Philippines Agriculture, Information about Agriculture in Philippines
The Philippines is still primarily an agricultural country despite the plan to make it an industrialized economy by 2000. Most citizens still live in rural areas and support themselves through agriculture. The country's agriculture sector is made up of 4 sub-sectors: farming, fisheries, livestock, and forestry (the latter 2 sectors are very small), which together employ 39.8 percent of the labor force and contribute 20 percent of GDP. The country's main agricultural crops are rice, corn, coconut, sugarcane, bananas, pineapple, coffee, mangoes, tobacco, and abaca (a banana-like plant). Secondary crops include peanut, cassava, camote (a type of rootcrop), garlic, onion, cabbage, eggplant, calamansi (a variety of lemon), rubber, and cotton. The year 1998 was a bad year for agriculture because of adverse weather conditions. Sector output shrank by 8.3 percent, but it posted growth t he following year. Yet, hog farming and commercial fishing posted declines in their gross revenues in 1999. The sector is burdened with low productivity for most of its crops. The Philippines exports its agricultural products around the world, including the United States, Japan, Europe, and ASEAN countries (members of the Association of Southeast Asian Nations). Major export products are coconut oil and other coconut products, fruits and vegetables, bananas, and prawns (a type of shrimp). Other exports include the Cavendish banana, Cayenne pineapple, tuna, seaweed, and carrageenan. The value of coconut-product exports amounted to US$989 million in 1995 but declined to US$569 million by 2000. Imported agricultural products include unmilled wheat and meslin, oilcake and other soybean residues, malt and malt flour, urea, flour, meals and pellets of fish, soybeans and whey. One of the most pressing concerns of the agricultural sector is the rampant conversion of agricultural land into golf courses, residential subdivisions, and industrial parks or resorts. In 1993 the nation was losing irrigated rice lands at a rate of 2,300 hectares per year. Small land-holders find it more profitable to sell their land to developers in exchange for cash, especially since they lack capital for seeds, fertilizers, pesticides, and wages for hiring workers to plant and harvest the crops. Another concern is farmers' continued reliance on chemicalbased fertilizers or pesticides that have destroyed soil productivity over time. In recent years however, farmers have been slowly turning to organic fertilizer, or at least to a combination of chemical and organic inputs. Environmental damage is another major concern. Coral-reef destruction, pollution of coastal and marine resources, mangrove forest destruction, and siltation (the clogging of bodies of water with silt deposits) are significant problems. The agriculture sector has not received adequate resources for the funding of critical programs or projects, such as the construction of efficient irrigation systems. According to the World Bank, the share of irrigated crop land in the Philippines averaged only about 19.5 percent in the mid-1990s, compared with 37.5 percent for China, 24.8 percent for Thailand, and 30.8 percent for Vietnam.
