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i
WORKING PAPER
DEPARTMENT OF AGRICULTURE AND
JAPAN INTERNATIONAL COOPERATION AGENCY
Formulation Team on the Drafting of the
Strategic Agribusiness Development Plan
COMMODITY SITUATION REPORT: DURIAN
Prepared by
JOSE ULYSSES J. LUSTRIA, ACQUILYN E. MORILLO, AND
ALDRIN G. NACIONAL
November 2009
____________________
Mr. Lustria is OIC-Chief, Public Investment Program Division (PIPD), Planning Service,
Department of Agriculture. Ms. Morillo and Mr. Nacional are Technical Assistants at the
PIPD.
ii
TABLE OF CONTENTS
I. OVERVIEW ............................................................................................................. 1
A. Background ............................................................................................................... 1
B. Contribution to the Economy ..................................................................................... 2
II. SITUATIONAL ANALYSIS ................................................................................... 2
A. Production ................................................................................................................. 2
1. World Production ................................................................................................ 2
2. Domestic Production ........................................................................................... 3
B. Supply and Demand................................................................................................... 6
1. Supply ................................................................................................................. 6
2. Demand ............................................................................................................... 7
a) World demand (exports). ................................................................................. 7
b) Domestic demand. ........................................................................................... 7
C. Value Chain System .................................................................................................. 7
1. Input Supply Subsystem ....................................................................................... 8
2. Production Subsystem.......................................................................................... 9
3. Marketing Subsystem ......................................................................................... 10
4. Processing Subsystem ........................................................................................ 12
5. Support Subsystem ............................................................................................. 13
D. Prices....................................................................................................................... 13
1. World Prices ..................................................................................................... 13
2. Domestic Prices................................................................................................. 13
3. Price Formation ................................................................................................ 14
E. SWOT Analysis ....................................................................................................... 14
F. Problem Tree Analysis ............................................................................................ 15
III. SUMMARY, ISSUES AND RECOMMENDATIONS ......................................... 16
IV. REFERENCES ...................................................................................................... 22
IV. ANNEXES.............................................................................................................. 23
iii
LIST OF FIGURES
Figure 1 . Percentage share of top producing provinces in durian production
(in MT), 2008……………………………………………………...…
3
Figure 2 . Annual percentage share of top producing provinces in durian production (in MT), 1998-2008. …………………………………...…
4
Figure 3 . Volume of durian production (in MT) and area harvested (in Hectares), 1998-2008. ……………………………………………
5
Figure 4 . Durian Yield (in MT/Ha), 1998-2008. …………………………….… 5
Figure 5 . Value of durian production (in Million Pesos), 1998-2008. ……….… 6
Figure 6 . Agribusiness system of durian. …………………………………….… 8
Figure 7 . On farm costs in durian production. …………………………………. 9
Figure 8 . Distribution flow of durian. ………………………………………….. 11
Figure 9 . Marketing channels of durian in Davao city and districts. ………...… 12
Figure 10 . Farm gate price of durian, 1998-2008….…………………………….. 14
Figure 11 . Problem tree analysis of durian industry. ……….…………………… 15
iv
LIST OF TABLES
Table 1 . NSIC registered durian varieties. ……………………………………. 1
Table 2 . Durian production seasonality in the Philippines, Thailand and Malaysia……………………………………………………………….
3
Table 3 . Supply and utilization account of durian (in MT), 1998-2008……………………………………………………………..
7
Table 4 . Issues and recommendations in the durian industry. ….……………...
17
v
LIST OF ANNEXES
Annex 1 . Gross value output of selected fruits (At constant prices), 1998-2008.…………………… ………………………………………
23
Annex 2 . Updated average costs and returns of durian production (in PhP/Ha), 1998-2008..……………..…… ………………………………………
24
Annex 3 . Case report on Rosario Farm ……………………………………… 25
1
I. OVERVIEW
A. Background
Durian (Durio zibethinus Murray) is an exotic fruit popularly known as the “King of
Tropical Fruits”. It is one of the most highly valued and most desired among the seasonal
fruits in Southeast Asia because of its unique taste and nutritional value. It is high in
carbohydrates, calcium, phosphorous, and ascorbic acid. As a versatile crop, durian can be
grown in a wide range of agro-climatic conditions (GMA-HVCC, ____). It has been regarded
as a priority crop under the agricultural development program because of its popularity and
huge potential in the international market.
The Durian, a native of the rainforests of Malaysia and Indonesia, is a tall tree
reaching as high as 40m in the jungle rainforest or in semi-orchard. Seed trees may take 8-10
years to fruit. Grafted durian grows to 15 - 20m tall and fruits in 5 to 6 years. The fruit is
green to brown in color, pendulous, round to oblong in shape and is completely covered with
strong sharp thorns. It is a capsule which splits into five parts when ripe and each segment
contains brown seeds covered with thick, firm, creamy and yellow pulp with a strong and
very distinctive aroma (Cunningham, 2000).
Apart from being consumed fresh, it can be processed into candies, jams, pastilles,
preserves, blends or a flavoring for ice creams, cakes, pureed into fillings, for rolls and tarts
and is being processed into chips. The edible parts of the fruit is also frozen or chilled and
packed into polystyrene trays.
Durian has several varieties. In the Philippines, a breeding program has resulted in a
number of cultivars of local origin. The National Seed Industry Council (NSIC) registered
durian varieties are shown in Table 1.
Table 1. NSIC registered durian varieties.
