Agritourism, a new business model for mango growers

My plan is to contribute to Philippine Agritourism starting with the development of a new website. The idea is to promote mango farming using a different business model. If you are a small mango grower in the Philippines, you should also consider Agritourism. It may help increase your revenues and profitability. The exciting news from the First National Agritourism Research Conference in Los Banos (June 27~29, 2012) is that the national, provincial and municipal governments have correctly concluded that Agritourism should be given the highest development priority.

The Department of Agriculture is the protector of our food supplies. To assure sufficient food quantity and quality for the population, you need profitable farms as producers. But the total number of farms, farmers, and students studying agriculture are in decline, which places the entire country at risk. The Department of Tourism generates foreign exchange by inviting more visitors to the Philippines. Farm tours, sampling produce and purchasing agriculture products is an alternative experience to sightseeing and going to the beach. The global movement is towards large, highly mechanized commercial farming. Combining agriculture and tourism is one way for small farms to survive and prosper. 

Another national goal is increased employment opportunities in rural areas. One of the earliest pioneers in Philippine Agritourism is Costales Nature Farms in Laguna. This six hectares integrated organic farm is not only profitable, but it also provides employment for sixty workers. That’s impressive!

Mango is not a lucrative crop in situations where growers are dependent on agreements with sprayer-contractors. The grower’s share in the supply chain, according to a study for SEARCA (Southeast Asian Regional Center for Graduate Study and Research in Agriculture) by Dr. Flordeliza Lantican from the Department of Agricultural Economics, University of the Philippines Los Banos, is 10.92%. What this means is nearly 90% of the money paid by the consumer goes to intermediaries in the supply chain, including the sprayer-contractor, sprayer-trader, wholesaler, wholesale-retailer and retailer. 
 
I am part owner through inheritance of a mango farm located in Tanay, Rizal. The original planting by my father about forty years ago was 1,000 trees. At the present time, we are solely reliant on a sprayer-contractor. The fruits are high quality exports to Japan and Korea, but our revenue share is minimal. It is about breakeven after paying land taxes and caretakers’ salaries. Money generated from a good harvest has to be kept in reserve in the event of a bad harvest year.

To improve farm revenues, the U-Pick Agritourism business model was selected. It eliminates the intermediaries. The supply chain relationship is direct between grower and consumer. Both sides benefit. The grower keeps a higher percentage of revenues. The consumer receives a 40% price discount. In addition, the farm visit provides a wholesome, fun and entertaining activity for the entire family.  

Our farm is less than 75 kilometers from Manila or about a two hours drive. We are inviting city residents and the international expatriate community to visit and participate in the 2013 mango harvest. There will be an entrance fee to compensate for free sampling and additional expenses. Carabao, also known as Manila Super Mango, has a very good taste reputation. But there is nothing more succulent, more sweet, more delicious than mangos that have been permitted to ripen on the tree. The plan is to place elevated fishing nets under the canopy of select trees to catch falling ripe mangos. Yes, visitors are permitted to bring jars of bagoong if their taste preference is green mangos. They just have to keep away from the expatriate families since they don’t like the smell. 

The main activity is mango picking. Before exiting the farm, harvested mangos are weighed and paid. The payment is calculated based on the Metro Manila prevailing retail price, less a 40% discount. This is easy to determine since the Philippine Bureau of Agricultural Statistics publishes three times a week the retail and wholesale prices in Metro Manila for commodities, including fresh mangos.

There are some extra expenses such as preparing the orchards and installation of eco-san (ecological-sanitation) toilets. Additional personnel and security are needed during designated harvest days, which will be weekends and holidays. The long term goal is to prepare the farm to receive tourists for day tours and farm stay programs. Facilities are needed for overnight visits and vacations. Farm resorts require equity capital from investors or bank financing.

The new website, www.u-pickfruits.com was created to promote U-Pick Mangos. Conversion to an Agritourism business includes risks and rewards. The main motivation is increased revenues, but there are also non-monetary reasons. Foremost in my mind is to teach the next generation the value of agriculture and sustainability. In turn, the legacy of small scale farming can be passed on to future generations.

If there are other Philippine mango growers who are interested in Agritourism, please let me know. Send a text message to 0947-735-7552. Include the word “mango” and your email address. The text response will be my email address.

(J.J. Reyes is a Fil-Am residing in Honolulu. He is planning to engage in several new business ventures in the Philippines after his retirement. This includes managing the family farm.)

NOTE: Above article is original and it has never been published. Submitted for publication consideration by:

Juan Jose’ Reyes
Managing Director
American Institutes for Learning, LLC
1833 Kalakaua Avenue, Suite 806
Honolulu, Hawaii 96815, USA
TEL: (808) 942-9990
CEL: (808) 924-9533
EMAIL: americaninstitutes@gmail.com

By: Juan Jose Reyes