In the late 1990s, the government attempted to modernize the agriculture sector with the Medium Term Agricultural Development Plan and the Agricultural Fisheries Modernization Act. The fisheries sector is divided into 3 sub-sectors: commercial, municipal, and aquaculture (cultivation of the natural produce of bodies of water). In 1995, the Philippines contributed 2.2 million tons, or 2 percent of total world catch, ranking it twelfth among the top 80 fish-producing countries. In the same year, the country also earned the distinction of being the fourth biggest producer of seaweed and ninth biggest producer of world aquaculture products. In 1999 the fisheries sector contributed P80.4 billion at current prices, or 16 percent of gross value added in agriculture. Total production in 1999 reached 2.7 million tons. Aquaculture contributed the most, with 949,000 tons, followed closely by commercial fishing with 948,000 tons, and municipal fisheries with 910,000 tons. Domestic demand for fish is substantial, with average yearly fish consumption at 36kg per person compared to a 12kg figure for consumption of meat and other food products. http://www.nationsencyclopedia.com/economies/Asia-and-the-Pacific/PhilippinesAGRICULTURE.html#ixzz0f6nimkfD Agriculture exports seen to grow by 18%
By Riza T. Olchondra Philippine Daily Inquirer First Posted 22:22:00 07/29/2009 Filed Under: Food Food,, Agriculture TOTAL AGRICULTURAL exports from the Philippines are expected to reach $4.5 billion this year, representing an 18-percent increase over the previous year’s level, according to an official of the Department of Agriculture. Assistant Secretary Salvador Salacup said on the second day of the Food Industry Summit 2009 that the fresh produce would still be the main growth driver for 2009. The Philippines exported $3.8 billion worth of agricultural products in 2008. He said that the top agriculture exports exports will be mangoes, bananas, coconut, pineapple, seaweeds and mariculture. Okra, Salacup said, will be among the top export earners since the Japanese market has lifted restrictions on Philippine shipments. This could make okra exports rebound to anywhere from 2,500 tons to 3,000 tons in 2009 from 1,425 tons in 2008. According to the Philippine Okra Producers and Exporters Association, okra sales to Japan—the largest market for okra worldwide—dropped to 1,425 tons in 2008 from 2,500 tons in 2006 and 1,600 tons in 2007. The group said this was caused by 17 cases of chemical residue detection in Philippine okra. Processed food will also be a good earner since these products command higher prices compared to fresh food.
In the case of okra, for example, vacuum-fried version of this vegetable can be marketed outside Japan to expand sales prospects. The European Union and the United States are being targeted as potential markets Economic Performance. In 2008, the country’s Gross National Product (GNP) grew by 6.17
percent. In terms of Gross Domestic Product (GDP), the economy registered a 3.84 percent expansion. Agriculture and fishery sector, which contributed 18 percent to the GDP, posted a 3.23 percent growth. Employment and Wages. There were 34.09 million employed persons in 2008. This translated to an
employment rate of 92.6 percent. About 12.03 million persons were employed in the agriculture sector and they represented 35 percent of the country’s employment. In nominal terms, the average wage rate received by palay farm workers in the first half of 2008 was P 209.03 per day while corn farm workers were paid P 170.31 per day. Agricultural Support Services. The 2008 government expenditures for the agriculture sector stood
at P 43.03 billion, lower by 28.34 percent from the previous year’s record. Agricultural loans in 2008 reached P 419.89 billion, up by 20.19 percent from the 2007 level. About 46 percent of these loans were granted for production purposes. The proportion of the irrigated service area to total potential irrigable area increased to 48.62 percent in 2008. This was 46 percent in the previous years. Production Performance. Production of palay in 2008 was up by 3.54 percent while corn
production grew by 2.84 percent. Coconut and sugarcane recovered from previous year’s slump and recorded output gains of 3.14 percent and 19.64 percent, respectively. Other major growth contributors were banana and pineapple. Production Production increases were posted by carabao at 2.53 percent, cattle at 0.97 percent and goat at 1.91 percent. Hog production declined by 1.60 percent. Chicken and chicken egg production expanded by 5.76 percent and 4.68 percent, respectively. There were output reductions of 7.65 percent for duck and 9.66 percent for duck eggs. Commercial and municipal fisheries posted more than 2.0 percent increment each in production. Aquaculture recorded an 8.71 percent increase in output. Prices. On the average, prices received by farmers for their produce increased by 17.46 percent in
2008 from previous year’s levels. Prices of cereals were up by 21.50 percent. Specifically, Specifically, the price gain in palay was 25.23 percent while it was 22.13 percent for white corn and 5.17 percent for yellow corn. Vegetables and legumes registered the highest price increments which averaged 44.40 percent. Poultry products indicated 4.86 percent growth in prices. On the other hand, prices paid by consumers for food, beverages and tobacco items went up by 12.90 percent in 2008 Agricultural trade. The country recorded agricultural export earnings of US$ 3,889.30 million in
2008. This was 22.77 percent higher than the previous year’s level. Coconut oil and fresh banana remained the country’s top agricultural exports with a combined share of 37.18 percent. Most of the shipments of coconut oil went to the United States of America and the Netherlands. France and Japan were the major destinations of fresh bananas. Agricultural imports valued at US$ 7,684.74 billion in 2008, up by 56.25 percent from the 2007 expenditures. Rice remained as the leading import item in 2008 followed by wheat and meslin. The major suppliers of rice were Vietnam and Thailand while the bulk of wheat and meslin originated from United States of America.