REGISTRATION
NUMBER
VARIETY
NAME
OWNER/
ADDRESS
NSIC 1995 Dr 01 ARANCILLO BPI-Davao NCRDC / Bago Oshiro, Davao City
NSIC 1995 Dr 02 GD 69 Angel Galang / MacArthur Highway, Matina, Davao City
NSIC 1997 Dr 03 ALCON FANCY Alfonso and Conchita Abad / Los Amigos, Tugbok,
Davao City
NSIC 1997 Dr 04 LACSON UNO Simeon Latayan / Lacson , Calinan, Davao City
NSIC 1997 Dr 05 OBOZA Alfonso and Conchita Abad / Los Amigos, Tugbok,
Davao City NSIC 1999 Dr 06 DUYAYA Severino Belviz / Museum Rd., Calinan, Davao City
NSIC 1999 Dr 06 DUYAYA Severino Belviz / Museum Rd., Calinan, Davao City
NSIC 2000 Dr 07 SULIT -do-
NSIC 2000 Dr 08 NANAM -do-
NSIC 2000 Dr 09 LACSON DOS BPI-Davao NCRDC / Bago Oshiro, Davao City
NSIC 2000 Dr 10 PUYAT -do-
NSIC 2000 Dr 11 UPLB GOLD Dept. of Horticulture, UP Los Baños, College, Laguna
(Source: BPI, 2009)
2
B. Contribution to the Economy
The contribution of durian has been increasing but has remained relatively small. For
the period 1998 to 2008, durian recorded an average contribution of 0.60 percent to total
value of agricultural crop production and an average contribution of 0.29 percent to total
value of agricultural sector output, increasing from PhP 593 million to PhP 1,050 million
(see Annex 1).
In general, fruits contribute significantly to the economy in terms of employment,
income and foreign exchange generated through various activities; production, processing
and marketing in the fruit industry. Many of the fruit species such as Durian are classified as
multipurpose tree species that provide important ecological/environmental functions such as
biodiversity, soil erosion control, and greening effect in both upland and lowland areas.
II. SITUATIONAL ANALYSIS
A. Production
1. World Production
a) Major producing countries. The concentrations of durian production in
commercial scale are in Thailand, Malaysia, and Indonesia. The Philippines and other
Southeast Asian nations also produce durian commercially, but at much smaller levels and
mostly for domestic markets. It is difficult to calculate the exact production estimates of
producing countries with the lack of updated figures (Cunningham, 2000).
b) Productivity and competitiveness. The main producers of durian are
Thailand and Malaysia. Indonesia has been exporting significant volumes, while the
Philippines and other Asian countries produce durian at a small scale, mostly for domestic
markets. Major importers of durian are Asian countries as well. The Philippines has a
relatively low durian production and very low per capita consumption. However, if the
Philippines can increase the production of good quality fruits rapidly, it can compete with
other exporting countries.
The Philippines have the following advantages: 1) closer to potential markets such as
mainland China, Taiwan, Hong Kong, Japan, and South Korea; 2) increasing demand in
Europe, Canada, and USA; and 3) different production seasons with major competing
countries such as Thailand and Malaysia. The Philippines can tap the market originally
supplied by other durian-producing countries according to seasonal harvest (Eusebio & Anit,
2003).
Availability of durian is affected by short harvest seasons, typically only two to three
months, although smaller harvests are also reported during other months of the year. Thai and
Malaysian production is highest between June and July, although exports are also reported
during other months (mostly immediately preceding or following this period). Production in
the Philippines is mainly August to October, as shown in Table 2.
3
Table 2. Durian production seasonality in the Philippines, Thailand and Malaysia.
April May June July August Sept Oct
Thailand
Malaysia
Philippines
(Source: Eusebio & Anit, 2003)
2. Domestic Production
a) Major producing provinces by volume of production. Durian is mainly
cultivated in Mindanao, particularly in Sulu and the Davao region. In 2008, production is lead
by Davao del Sur, as shown in Figure 1.
Figure 1. Percentage share of top producing provinces in durian production
(in MT), 2008.
(Source: BAS, 2009)
For the period 1998-2008, the average percentage share of Davao del Sur in
production accounts to 5.68 percent (Figure 2). There is an evident increase in share to total
production from 2007 to 2008, wherein the share accounts to 2.87 percent and 41.82 percent
respectively. On the other hand, for the same period, Sulu, registered the greatest average
percentage share to total production with share of 39.30 percent from 1998 to 2008, exhibited
by consistent high production before 2008.
4
Figure 2. Annual percentage share of top producing provinces in durian production
(in MT), 1998-2008.
(Source: BAS, 2009)
b) Volume, area planted, and Productivity. There are variations in the production
volume trend of durian, exhibiting an average rate of 7.83 percent from 1998 to 2008, despite
consistent area expansion, as shown in Figure 3. A substantial 51 percent increase in 2007
production is evident. As reported by BAS, production surge was brought about by increase
in harvest in Zamboanga, good fruiting performance in northern Mindanao, increase in
number of bearing/mature trees in the Davao region, area expansion in SOCCSKSARGEN
and good harvest due to favorable weather in CARAGA. However, production decreased in
2008 due to excessive rains (BAS, 2009).
Further, Figure 4 shows that yield has been decreasing from 6.02 MT/Ha in 1998 to
2.80 MT/Ha in 2008.
5
Figure 3. Volume of durian production (in MT) and area harvested (in Hectares), 1998-2008.
(Source: BAS, 2009)
Figure 4. Durian Yield (in MT/Ha), 1998-2008.
(Source: BAS, 2009)
6
c) Value of Production. Durian’s contribution to the economy has been gradually
increasing from 1998 to 2008 as shown in Figure 5. There was a growth surge in 2007 with
production value of Php1495.70 million, which is evidently greater than the annual average
production value of PhP 819.29 million from 1998-2008. The gradual increase in production
value is due to the increase in production despite fluctuating nominal price.
Figure 5. Value of durian production (in Million Pesos), 1998-2008.
