Carabao Marketing and Financing

MARKETING

Carabao marketing in the Philippines is not organized and usually more to the advantage of the middlemen.

Several middlemen undertake trading function. Considered important channels of distribution, are barrio agents, shippers, Manila based buyers (dealers and butcher-retailers) and meat retailers. The existence of so many middlemen in the distribution network is disadvantageous to both the producers who received relatively low price for their products and the consumers who pay relatively high price for meat products.

Studies have shown that in carabao marketing, profit as percentage or gross margin ranged from 60 to 88%. Marketing efficiency can be increased by reducing the number of stages in the marketing channels and increase direct selling from producers to butcher-retailers or processors. The components of marketing margin and middlemen’s income statements implied that the assertion of producers and consumers that middlemen are making excessive profits maybe justified, if not that the unquantifiable risks like death losses, unforseen shrinkage and price changes curtail the expectation of profit.

Improper handling of the animals during transport results in about 15 to 20% shrinkage of weight, death losses and also inferior carcass quality. The majority of the carabaos from the different provinces of Luzon are brought to Manila either by trucks or train. Carabao from the Visayas, Mindanao, and Mindoro are transported by ships.

Factors that influence the degree of shrinkage during transport:

  1. Length of the journey.
  2. Degree of comfort en route.
  3. Kind and amount of feeds used
  4. Degree of finish of the carabao
  5. The fill at market
  6. Condition of the animal at loading time.

Tips on Pre-Shipment of Carabaos

The animals must be handled carefully prior to and during transport to avoid such incidents as downers on account of fractures and decreased market value because of bruises attributed to fighting, and high shrinkage. The following measures are suggested to avoid untoward development in transport:

1. Provide adequate loading facilities. These will prevent loading difficulties and stresses.

2. Provide adequate bedding. Litters such as rice straw, rice hulls, etc. are good bedding materials. For a firm footing to prevent slippage, scatter a layer of sand on the floor.

3. Examine the vehicle before loading. Compartments where animals are to be kept during the transport should be free from any sharp objects or protruding nails or cracks and broken boards.

4. Load and unload the animals quietly. Unnecessary noise or pain inflicted on the animal should be avoided while loading or unloading. Carabaos, if scared and provoked have tendencies to become vicious which could result to accidents dangerous to animals or the handler. Also, scared animals are difficult to unload.

5. Avoid overloading and underloading. Overloading of animals easily results to fighting, bruising, crippling or even death. However, underloading also have the same results.

6. Feeding of roughage only could result to high shrinkage. Concentrates should be given to improve the condition of the animal and at the same time minimize shrinkage.

7. Prior to marketing the necessary credentials such as health certificates, permit and brand inspection should be secured. Compliance with this regulation could avoid delays in shipment and consequently unnecessary losses.

Marketing Strategies

1. If backyard carabao producers can organize themselves into a cooperative or association, then marketing of carabaos can be scheduled to get enough volume and sell direct to processors. Selling direct to processors will eliminate the unnecessary middlemen and will enable the producers to get better price for their animals since they are engaged in a regular meat processing operation.

2. Sell the animals in the auction or livestock markets where the degree of competition among buyers is high and therefore the price is advantageous. to the producers.

3. Sell the animals on actual live weight basis. This will enable the farmers to get the actual value of their animals if they are properly informed of the existing market price for different grades.

4. In distant areas where auction or livestock market is not available and producers association is absent, farmers should sell directly to butcher-retailers or shippers on a liveweight basis to eliminate the unnecessary market intermediaries.

In the absence of a weighing scale, the liveweight of the carabao can be estimated. The weight is significantly correlated to the height and the midriff girth. The height of the carabao is the vertical distance between the ground and the top of the withers. The midriff girth is the circumference of the abdominal region going over and around the back of the ventral midline at about the umbilicus or in front of the prepuce in the male.

In taking the estimated weight consider the measurements when the animal is at its normal and quiet stand.

For example, a carabao with a height of 55 inches and midriff girth of 53 inches will have an approximate weight of 250.0 kg.

Y = (-1560.48 + 23.92 (55) + 15.03 (53)
= (-1560.48+1315.6+796.5)
= (-1560.48 x 2112.1)
= 250.0 kg

FINANCING

Credit is important in the expansion of existing cattle projects and the encouragement of new ones to achieve our objective of increasing livestock production. The government is extending its full support in terms of credit and financing through participating rural banks by launching the Multi-Livestock Dispersal Loan Program (MLDLP). This program adopted a new system of animal dispersal where rural banks are tapped as distributing and collecting arms.

At present, the Rural Banks of Barili and Santander, Community Bank of Medellin, and Bangko del Norte in Cebu; Cooperative Bank of Bohol, Rural Bank of Larena, Siquijor and Cooperative Bank of Negros Oriental, Rural Bank of Sta. Catalina and Valencia in Negros Oriental in coordination with the Department of Agriculture and the Bureau of Animal Industry is servicing MLDLP.

The loan is primarily used to purchase animals either for breeding and fattening. The financing scheme is as follows:

  • Size of Loan
  • Payment and Amortization Plan

Term = 8 years, equal annual payment with two (2) yrs. Of grace period on principal.Table 8. Eight (8)- year Amortization schedule

  • Year 1 Interest only 10%
  • Year 2 Interest only 10%
  • Year 3 16.66 % of principal plus 10% on balance
  • Year 4 16.66 % of principal plus 10% on balance
  • Year 5 16.66 % of principal plus 10% on balance
  • Year 6 16.66 % of principal plus 10% on balance
  • Year 7 16.66 % of principal plus 10% on balance
  • Year 8 16.66 % of principal plus 10% on balance

For more information, contact:

Livestock Division
Department of Agriculture
Regional Field Unit No. VII
M. Velez St., Cebu City

The publication of this guide was made possible through the Livestock Division of DA-RFU-VII. May this serve our clientele at its best. – Eduardo B. Lecciones, Jr., Regional Executive Director

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