Supply Chain Analysis of African Hito (Clarias Gariepinus)
Supply Chain Analysis of African Hito (Clarias Gariepinus)
Supply Chain Analysis of African Hito (Clarias Gariepinus)
IN KABACAN, COTABATO
BS Agricultural Economics
JULY 2023
I. INTRODUCTION
Products: The primary product of catfish farming is the African hito itself. Once
fully grown, these catfish are harvested and sold to various markets, including
local restaurants, fish markets, and direct consumers. Hito is valued for its firm,
white flesh and mild flavor, making it suitable for a wide range of culinary
preparations.
Services: The African hito farming industry in Kabacan relies on three crucial
services: hatcheries, feed suppliers, and technical assistance. Hatcheries provide
farmers with genetically superior fingerlings, ensuring the success of catfish
farming. Dedicated feed suppliers formulate balanced feeds tailored to meet the
dietary needs of Hito catfish at different growth stages, promoting their health and
development. Technical assistance is offered by agricultural extension services,
government agencies, and private consultants to support farmers in enhancing
productivity and sustainability. They provide guidance through training sessions
on best practices, disease management, and water quality monitoring, among
other aspects. By sharing their expertise, these entities contribute to the growth
and success of the hito farming industry in Kabacan.
Processes: The African hito farming supply chain in Kabacan involves several
key processes. First, the ponds are prepared by removing debris, controlling
weeds, and ensuring suitable water conditions. Fingerlings are then stocked in
the prepared ponds or tanks at optimal densities to promote growth and survival
rates. Feeding and water management are crucial, with farmers providing
balanced feed and monitoring water parameters. Disease management
practices, including vaccination and regular health checks, are implemented to
safeguard the catfish population. Growth monitoring involves periodically
sampling and measuring individuals to inform feeding practices and determine
the ideal harvesting time. Once the catfish reach the desired size, they are
harvested using methods like seining or draining ponds. Finally, the harvested
catfish are transported to local markets or processing facilities for sale or further
processing before reaching end consumers.
This study aims to assess the supply chain of African Hito in Kabacan and
to identify areas for improvement. The specific objectives are as follows:
1. Provide an overview of the African Hito industry;
2. Map out the specific supply chain of African Hito in Kabacan;
3. Analyze the activity of African Hito supply chain members,
4. Discuss the product, financial and information flow of African Hito supply in
Kabacan,
5. Recommend areas for improvement based on the results of the study.
The scope of this study is specifically limited to the supply chain of African
hito farming within the geographic boundaries of Kabacan, Philippines. The
primary focus is on the production of African hito within Kabacan. Furthermore,
while aquaculture encompasses various other species and practices, this study
specifically focuses on African hito farming and does not include other catfish and
fish species or aquaculture activities within Kabacan.
II. REVIEW OF RELATED LITERATURE
This chapter contains the definition, literature, articles, and studies about
African hito. It also includes industry profiling of African hito.
AFRICAN HITO
Source: https://poshjournal.com/fried-catfish-recipe
Grilled African hito is often served with a side of steamed rice and a variety
of condiments and dipping sauces. A common accompaniment is a soy sauce
and calamansi dip, providing a tangy and savory element to complement the
grilled fish.
Source: Lutong Bahay Recipe, inihaw na Hito (grilled catfish), (September 2022).
For a fusion twist, African Hito catfish can be incorporated into Filipino-style
curry dishes. The catfish fillets are gently simmered in a fragrant curry sauce
made with spices like turmeric, cumin, coriander, and ginger, along with coconut
milk. The catfish absorbs the aromatic flavors of the curry, resulting in a hearty
and flavorsome dish. Each of these Pinoy sauce dishes highlights the natural
qualities of the African Hito catfish, allowing it to absorb and complement the rich
and savory flavors of the Filipino sauces.
