Prepared: Mark C Ratilla (UCO:440120)


AGRICULTURE IN THE PHILIPPINES



Geography

            The Republic of the Philippines is located in Southeastern Asia, an archipelago between
the Philippine Sea and the West Philippine Sea and East of Vietnam. It consists of 7,107 islands
that are categorized into three main geographical divisions: Luzon, Visayas, and Mindanao. Its
total land area is around 300,000 square kilometers by which 99% percent constitutes land and the
remaining 1% is water. From this, the estimated total land area devoted to agriculture reached
9.671 million hectares or 32% from the country’s total land area. Of this, 51% and 44% were arable
and permanent croplands, respectively.

                           Figure 1. Geographical Map of the Philippines


Agriculture in the Economy

According to World Bank Statistics (2013), the country’s GDP reached $291.799 billion and ranked
39^th among all other economies of countries throughout world. In terms of percentage share to the
country’s nominal GDP, services sector accounted more than half of the country’s GDP at 56% and was
followed by the industrial sector at 30% and lastly the agricultural sector at only 14%.

                        Figure 2. Percentage Contribution to GDP, by Sector

Several decades ago, the Philippine economy and employment was used to be dependent to its
agricultural sector. However, this continues to decline up to present due to the government’s plan
to industrialize the country as well as the reason that the population becomes less dependent on
farming. As a result, the country’s agriculture sector’s importance has continuously dropped over
the past decades from 29.7 percent in1946 to 14 percent in 2013 in terms of percentage share to the
country’s GDP.

There are 4 sub-sectors that made up the whole agricultural sector of the country:1)  crop farming,
2) fisheries, 3) livestock, and 4) forestry. The size of the activity ranges from small (backyard)
activity for farmers’ subsistence to large (commercial) scale with focus on exports.  Crop farming
activities contribute around 50% of the share of agriculture in GDP. Meanwhile, other sectors
contribute the following: 13% in livestock, 11% in poultry, 19% in fishery and 7% for other
agricultural activities and services.


Production

Major farming activities in the country mainly include rice (21%) and corn production (6%). Rice
production reached 18.44 million metric tons in 2013, 2.26 percent in the previous year. Meanwhile,
corn production decreased to 7.38 million metric tons, 0.40 percent lower than the former year.
Output declines were also noted for other major crops such as coconut, sugarcane, banana, coffee,
abaca and calamansi. This decline was brought about by undesirable climatic conditions as well as
the devastations of typhoons (e.g. Typhoon Bopha and Haiyan) in crop producing areas. Overall, the
crops subsector failed to record output increment during the year. However, production in the
livestock subsector showed improvement than the previous year. Hog and cattle production rose by
1.95 percent and 1.76 percent, respectively. Dairy had a 5.58 percent output gain. The poultry
subsector came up with a 4.29 percent growth in production. All poultry components posted output
increments. Chicken had the biggest expansion at 5.11 percent. The fisheries subsector recovered
from the previous year's decline with a 1.24 percent increase in production in 2013. In totality,
output increased by 1.76 percent.

                           Figure 3. Rice and Corn Volume of Production

Figure 4. Top Export Commodities Volume of Production


Agricultural Employment

            Based on records, the country had a total of 38.12 million employed people in 2013.
From this, around 31% (11.84 million persons) were employed in the agricultural sector which was
1.93% lower than year 2011. In terms of nominal wage rates, farm workers were paid PhP 231.28 per
day or per 8-hours of work.


External Trade

            The total value of the country’s exports was US$ 6,318 million f.o.b. (25.42% higher
than previous years), approximately 12% of the country’s total exports in 2013. The significant
drop in 2012 were brought about by continued scarcity of supply of essential raw materials which
are vital inputs for crop production and reduced crop productivity showing yields below global
average. Despite these, coconut oil and fresh banana remained as top earners with a combined share
of 30 percent in the total value of agricultural exports. Major markets for coconut oil were the
United States of America and the Netherlands and for fresh banana, Japan and China. Meanwhile, tuna
and pineapples constitute 18% share in the country’s total value of agricultural exports. Tuna
products were mainly exported to USA and Germany while the markets of pineapples include USA and
Japan.

On the other hand, expenditures on agricultural imports dropped by 4.49 percent. Wheat and meslin,
soyabean oil/cake meal, and milk and cream and products, together, comprised 30 percent of the
country's total value of agricultural imports. The United States of America was the leading
supplier of wheat and meslin and soyabean oil/cake meal. New Zealand and USA were the primary
sources of milk and cream and products. The country sustained agricultural trade deficit in 2013.
Deficits were noted in the country's trade with Australia, USA and ASEAN countries.


                           Figure 5. Total Value of Exports and Imports

Prices

On the average, farmers gained 2.18 percent from the prices they received for their produce in
2013. Meanwhile, prices for agricultural commodities have increased compared to the previous year.
As an example, the price for cereals which include rice and corn rose by an average of 3.17
percent. Likewise, prices for crops and tubers, as well as fruits also increased. Poultry and
livestock products posted the biggest price gains at 12.86 percent and 7.48 percent, respectively.
Prices of fishery products went up by 1.03 percent. On the other hand, price cuts were registered
for commercial crops at 4.62 percent and vegetables and legumes at 0.25 percent.  Meanwhile, prices
paid by consumers for food and non-alcoholic beverages were up by an average of 2.79 percent in
2013.

In totality, inflation rates were 3.0 percent for all items and 2.8 percent for food and
non-alcoholic beverages in 2013. Producer price index in agriculture and consumer price index were
140.9% and 133.9%, respectively.

                           Figure 6. Annual Inflation Rates (All Items)

Agricultural Support Services

From the total national expenditure, around 5.54 % was accounted for agricultural expenditure. In
2013, the government expenditures for the agriculture sector amounted to P111.14 billion, higher by
26.03 percent from the 2012 record. This amount was mainly spent for irrigation facilities, farm to
market roads, post-harvest facilities, agriculture and fisheries modernization and many others. The
government has also sought to improve access to agricultural loans through the Agricultural Credit
Policy Council (ACPC) Agricultural production loan, a mechanism that helps farmer finance their
inputs to the process of production.

However, governance is still a huge block to attain significant progress in the Philippine
agricultural sector. The ineffectiveness of the bureaucracy that is tasked with implementing
agricultural development initiatives are among the major concerns. Analysts have pointed out that
these implementing institutions are having difficulties on the following: over-centralization,
politicization of the bureaucracy, lack of clear organizational framework, fragmentation/weak
coordination, weak technical and managerial capability, unclear communication lines, unstable
budget and corruption.


References


Albert, J. R. (2013). How Important is Agriculture in the Economy? . Retrieved from National
Statistical Coordination Board Website:
http://www.nscb.gov.ph/beyondthenumbers/2013/04122013_jrga_agri.asp

Bureau of Agricultural Statistics. (2013). Overview of Philippine Agriculture. Retrieved from
CountrySTAT Philippines Website: http://countrystat.bas.gov.ph/?cont=9

Bureau of Agricultural Statistics. (2013). Philippine Agriculture In Figures. Retrieved from
Philippine Statistics Authority Website: http://countrystat.bas.gov.ph/?cont=3

Central Intelligence Agency. (2013). The World Fact Book: Philippines. Retrieved from Central
Intelligence Agency Website:
https://www.cia.gov/library/publications/the-world-factbook/geos/rp.html#Econ