DEPARTMENT OF AGRICULTURE Corn Program

CORN INDUSTRY DEVELOPMENT ROADMAP 2011-2017

ASEC. EDILBERTO M. DE LUNA
National Corn Program Coordinator

LOCAL SCENARIO

IMPORTANCE OF CORN
Yellow corn is mainly used and traded as raw material for animal feeds (almost 70% of national corn annual produce) White corn serves as main food staple for about 15% of the total population (mostly in major islands of Visayas and Mindanao) Around 1.5 million farmers depend on corn production

ECONOMIC VALUE OF CORN, 2012

CURRENT PRICES INDUSTRY GROUP GVA in AGRICULTURE & FISHERY
A. AGRICULTURE Palay Corn Coconut Sugarcane Cassava Other Crops Livestock Poultry Activities & Services B. FISHERY

CONSTANT PRICES 2012

694.77 565 140.74 40.25 30.52 16.63 8.32 110.79 93.26 74.54 49.84 129.89

2012
1,253.39 1,060 279.53 82.07 86.89 28.96 16.31 217.79 152.98 112.61 83.09 193.16

% SHARE TO GVA
100 84.59 26.37 7.74 8.20 2.73 1.54 20.54 14.43 10.62 7.84 15.41

% SHARE TO GVA
100 81.31 24.91 7.13 5.40 2.94 1.47 19.61 16.51 13.19 8.82 18.69
Source: NSCB

Units in Billion Pesos except for percentages; Constant Prices based on 2000 Prices

Corn-livestock-poultry integrated industries contribute 32.79% of GVA to AF in 2012, at current prices. These sub-industries has a combined 2012 economic value of PhP347.66 Billion, at current prices.

CORN PRODUCTION PERFORMANCE, 2001-2012

8.00 7.00 6.00 5.00 4.53 5.24 7.41

Million MT

4.00 3.00 2.00 1.92 1.00 0.00 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2.17 2.61

AAGR

Combined 4.89%

White 1.35%

Yellow 7.13%

Source: BAS

CORN PRODUCTION BY REGION, 2012

1,800 1,809

1,600
1,400
VOLUME ('000 MT)

1,200 1,000 865

960

800
600 400 205 200 383 364

623

256

171

168

151

241

TOP 10 CORN PRODUCING RPOVINCES, 2012

YELLOW CORN WHITE CORN PROVINCE VOLUME (MT) % SHARE PROVINCE VOLUME (MT) % SHARE Isabela 1,183,123 23 Maguindanao 396,468 18 Bukidnon 780,267 15 Lanao del Sur 223,782 10 Cagayan 396,658 8 Lanao del Norte 205,799 10 South Cotabato 382,249 7 Zamboanga del Sur 120,078 6 North Cotabato 316,920 6 Cebu 90,122 4 Pangasinan 264,335 5 Sarangani 73,487 3 Sultan Kudarat 189,111 4 North Cotabato 68,558 3 Quirino 166,280 3 Bukidnon 65,247 3 Iloilo 145,273 3 Negros Oriental 64,323 3 Camarines Sur 126,638 2 South Cotabato 53,732 2

CORN AREA HARVESTED, 2001-2012

3.00 2.49 2.50 2.59

2.00
1.57
Million HA

1.50 1.00
0.92

1.31

1.28

0.50 0.00
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
AAGR

Combined 0.45%

White (1.54%)

