Assessment of the Economic Effect of Value-Adding Activities in the Production and Marketing System of Salt in Ilocos Norte, Philippines: The Case of Pagnasahan Norte Agas Asin Association

The study is an attempt to determine whether the adoption of iodization and proper packaging of salt will improve not only the production and marketing system but also the income of the salt producers in Ilocos Norte. It used the unprocessed secondary data of the DAAE-UPLB CHED-funded project entitled “Value Chain Upgrading and Capacity Building for Salt Supply Chain Actors and Business Model Development for Village-Level Processors in the Philippines” to assess the economic effect of iodization and packaging in the production and marketing system of salt among the 16 active producer-members of the Pagnasahan Norte Agas Asin Association in Badoc, Ilocos Norte. They were grouped into Non-Adopters and Adopters to determine the difference in their contribution income statement from performing the two value-adding practices. The contribution income statements of the two groups were also subjected to cost volume profit and partial budget analyses and Fisher’s Exact Test to verify the socio-economic impact of their value-adding practices. Results revealed that the Adopters have higher net operating income and operating profit margin than Non-adopters. It was also found that if Non-adopters were to perform iodization and packaging practices, the increase in their net income would be more than enough to cover the corresponding increase in their expenses. This was further strengthened by Fisher’s exact test result which verified that the adoption of iodization and packaging indeed increased the income of the salt producers. These results can be used to encourage non-practicing salt producers to adopt iodization and packaging.