ABSTRACT
The importation of rice and crops was widely perceived by local farmers in Santa Rita, Pampanga, as a major contributor to their economic status; however, the role of pricing strategies in this relationship remained underexplored. This study examined the effects of the importation of rice and crops on farmers' economic status, with particular attention to the use of cost-plus pricing and competitive pricing strategies.
A quantitative descriptive-correlational research design was used, with data collected from 244 local farmers and analyzed through Partial Least Squares-Structural Equation Modeling (PLS-SEM). Farmers perceived importation as intensifying price competition in local markets and reducing the farm-gate prices, which resulted in income instability and decreased motivation to remain in farming.
Most farmers did not apply or use cost-plus pricing, likely due to limited knowledge of cost accounting and financial management, while competitive pricing, often involving price matching or undercutting competitors, was commonly practiced and proved detrimental to their economic status. Importation had only a weak direct effect on farmers’ economic status, whereas competitive pricing exerted a significant negative impact on income and financial stability; cost-plus pricing showed no significant effect.
Additionally, importation did not influence the frequency of pricing strategy use, and neither strategy mediated the relationship between importation and farmers’ declining economic status. These findings suggested that other factors, such as trader-controlled farm-gate prices and limited market access, played a more substantial role.
The study emphasized the need for improved pricing support mechanisms, agricultural policies, enhanced financial literacy among farmers, strengthened agricultural cooperatives, and a reassessment of trade and tariff policies under the Rice Tariffication Law to protect local producers and strengthen the agricultural sector.
Keywords: Use of Pricing Strategies, Importation of Rice and Crops, Farmers’ Economic
Status
https://doi.org/10.65494/pinagpalapublishing.155