Yellow 3.35%

Source: BAS

CORN AVERAGE YIELD, 2001-2012

4.50 4.00 3.50 3.00 2.83 2.86 4.09

2.50

MT/HA

2.00 1.50 1.00 0.50 0.00

1.82 1.65 1.23

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

AAGR

Combined 4.28%

White 2.86%

Yellow 3.48%

Source: BAS

CORN FARMGATE PRICES, 2001-2012

15.00
14.34

14.00
13.00 12.00
P/kg

12.62

11.00

10.00
9.00 8.00
6.84 6.50

7.00
6.00

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Yellow
Source: BAS

White

YELLOW CORN SUPPLY & DEMAND, 2001-2012

6,000 5,000
VOLUME ('000 MT)
5,198
5,241 3,725

4,000 3,000 2,000 1,000 -

2,607
913 172

1,645

86

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

YC Import

FW Import

Local Demand

Local Production
Source: BAS, LDC, PAFMI

CORN-FEED SUPPLY & DEMAND, 2013

ITEM
SUPPLY of Yellow Corn & Corn Substitutes Beginning Stock (includes cassava and feedwheat) Net Local Yellow Corn Available Local Yellow Corn Production Less: 9% Postharvest Losses Cassava Substitute (corn equivalent) DEMAND of Yellow Corn for Feeds ENDING STOCK of Yellow Corn & Corn Substitutes No. of months to last
Source: BAS, LDC

VOLUME ('000 MT) CORN CORN + CASSAVA

7,167 2,386 4,781 5,254 473 5,265 1,902 4.33 7,767 2,386 4,781 5,254 473 600 5,265 2,502 5.70

CONSTRAINTS AND OPPORTUNITIES for YELLOW CORN

CONSTRAINTS OPPORTUNITIES

RISING COST OF INPUTS Total production cost of

PhP35,182/Ha in 2012 as compared to PhP28,664/Ha in 2011 LIMITED POSTHARVEST FACILITIES 161 DA village-type dryers, 12 NABCOR CPHPTC, 3 NFA corn centers and 50 units from private sector as of 2012 with total annual rated capacity of 556,870 MT (10% of the total YC production)

TIGHT WORLD SUPPLY Corn for bio-fuel production

and adverse weather condition resulting in high world market prices (USD315/MT FOB or PhP12.92/kg in 2012 as compared to USD292/MT FOB or PhP12.56/kg in 2011) At least 4 million MT yellow corn is imported annually by ASEAN from US and the Americas

CONSTRAINTS

OPPORTUNITIES

NEGATIVE EFFECTS OF CLIMATE CHANGE Average of 18 typhoons every year from 2006 to 2011 and frequency of El Nino occurrence is during the first semester from 2002 to 2010 LOW QUALITY OF GRAIN DUE TO HIGH AFLATOXIN LEVEL Aflatoxin level of greater than 20ppb for food and 50ppb for feeds

INCREASING DOMESTIC DEMAND FOR CORN High growth rates of hog and poultry sectors will require greater corn supplies (average annual growth rates of 1% and 5%, respectively based on target demand 2012-2017) Emerging needs for food and industrial uses (e.g. starch production) AVAILABILITY OF HIGHYIELDING VARIETIES AND OPEN-POLLINATED VARIETIES Hybrid seed potential of 7-10 mt/ha; OPV seed potential of 45 mt/ha

CONSTRAINTS AND OPPORTUNITIES for WHITE CORN

CONSTRAINTS OPPORTUNITIES

Negative perception that corn grits are only for the poor Low productivity Requires special packaging of white corn grains and grits High cost of processing due to lack of post harvest facilities Inaccessibility of white corn grits in urban areas Climate change many areas in the Philippines are vulnerable to drought and flooding Increasing prices of inputs (e.g. fertilizer, seeds)

Increasing corn consumption will definitely contribute to the Food Staples Sufficiency Program Health food low glycemic index prevents diabetes and helps build stamina Availability of high-yielding open pollinated varieties Tight world supply and increasing price of rice

YELLOW CORN: COST & RETURN ANALYSIS, 2012

ITEM PRODUCTION Seeds Fertilizer Pesticide Labor Land Rental POST PRODUCTION Harvesting & Hauling Shelling Drying Sacks Interest TOTAL COST AVERAGE YIELD (KG/HA) FARMGATE PRICE GROSS INCOME NET INCOME NATIONAL COST COST (P/HA) (P/KG) 25,215 5.04 4,500 0.90 7,470 1.49 1,645 0.33 9,100 1.82 2,500 0.50 9,967 1.99 2,750 0.55 2,500 0.50 1,500 0.30 1,200 0.24 2,017 0.40 35,182 7.03 5,000 12.50 62,500 27,318 5.47 REGION 2 COST COST (P/HA) (P/KG) 29,580 3.70 7,980 1.00 9,960 1.25 9,120 2,520 11,460 2,880 3,000 1,800 1,440 2,340 41,040 7,000 87,500 46,460 1.14 0.32 1.43 0.36 0.38 0.23 0.18 0.29 5.13 12.50 7.37