YEAR In metric
tons
2020 1.34
2021 1.64
2022 1.65
The provided data represents the average farm gate prices of commercial
catfish in SOCCSKSARGEN over a three-year period. In 2020, the average farm
gate price of commercial catfish in SOCCSKSARGEN was 100.22 pesos per
kilogram. This indicates that catfish farmers were receiving an average price of
100.22 pesos for each kilogram of catfish sold at the farm level. In 2021, the
average farm gate price decreased to 88.3 pesos per kilogram. This suggests a
decline in the price received by catfish farmers compared to the previous year.
The data provides an overview of the trend in average farm gate prices for
commercial catfish in SOCCSKSARGEN during the specified years. It suggests
some variability in prices, with a decrease in 2021 followed by a small increase
in 2022. The factors influencing these price fluctuations could include market
demand, supply levels, production costs, and other market dynamics specific to
the catfish industry in SOCCSKSARGEN.
YEAR In million
pesos
2020 135
2021 145
2022 148
III. METHODOLOGY
Location of the research
This study was conducted in the Kabacan where most of the African catfish
farming conduct fisheries activities. The research location was determined
deliberately, by considering Poblacion area of Kabacan which known as the main
processors and marketers of African hito. The research was undertaken on the
month of July 2023.
Research plan
The respondents of this study are farmers who cultivate the African hito,
traders, and processor knowing as following the flow of supply chain products
from producers to consumers.
Data analysis
The research data was analyzed descriptively in a set of qualitative and
quantitative data. The supply chain analysis of African hito (Clarias gariepinus)
aquaculture business in Kabacan was conducted through several stages: (1)
identifying the actuator of African catfish business supply chain, (2) identifying the
activity of supply chain members, (3) drawing the pattern of supply chain flow
from the business of African catfish aquaculture.
IV. RESULTS AND DISCUSSION
Part 1 shows the basic information of the farmers, which includes the sex, age,
civil status, number of years in school, number of family members, address, farm
address, and cellphone number. Our respondent for producer is Mr. Alfred
Tormo, married with a total of six family members that reside in Barangay
Dagupan, Kabacan. The respondent owns a land who has more than 4 years of
experience in African hito farming. He owns 2 hectares of land and two 10m by
15m of that land are earthen ponds devoted for African hito production. He is also
a member of two associations: the Kabacan Farmer’s Association and Dagupan
ARB. The benefits and services they received for the Farmers Association include
free seeds and fertilizer for every farmer for his palay and fingerlings stocking for
his African hito farming in collaboration with USM-SOXAARRDEC early last year.
And for the Dagupan ARB, their association recently receive farm machines from
Korea International Cooperation Agency (KOICA).
The provided data presents income, costs, and other relevant information
for a farmer engaged in both rice and African Hito catfish production. In terms of
income sources, the farmer generates revenue from two main sources: rice
production and African Hito catfish production. The data indicates that there are
two harvests per year for each of these commodities. The volume harvested per
rice production cycle is 3,600 kilograms, with a unit price of 16 Philippine pesos
per kilogram. For African Hito catfish, the farmer harvests 880 kilograms per
production cycle, with a higher unit price of 150 Philippine pesos per kilogram.
The selling price is set by the buyers, based on other producers' prices. The
farmer contacts buyers through phone calls, suggesting a direct communication
approach.
COST
EXPENSE ITEM
per Harvest
Inputs
b. Feeds
Commercial 90 Kg 26 2340
Alternative 50 Kg 20 1000
e. Others 1000
Labor
# Workers Rate/Worker
Pond Preparation
Stocking
Sorting 2
Fish transfer 2
Daily feeding 2
Monitoring 2
Observation 2
Monitoring and 1
2 350 350
maintenance
Fish Health
Inspection and monitor 1 1 350 350
Administer 1
Harvesting
Draining 2
Overhead Costs
Supplies 1500
Utilities 1500
Transportation 1600
Insurance 400
Taxes and gov’t fees 1200
Moving on to costs of production, several expense items are outlined. For
inputs, the farmer spends 7,200 Philippine pesos per harvest on fingerlings.
Commercial feeds are purchased at a cost of 2,340 Philippine pesos, while
alternative feeds cost 1,000 Philippine pesos. Other costs include water
requirements (1,500 PHP), pond infrastructure (500 PHP), fish health products
(2,000 PHP), and miscellaneous expenses (1,000 PHP).
