Cost and return of investment in mango production

Mango production is a venture that involves test of patience. In general,takes about four to five years before mango growers can recover their investments and losses, and at least 15 years to fully enjoy higher return of investments.

The Bureau of Plant Industry-National Mango Research and Development Center (BPI-NMRDC) made a study on the estimated cost and return for one-hectare mango orchard, which is based on planting density of 100 trees.
For a Hectare

Table 1: Cost and Return for a Hectare of Mango Orchard

1)    Based on planting density of 100 trees per hectare with a spacing of 1om x 10m and with 70 percent of trees respond to induction (based on March 2003 prices)

2)    At p25.00.kg of fruit

3)    Production cost includes all operational expenses such as establishment and maintenance (includes prunign, weeding/cultivation, fertilization, irrigation, flower induction, fruit bagging, IPM and harvesting)

It can be observed that a mango grower spends around P25, 000 for the establishment of a one hectare mango orchard. In the second year, an average operational cost of P6, 400 to P7, 000 is incurred for the maintenance of the orchard. In the start of the fourth year, production inputs increased drastically due to the purchase of chemical sprayers (since the tree starts to bear fruits) that would be needed for induction activities. This sudden increase in production inputs recurs when the tree is 10 years or older, since materials such as sprayers have already depreciated and are needed to be changed.

Thus, such scenario explains that the farmer experiences yearly losses until the mango tree reaches its peak production at the age of 15 years onwards. However, when the tree reaches this age, the operational expenses incurred in the earlier years can be easily recovered.

Using the matrix of cost and return from the BPI-NMRDC, the return of investment (ROI) in the 15th year reaches as high as 110 %. This profit percentage continues to increase as the tree gets older.
The average ROI of mango grower can be derived using this formula:

Average ROI= 746,721.70 x 100% =110.31%


Young trees are not producing well because they tend to behave as “vegetative”. The high levels of ‘Gibberellic Acid’ (GA) in the system is responsible for this. The use of growth retardant such as ‘Paclobutrazol’ (Cultar) has been used to enhance early fruit production of young trees.

Table 2A: Cost Structure for the Establishment and Maintenance of One-Hectare Mango Farm (Luzon)

Source: Strategic Action Plan: mango, Department of AgricultureTable 2B: Cost Structure for the Establishment and Maintenance of One-Hectare Mango Farm (Guimaras)

Source: Strategic Action Plan: mango, Department of AgricultureTables 2A and 2B show the cost structure for the establishment of a one-hectare mango farm in Luzon and Guimaras. The distribution of operational cost as well as other maintenance services such as fruit bagging, IPM and harvesting are included here.

In particular, the tables indicate that regardless of location and age of trees, the cost of materials and chemicals comprise the bulk of total expenses, followed by labor, packaging materials and fixed costs (land rentals and depreciation expenses).

(Strategic action Plan Mango)