Source: http://www.bas.gov.ph/agri_dev.php
Agriculture in the Philippines THE PHILIPPINES, ONE OF THE LARGEST islandgroups in the world with 7,100 islands and islets, is strategically located within the area of nations that sweeps southeast from Mainland Asia across the equator to Australia.
Its boundaries are formed by three large bodies of water: on the west and north by the South China Sea; on the east by the Pacific Ocean; and on the south by the Celebes Sea and coastal waters of Borneo. The total land area of the Philippines is 300 thousand square kilometers or 30 million hectares. It constitutes two percent of the total land area of the world and ranks 57th among the 146 countries of the world in terms of physical size. The Philippines advocates the archipelago doctrine, as such it gains exclusive to all resources living or non-living in and at the bottom of an area of about 276,000 square nautical miles. 1. The Philippi Philippines nes is divided divided into into three three major island island groups: groups: 2. Luzon, Luzon, with an an area of of 141 thousan thousand d square square kilometers kilometers;; 3. Mindanao, Mindanao, with with an area of of 102 thousand thousand square square kilomete kilometers; rs; and 4. Visayas, with an area of 57 thousand square kilometers. Land Area
The Philippines is an agricultural country with a land area of 30 million hectares, 47% of which is agricultural land. In the Philippines, prime agricultural lands are located around the main urban and high population density areas. Land resources in the country are generally classified into forest lands and alienable and disposable lands. A total of 15.8 million hectares were classified into forest lands, and 14.2 million hectares are alienable and disposable lands. Out of the 14.2 million hectares alienable and disposable lands, 93% or 13 million hectares are classified as agricultural lands. Land Distribution
The total area devoted to agricultural crops is 13 million hectares. This is distributed among food grains, food crops and non-food crops. Food grains occupied 31% (4.01 million hectares), food crops utilized 52% (8.33 million hectares) while 17% (2.2 million hectares) were used for non-food crops. For food grains, the average area utilized by corn was 3.34 million while rice occupied 3.31 million hectares. Of the total area under food crops, coconut accounted for the biggest average harvest area of 4.25 million hectares.
Sugarcane with 673 thousand hectares; Industrial crops with 591 thousand hectares; 148 thousand hectares for fruits; 270 thousand hectares for vegetables and rootcrops; 404 thousand hectares for pasture and 133 hectares for cutflower. According to land capability, 78.31% of the t he alienable and disposable land are prime agricultural areas, 6.1 million hectares are highly suitable for cultivation. Farm System/Structure
Philippine agriculture is characterized by a mixture of small, medium and large farms. Majority of the farms in the country are all small farms averaging about 2 hectares. These are simple farms which are owned and managed by single families ranging from subsistence to commercial production. Farming is generally undertaken on small farms. Two-thirds of all farms in 1988 were no larger than three hectares. Eighty-five percent of all farms were no more than five hectares. Over a period of ten years ye ars ending in 1996, the proportion of small farms had been bee n expanding. The Philippine Agrarian Reform Council Secretariat reported that the government had acquired and distributed about 4.1 million hectares of agricultural lands to agrarian reform beneficiaries. Under this Program implementing the comprehensive agrarian reform law, a farm household cannot own a farm larger than five hectares. A typical farming system consists of a major crops, with rice, corn and coconut as common base crops, and a few heads of livestock and poultry. Rice, corn, coconut and many crops are principally produced by small farms. Prior to CARP, there were large plantations in rubber, coffee, oil palm, cacao, banana, pineapple, etc. Contract growing schemes operate in corn seeds, banana, tomato, cucumber, oil palm, asparagus and broiler chicken. Agriculture in the Economy