Labor costs include both family labor and hired labor, with specific tasks and
rates provided for each stage of production. Pond preparation, stocking, feeding
and nutrition, water quality management, fish health, harvesting, and post-harvest
handling all involve labor expenses.
Overhead costs cover administrative and management expenses, supplies,
utilities, equipment and tools, transportation, insurance, taxes, and government
fees. The values provided reflect the estimated costs incurred for each category.
Disposal
Item (Specify unit) Average per harvest (kg)
Diseases 45
Harvesting 5
Transfer 10
Buyers
Name & type of main
Commodity Location Mode of Payment
buyers
Overall, the data suggests that the main buyers for African Hito and rice are
primarily wholesalers, processors, and assemblers located in Kabacan. Cash
payments seem to be the preferred mode of payment for all buyers listed.
Understanding the types of buyers and their preferences can help farmers and
sellers in making informed decisions regarding pricing, quantity, and market
strategies to effectively cater to the demands of these buyers in Kabacan.
Flow of information
The provided data pertains to the flow of information in relation to price and
quality in the context of catfish farming. The main source of market and price
information is co-growers, indicating that farmers within the catfish farming
community play a crucial role in sharing market and price information. The price
is determined based on the existing price in the market. The method of price
discovery is through word of mouth, suggesting that information is shared
informally among farmers. The buying price is not negotiable, likely due to
following standard pricing practices. Farmers effectively use price information in
haggling with buyers, implying that they leverage market information during
negotiations. Farmers validate price information, primarily relying on co-farmers
as a basis for validation. Farmers also share information with other farmers who
produce the same commodity, highlighting a collaborative approach within the
catfish farming community.
Quality Information
Farmers grade/classify their commodity before selling, using size and
aliveness as criteria. This highlights the importance of selling live catfish,
indicating that the quality of the catfish is assessed based on its size and vitality.
Overall, the data suggests that information flow among catfish farmers
primarily relies on co-growers for market and price information. Collaboration and
validation of information within the farming community are evident. However,
challenges may arise in obtaining comprehensive market information due to the
fragmented nature of the catfish market. The focus on grading and selling live
catfish highlights the significance of quality information in the catfish farming
industry.
Technical Information
Source Rank Kind of Remarks
Information*
Own experience 7 E
Government agencies 8 C
(specify)
Cooperatives 8 A
NGO’s private 8 B
Consultants 10 C
Mass media 9 E
Trade Fairs, etc. 9 D
Overall, the data indicates that the farmer considers other growers'
practices, consultants, seminars, government agencies, cooperatives, and mass
media as important sources of technical information. These rankings provide
insights into the farmer's preferences and the sources they rely on for acquiring
knowledge to enhance their farming practices.
The table shows the initial investment in the Grilled and Deep-fried African
catfish business. It includes assets such as land, building, machinery, food and
cooking equipment, equipment/tools, vehicles, and others. The total initial
investment is 300,000 PHP.
PROCESSING ACTIVITIES
The processor has a consistent and regular source of African hito from
Amas Fish Farm. They impose quality specifications, preferring Hito that weigh 2
to 3 pieces per kilogram. They have set a daily maximum quantity of 25 kilograms.
These specifications and requirements demonstrate the trader's preference for
specific product attributes and their control over the volume of African Hito they
are willing to purchase daily.
Name of % of Unit Qty per Frequency of Duration to
Processed Total process process per process
Product month
Deep fried 65 5 to 8 kilos 120 1 hr
Grilled 35 2 to 5 kilos 120 1 hr
The table shows the name of the processed product, which is "Grilled and
Deep-fried African Catfish." The percentage of total is 100%, indicating that all the
processed catfish is grilled and deep-fried. The quantity per processing, frequency
of processing per month, and duration to process are specified.
