A Comprehensive Economic Analysis of the Coffee Value Chain in Region X: Advancing Sustainability and Empowering Local Communities

This study examines the economic, structural, and sustainability dimensions of the coffee value chain in Region X (Northern Mindanao), focusing on Bukidnon and Misamis Oriental, emerging centers for Robusta and Arabica production in the Philippines. It highlights coffee's growing significance in the national agenda, as noted in the Philippine Coffee Industry Roadmap, and the rising interest among upland farmers in specialty coffee, value-added processing, and climate-resilient agricultural livelihoods. A mixed-methods design captured the value chain's multifaceted nature and the diverse experiences of industry actors. Quantitative data were collected from 150 coffee farmers through structured surveys, while qualitative insights came from key informant interviews and focus group discussions with cooperative leaders, traders, processors, and local government representatives. These primary data were supplemented by secondary data from the Philippine Statistics Authority (PSA), the Department of Agriculture, and studies from the Philippine Institute for Development Studies (PIDS). Porter's Value Chain Framework analyzed primary activities—input procurement, farm production, postharvest handling, processing, and marketing—and support functions like extension services, financing, training, infrastructure, and governance. Profitability assessments used standard farm-management indicators, specifically Return on Investment (ROI) and Return on Sales (ROS), to evaluate the economic viability of various coffee products. The findings show that value addition is crucial for farmer profitability. ROI significantly increases when producers engage in drying, hulling, and quality upgrading instead of selling cherries immediately after harvest. Profitability for fresh cherries ranged from 55–60 percent, while dried parchment and hulled beans generated ROI values of 85–95 percent. Arabica green beans had the highest overall profitability (ROI 95%, ROS 40%), demonstrating the premium potential of high-altitude Arabica from Bukidnon. Robusta, especially when processed into dried or hulled forms, also yielded competitive returns, underscoring its commercial relevance in Region X. However, economic gains are hindered by structural constraints, including limited access to certified seedlings, inconsistent drying infrastructure, inadequate mechanization, low cooperative participation, and trader-driven markets with limited transparency. SWOT and TOWS analyses reveal opportunities for upgrading, such as regional branding initiatives, digital traceability systems, farmer clustering, and cooperative consolidation. Risks remain, notably climate variability, aging trees, and price volatility in domestic and international markets. The study concludes that enhancing postharvest systems, strengthening extension and technical services, and establishing unified regional governance are vital for improving the competitiveness and sustainability of the Region X coffee value chain. These recommendations align with the Philippine Coffee Roadmap's goals of increasing productivity, quality, and long-term resilience across the sector. Comments to this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph.