
BUYERS FREQUENCY
PERCENTAGE
Individual buyers only
-
-
Institutional buyers only
-
-
Both
10
100
TOTAL 10
100
Trader-Consumer Relationship
Table 9 also presents that most of the clients of the traders were preferred buyers
or ‘suki’. According to the traders, if you are engaged in a business, you need to develop
a good relationship with your customers because they are the life of your business.
Coordination Mechanisms Along Cauliflower Supply Chain
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Table 9. Relationship between the traders with their consumers
RELATIONSHIP FREQUENCY
PERCENTAGE
Relative
-
-
‘Suki’
10
10
TOTAL 10
100
Problems Encountered by Farmers with
their Supplier/Trader
Farmer respondents said that they enjoy some benefits from their supplier who
provides job for them. Furthermore, the relationship is advantageous to farmers who lack
money for his farm operations, the crops were financially secured and they do not worry
about searching for a trader to sell their product. However, the farmers also encounter
some problems with their suppliers.
As reflected in Table 10, majority (58.3%) of the problems encountered by
farmers was delayed delivery of farm inputs by the supplier. Other problems mentioned
were: supplier cannot provide all the necessary inputs needed for maintenance (16.7%)
and delayed payment of product from the trader due to delayed payment from their
clients too (8.3%). The rest (16.7%) did not mention any problem. To remedy for the
delayed delivery of farm inputs, the farmers borrow from other farmers or just wait.
.
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
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Table 10. Problems encountered by farmers with their supplier/traders
PROBLEMS FREQUENCY
PERCENTAGE
1. Delayed delivery of farm inputs
35
58.3
2. Suppliers cannot provide all inputs
needed for maintenance
10
16.7
3. Delayed payment of product
5
8.3
4. No answer
10
16.7
TOTAL 60
100
Problems Encountered by Traders with
their Clients
All the trader respondents cited similar problems. For restaurants, most problems
encountered were difficulty in collecting debts. Another is the punctuality in delivering
their order otherwise, if the traders are late, their customer will shift to another source
that is more accommodating. Other problems mentioned were customers buy on
consignment basis, and that their customers are demanding in the sense that they want a
quality cauliflower at low price or ‘barat’ as the traders call it.
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
29
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
Summary
This study was conducted to determine the coordination mechanisms of the
cauliflower supply chain actors in Kabayan, Benguet. A total of 60 farmers were selected
at random in the said municipality and 10 of their respective suppliers at the same time
traders at the Baguio City Hangar Market and at the La Trinidad Trading Post. An
interview guide was used to collect the needed information. The information was
consolidated, tabulated and analyzed using frequency tables and percentage.
Most of the respondents were male. Majority of both farmer respondents and their
respective suppliers/trader were married. There was a higher percentage among the
farmers who had no formal education. As for supplier-traders, higher percentage had
reached college level.
Regarding resource sharing in terms of operation, farm input supplies were
provided by the supplier, payment of labor as well transportation expenses were the
responsibility of the farmers. Majority of the land used were owned by the farmers. In
keeping records of sales, each actor has duplicate copy that serves as their future
reference in case of complaints and for consistency of records. As for tactical resource
sharing, doing inventories were entrusted to the farmers. Farmers did not consciously
plan their production. For the strategic resource sharing, farmers aimed to be competitive
in the market by producing quality cauliflower. Organic farming was mentioned by
farmers that could probably contribute to competitiveness. However, they said that they
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
30
cannot practice organic farming due to lack of financing and the difficulty in doing this.
Suppliers did not favor nor agreed with them too.
When it comes to decision-making, farmers usually decide the choice of variety to
be planted and the time of planting. Their farm input supplier-trader takes responsibility
in marketing the commodity.
Along the level of control with regards to the monitoring of farm, majority said
that their supplier do not visit their farm. They entrusted the crop to the farmers.
For risk, majority had a fair division because both the farmers and their supplier
have equal share. However, in the styles of sharing the benefit or net income the
agreement between the actors vary.