WHITE CORN: COST & RETURN ANALYSIS, 2012

ITEM CASH COSTS Farm Inputs (Seeds, Fertilizer, Pesticide) Paid in Cash Hired Labor Others Paid in Cash NON-CASH COSTS Farm Inputs (Seeds, Fertilizer, Pesticide) Paid in Kind Hired Labor Paid in Kind Others Paid in Kind IMPUTED COSTS Farm Inputs (Seeds, Fertilizer, Pesticide) Labor Others TOTAL COSTS AVERAGE YIELD (KG/HA) FARMGATE PRICE GROSS RETURNS NET RETURNS NATIONAL COST COST (P/HA) (P/KG) 6,302 3.89 ARMM COST COST (P/HA) (P/KG) 7,124 2.85

2,561 1,836 1,905 2,097

1.58 1.13 1.18 1.29

2,746 705 3,673 4,136

1.10 0.28 1.47 1.65

235 297 1,565 8,873 62 6,701 2,110 17,272 1,620 22,243 4,971

0.15 0.18 0.97 5.48 0.04 4.14 1.30 10.66 13.73 3.07

514 1,265 2,357 11,266 2 9,717 1,547 22,526 2,503 35,242 12,716

0.21 0.51 0.94 4.50 0.00 3.88 0.62 9.00 14.08 5.08

PROGRAM DIRECTIONS

PROGRAM GOAL:
Increase production of quality corn for human consumption, feeds and industrial uses, as well as empower the farmers to increase their income, thereby improving their quality of life.

OBJECTIVES:
Attain self-sufficiency and/or surplus in corn by 2013 Increase corn production from 6.97 MMT in 2011 to 8.73 MMT in 2014 Increase yearly income per hectare of farmers

MAJOR STRATEGIES
A. ENHANCING PRODUCTION Increase area thru development of idle and new lands suitable for corn production and promote intercropping of corn to coconut and/or cassava Increase yield thru the use of quality planting materials and costreducing technologies or varietal shift from traditional and OPV to high yielding varieties

PRODUCTION TARGET
YEAR 2011 2012 2013 2014 2015 2016 2017 PRODUCTION ('000 MT) AREA ('000 HA) YIELD (MT/HA) Combined White Yellow Combined White Yellow Combined White Yellow 6,971 2,150 4,821 2,545 1,284 1,261 2.74 1.67 3.82 7,407 2,166 5,241 2,594 1,312 1,282 2.86 1.65 4.09 8,213 2,487 5,726 2,696 1,406 1,290 3.05 1.77 4.44 8,730 2,518 6,212 2,717 1,415 1,302 3.21 1.78 4.77 9,277 2,860 6,417 2,756 1,447 1,309 3.37 1.98 4.90 9,863 3,079 6,784 2,792 1,478 1,314 3.53 2.08 5.16 10,532 3,373 7,160 2,852 1,514 1,338 3.69 2.23 5.35

*2011-2012 Actual Data; 2013-2017 Target

B. REDUCING POSTHARVEST LOSSES Establish more PHFs and equipment in major corn producing areas to reduce losses Maintain premium quality corn grains and grits in accordance with the approved standards thru trainings and positioning of appropriate technologies

POSTHARVEST LOSS REDUCTION TARGET

PRODUCTION YEAR ('000 MT) 2011 2012 2013 2014 2015 2016 2017 6,971 7,407 8,213 8,729 9,277 9,863 10,533 PH LOSS SAVINGS NET AVAILABLE VOLUME % VOLUME VALUE ('000 CORN ('000 MT) % ('000 MT) DIFF ('000 MT) PHP) 15 1,046 5,925 12.7 941 6,466 2.3 170 2,129,513 9 739 7,474 3.7 304 3,798,513 7 611 8,118 2 175 2,182,250 6 557 8,720 1 93 1,159,625 5 493 9,370 1 99 1,232,875 4 421 10,112 1 105 1,316,625

Notes: 1. Value savings is based on constant price of Php12.5 per kilogram. 2. Net Available Corn is based on Annual Production less PH Loss Volume.

