Cost and Price Competitiveness of Soybean Production in Isabela, Philippines


Jessa Danica Villa L. Agcopra and Ma. Eden S. Piadozo


The study was conducted to determine whether local soybean production can replace importation through cost and price competitiveness analysis. A complete enumeration of the 58 farmers with harvested soybean for crop year 2015 was done in the Municipality of Burgos and Ilagan City in Isabela province. The soybean farmers are engaged in either organic or conventional production practices. This is in line with the current program of the government to increase the production of organic soybeans through the Soybean Development Program of the Department of Agriculture-Bureau of Agricultural Research. The result of the study reveals that the province of Isabela cannot be a major producer of soybean in the immediate short run since domestically producing soybeans would incur higher costs to society. The Resource Cost Ratio (RCR) in producing soybean for both the conventional and organic practices are 6.00 and 3.26, respectively, under comparative advantage; and 4.60 and 2.22, respectively, under competitive advantage. Under both scenarios, organic farming involves higher production costs than conventional farming due to higher labor cost. Further, comparing the import parity price vis-à-vis the domestic wholesale price, the computed ratio is 0.75 indicating the lack of competitiveness of Isabela province to domestically produce soybean. As a result, the Philippines has to continue importing soybean to meet the demand of the feed and food industries which utilize soybean in producing various commodities.

Cost and Price Competitiveness of Soybean Production in Isabela, Philippines