Philippine agriculture plays a vital role in the economy. This attaches the high priority of transforming agriculture into a modern, dynamic and competitive sector. A sustained expansion of the national economy requires sustained growth in the agricultural sector. Agriculture including forestry and fishery, plays a dominant role in the Philippine economy. The country’s population is predominantly rural (70 percent of the total) and two-thirds of this population depends on farming for their livelihood. In terms of employment, about one-half of the labor force is engaged in agricultural activities. Primarily, Philippine agriculture consisted of rice, corn, coconut, sugar, banana, livestock, poultry, other crops and fishery production activities. The sector’s contribution to the economy has been substantial 23% of gross domestic product in 1995. It registered a growth rate of 3.2%. The growth was mainly due to the expansion of the poultry, livestock, and palay subsectors. General Performance of Agriculture
Over the past six decades, the agricultural sector was confronted by both internal and external bottlenecks that constrained its performance and growth.
Despite the sector’s desire to implement reforms to increase productivity, efficiency, competitiveness, market adaptability, and sustainability of agri-based industries, these reforms were hampered by inadequate resources, limited implementing capabilities of national and local government units ( LGUs), and weak coordination among implementing agencies. In addition, the occasional occurrences of natural disasters (e.g., El Niño phenomenon and La Niña phenomena) and international market crisis (e.g., 1997 financial crisis) exacerbated the real growth of the sector, resulting res ulting to contraction in output as observed in 1998. From 1993 to 2004, agriculture, fisheries, and forestry hardly grew on the average by 2.6% (Fig. 1). Real growth in agriculture of 1% in the Philippines from 1980 to 1990 lagged behind the world average and middle-income country average of 2.8% and 3.5%, respectively. Neighboring Asian countries such as China, Vietnam, and Thailand posted very high growth rates during the period. From 1990 to1997, the Philippines improved its real agricultural growth rate to 1.9%, but this is still considerably lower than middle-income countries in Asia. However, during the 1998-2003 period, Philippine agricultural growth was comparable to Thailand and Vietnam. GATT-WTO Ratification
In December 1994, the Philippine Congress ratified the Philippine accession to the Uruguay Round General Agreement on Tariff and Trade under the World Trade Organization (GATT-WTO). Specifically, under the GATT-WTO, and other external agreements congruent to WTO, the Philippines was committed to the following: 1. Removal Removal of Quantitativ Quantitative e Restrictions Restrictions (QRs) (QRs) and Conversio Conversion n of QRs into their Tariff Equivalents. 2. Reduction Reduction of Tariffs Tariffs on Agricultur Agricultural al Products. Products. Developing Developing countries countries to reduce average tariffs by 24% with a minimum 10% cut per tariff lines from 1995 to 2004. 3. Reduction of Production Subsidies. For developing countries, reduction of trade distorting domestic subsidies by 13% from 1995 to 2004. However, under the “de minimis” principle of the agreement, no reductions are required if the domestic support is no more than 10%.
4. Minimum Minimum Access Access Volume Volume (MAV). The allowin allowing g of annual import imports s at a lower tariff of volumes equivalent to 3% of 1986-1988 consumption for 1995, increasing to 5% of 1986-1988 consumption by 2004. 5. Tariff Tariff Bindings. Bindings. Countries Countries will will bind tariff tariff rates at levels levels beyond beyond which which no further increases will be imposed. 6. Prohibitio Prohibition n of Additional Additional Non-Tariff Non-Tariff Measures. Measures. No new non-tariff non-tariff measures, measures, such as import licensing, variable import levies, import quotas, and import bans may be imposed. 7. Plant Variety Variety Registratio Registration n and Protection. Protection. Interventio Intervention n and ownership ownership of biological products such as plant and microorganisms should be protected under patent or the sui generis system or both.
