Profitability and Profit Efficiency of Sugarcane Block Farming in Balayan, Batangas, the Philippines: An Empirical Study

Marietta Dina Padilla Fernandez; Joel Guansing Ronario; Evelyn Bagtas Estanislao; Lea May De Los Reyes Aguila

doi:doi:10.11648/j.ijae.20220705.16

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Profitability and Profit Efficiency of Sugarcane Block Farming in Balayan, Batangas, the Philippines: An Empirical Study

Marietta Dina Padilla Fernandez, Joel Guansing Ronario, Evelyn Bagtas Estanislao, Lea May De Los Reyes Aguila

Published in International Journal of Agricultural Economics (Volume 7, Issue 5)

Received: 23 August 2022 Accepted: 13 September 2022 Published: 27 October 2022

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Abstract

This study aimed at determining the profitability and profit efficiency of sugarcane block farming in Balayan, Batangas, Philippines. Farm-level data obtained from 157 block farm members in Crop Years (CY) 2018-19 and 2019-20 were used and analyzed using a Cobb-Douglas stochastic frontier profit function model. Empirical results show that the block farm mean profitability is higher in CY 2019-20 than in CY 2018-19 by 27% in both gross margin and profit while only 5% for Revenue/Cost ratio. While the mean profit efficiency scores increased from 0.57 in CY 2018-19 to 0.77 in CY 2019-20. Although around 96% of the sample farms were inefficient in CY 2018-19, this became 100% in the succeeding year. With efficiency score of 0.77 for the current year, there is still opportunities to increase profit efficiency by 23% through the adoption of the best farm practices in the study area. The factors that influenced profit efficiency were the costs of power, man-animal, fertilizer, planting materials, labor, and fixed cost. Also, the number of trainings, number of planting materials, and frequency of weeding positively influenced efficiency. The sole constraint to efficiency was the use of N fertilizer (kg). Block farming had played its part in increasing farmers’ profit efficiency through technology diffusion and adoption as various training, technical advisory and production support embedded in the program were provided to the members. Therefore, the Sugar Regulatory Administration (SRA) should continue organizing small farmers unto block. It should also organize service providers in the district to serve as a hub in providing production support services making productivity inputs (high yielding varieties and farm machinery) accessible in the area. Furthermore, SRA should expand the coverage of its Socialized Credit Program to enable farmers to modernize their farm operations and enhance their farm income and profit.

Published in	International Journal of Agricultural Economics (Volume 7, Issue 5)
DOI	10.11648/j.ijae.20220705.16
Page(s)	243-253
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2022. Published by Science Publishing Group

Keywords

Block Farming, Block Farms, Profitability, Profit Efficiency, Stochastic Frontier Approach, Sugarcane Farmers

References

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[3]	Carambas, N. (2018) Profit function approach to productivity and efficiency analysis of sugarcane farms in the Philippines. PhD Thesis. University of the Philippines at Los Baňos.
[4]	Coelli, T. J. (1996). “A Guide to FRONTIER Version 4.1: A computer program for stochastic frontier production and cost function estimation.” CEPA Working Paper 7/96, School of Economics, University of New England, Armidale, Australia.
[5]	De los Santos, D. and Mendoza, T. (2002). “Crop production: determinants of sugarcane yield in agrarian reform communities in Negros Occidental, Philippines”, The Philippine Agricultural Scientist. 85 (2): 114–121.
[6]	Delgado, C. L., Narrod, C. A., Tiongco, M. M. and de Camargo Barros, G. S. A. (2008). Determinants and implications of the growing scale of livestock farms in four fast-growing developing countries. International Food Policy Research Institute. Washington DC.
[7]	Geron, Ma. Piedad S. (1994) The impact of Comprehensive Agrarian Reform Program (CARP) on the crop sector. Philippine Institute for Development Studies. DISCUSSION PAPER SERIES NO. 94-15. https://dirp4.pids.gov.ph/ris/dps/pidsdps9415.pdf
[8]	Hailemichael, Mulie (2014). The determinants of profit efficiency of coffee producing and marketing cooperatives (The case study of Sidama Coffee Farmers’ Union). Journal of Economics and Sustainable Development. 5 (7) 125-138.
[9]	https://batangas.balinkbayan.gov.ph/batangas-province/.
[10]	https://weatherspark.com/y/134505/Average-Weather-in-Balayan-Philippines-Year-Round
[11]	Khounthikoumane, S.; Chang, J. B.; and Lee, Y. (2021) Profit efficiency of rice farms in wet-season lowlands in Champhone District, Savannakhet Province, Lao PDR. Agriculture. 11 (657). https://doi.org/10.3390/ agriculture11070657.
[12]	Mohapatra, Rangalal (2011). Farmers’ education and profit efficiency in sugarcane production: A stochastic frontier profit function approach. IUP Journal of Agricultural Economics, 8 (2): 18-35.
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[14]	NEDA Discussion Note (2020) An assessment of reform directions for the Philippine sugarcane industry. https://neda.gov.ph/an-assessment-of-reform-directions-for-the-ph-sugar-industry/
[15]	Ogunleye, A. S., Adeyemo, R., Bamire, A. S. and Kehinde, A. D. (2017). Assessment of profitability and efficiency of cassava production among government and non-government assisted farmers association in Osun State, Nigeria. African Journal of Rural Development, 2 (2): 225-233.
[16]	Ogunniyi L. T. (2011). Profit efficiency among maize producers in Oyo State, Nigeria ARPN Journal of Agricultural and Biological Science, 6 (11): 11-17.
[17]	Padilla-Fernandez, M. D. and Nuthall, P. L. (2012) Farm size and its effect on the productive efficiency of sugar cane farms In Central Negros, International Society for Southeast Asian Agricultural Sciences. 18 (1) 49-61.
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APA Style