Most problems encountered by the farmer with their supplier were delayed
delivery of farm inputs by their supplier/trader. Another problem met was the delayed
payment of the product.
Though farmers encounter problems with their supplier, they mentioned that they
also gained benefits from them such as; their supplier/traders provide job to them,
advantage to farmers who lack money farm operations, crops were financially secured,
and the farmer do not worry about selling their products.
Difficulty in collecting debts from their clients was the usual problem of the
traders. Other problems encountered were punctuality in delivering orders to a particular
restaurant and the costumers’ demand where they want a quality product at a low price.
Customers also want to buy on consignment basis.
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
31
Conclusions
Based on the results of the study, the following conclusions were drawn:
1. In resource sharing the supplier provided financial input while the farmer did
the farm operation. Both actors worked together on a particular task.
2. Majority of the decisions in the area of production was taken by the farmer and
marketing the product by their respective trader.
3. Majority of the farm operations were not monitored by their supplier. This is
because they trusted the farmers.
4. The farmers and suppliers have fair risk sharing while sharing in benefits
varies.
Recommendations
Based on the conclusions, the following recommendations are made:
1. In decision making, both farmers and their respective suppliers/traders should
jointly plan in both areas of production and marketing to improve product and
service quality.
2. More researches should be done to look into how farmers, traders and other
members of the supply chain would all benefit from the relationship.
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
32
LITERATURE CITED
ANCESTRAL DOMAIN MANAGEMENT PLAN. 1999. Kabayan, Benguet. Book II
Pp. 199, 208,351.
BATT, P.J. 2004. Agriproduct Supply Chain Management in Developing Countries.
Edited by G.I. Johnson and P.J. Hofman. P. 27.
BENGUET COMMODITY PROFILE. 2006. Office of Provincial Agriculturist (OPAG).
Province of Benguet
DRAFT REPORT. Comprehensive Land Use Plan and Zoning Ordinance. 2002.
Kabayan, Benguet. P. 79.
JULIAN, J.D. 2006. Consumers Choice of Market Outlets for Grocery Items in La
Trinidad, Benguet. BS Thesis. BSU, La Trinidad, Benguet. P. 1
MONCZKA, R., R. TRENT, and R. HANDFIELD. 2005. Purchasing & Supply Chain
Management. Mason, Ohio: Southwestern Copyright 2005. Pp. 4-5.
VARAMAKI, E. and J. VESALAINEN. 2003. Modeling Different Types of Multilateral
Co-operation between SME’s. Pp. 27-47.
WATERS, D. 2003. Logistics: An Introduction to Supply Chain Management. New
York: Palgrave Mac Millan, Copyright Donald Waters 2003. Pp. 7, 8-9, 17.
XU, L. and B.M BEAMON. 2006. The Journal of Supply Chain Management. February
2006. Pp. 4-5.
YUBOS N.P. 2006. A Documentation of Traders, Input Suppliers and Farmers’ Input-
Supply Relationships in Madaymen, Kibungan, Benguet. BS Thesis. Benguet
State University. P. 1.
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
33
APPENDICES
Appendix A. Communication Letter
Benguet State University
COLLEGE OF AGRICULTURE
La Trinidad, Benguet
January 2007
Sir/Madam:
The undersigned is a fourth year Bachelor of Science in Agribusiness (BSAB)
student majoring in Enterprise Management. I am presently conducting a research
entitled “Coordination Mechanisms along Cauliflower Supply Chain in Kabayan,
Benguet” in partial fulfillment for the requirement of the course.
In this regard, may I ask a portion of your precious time to answer all the
questions to complete the research undertaking. Rest assured that all information you will
give will be treated with outmost confidentiality.
Thank you very much for your support.
Respectfully yours,
Mary Claire A. Paloan
Researcher
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
34
Appendix B. Interview Guide for Farmers
I. General Information:
1. Name (optional) __________________________________Gender :____( F) ____ (M)
2. Highest Educational Attainment
____ No formal education
____ Elementary graduate
____High school level
____ High school graduate
____ College level
____ College graduate
____Vocational
3. Civil Status ____single
____married
II. Coordination Mechanisms Attributes
A. Resource Sharing
1. Operational resource sharing
a. Who is responsible in financing your inputs?