(Source: BAS, 2009)
B. Supply and Demand
1. Supply
The supply and utilization account in Table 3, presented the country’s durian
production as primarily for local consumption. The volume of production is relatively low for
the country to export. There has been no durian importation from 1998 to 2008.
On the average, net food disposable accounts for 94 percent of the gross supply.
Reports on processed durian, are not currently available. To provide such information, further
primary data gathering is necessary.
7
Table 3. Supply and utilization account of durian (in MT), 1998-2008.
S u p p l y U t i l i z a t i o n
Net Food Disposable YEAR
PRODN
Imports
Gross Supply
Exports
Seeds
Feeds & Waste
Processing Total
Per Capita Kg./Yr.
Grams/Day
1998 29,063
29,063
1,744 27,319
0.37 1.01 1999 26,693
26,693
1,602 25,09
1 0.34 0.93
2000 25,764
25,764
1,546 24,218
0.32 0.88 2001 27,037
27,037
1,622 25,41
5 0.33 0.90
2002 31,638
31,638
1,898 29,740
0.37 1.01 2003 39,817
39,817
2,389 37,42
8 0.46 1.26
2004 40,907
40,907
2,454 38,453
0.47 1.29 2005 47,296
47,296
2,838 44,45
8 0.52 1.42
2006 48,465
48,465
2,908 45,557
0.52 1.42 2007 73,250
73,250
4,395 68,85
5 0.78 2.14
2008P 51,399 51,399 3 3,084 48,312
0.53 1.45 P - Preliminary data
(Source: BAS, 2009)
2. Demand
a) World demand (exports). In 2008, the country exported a total of three MT of
fresh durian to France, Kuwait, Saudi Arabia and United Arab Emirates. The durian supply
and utilization account of BAS does not reflect export data prior 2008, both in fresh and
processed form.
The main market for durian is in Asia. Thailand, Malaysia and Indonesia, the main
producers, are also the main consumers of the fruit. The main export markets are Singapore,
Hong Kong and Taiwan. Lesser amounts are exported to North America and Europe, where it
is consumed by members of the Asian population there. It is generally unknown to the non-
Asian population (Cunningham, 2000).
b) Domestic demand. Durian produce are mostly for domestic consumption. From
1998 to 2008, the average annual per capita consumption was 0.45 kgs., which range from
0.32 kilograms in 2000 to 0.78 kgs. in 2007.
As elaborated by Cunningham (2000), consumption of durian in the Philippines is
supply-led. Durian is a popular fruit and is relatively expensive. The fact that consumers in
Davao are prepared to pay PhP 60/kg or more for durian and that only 30% of the gross
weight may be consumable is an indication of its popularity. All produce brought to the
market clears without any problems. There are recurring reports of unavailability of product.
Given the popularity of the fruit in the Philippines there is little doubt that consumption
would increase if it was more widely available. There is also scope for reducing prices thus
making the product more affordable for a larger potential market.
C. Value Chain System
Generally, durian is characterized by a value chain, depicting farm production as its
core and a system showing the commodity flow from farm (seed) to shelf. Based on the
Durian Strategic Action Plan in 2002, the agribusiness system is presented in Figure 6.
8
Figure 6. Agribusiness system of durian.
(Source: DA-SAP, 2002)
1. Input Supply Subsystem
a) Seeds and seedlings. In the Philippines, it is recommended to use three-year old
planting material or Large Planting Material (LPM) since durian can be difficult to establish
and the survival rate of LPM is much higher than one-year old seedlings. The use of LPM
shortens the gestation period of the plant. Commercial durian varieties are propagated
vegetatively. This is done by either grafting or budding. Rootstocks used vary but increasing
efforts are being made to identify rootstocks which are resistant to Phytophtera palmivora, a
soil borne fungus which is the most serious pathogen of durian and the major cause of
premature death in seedlings and trees. In Thailand, Chaynee variety is used and there are
good reports from Malaysia on the use of Durio lowianus.
ATI (2008) estimated that cost of planting materials accounts to 36 percent of total
cost of establishment for Durian without intercrop.
b) Fertilizer and Pesticide. On the average, fertilizer and pesticides accounted to 14
percent of total on farm-costs for the period of 1998 to 2008.It is considered as a major cost
driver and the increasing price of fertilizer is an absolute concern (BAS, 2009).
c) Agricultural Machinery. In durian farms, agricultural machinery and equipment
used are simple such as plow and harrow for land preparation. To remove nonproductive and
disease-infected branches, pruning shear and pruning saw are utilized. Propping implements
such as bamboo poles and polypropylene twine are used to prevent breaking and lodging
while for harvesting, cushions are used to protect the fruit (ATI, 2008).
d) Labor. Among all cost item, labor is considered a major cost driver accounting to
40 percent of durian on-farm costs. The primary cost which accounts to 29 percent of total
on-farm cost is in the form of hired labor (paid in kind).
9
Figure 7. On farm costs in durian production.
(Source: BAS, 2009)
2. Production Subsystem
Durian production in commercial scale can be found in Thailand, Malaysia, and
Indonesia. The Philippines and other Southeast Asian nations also produce durian
commercially, but at much smaller levels and mostly for domestic markets. It is difficult to
calculate the exact production estimates of producing countries with the lack of updated
figures (Cunningham, 2000).
Native durian trees have been grown in the province for years, wherein production is mainly small scale / backyard. Durian produce are mostly for domestic consumption. Native durian trees have been grown in the province for years, wherein production is mainly small scale / backyard. The durian trees are grown mixed with coconut, banana and other fruit trees (BAS, 1992).
Two major operations are performed by farmers, which are crop care and harvesting.