Marietta Dina Padilla Fernandez, Joel Guansing Ronario, Evelyn Bagtas Estanislao, Lea May De Los Reyes Aguila. (2022). Profitability and Profit Efficiency of Sugarcane Block Farming in Balayan, Batangas, the Philippines: An Empirical Study. International Journal of Agricultural Economics, 7(5), 243-253. https://doi.org/10.11648/j.ijae.20220705.16

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ACS Style

Marietta Dina Padilla Fernandez; Joel Guansing Ronario; Evelyn Bagtas Estanislao; Lea May De Los Reyes Aguila. Profitability and Profit Efficiency of Sugarcane Block Farming in Balayan, Batangas, the Philippines: An Empirical Study. Int. J. Agric. Econ. 2022, 7(5), 243-253. doi: 10.11648/j.ijae.20220705.16

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AMA Style

Marietta Dina Padilla Fernandez, Joel Guansing Ronario, Evelyn Bagtas Estanislao, Lea May De Los Reyes Aguila. Profitability and Profit Efficiency of Sugarcane Block Farming in Balayan, Batangas, the Philippines: An Empirical Study. Int J Agric Econ. 2022;7(5):243-253. doi: 10.11648/j.ijae.20220705.16

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@article{10.11648/j.ijae.20220705.16,
  author = {Marietta Dina Padilla Fernandez and Joel Guansing Ronario and Evelyn Bagtas Estanislao and Lea May De Los Reyes Aguila},
  title = {Profitability and Profit Efficiency of Sugarcane Block Farming in Balayan, Batangas, the Philippines: An Empirical Study},
  journal = {International Journal of Agricultural Economics},
  volume = {7},
  number = {5},
  pages = {243-253},
  doi = {10.11648/j.ijae.20220705.16},
  url = {https://doi.org/10.11648/j.ijae.20220705.16},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijae.20220705.16},
  abstract = {This study aimed at determining the profitability and profit efficiency of sugarcane block farming in Balayan, Batangas, Philippines. Farm-level data obtained from 157 block farm members in Crop Years (CY) 2018-19 and 2019-20 were used and analyzed using a Cobb-Douglas stochastic frontier profit function model. Empirical results show that the block farm mean profitability is higher in CY 2019-20 than in CY 2018-19 by 27% in both gross margin and profit while only 5% for Revenue/Cost ratio. While the mean profit efficiency scores increased from 0.57 in CY 2018-19 to 0.77 in CY 2019-20. Although around 96% of the sample farms were inefficient in CY 2018-19, this became 100% in the succeeding year. With efficiency score of 0.77 for the current year, there is still opportunities to increase profit efficiency by 23% through the adoption of the best farm practices in the study area. The factors that influenced profit efficiency were the costs of power, man-animal, fertilizer, planting materials, labor, and fixed cost. Also, the number of trainings, number of planting materials, and frequency of weeding positively influenced efficiency. The sole constraint to efficiency was the use of N fertilizer (kg). Block farming had played its part in increasing farmers’ profit efficiency through technology diffusion and adoption as various training, technical advisory and production support embedded in the program were provided to the members. Therefore, the Sugar Regulatory Administration (SRA) should continue organizing small farmers unto block. It should also organize service providers in the district to serve as a hub in providing production support services making productivity inputs (high yielding varieties and farm machinery) accessible in the area. Furthermore, SRA should expand the coverage of its Socialized Credit Program to enable farmers to modernize their farm operations and enhance their farm income and profit.},
 year = {2022}
}