C. IMPROVING MARKET LINKAGES Facilitates marketing tie-ups and contract growing arrangements Provides timely price and market information Promote corn exportation

D. HUMAN RESOURCE DEVELOPMENT Empower the present and future farmers by developing their skills, knowledge and attitude thru trainings such as FFS, FSTP, etc. Organize and strengthen more cluster areas E. POLICY FORMULATION & ADVOCACY Identify the appropriate policies conducive to corn industry making it competitive over the long term

F. INFRASTRUCTURE SUPPORT Provide farm machineries and farm-to-market roads Install small irrigation systems in major strategic areas G. PROGRAM MANAGEMENT Facilitate linkages with policy-makers, field implementers, LGUs, private sectors and other stakeholders

OTHER STRATEGIES
Conduct R&D for yellow and white corn that include SSNM, IPM, CPAR and other researches Genetic conservation and utilization Product and by-product development and utilization Coordinate with lending institutions to provide guarantee to conduits, credit to farmers especially in new areas and insurance in highly vulnerable areas

SUFFICIENCY TEST
ITEM NET CROP AVAILABLE White Corn Yellow Corn Cassava (in Corn Equivalent) REQUIREMENT Food Feeds & Other Industrial Uses SURPLUS/DEFICIT Food Feeds & Other Industrial Uses SUFFICIENCY LEVEL Food Feeds & Other Industrial Uses 2011 6,541 1,877 4,098 566 6,730 1,564 5,166 (502) (502) 95% 100% 90% 2012 7,396 2,153 4,673 570 7,034 1,675 5,359 (116) (116) 99% 100% 98% VOLUME ('000 MT) 2013 2014 2015 8,553 9,434 10,244 2,463 2,642 2,865 5,171 5,613 5,959 919 1,179 1,420 7,250 7,480 7,744 1,748 1,824 1,904 5,502 5,656 5,840 588 1,136 1,539 588 1,136 105% 110% 100% 100% 111% 120% 1,539 113% 100% 126% 2016 11,234 3,101 6,425 1,708 8,016 1,987 6,029 2,104 2,104 117% 100% 135% 2017 12,241 3,419 6,855 1,967 8,293 2,085 6,208 2,614 2,614 121% 100% 142%

*2011-2012 Actual Data; 2013-2017 Target

INCOME & JOB TARGET

YEAR FARMERS INCOME* (PHP/HA) Combined White Yellow Combined 2011 36,088 20,010 55,053 45,000 2012 36,807 20,521 54,577 49,000 2013 40,840 22,865 61,633 102,000 2014 44,805 23,932 68,894 21,000 2015 48,813 27,645 73,614 39,000 2016 53,266 30,292 80,618 36,000 2017 57,913 33,690 86,902 60,000
*4% inflation rate on corn price every year; baseline data is sourced from BAS

JOB GENERATION (NO.) White 15,000 28,000 94,000 9,000 32,000 31,000 36,000 Yellow 30,000 21,000 8,000 12,000 7,000 5,000 24,000

PROGRAM BUDGET
ITEM GRAND TOTAL PRODUCTION SUPPORT IRRIGATION DEVELOPMENT POSTHARVEST DEVELOPMENT MARKETING DEVELOPMENT CREDIT FACILITATION EXTENSION SUPPORT RESEARCH & DEVELOPMENT REGULATORY INFORMATION SUPPORT POLICY FORMULATION CORN PROGRAM BUDGET (PHP'000) 2011 2012 2013 2014 483,642 950,739 1,524,302 1,796,965 302,500 380,022 605,217 881,481 3,660 12,810 15,050 15,400 338,610 527,986 556,285 5,105 5,105 14,839 14,824 136,312 19,380 2,000 10,185 4,500 170,127 28,380 2,000 9,185 4,500 287,418 49,115 8,050 8,040 8,587 279,490 49,485

PROGRAM IMPACT
Sufficiency and/or surplus in yellow corn Postharvest loss reduction Increased farmers income Price stability Job generation Net exporter of corn

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