In crop care, old trees do not need inputs and much maintenance but newly planted trees or
young trees need regular care and inputs until the tree reaches maturity. Farmers usually clear
the undergrowth near the base of the trees. In harvesting, the most common practice is to wait
for the fruit to drop, which is an indication that the fruit is ripe (BAS, 1992).
a) As a guide to durian production, the government assists farmers by providing
trainings on improved cultural management practices. It is recommended that a holistic
approach must be applied in durian production. It was emphasized that two very important
practices, water and nutrient management must be applied because of its stronger impact on
the growth and fruiting of the tree. Basic requirements for growing durian must be set so that
10
the durian tree shall thrive best. It is necessary that the soil must be sandy loam or clay loam
with soil pH of 5.5 to 6.5 that is rich, deep, well drained and had high organic matter. The
environment must be moist. Areas with evenly distributed rainfall of 1,500 to 2,000 mm/year
and free from strong winds are recommended. Also, an elevation not exceeding 800m and
temperature of 25C to 30C are suggested. It must necessarily be ensured that the land is
readily prepared, with suitable acidity, canal constructions and field lay-out. Further care and
maintenance of the durian tree involves shading, mulching, irrigation, pruning, weeding and
sanitation. Likewise, a holistic approach to proper plant nutrition, which can be achieved
through balanced fertilization necessary for vegetable growth, reproduction and repair, are to
be employed. In addition, flower and fruit thinning, propping and tying shall be employed for
maintenance (ATI, 2008).
b) The quality of durian is affected by the harvest and postharvest practices of the
grower. A properly matured durian fruit commands a better market price. The indices to
measure maturity of durian are as follows (ATI, 2008):
1. The tips of the spikes turn darker brown than the base of the spike.
2. The spike tips also become slightly elastic and more flexible.
3. The grooves between spikes expand and turn darker.
4. The fruit stem becomes more stiff and flexible than unripe fruits.
5. Change in husk color from green-brown to yellow.
6. The sutures in the rind where the sections will split apart become more noticeable.
7. The fruit has a hollow sound when tapped.
8. When shaken the best fruits have a sound of something inside the fruit.
9. The sap of the fruit stem is clear and sweet. In unripe fruits, it is thick, sticky and
not sweet.
10. If a small window into the fruit is cut to check the fruit inside, the pulp is darker
than unripe fruits.
11. The aroma is stronger.
12. The abscission zone in the fruit stem just above the fruit tends to bulge
It is necessary to avoid bruising the fruit. A cushion must be provided to prevent fruits
from dropping directly on the soil. Harvest shall be done on sunny days and at least a day
after a heavy rain. Management practices after harvest must be employed from conduct of
soil and leaf tissue analysis, to pruning, weeding, foliar spraying, fertilizer application and
irrigation.
In postharvest handling, fruits must be sorted on-farm to remove deformed, infected,
and damaged fruits. It shall be delivered to packing house, must be inspected, and tagged.
Disinfectants such as soap or chlorine are recommended. Fruits shall be dried and cleaned to
finally weigh and pack.
3. Marketing Subsystem
From the major supply to the demand areas, fresh durian flows through a spatial
network of buyers/sellers, wherein the three main components of the network are a)
movements from farmers through the wholesaler to the traders within the supply area; b)
shipment from the supply area port to the major demand areas in the country (NCR, Cebu);
and c) handling/distribution to processors and types of traders and/or intermediate end-users
within the demand areas.
11
Figure 8. Distribution flow of durian.
(Source: GMA-HVCC, ____).
Figure 9 shows a more detailed marketing channel for durian in Davao City, one of
the top producing provinces in the country
From the production areas, the fruits are either picked up or are delivered by farmers
to buyers in the trading centers or to traders in Davao City. The assembler delivers the fruits
procured to the assembler/distributor and assembler/shipper in the trading center or
assembler/distributor in the city. The assembler/distributor based either in the trading or
market center both sell to transient traders, processors and consumers. Those based at the
market center also sell to retailers. The assembler/shipper in the municipality ships directly to
Manila and sells the rejects to consumers and processors. Aside from shipment to Manila, the
assembler/distributor/shipper in the market center also sells to processors, consumers and
transient traders (BAS, 1992).
12
Figure 9. Marketing channels of durian in Davao city and districts. (Source: BAS, 1992)
4. Processing Subsystem
Food processing is one activity that strengthens the linkage between agriculture and
industry. It enhances both upstream and downstream activities in the production-marketing
chain. With agro-processed products, the value-added contribution of agricultural fresh
produce is increased. At the same time, downstream activities are enhanced to more efficient
utilization of agricultural inputs and machineries (Elazegui, 1998).
As with other fruits, durian is processed when the fresh fruit market cannot absorb the
excess supply or because of unmet quality fruit standards, that is why, most processors are
durian farm owners. To absorb excess supply during harvest, durian is sometimes processed
into frozen durian, durian chips, durian cake, sweet dried durian, French-fried durian, ice
cream and candies. Processed durian products are mostly supplied to the domestic market,
while frozen durian is not common among local consumers (EntrePinoy, 2008).
13
Durian products are developed to create value-added products, prolong shelf life of
durian, extend the marketing period, solve the odor problem (unlike fresh durian, durian
products can be shipped by air), and reduce the cost shipment.
To better understand the processing industry, please see the case report on one
processor visited by the SADP team (Annex 3).
5. Support Subsystem
Support for the fruit industry comes from, government, non government and private
institutions. The DA through its GMA-HVCC banner program provides a comprehensive
package which includes:
a) Production Support Services;
b) Market Development Services;
c) Credit Facilitation Services;
d) Irrigation Development Services;
e) Other Infrastructure/ Post-Harvest Development Services;
f) Extension Support, Education and Training Services;
g) Research and Development;
h) Regulatory Services;
i) Information Support Services and
j) Policy Formulation, Planning and Advocacy Services.
Various donor countries or agencies have also provided support – both technical and
financial assistance.
D. Prices
1. World Prices
World market price cannot be analyzed due to unavailability of data on world market
prices.
2. Domestic Prices
The farm gate price of durian in 2008, as shown in Figure 10, was PhP32.62/kg. In
1998-2008, the price was fluctuating with a recorded average farmgate price of PhP34.36.
The lowest price was Php25.48 per kilogram in 1999 and hit its highest in 2000 at P54.93 per
kilogram. Analysis on wholesale and retail prices cannot be provided due to lack of data.
14
Figure 10. Farmgate price of durian, 1998-2008.
(Source: BAS, 2009)
3. Price Formation
Small farmers retailing at the supply level normally based their selling price on the
perceived prevailing market price. The prevailing market price may have been learned
through word of mouth. Small farmers are not too conscious of the price.
Medium and large farmers are more price-conscious. They canvass price in
prospective destinations before delivering to the location. Distributors often dictate the price
but farmers could negotiate based on their canvass. Retailers, who sources from small
farmers, have the freedom to name their price according to normally prevailing market price.
E. SWOT Analysis
The SWOT of the durian industry is as follows (GMA-HVCC, ___; PCARRD, 2003;
DA-SAP, 2002 and SADP consultation and field visit, 2009):
Strengths
Availability of areas highly suitable to durian production,
Availability of technical expertise and farm labor, and
Availability of improved technologies on production, handling, and processing.
Weaknesses
High cost of production,
Lack of efficient marketing system,
Lack of farm-to-market roads,
Poor technology transfer,
Inaccessible credit facilities,
Poor market information, and
Inadequate postharvest facilities and technology access for processing.
15
Opportunities
Growing demand in local and export markets,
Proximity to export markets ,
(Singapore, China, Japan, Hongkong, Taiwan and South Korea),
The Philippines capacity to supply export demand at certain period of the year
when supply in Thailand and Malaysia becomes scarce or limited, and
Unmet demand for fresh and processed fruit.
Threats
Presence of destructive diseases like Phytopthara,
Drought (El Niño), and other calamities.
F. Problem Tree Analysis
The problem tree (Figure 11) shows us graphically the linkages among the various
problems in the durian industry. The SWOT analysis was used as a main input in its
formulation.
Figure 11. Problem tree analysis of durian industry.
16
III. SUMMARY, ISSUES AND RECOMMENDATIONS
As one of the most highly valued and most desired seasonal fruit in Southeast Asia,
opportunities abound the durian industry. It has been regarded as a priority crop under the
Philippine agricultural development program because of its popularity and huge potential in
the international market. Despite the relatively small economic contribution, durian
production is expected to expand further. The consumption of durian is supply-led. It can be
consumed fresh or can be processed.
The Philippines can take advantage of the increasing demand in both local and export
markets. To set foot in the export market, the yield and production of durian in the country
must be improved. Increase utilization of superior and high yielding varieties, improved
cultural management practices and postharvest technologies are necessary activities to
facilitate development.
Among the cultural management practices expected to contribute to the increasing
yield include proper plant nutrition, irrigation, pruning, and control of pests and diseases.
Moreover, technologies related to pre- and post- harvest treatments should be available to
extend the shelf life of both fresh and minimally processed products. (Eusebio & Anit, 2003)
Table 4 illustrates the issues and gaps in the durian industry. Accordingly,
recommendations were also provided.
Moreover, reviews on the existing programs formulated by the government to solve
the concerns of the industry - from access to agricultural resources and services to market
information - is imperative in strengthening its competence in dealing with the prevailing
issues of the fruit industry. One good example is the Food Terminal Concept which is
developed by DA. This concept is especially designed to develop market infrastructure of the
industry by establishing chain of marketing facilities from farm to consumers and developing
distribution centers (food terminal hubs) which are designated regional or provincial agro-
industrial centers for proximity to value-adding and processing activities. Active involvement
of LGUs, NGOs, private sector GOs, and joint-venture between any of the parties above is
highly encouraged to operate the hubs so that trading system will be more efficient and
transparent and market information will be more accessible to the agents of the market.
17
Table 4. Issues and recommendations in the durian industry
Supply chain/Element Issue/Gap Recommendation
I. Input Supply Subsystem
Seeds and Seedlings, etc. Insufficient planting materials with
high quality
Development of new varieties, varietal improvement
through biotechnology, accreditation of nurseries, and
intensification of R & D through SUCs and other agro-
based research and development institutions
Limited supply of reliable scion
groves
LGUs to establish scion groves in every municipality.
Variety Susceptibility of existing varieties
to Phytopthara
Conduct of focused research and development for the
development of Phytopthara-resistant varieties.
Screening and testing of varieties for resistance to
Phytopthara.
Fertilizer and Pesticide Increasing costs Improvement of logistics; utilization of organic
fertilizers; development of alternative means or product
efficacy
High tariff rates for imported
chemical inputs.
Lowering of tariff for agricultural input; government
subsidy.
Agricultural
Machinery/equipment Need for standards in farm
equipment
Establishment of agricultural machinery and equipment
standards
Labor Increasing cost of labor Maximum utilization of family labor
Site Selection/ Crop
Establishment Durian plant is exacting in its soil
and agro-climactic requirements,
e.g. evenly distributed rainfall,
typhoon -free areas. Growers
operating in areas with long dry
season realize low yield and profit
Mapping of areas suitable to durian to promote year-
round supply and increase yield; implementation of crop
zoning.
18
II. Production Subsystem
Inconsistent supply; fragmented
production
Expansion of production areas; integration of supply;
policy/legislative work on issues such as public land
access
Pest/ Disease Management Prevalence/existence of pests and
diseases
Strict quarantine regulation to prevent spread of pest and
diseases and intensified information campaign about the
threat of disease
R, D and extension program aimed at developing an
effective and efficient Integrated Pest Management
(IPM) Strategies
Limited awareness on control of
Phytopthara disease which affects
seedlings and mature trees.