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TY  - JOUR
T1  - Profitability and Profit Efficiency of Sugarcane Block Farming in Balayan, Batangas, the Philippines: An Empirical Study
AU  - Marietta Dina Padilla Fernandez
AU  - Joel Guansing Ronario
AU  - Evelyn Bagtas Estanislao
AU  - Lea May De Los Reyes Aguila
Y1  - 2022/10/27
PY  - 2022
N1  - https://doi.org/10.11648/j.ijae.20220705.16
DO  - 10.11648/j.ijae.20220705.16
T2  - International Journal of Agricultural Economics
JF  - International Journal of Agricultural Economics
JO  - International Journal of Agricultural Economics
SP  - 243
EP  - 253
PB  - Science Publishing Group
SN  - 2575-3843
UR  - https://doi.org/10.11648/j.ijae.20220705.16
AB  - This study aimed at determining the profitability and profit efficiency of sugarcane block farming in Balayan, Batangas, Philippines. Farm-level data obtained from 157 block farm members in Crop Years (CY) 2018-19 and 2019-20 were used and analyzed using a Cobb-Douglas stochastic frontier profit function model. Empirical results show that the block farm mean profitability is higher in CY 2019-20 than in CY 2018-19 by 27% in both gross margin and profit while only 5% for Revenue/Cost ratio. While the mean profit efficiency scores increased from 0.57 in CY 2018-19 to 0.77 in CY 2019-20. Although around 96% of the sample farms were inefficient in CY 2018-19, this became 100% in the succeeding year. With efficiency score of 0.77 for the current year, there is still opportunities to increase profit efficiency by 23% through the adoption of the best farm practices in the study area. The factors that influenced profit efficiency were the costs of power, man-animal, fertilizer, planting materials, labor, and fixed cost. Also, the number of trainings, number of planting materials, and frequency of weeding positively influenced efficiency. The sole constraint to efficiency was the use of N fertilizer (kg). Block farming had played its part in increasing farmers’ profit efficiency through technology diffusion and adoption as various training, technical advisory and production support embedded in the program were provided to the members. Therefore, the Sugar Regulatory Administration (SRA) should continue organizing small farmers unto block. It should also organize service providers in the district to serve as a hub in providing production support services making productivity inputs (high yielding varieties and farm machinery) accessible in the area. Furthermore, SRA should expand the coverage of its Socialized Credit Program to enable farmers to modernize their farm operations and enhance their farm income and profit.
VL  - 7
IS  - 5
ER  -

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Author Information

Marietta Dina Padilla Fernandez

Research, Development and Extension Department, Sugar Regulatory Administration, Quezon City, Philippines
Joel Guansing Ronario

Research, Development and Extension Department, Sugar Regulatory Administration, Batangas, Philippines
Evelyn Bagtas Estanislao

Research, Development and Extension Department, Sugar Regulatory Administration, Quezon City, Philippines
Lea May De Los Reyes Aguila

Department of Agricultural and Applied Economics, University of the Philippines, Laguna, Philippines

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APA Style

Marietta Dina Padilla Fernandez, Joel Guansing Ronario, Evelyn Bagtas Estanislao, Lea May De Los Reyes Aguila. (2022). Profitability and Profit Efficiency of Sugarcane Block Farming in Balayan, Batangas, the Philippines: An Empirical Study. International Journal of Agricultural Economics, 7(5), 243-253. https://doi.org/10.11648/j.ijae.20220705.16

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ACS Style

Marietta Dina Padilla Fernandez; Joel Guansing Ronario; Evelyn Bagtas Estanislao; Lea May De Los Reyes Aguila. Profitability and Profit Efficiency of Sugarcane Block Farming in Balayan, Batangas, the Philippines: An Empirical Study. Int. J. Agric. Econ. 2022, 7(5), 243-253. doi: 10.11648/j.ijae.20220705.16

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AMA Style

Marietta Dina Padilla Fernandez, Joel Guansing Ronario, Evelyn Bagtas Estanislao, Lea May De Los Reyes Aguila. Profitability and Profit Efficiency of Sugarcane Block Farming in Balayan, Batangas, the Philippines: An Empirical Study. Int J Agric Econ. 2022;7(5):243-253. doi: 10.11648/j.ijae.20220705.16

