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HIGH VALUE VEGETABLE FARMING IN THE PHILIPPINES: DOLE TROPIFRESH INC.

I. POINT

OF

VIEW

In this case, we will assume the point of view of the manager of DOLE TROPIFRESH INC. because he is the one who has the power to make decisions. Aside from that, he has the full vision on the situation.

II. MARKET SITUATION ANALYSIS


1. Opportunities-Threats analysis Opportunities Its mission is to produce top quality fresh horticultural produce, in terms of quality, reliability and cost that will meet the needs of its costumer. Therefore it is heading towards the direction of being the leading provider to the costumers of DOLE Asia.
o

Asparagus; one of the main product of DOLE TROPIFRESH INC. was one of the main export product in Japan. DOLE TROPIFRESH exports to Australia during months of April to June. These months are off-season of asparagus in Australia.

Threats The total depth of the contract growers was recorded P22.75 M. And, some of the production contracts will be expired in one year.
o

The DOLE TROPIFRESH INC. has a recently 650 contract growers, 60% of them are Christians and 40% are Muslims. These growers are classified according to associations. 70% of them are indebted to the company at an average of 50,000 per grower.

o Japan is also producing asparagus. During April to June, Japans asparagus is in season. So DOLE TROPIFRESH INC produces only 10 tons/day, which is 50% lower than its normal production.

2. Strengths-Weaknesses analysis Strengths DOLE TROPIFRESH INC has a wide plantation land. It covers a total area of 1000 hectares which was being farm by 650 growers. This strength makes the firm more productive in their produce. o Contract growing farms is in good location. These farms are positioned in Polomok and Tupi, South Cotabato. It is stated that based on research, its temperature, humidity, soil, and rainfall are suited for asparagus

production. Aside from that, the farms are also near the processing plant. o Financed by the bank DOLE TROPIFRESH INC borrows from accredited banks at 10% interest per year.
o

The company is strengthening its technical assistant efforts and increasing the control of the actual farm operations. Dole Tropifresh has adopted a production system that suits the growth requirements of asparagus. This assured them of substantial exportable volume.

Weaknesses There is a wide variation of production It is caused by the differences in labor inputs and the attitude of growers toward farming. There are forward looking farmers that strategizes in order to increase production. on the other hand, others just take farming as a way of life and not as a business. 3. Target markets The major market of DOLE TROPIFRESH INC is Japan. It acquires 90% of the total market volume. The remaining 10% are distributed to the domestic market and local markets.
4. Current Marketing Mix or Marketing Strategies.

a. Product

Asparagus is the main product of DOLE TROPIFRESH INC. It is one of the main exports by DOLE Company. It was produced through contract growing. Two varieties of asparagus was being planted the UC157 which covers 90 % of the total product and atlas. The cropping cycle of Asparagus covers 38 weeks, which includes 5 weeks of selection period which happens twice, two times harvest for every 8 weeks after the selection, and a 12 weeks rest period. Asparagus can yield to 1-11 tons per hectare; depend on the variations of the labor inputs. b. Price In Japan, Dole charges an average of 3000-3500 yen per seven-kilogram box of of asparagus. That is equivalent to Php171-200 per kilogram. On the other hand in the domestic market, prices range depending on its grades is Php15-60 per kilogram. The table below shows the prices according to their corresponding grades. Grade Dole Mountain Class A 7 c. Place The farms are located in Polomok and Tupi, South Cotabato. It is stated that based on research, its temperature, humidity, soil, and rainfall are suited for asparagus
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Price per kg Php 60 Php 40 Php 40 Php 15

production. Aside from that, the farms are also near the processing plant.

d. Promotion DOLE TROPIFRESH INC promotes their products

collectively from bananas to other horticultural crops. There is no promotion strategies done for particular products other than the pineapple and its by products.

III.

THE CASE PROBLEM


Having carefully reassessed and evaluated the marketing mix of

DOLE TROPIFRESH INC its current period, the case problem is then stated as: How will DOLE TROPIFRESH INC increase farmers productivity and collect their receivables?

IV.

CASE OBJECTIVE
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The objective of analyzing this case is to determine the strategies in increasing contract growers productivity and in collecting the companys receivables. To help the company find a strategy on how to collect the growers depth, considering that it is still profitable to the Company. To help the farmers pay their dept to the company.

V. ALTERNATIVE SOLUTIONS
1.

TO THE

PROBLEM

Hold Trainings to increase farmers knowledge on Asparagus farming. PROS:

Motivate the farmers to engage themselves on the proper way of farming. The farmers production may increase and at the same time they can have a profitable output.

CONS:

The growers depth would be lessened. It will cause an additional cost to the company. Time consuming on both point of view of the farmers and the company. Farmers may not be willing to engage on training.

2. it.

Set a quota and give incentives to those who will meet PROS:
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The farmers will be motivated to work harder and increase their production of a high yield of horticultural crops.

It can reduce the wide variability in the production of their contract growers. The farmers will be able to pay their depth because of additional output.

CONS: There will be an additional cost to the company. It can cause a conflict among the contract growers.

3.

Coordinate with credit cooperatives to provide loans for the farmers. PROS: This will allow contract growers to rehabilitate their farms. Growers will be provided an additional capital for inputs to sustain the farm such as seed, tractor rentals, labor costs and irrigation costs. This will also provide lighter burden for the growers since lower interest rates can be acquired from the credit cooperatives. CONS: There is a possibility that the Growers depth would be increase.

VI.

RECOMMENDATION
After carefully reviewing and evaluating the three

alternatives, it is recommended to implement the first alternative which is to hold training on the proper way of how to increase the knowledge of the farmers on asparagus farming. For the reason that asparagus can yield to a higher inputs given the same supplies of input, the only thing that will affect the output is the labor input applied. The farmers could have a higher output produced that can increase their net-income that would lessen their depth.

VII. PROPOSED STRATEGIES

OR

PLANS

The first step of the company is to inform the growers that there would be training on the proper way of effective growing of asparagus given the same amount of input that would yield to higher output produce. At the same time motivate them to farm not because it is a way of life but to farm because it is a business that will provide them a higher income. For that reason, the company should require all the farmers to attend the training. The training purpose would not only be knowledgeable but also for the growers to improve the relationship among the other growers. Invite some professionals or credible speaker so that the farmers would believe the things that will be taught to them. The company should also assign someone to monitor the growers if they are doing well.
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VIII. FUTURE TRENDS


Though Dole Tropifresh is heading towards the direction of being the leading provider of horticultural produce to the customers of Dole Asia, there are future events that may affect the operations in the farm. There are possibilities of drought and heavy rains, potential competitors

IX.

CONTINGENCY PLANS
If the proposed strategy would not work effectively it is recommended to implent the second alternative which is to give a set a quota and give incentives to those who will meet it. Since the growers can be consider as profit minded. Through this they can be motivated to increase their production and along the way it could decrease their depth to the company.