The table shows the labor inputs for the processing activities in the Grilled
and Deep-fried African catfish business. The activities include clearing, sorting,
pack/storage, packaging. It requires 10 hired laborers for each activity. The
frequency of occurrence per year is every day. The rate per labor for clearing,
sorting, pack/storage is 150 PHP, and for packaging is 200 PHP. The cooking
activity has a rate per labor of 300 PHP. Food expenses per MD (meal/day) are
1000 PHP.
The table shows the processing losses for grilled and deep-fried African
catfish. The average volume processed is 80 to 100 pieces per process, and the
percentage losses to volume processed are 1%.
Flow of information
Traders play a significant role in setting selling prices for the products they
sell, as revealed in the data. They base their prices on quotes provided by
suppliers, market prices of the ingredients used for processing, and prices of fellow
business. The primary sources of market and price information are traders and
direct competitors indicating that direct communication is key to gathering market
insights.
TRADER’S INTERVIEW QUESTIONNAIRE
Part 1-A includes the purchasing practices of the producer. This includes the
sources of African hito, the quality specifications and quantity requirements for the
fish, as well as the transportation and labor cost of delivery and pick-up. The
producer’s sources of African hito is the regular source. In terms of quality
specifications, the African hito are classified based on farmers’ classification. In
terms of quantity, the producers require the supplier to provide at least 30
kilograms per day. The transportation and labor costs may run up to Php 2,000 for
a month which is just for delivering to customers, mainly because farmers sell it
directly to them.
No. of No.
Quantity Source/
Average Days months Cost/ Cost/ Total
Item Transpo Destinati
Distance per per month unit Cost
rted on
month year
ASSEMBLIN
G
Hired vehicle 1 Pikit 16km 8 11 1000 11000
Own vehicle 1 Matalam 10km 8 11 500 5,500
27,500
Xxx Kabacan Xxx Xxx Xxx 2500
Gasoline&oil
Driver 71,500
Xxx Kabacan Xxx Xxx Xxx 6500
Helper 60500
Xxx Xxx Xxx Xxx 5500
Helper 60500
Xxx Kabacan Xxx Xxx Xxx 5500
LOSSES IN DISPOSAL
Average per
Cost/unit Total Cost Remarks
month
Total Volume purchased 860 kilos Php140 Php120,400
(kilos)
Volume sold (kilos) 850 kilos Php175 Php148,750
African hito 850 kilos Php175php Php148,750
per kilo
Total Losses (kg) : 10 Not totally loses. Weak hitos
kilos were removed early, cleaned,
and frozen
The table above shows the losses in disposal. This includes the average
per month, cost per unit, and total cost, as well as remarks for the total volume
purchased, volume sold, and grading of African hito. It sells 175 per kilo in terms
of volume. In terms of grading, African hito are classified into single class. It is
already classified by the farmer upon acquisition. In contrast, according to the
trader, these losses are not really considered as losses as weak hitos were
separated from the tank, eviscerated, and frozen for their own consumption.
The table above shows the product and supply. This includes the type of
commodity, suppliers, number of suppliers, mode of payment, volume bought per
month, and the buying price. For the commodity, the top 3 suppliers are located in
Mlang and Kabacan. There is one supplier for each mentioned municipality. The
trader and supplier use a cash-to-cash method where the volume bought per
month is 400 and 460 respectively for each supplier, with a buying price of Php
140 to 150 per kilo.
COST
EXPENSE ITEM
per Month
Materials
Quantity Price Cost
a. Supplies 1 5,500
b. Establishment 1 12,500
Labor
# Workers Rate/Worker Cost
a. part-time 2 100 6000php
b. full-time 3 200 12,000php
c.
Transportation 2000
Rent or Lease 12,500
Communication 600
Electricity 5,000
Water 500
Depreciation
Others:
Total Cost 38,600
The table above shows the itemized expenses. This includes the itemized
expenses and the costs for the materials and labor. In material expenses, there is
a supply and an establishment. The accumulated price of the supplies was around
Php 5,500. For the establishment, the total expenses were over Php12,500 In
terms of laborers, there are 5 to 6 laborers and they are categorized into 2: full-
time, which is paid at 200php daily, and part-time, which is paid at 100php daily.