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@article{10.11648/j.ijae.20220705.16,
  author = {Marietta Dina Padilla Fernandez and Joel Guansing Ronario and Evelyn Bagtas Estanislao and Lea May De Los Reyes Aguila},
  title = {Profitability and Profit Efficiency of Sugarcane Block Farming in Balayan, Batangas, the Philippines: An Empirical Study},
  journal = {International Journal of Agricultural Economics},
  volume = {7},
  number = {5},
  pages = {243-253},
  doi = {10.11648/j.ijae.20220705.16},
  url = {https://doi.org/10.11648/j.ijae.20220705.16},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijae.20220705.16},
  abstract = {This study aimed at determining the profitability and profit efficiency of sugarcane block farming in Balayan, Batangas, Philippines. Farm-level data obtained from 157 block farm members in Crop Years (CY) 2018-19 and 2019-20 were used and analyzed using a Cobb-Douglas stochastic frontier profit function model. Empirical results show that the block farm mean profitability is higher in CY 2019-20 than in CY 2018-19 by 27% in both gross margin and profit while only 5% for Revenue/Cost ratio. While the mean profit efficiency scores increased from 0.57 in CY 2018-19 to 0.77 in CY 2019-20. Although around 96% of the sample farms were inefficient in CY 2018-19, this became 100% in the succeeding year. With efficiency score of 0.77 for the current year, there is still opportunities to increase profit efficiency by 23% through the adoption of the best farm practices in the study area. The factors that influenced profit efficiency were the costs of power, man-animal, fertilizer, planting materials, labor, and fixed cost. Also, the number of trainings, number of planting materials, and frequency of weeding positively influenced efficiency. The sole constraint to efficiency was the use of N fertilizer (kg). Block farming had played its part in increasing farmers’ profit efficiency through technology diffusion and adoption as various training, technical advisory and production support embedded in the program were provided to the members. Therefore, the Sugar Regulatory Administration (SRA) should continue organizing small farmers unto block. It should also organize service providers in the district to serve as a hub in providing production support services making productivity inputs (high yielding varieties and farm machinery) accessible in the area. Furthermore, SRA should expand the coverage of its Socialized Credit Program to enable farmers to modernize their farm operations and enhance their farm income and profit.},
 year = {2022}
}

Copy | Download

TY  - JOUR
T1  - Profitability and Profit Efficiency of Sugarcane Block Farming in Balayan, Batangas, the Philippines: An Empirical Study
AU  - Marietta Dina Padilla Fernandez
AU  - Joel Guansing Ronario
AU  - Evelyn Bagtas Estanislao
AU  - Lea May De Los Reyes Aguila
Y1  - 2022/10/27
PY  - 2022
N1  - https://doi.org/10.11648/j.ijae.20220705.16
DO  - 10.11648/j.ijae.20220705.16
T2  - International Journal of Agricultural Economics
JF  - International Journal of Agricultural Economics
JO  - International Journal of Agricultural Economics
SP  - 243
EP  - 253
PB  - Science Publishing Group
SN  - 2575-3843
UR  - https://doi.org/10.11648/j.ijae.20220705.16
AB  - This study aimed at determining the profitability and profit efficiency of sugarcane block farming in Balayan, Batangas, Philippines. Farm-level data obtained from 157 block farm members in Crop Years (CY) 2018-19 and 2019-20 were used and analyzed using a Cobb-Douglas stochastic frontier profit function model. Empirical results show that the block farm mean profitability is higher in CY 2019-20 than in CY 2018-19 by 27% in both gross margin and profit while only 5% for Revenue/Cost ratio. While the mean profit efficiency scores increased from 0.57 in CY 2018-19 to 0.77 in CY 2019-20. Although around 96% of the sample farms were inefficient in CY 2018-19, this became 100% in the succeeding year. With efficiency score of 0.77 for the current year, there is still opportunities to increase profit efficiency by 23% through the adoption of the best farm practices in the study area. The factors that influenced profit efficiency were the costs of power, man-animal, fertilizer, planting materials, labor, and fixed cost. Also, the number of trainings, number of planting materials, and frequency of weeding positively influenced efficiency. The sole constraint to efficiency was the use of N fertilizer (kg). Block farming had played its part in increasing farmers’ profit efficiency through technology diffusion and adoption as various training, technical advisory and production support embedded in the program were provided to the members. Therefore, the Sugar Regulatory Administration (SRA) should continue organizing small farmers unto block. It should also organize service providers in the district to serve as a hub in providing production support services making productivity inputs (high yielding varieties and farm machinery) accessible in the area. Furthermore, SRA should expand the coverage of its Socialized Credit Program to enable farmers to modernize their farm operations and enhance their farm income and profit.
VL  - 7
IS  - 5
ER  -

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