Bananas and Food Security - Bioversity International

454 Les productions bananières / Bananas and food security – Session 2
included the village and town traders as well as shippers in the province and included
the market centres of Metro Manila for other traders. The subsequent survey covered 27
banana traders.
Organisation of marketing
At the village level, sales were completed either at the buyer’s premises or at the
roadside. Banana buyers living within the village were either commission agents (CA) or
assembler-shippers (AS) doing part-time business besides farm work. The commission
agents purchase bananas in small lots and give advance capital for out of village
assembler-shippers and assembler-shipper-wholesaler-retailers (ASWR) on a commission
basis, mostly at the rate of PHP0.05 per finger. The assembler-shippers and ASWR collect
mature green bananas directly from farmers or agents to fill up their transport vehicle
(usually modified jeeps) and load this into a ro-ro type boats for large to wholesalers and
retailers in Metro Manila. More than 80% of the volume sold at the farm was handled by
assembler-shippers and only eight farms sold to commission agents. Two farms were
selling directly to wholesalers and retailers in Metro Manila.
There exists a hierarchy of buyers in the area mainly to minimise transaction costs
and secure the necessary operational volume of bananas. Other traders are tied to
agents or assembler-shippers whose transaction cost is lower as they live in the area and
require less time to search for available supply. The commission agents are tied to AS or
ASWR who in turn sell to wholesaler-retailers and retailers. Wholesaler-retailers buy
green bananas in bulk and sell either on a wholesale or retail basis while retailers buy in
bulk but sell as retail only. The ripening of bananas was performed at the WR and R
levels. Some farms also sell to town traders who were also selling to assembler-shippers.
Town traders have permanent stalls located at the town centre and buy directly from
farmers. In general, farmers were free to sell to any of the village traders or town
traders.
Credit tying
One major constraint in the operation of the village traders is the shortage of capital.
The average working capital amounted to PHP16,625 (approximately US$416) which is
not an easy sum to raise at the village level as loans from banks are difficult to obtain
due to collateral requirements, a long delay in processing and very high interest rates. To
mitigate such difficulty, an informal credit system is now practised in the area whereby
farmers are paid four to seven days after sale, giving time to traders to dispose of their
purchased bananas.
Between traders, credit tying was also a common practice by those short of capital
and by small traders to ensure the delivery of bananas. An agent or assembler-wholesaler
receives an advance amount from wholesaler-retailers and retailers and uses this to
purchase bananas from the village, delivering these within a week. No explicit interest is
charged on the advances as long as the delivery of bananas is done within the agreed
period. The no-interest arrangement is made only to secure the supply of bananas to