To cushion the impact of trade reforms under GATT-WTO, the Philippine government committed safety net measures to neutralize temporary adjustments and dislocations in the sector and to enhance farmer’s competitiveness. Some of these internal commitments of the Philippine Government include: 1. Tariff Tariff Reduction Reduction on Inputs. For For those inputs inputs directly directly used for agricultur agricultural al modernization, the tariff rates were reduced to zero. 2. Trade Remedies. Remedies. These These are measures measures that that provide provide industries industries relief relief from import surges, declining import prices and/or dumping. 3. Reforms Reforms in the VAT for for Agricultura Agriculturall Processors. Processors. Exemption Exemptions s from the value-added tax (VAT) of food and non-food agricultural products and marine commodities. 4. Budgetary Budgetary Support Support in Agricultu Agriculture. re. Under Under the Uruguay Uruguay Action Action Plan of DA, the budget support for agriculture from 1995 to1998 was estimated at P72.9B. Fifty-eight percent of this should have come from DA-GAA and the rest from DAR, DPWH-GAA, Asset Privatization Thrust (APT), Minimum Access Proceeds, Savings and Reserves. Global Competitiveness of Agricultural Products
A recent study which covered majority of the strategic agricultural commodities of the Philippines indicated that most agricultural products are globally competitive as import substitutes. Among its crop commodities, coconut oil, palm oil, cavendish banana, banana chips, coffee beans, mango, pineapple, durian and mangosteen, onion (seasonal), abaca, cacao, and rubber are exportcompetitive crops. Except raw sugar and garlic, other crops (rice, yellow corn, potato, cassava, vegetables, tomato and cutflowers are competitive as import substitutes. The competitiveness factor include, among others, productivity, border prices, costs of production, quality, and volumes, especially for exports. For livestock and poultry products, processed meats for pork and chicken have export potentials. Dairy has no competitiveness both as import substitute and as export, while most of the products are competitive as import substitutes in fresh meat form. A major competitiveness factor for swine and beef export is the quality (i.e., the Philippines is not an FMD-free zone and thus will have difficulty in being accepted as suppliers of these meat products). High feed costs, due in part to the high cost of producing domestic corn, are major concerns among livestock and poultry growers. For fisheries products, carageenan, seaweeds, prawns, tuna, and deboned milkfish are export winners. Likewise, tilapia is also emerging as competitive product in the export market. The major competitiveness factors include productivity, high feed costs, distance on international waters, and pest and diseases. Summary
The performance of Philippine agriculture relative to its Asian counterparts in the 1980s was low due in part to external and internal bottlenecks. However,
during the 2000s, the growth of the sector was at par with most of the agricultural economies of Asia. Although Philippines is basically a smallhold agriculture, Philippine exports in banana, pineapple, and papaya are international benchmarks in global trade. The sector has also competitive advantage in the export of fishery products, banana chips, coconut oil, sugar, and abaca. A most notable development in the agriculture sector over the past 15 years was its sectoral transformation into agro-industrial services. From 1990 to 2003, the GDP share of agriculture dropped from 21 to 14%, while services increased from 43 to 53%, and industry from 32 to 34%, respectively. The 14% GDP share of Philippine agriculture in 2003 pales in comparison with Malaysia and Thailand of 9% each, and South Korea at 4%. It is envisioned, however, that enhancing agro-industrial development will further accelerate Philippine agriculture’s sectoral transformation. Sources: •
•
Department of Agriculture (DA), Philippines (http://www.da.gov.ph) Philippine Council for Agriculture, Forestry and Natural Resources Research and Development (PCARRD), Department of Science and Technology (DOST) (http://www.pcarrd.dost.gov.ph)