Information dissemination on control measures, e.g.
sanitation, well-drained soil, use of large planting
materials, etc.
Cultural Practices Non-adoption of production
technology on fertilization,
irrigation, pruning, etc.
Intensification of technology information dissemination
through model farms and conduct training on improved
cultural methods; distribution of information technology
materials
Poor fruit quality: only about 50% of
harvest meet requirements for export
due to improper harvesting,
inappropriate maturity index,
mishandling and physiological
defects due to poor weather, poor
drainage and sanitation, nutrient
deficiency, etc.
Development and implementation of Good Agricultural
Practice Program to minimize pre-harvest defects and
disorders.
19
III. Marketing Subsystem
Inefficient marketing system
Poor access to timely market
information
Improvement of logistics (to address high postharvest
losses); establishment of trans-shipment facilities; revisit
of the Food Terminal approach
improvement of market intelligence, information
systems and database improvement., particularly on price
monitoring, supply and demand forecasting and analysis
Difficulty in producing economic
volumes due to fragmented and
backyard planting/production.
Promotion of production-marketing clusters
Lack of market promotion activities
for small growers.
Market promotion program through trade fairs,
exhibitions and missions.
Transport-high air freight cost; lack
of refrigerated transport facilities.
Establishment of cold chain systems in strategic areas
IV. Processing Subsystem
Inadequate postharvest and
processing facilities; need for
standards in equipment
Increase and improvement in processing and postharvest
facilities (e.g., processing and packaging plants, peeling
and cutting machines); utilization of biotechnology.
Exploring of guarantee and credit facility for facilities
improvement to meet quality and safety standards.
Low awareness on proper
postharvest handling
Establishment of postharvest clinic to address
postharvest related concerns in the area
Conduct of capability building
Lack of awareness of importing
countries standards
Compilation/updating of importing countries standards
and dissemination of these information to processors
Local standards are not harmonized
with international standards
Harmonization of local standards with market leaders
like Thailand and Malaysia
20
Limited access and high cost of
product testing and quality/safety
system certification services
Supplementing of Food Development Center testing
services available only in Manila; upgrading of DOST
regional testing laboratories to conform with the Codex
guidelines for the assessment of the competencies of
food testing laboratories.
Need for government-sponsored accredited laboratory
conducting complete food laboratory analysis
Overhaul the food import and export inspection and
certification systems to conform with Codex guidelines.
To supplement FDC testing services available only in
Manila, upgrading of DOST regional testing laboratories
to conform with the Codex guidelines for the assessment
of the competencies of food testing laboratories.
Poor fruit quality: only about 50% of
harvest meet requirements for export
due to improper harvesting,
inappropriate maturity index,
mishandling and physiological
defects due to poor weather, poor
drainage and sanitation, nutrient
deficiency, etc.
Development and implementation of Good Agricultural
Practice Program to minimize pre-harvest defects and
disorders.
Inherent perishability and short
shelf-life (2-3 days under ambient
conditions) of the fruit
Application of wax coating to inhibit moisture loss.
Refrigerated storage/transport (15C to extend shelf life
to 15 days). Blast freezing and other technology.
Insufficient supply and inconsistent
quality of raw materials
strengthening of backward integration,
Expanded GMP and HACCP training program
21
V. Support Subsystem
Inadequate support systems Provision of more support facilities such as ports, farm-
to-market roads, cold chain systems, irrigation facilities;
also regulatory and food safety system (e.g., traceability,
database/s); promotion of GAP and monitoring of
compliance; accessible credit and crop insurance
facilities; strengthening of the Research and
Development-Extension system in the different levels of
government, from national to local government level
Note: Issues and Recommendations were identified from (through) key informant interviews, secondary data, workshops, consultations and field visits
22
IV. REFERENCES
Agricultural Training Insitute (ATI). Department of Agriculture. (2008). A Guide to Durian Production: Economics of Durian. Brochure.IES Material Series No. 4-6. Knowledge Products Management Division.
Bureau of Agricultural Statistics, Department of Agriculture (2009) Countrystat. Retrieved on
September 2009 from <http://www.countrystat.bas.gov.ph> Bureau of Agricultural Statistics, Department of Agriculture (1992). Marketing and
Information Needs Assessment for Davao City. Technical Report. Bureau of Agricultural Statistics, Department of Agriculture (1992). Marketing and
Information Needs Assessment for Davao Norte. Technical Report. Bureau of Plant Industry, Department of Agriculture (2009). NSIC Registered Fruit Crops
Varieties, CY 1995-2008. Cunningham, T. (2000). Durian Market Report. Project ALA - 97/68 Upland Development
Programme in Southern Mindanao (UDP). Retrieved on December 2008 from
<http://www.saveuplands.org/plugin/library/download.php?id=228> Department of Agriculture. (2002). Durian strategic action plan. April 2002. Elazegui, D.D. (1998). Food processing in the Philippines: Issues and challenges. Working paper no.
98-03. ISPPS, CPAF, UPLB.
Eusebio, J.E. and E. Anit. Philippine Council for Agriculture, Forestry and Natural Resources Research and Development. (2003). Industry Situationer: Durian. <http://maidon.pcarrd.dost.gov.ph/joomla/index.php?option=com_content&task=view&id=745>
EntrePinoy, (2009). Utilization and Processing of Durian Fruit. October 2006. Retrieved on
October 2009 from <http//www.mixph.com/2006/10/utilization-and-processing-of-durian-fruit.html>.