____supplier-trader
____farmer
____ both take equal part
b. Who take charge in paying labor in the operation (e.g. weeding, cultivation,
etc.)?
____supplier-trader
____farmer
____ both take equal part
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
35
c. Who is responsible in the transportation expense in marketing your product?
____supplier-trader
____farmer
____ both take equal part
d. Who owns the land to be planted with?
____supplier-trader
____farmer
e. Who keeps records of sales?
____supplier-trader
____farmer
____each actor has their own records
2. Tactical resource sharing
a. Who does the inventory?
____supplier-trader
____farmer
____jointly prepared by the actors
b. Do you jointly plan for the volume of output to be produced?
( ) yes ( ) no
3. Strategic resource sharing
a. Do you have any plan of being competitive in the market?
( ) yes ( ) no
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
36
If yes, what are they?
________________________________________________________________________
________________________________________________________________________
b. Do you discuss this with your partner?
( ) yes ( ) no
Why?
________________________________________________________________________
B. Decision Making
1. Production area
a. Who decides for the variety of cauliflower to be planted?
____supplier-trader
____farmer
____both
actors
b. Who decides when to plant?
____supplier-trader
____farmer
____both
actors
2. Marketing area
a. In marketing your output, who decides when to harvest your product?
____supplier-trader
____farmer
____both
actors
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
37
b. Who decides where to sell your product?
____supplier-trader
____farmer
____both
actors
C. Level of Control
a. Do your supplier-trader visits your farm?
( ) yes ( ) no
If yes, what particular aspect do they visit?
________________________________________________________________________
________________________________________________________________________
c. How often?
____once
____twice
____thrice
____others
(please
specify)_____________________
D. Risk and Reward Sharing
a. Who takes responsibility when you encounter bankruptcy due to natural
calamities (typhoon, earthquake) and spoilage?
____supplier-trader
____farmer
____both
actors
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
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b. How is the benefit divided?
________________________________________________________________________
________________________________________________________________________
III. Problems Encountered
1. What are the problems you encounter related to coordination mechanisms along the
cauliflower supply chain?
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
2. How do you solve these problems?
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
39
Appendix C. Interview Guide Questionnaire for their Supplier/Trader
IV. General Information
1. Name (optional) __________________________ Gender :____(F)____(M)
2. Highest Educational Attainment
____ No formal education
____ Elementary graduate
____High school level
____ High school graduate
____ College level
____ College graduate
____Vocational
3. Civil Status ____single
____married
4. Who are your clients?
____individual
buyers
____institutional
buyers
____both individual and institutional
5. What is you relation to your clients?
____relative
____’suki’or preferred buyers
6. What are the problems you have encountered with your clients?
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
Coordination Mechanisms Along Cauliflower Supply Chain
in Kabayan, Benguet /Mary Claire A. Paloan. 2007
Document Outline
- Coordination MechanismsAlong Cauliflower Supply Chain in Kabayan, Benguet
- BIBLIOGRAPHY
- ABSTRACT
- TABLE OF CONTENTS
- INTRODUCTION
- Rationale
- Statement of the Problem
- Objectives of the Study
- Importance of the Study
- Scope and Limitation of the Study
- REVIEW OF LITERATURE
- Supply Chain
- Coordination Mechanism Attributes
- METHODOLOGY
- RESULTS AND DISCUSSION
- Profile of the Respondents
- Operational Resource Sharing
- Tactical Resource Sharing
- Strategic Resource Sharing
- Decision Making Style
- Level of Control
- Risk and Reward Sharing
- Buyers of the Commodity
- Trader-Consumer Relationship
- Problems Encountered by Farmers withtheir Supplier/Trader
- Problems Encountered by Traders withtheir Clients
- SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
- Summary
- Conclusions
- Recommendations
- LITERATURE CITED
- APPENDICES