For the monthly cost of labor, the full-time laborer is Php 12,000 and Php6,000 for
part-time. In terms of transportation, the monthly cost is Php 2000 depending on
the location of the delivery. For rents, the monthly cost is PHp12,500; for
communication, the producer’s cost is around Php600; for electricity, the monthly
cost is Php5,000. For water, the cost is Php 500. The total cost for the monthly use
of all the materials and labor may run to Php 38,600.
A. Buyers
Top 3 Buyers Volume Sold Length of
per month Mode of
Commodity (Name, Type, Selling Price Relations
Payment
Location) hip
160 Cash to
African hito 1. Matalam 175 1 year
cash
600
Cash to
2. Kabacan 175 1 year
cash
100
Cash to Half a
3. Mlang 175
cash year
The table above shows the buyers. This includes the type of commodities,
volume sold per month, selling price, mode of payment, and length of relationship.
In commodities. African is hito only one commodity. The producer has 3 buyers
and the location is in the municipality of Matalam, Kabacan, and Mlang. For the
volume sold per month, it may run to more than 800 kilos and the selling price is
Php 175. In terms of payment, the mode is cash to cash and the length of the
relationship between the producer and his buyers is more than 1 year.
Flow of information
Traders play a significant role in setting selling prices for the products they
trade, as revealed in the data. They base their prices on quotes provided by
farmers, giving them influence over market prices through interactions with both
farmers and fellow co-traders. The primary sources of market and price information
for traders are farmers and co-traders, indicating that direct communication is key
to gathering market insights.
Traders use co-traders' prices as a basis for their pricing, and negotiation is
the key method in determining prices. This suggests that traders engage in
bargaining to reach mutually agreed-upon prices for their products. Price discovery
occurs through direct linkage with players, implying direct engagement with
farmers and other traders. The purchase price is negotiable, allowing traders to
adjust buying prices according to market conditions, demand, and harvest volume.
Overall, traders operate in a dynamic environment, actively engaging with farmers
and co-traders to set prices, negotiate deals, and gather crucial market
information. Price discovery and negotiation significantly impact the final prices of
the traded products in this market.
Quality Information
Supply chain can also be considered as logistics network, with key players.
A primary member of African hito supply chain in Kabacan are fingerlings
suppliers, African catfish farmers, traders, retailers, street vendors, fish processing
enterprises like restaurants, and consumers households.
End Customers: The supply chain ends with the end customers, which can
include individuals, households in Kabacan who purchase the Hito catfish for
consumption.
Fingerlings
Suppliers
This chapter presents the over-all outcomes of the study, which underwent
the series of data gathering and interpretation, thus resulting in a conclusion based
on the answers of the respondents.
1. The flow of products or goods from upstream to downstream, for example the
raw materials sent from supplier to the farmers, after the hito production
harvested and finished, it is then sent to trader, retailer, processor, then end-
customer.
2. Financial flows and other similar term which flow from upstream to
downstream.
3. The flow of information from upstream to downstream. There are three supply
chain distribution patterns in the research locations such as: the flow of products,
the financial flows, and the flow of information. The flow of products runs from
upstream to downstream or from farmers to the consumer. The Financial flow
flows from downstream to upstream which is from customer to the farmers. The
flow of information moves from upstream to downstream.
Based on the conclusion provided, there are several areas for improvement
in the African Hito (Clariae gariepinus) industry supply chain in Kabacan. Firstly,
expanding market reach by exploring the export market and conducting market
research can lead to growth. Modernizing financial transactions through mobile
banking or online methods can improve efficiency and security. Embracing digital
technologies, like inventory management software, can enhance coordination and
transparency. Investing in fish processing techniques, packaging, and quality
control can increase marketability. Encouraging collaboration and providing
training to stakeholders can improve practices. Diversifying markets, such as
restaurants and supermarkets, can reduce dependence on traditional markets.
Implementing traceability and quality assurance measures will boost consumer
confidence. By addressing these aspects, the supply chain can become more
competitive, efficient, and sustainable, benefiting everyone involved, from farmers
to consumers.
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