Food and Agriculture Organization-United Nations (2009). FAOSTAT. Retrieved on
September 2009 from <http://www.fao.org> Ginintuang Masaganang Ani-High Value Commercial Crops (GMA-HVCC). Department of
Agriculture Commodity profiles. Retrieved on October 2008 from <http://www.hvcc.da,gov.ph>
Philippine Council for Agriculture, Forestry and Natural Resources Research and
Development. (2003). Industry Profile: Durian.
<http://www.pcarrd.dost.gov.ph/divisions/crd/cin/durian/industry%20status.htm>
23
IV. ANNEXES
Annex 1. Gross value output of selected fruits (At constant prices), 1998-2008.
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 AVERAGE
TOTAL AGRI OUTPUT 224,172 245,874 242,318 253,131 262,788 272,011 286,245 292,581 304,000 318,068 330,396 275,599 TOTAL AGRI CROP OUTPUT 110,733 129,268 120,249 124,046 126,035 129,250 136,181 137,305 143,699 151,559 157,543 133,261
VALUE OF PRODUCTION IN AGRICULTURE AT CONSTANT PRICES, 1998 - 2008, (IN MILLION PESOS)
BANANA 6,252 8,181 8,824 9,056 9,442 9,610 10,080 11,274 12,162 13,396 15,551 10,348
PINEAPPLE 2,754 2,831 2,885 2,993 3,032 3,141 3,256 3,290 3,374 3,710 4,065 3,212
MANGO 6,307 6,297 6,167 6,392 6,950 7,244 6,947 7,058 6,589 7,341 6,338 6,694
CALAMANSI 216 908 922 927 923 923 913 1,024 1,003 1,028 1,018 891
PAPAYA 144 151 163 171 171 175 179 196 211 220 245 184
POMELO 66 68 65 61 64 61 58 57 55 54 52 60
DURIAN 593 545 526 552 646 813 835 966 990 1,496 1,050 819
MANGOSTEEN 17 16 15 16 16 16 16 17 15 15 3 15
SHARE TO TOTAL AGRI OUTPUT, 1998 - 2008, (IN %)
BANANA 2.79 3.33 3.64 3.58 3.59 3.53 3.52 3.85 4.00 4.21 4.71 3.71
PINEAPPLE 1.23 1.15 1.19 1.18 1.15 1.15 1.14 1.12 1.11 1.17 1.23 1.17
MANGO 2.81 2.56 2.55 2.53 2.64 2.66 2.43 2.41 2.17 2.31 1.92 2.45
CALAMANSI 0.10 0.37 0.38 0.37 0.35 0.34 0.32 0.35 0.33 0.32 0.31 0.32
PAPAYA 0.06 0.06 0.07 0.07 0.07 0.06 0.06 0.07 0.07 0.07 0.07 0.07
POMELO 0.03 0.03 0.03 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02
DURIAN 0.26 0.22 0.22 0.22 0.25 0.30 0.29 0.33 0.33 0.47 0.32 0.29
MANGOSTEEN 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.00 0.00 0.00 0.01
SHARE TO TOTAL AGRI CROPS, 1998 - 2008, (IN %)
BANANA 5.65 6.33 7.34 7.30 7.49 7.44 7.40 8.21 8.46 8.84 9.87 7.67
PINEAPPLE 2.49 2.19 2.40 2.41 2.41 2.43 2.39 2.40 2.35 2.45 2.58 2.41
MANGO 5.70 4.87 5.13 5.15 5.51 5.61 5.10 5.14 4.59 4.84 4.02 5.06
CALAMANSI 0.20 0.70 0.77 0.75 0.73 0.71 0.67 0.75 0.70 0.68 0.65 0.66
PAPAYA 0.13 0.12 0.14 0.14 0.14 0.14 0.13 0.14 0.15 0.15 0.16 0.14
POMELO 0.06 0.05 0.05 0.05 0.05 0.05 0.04 0.04 0.04 0.04 0.03 0.05
DURIAN 0.54 0.42 0.44 0.45 0.51 0.63 0.61 0.70 0.69 0.99 0.67 0.60
MANGOSTEEN 0.02 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.00 0.01
(Source: BAS, 2009.)
24
ITEM 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007R 2008P
CASH COST 10,923 10,606 11,631 12,237 12,423 13,921 16,453 18,942 19,253 20,023 25,997
Fertilizer
Organic 358 321 345 411 406 507 686 853 848 900 1,632
Inorganic 4,292 3,846 4,140 4,931 4,863 6,077 8,223 10,228 10,160 10,782 15,639
Pesticides 514 574 591 615 624 625 627 626 597 568 547
Solid 20 22 23 24 24 24 24 24 23 22 21
Liquid 494 552 568 591 600 601 603 602 574 546 526
Other material inputs 6 5 5 6 6 7 9 11 11 12 19
Hired labor 2,716 2,918 2,945 2,947 3,043 3,195 3,332 3,526 3,674 3,819 3,866
Land tax 979 989 999 1,009 1,019 1,029 1,039 1,049 1,059 1,070 1,081
Land rental 639 477 1,028 621 741 724 619 513 591 510 611
Transportation of inputs 444 474 544 607 613 634 714 845 952 957 1,059
Fuel and oil 4 4 5 5 5 6 7 8 9 9 11
Food expense 304 318 323 338 345 353 375 399 421 435 494
Repairs 667 680 706 747 758 764 822 884 931 961 1,038
NON-CASH COST 37,606
28,750
38,719
26,764
30,456
32,305
29,785
29,701
30,928
33,668 31,293
Hired labor (paid in kind) 14,969
16,081
16,234
16,240
16,769
17,374
18,118
19,172
19,979
20,766 21,023
Landlord's share 416
310
668
403
481
470
402
333
383
330 395
Harvester's share 22,221
12,359
21,817
10,121
13,206
14,461
11,265
10,196
10,566
12,572 9,875
IMPUTED COST 11,833 10,232 16,582 12,204 13,736 14,014 13,453 12,940 14,081 13,554 15,763
Operator/family labor 2,679
2,878
2,903
2,904
3,002
3,152
3,287
3,478
3,625
3,767 3,814
Exchange labor 170 182 184 184 190 200 208 220 230 239 242
Depreciation 524 576 634 697 767 844 928 1,021 1,123 1,235 1,359
Interest on operating capital
1,262 1,226 1,284 1,426 1,431 1,666 2,060 2,439 2,446 2,573 3,472
Rental value of owned land 7,198 5,370 11,577 6,993 8,346 8,152 6,970 5,782 6,657 5,740 6,876
ALL COSTS 60,362 49,588 66,932 51,205 56,615 60,240 59,691 61,583 64,262 67,245 73,053
GROSS RETURNS 205,583
114,354
201,593
93,534
122,047
133,639
104,104
94,222
97,645
116,190 91,271
RETURNS ABOVE CASH COSTS
194,660 103,748 189,962 81,297 109,624 119,718 87,651 75,280 78,392 96,167 65,274
RETURNS ABOVE CASH AND NON-CASH COSTS
157,054 74,998 151,243 54,533 79,168 87,413 57,866 45,579 47,464 62,499 33,981
NET RETURNS 145,221 64,766 134,661 42,329 65,432 73,399 44,413 32,639 33,383 48,945 18,218
NET PROFIT-COST RATIO 2.41 1.31 2.01 0.83 1.16 1.22 0.74 0.53 0.52 0.73 0.25
Cost per kilogram (P) 10.03 11.05 18.24 18.16 18.37 17.44 18.96 17.93 20.78 15.76 26.11
Yield per hectare (kg) 6,020 4,488 3,670 2,819 3,082 3,455 3,148 3,435 3,092 4,267 2,798
Farmgate price (peso/kg) 34.15 25.48 54.93 33.18 39.60 38.68 33.07 27.43 31.58 27.23 32.62
R - Revised estimates, P - Preliminary estimates
(Source: BAS, 2009)
Annex 2. Updated average costs and returns of durian production (in PhP/Ha), 1998-2008.
25
Annex 3. Case report on Rosario Farms.
Farm Name: Rosario Farms
Sector: Fresh and processed fruits
Principal Products
and Services: Fresh and processed durian
Interviewee/s: Severino Belviz
(Durian Council Chairman),
Emmanuel Belviz and
Mary Grace Belviz
Address: Agbisit Subd., Calinan, Davao City
Interviewer: SADP Team
Date: June 08, 2009
Nature of Business: Family Business
Farm size: 30 –ha durian plantation
(Total of 50 hectares; 20 ha planted with other fruit trees and vegetables)
156 durian trees/hectare
Year Started: 1988
Durian Varieties: Chanee and Monthong (Thailand)
Arancillo,
Kob (Cob),
Puyat,
Kimbangan
D 101,
D24,
Duyaya (Reg. No. PSB 99-DR-06),
Sulit (Reg. No. PSB 00-DR-07),
Nanam (Reg. No. PSB 00-DR-08)
Peak of Harvest
and Processing: Aug, Sep and Oct
High Demand: Dec, Jan, Mar, Apr, May
Annual Harvest Volume: 8-10 tons/hectare (good year)
Recovery rate: 30-40%
Variety for Processing: Puyat
26
Distribution: - Davao
Rosario’s Fruit Stop Outlet (Bankerohan Public Market, Davao),
Davao International Airport
- Tacurong
- General Santos City
- Manila*
- Visayas*
*by order only
Processing Details:
In the case of Davao, the popularity and profitability of durian attracted more growers. As a
result, the market is flooded with durian during peak season. The surplus and high rate of perishability
(short shelf-life) caused tremendous drop in prices.
Rosario farms can reach about 20 percent surplus of unsold fresh fruit during peak season. To
address this situation, the family resorted to processing fresh durian to minimally processed frozen
durian which commands high price during off-season.
Initially, this was a good strategy but it still cannot absorb the entire surplus. In 2001, product
development of durian candies was started. Trial and error and innovative cooking methods were
employed. In 2005, commercial production was started with starting volume of 500 - 1,000 packs of
durian candy per month which now reaches 2,000-3,000 packs per month.
Increasing competition in durian candy production pushed further developments. Other forms of
products were made such as jam, tarts, dried durian ornament and ube candy.
To acquire necessary technology on processing, Mary Grace Belviz, the fruit processing
manager, attended seminars and acquired technical assistance from various government offices and
private companies.
Mechanization processes employed in durian processing involves use of carajay, cooker-mixer,
molder and cutters. Hiring of employees on regular season requires 5 - 8 people and a cook. During peak
season it reaches 15, most were wives or family members of farm workers and working students on
shifting schedules. The pay depends on quantity output, usually they employ “pakyaw” system.
Production quota is maintained with 800 -1,000 packs per week (3 mos. shelf life) or 120 packs
per day. Durian sticks and cubes come in PhP 25/pack and PhP 50/pack packaging.
Durian candy processing is assisted by DTI, DA and DOST. DTI provided technical assistance
on Good Manufacturing Practices (GMP), DA with trainings on production, trade facts and market
promotions, DOST through technical assistance for plant lay-out, product testing, food safety audit and
labeling design. Also, assistance and semi-financing in the procurement of cooker mixer from DOST.
Constraints and limitations on the processing business stem from limited access to laboratory
food testing and packaging technology, which are too costly for cottage type business. Intervention of
the government on accreditation of laboratories for complete (food) analysis was recommended.
Likewise, establishment of incubation centers for processors.