Profitability of Actors in the Value Chain of Commercial Rice

Abstract

This qualitative study explored the value chain of commercial rice in Nueva Vizcaya, Philippines. It presented the value chain map of commercial rice highlighting the profitability of each actor involved in the value chain, namely paddy rice farmers, primary traders, millers, retailers, and final traders (wholesalers and retailers). The findings revealed that the miller contributes the highest value-added cost to commercial rice production, accounting for approximately 40.39% of the total, followed closely by the farmers at 39.22%. The primary trader represented 10.93%, while the wholesaler and retailer contributed 6.72% and 2.07% respectively. Analysis of the percentage of profit to cost showed that farmers earned the highest percentage at 32.36%, followed by the retailer at 8.48%, the primary trader at 5.11%, the miller at 2.32%, and the wholesaler at 1.68%. However, when considering the operating cycle of each actor, it became apparent that the primary trader emerged as the highest-earning actor due to their shorter operating cycle compared to other actors in the value chain. Hence, venturing into paddy rice production, trading, milling, and wholesaling of commercial rice in Nueva Vizcaya is profitable, given the wide market demand for rice as a staple food. There is a viable opportunity to enhance profitability among the various actors in the value chain, particularly for farmers, by leveraging appropriate government support programs, specifically by maximizing the utilization of initiatives provided under the Rice Tariffication Law.