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Manila Bulletin devider Business devider Trade & Industry devider Northern Mindanao poised to brew coffee boom despite structural gaps, trader dominance

Northern Mindanao poised to brew coffee boom despite structural gaps, trader dominance

Published Mar 9, 2026 12:00 am  |  Updated Mar 7, 2026 02:00 pm
(Unsplash)
(Unsplash)

Northern Mindanao, also known as Region 10, holds immense potential as a sustainable coffee powerhouse, yet its growth is currently stifled by aging plantations and a market structure that leaves farmers with limited bargaining power, according to a policy note by state-run think tank Philippine Institute for Development Studies (PIDS).

The PIDS report, published on March 5, emphasized that improving production techniques and postharvest practices is essential for increasing farm income. Coffee growers currently face low productivity due to aging trees, limited access to quality seedlings, and poor postharvest handling that undermines bean quality.

The researchers stressed that investing in drying, fermentation, and proper handling can significantly raise value. They cited that while the return on investment (ROI) for fresh cherries is around 55 to 60 percent, processed products such as dried parchment and hulled beans yield much higher returns of 85 to 95 percent.

However, the report lamented that the dominance of traders limits farmers’ bargaining power. Many growers rely on intermediaries and accept trader-set prices, often due to a lack of alternative market linkages.

Limited branding, weak cooperatives, and inadequate market information further hinder access to specialty and premium markets. This fragmentation prevents smallholder farmers from capturing the higher margins available in the emerging specialty coffee sector, the report said.

Despite these challenges, PIDS’ policy note identified Northern Mindanao as a region with strong potential for sustainable growth, thanks to its favorable agroecological conditions, active local institutions, and a growing specialty coffee sector.

“Region 10 has strong agroecological conditions and an emerging specialty coffee reputation. However, structural gaps—such as uneven access to quality planting materials, limited postharvest infrastructure, weak market linkages, and fragmented institutional coordination—continue to constrain productivity, competitiveness, and overall sector development,” the authors pointed out.

To transform the sector, the policy note called for strategic investments in value addition, cooperative strengthening, climate-smart practices, and market linkages. Recommendations included establishing a science-based coffee seed system and accredited nurseries to address the lack of quality seedlings.

Systematic rejuvenation programs for aging Arabica and Robusta plantations were also advised, along with the development of municipal-level processing hubs equipped with dryers and cupping laboratories to maintain quality standards. Promoting regional branding and digital traceability was further highlighted as a means to help local farmers enter premium markets.

The report said that enhancing postharvest systems and establishing unified regional governance are vital for the long-term competitiveness of Region 10’s coffee value chain. By addressing these structural weaknesses, Northern Mindanao can position itself as a competitive and sustainable coffee producer, ensuring economic gains are shared more equitably with smallholder farmers, it added.

Titled “Strengthening the Coffee Value Chain in Northern Mindanao,” the PIDS policy note was authored by a team from Xavier University (XU) in Cagayan de Oro City, including Jerelyn B. Medalla, associate dean of XU’s College of Agriculture; Glenda T. Orlanes, coordinator of XU’s Agribusiness Program; as well as faculty members Ereca P. Ampoloquio and Precious Dane P. Tagas of XU’s Agricultural Sciences Department.

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