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DRAFT

Research on Food Production


By Val Vibal

I. Current state of Philippine food crop production

A Macro Picture

The Philippine agriculture remains to suffer from laggard growth rate as compared
to its Asian neighbors. The promise accelerated growth of the sector since its
deregulation in the early 80’s and its liberalization and ascension to the WTO in the
90’s failed to produce its intended results. Agricultural growth has been erratic in
the past two decades characterize with periodic upward and downward movement
since its plunge in the early part of 1980s.

Agricultural production in 1981 – 1985 plunge from a negative output growth after
experiencing high growth rate in the 1970s as the government remove its support
to agriculture as part of its Structural Adjustment Program (SAP) in exchange for its
financial loans from WB and IMF.

It was only after 1986 that agriculture was able to recover from its negative rate.
From 1986 – 1990 agriculture experience an average gross value growth of 3.2%
then plunged again to 2% and 1.9% from 1991 – 95 and 1996 – 2000 respectively.
In 2001, agriculture again picked up and gained a 3.6% gross value growth rate
from 2001 – 2005.

The year 2007 witness its biggest growth rate of 5.1%, the highest growth rate in
past 2 decades equaling the growth rate of the early 80s. However, it still fail to
reach the golden year average of the1970’s of 6.2%. Last year’s production output
has even surpassed and almost doubled the annual average growth rate for 2001 –
2005 of 3.6%. It is the highest agricultural production growth rate ever recorded in
the country in the period of liberalized agricultural environment. (See Table 1)

Table 1. Compounded Gross Value added for Agriculture (1971 – 2007)

Year Period Gross Value Growth


Rate (%)
1971 – 75* 6.2
1976 – 80* 5.1
1981 – 85* 0.1
1986 – 90* 3.2
1991 – 95* 2.0
1996 – 00* 1.9
2001 – 05* 3.6
2006 3.8
2007 5.1
* Compounded Annual Growth Rate

Agricultural production in the country is divided into three main sub-groups.


Primary of this sub-group is agricultural crops sector that is further segregated

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between cereal crops and other agricultural crops like fruits, vegetables and cash
crops. The other main sub-groups are the livestocks and poultry sector and the
fishery sector. (See Table 2)

Agricultural crops take the lead in the growth in value of agricultural production
both in current and constant prices, with an average value of 338,310,265 million
pesos and 131,584,815 million pesos respectively. It is followed by the fishery
sector and livestock in contribution of agricultural value respectively.

Fishery is the second biggest contributor in agricultural production with an average


value of production of 95M pesos from 1990 – 2005. In 2007, fishery value
amounted to 180.5 M or double the average value of 1990 – 2005. Livestock and
poultry runs third and fourth respectively in terms of its contribution to agriculture.
Both are considered one of the robust sectors of agriculture with livestocks having
an average value contribution of 90.35M in 1990 -2005 while poultry contributing
an average of 83.4M.

Overall, the value of agriculture production for the past 3 decades have been
steadily increasing although in a slow pace with an average growth rate of 2.5%.
Such lingering growth of agriculture reflects the sad state of the country’s
agriculture despite being a known agricultural country.

Table 2 Value of Production in Agriculture by Type of Valuation, Sub-sector and Year


1990 1995 2000 2005 2006 2007
Agricultural
153,925.09 227,178.88 272,863.73 408,696.78 456,748.55 510,448.56
crops
Current Livestock 38,844.87 67,179.11 100,756.72 154,618.32 155,372.76 163,082.51
Prices Poultry 28,560.53 48,263.61 75,232.55 106,298.80 110,174.26 118,247.79
Fishery 52,177.15 83,084.13 98,619.49 146,392.95 163,374.38 180,545.13
Total 273,507.64 425,705.73 547,472.49 816,006.85 885,669.96 972,323.99
Agricultural
114,669.57 122,864.52 120,248.54 137,305.08 143,298.83 151,122.35
crops
Constant Livestock 23,960.35 28,244.96 35,156.39 39,383.03 40,318.66 41,294.31
Prices Poultry 21,658.30 28,466.53 36,628.43 44,607.97 44,443.42 44,540.93
Fishery 41,349.78 46,473.53 50,284.83 71,285.02 75,757.53 80,907.13
Total 201,638.00 226,049.54 242,318.19 292,581.10 303,818.44 317,864.71
Latest update: 2008-05-22 10:50
Source: Bureau of Agricultural Statistics (BAS)
Ph Unit: [million pesos]
Reference time: 1988-2007
Base time: 1985

Although, agricultural production experience a steady but slow-pace increment


since its almost negative growth in the late 80’s. Its contribution to domestic
production still remain a dismal third among the main sectors of the economy.

In terms of GDP contribution, Its average percentage share in the domestic


production continuous to decline. From a high GDP contribution of 30.4% in the
1970’s, its contribution steadily declines from 23% in the early years of the 1990s
and further erodes to 20.2% of the domestic production in 2001 – 2005. Worst the

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past 2 years saw it slide to its share of 14.2% and 18.2% in 2006 and 2007
respectively.(see table 3).

Table 3. Philippines GDP percentage share by major sector, 1971 – 2005

Period Agriculture Industry Service


1971 – 75 30.4 34.2 35.4
1976 – 80 27.4 37.4 35.2
1981 – 85 24.0 38.2 37.8
1986 – 90 23.4 34.7 41.9
1991 – 95 22.5 32.7 44.8
1996 – 00 20.2 35.4 44.6
2001 – 05 20.2 33.2 46.6
2006 14.2
2007 18.26
Source: Based on GDP data at constant 1985 price from NSCB

The situation pictures the declining trend in agricultural development for over 3
decades. Since the country’s shift from the policy of full government support to
agricultural deregulation and liberalization, agriculture suffered on the contrary
from slow growth and low productivity rather than further “competitiveness and
productivity” as can be seen from its decline in contribution to the economy.

Even the period under the Arroyo regime (2001 – 2005) with its program to
promote agribusiness investment has not produce a qualitative change in
agricultural production worst agricultural production further slide to a all time low
share of in the gross domestic production

With such eroding productivity, it is expected that its employment generation will
likewise decrease. From a high employment rate of 51.4% in the 80’s, agriculture’s
employment degenerate to 37% in 2000 and further decline by another 2% points
from 2006 – 2007. (see table 4)

Yet, despite such decline, agriculture continues to employ a significant number of


able laborers. It is still the main source of income and jobs for some 12 M people in
the countryside. (Table 5) More than 50% of the people in the countryside depend
in agriculture for their subsistence.

Table 4. Agriculture’s Employment Share and rate 1980 - 2007

Year No. of Employed Employment % Share in Employment


(‘000) Rate (%)
Agriculture* Non – Agri.
1980 16,434 95.0 51.4 48.6
1985 19,801 92.9 49.0 51.0
1990 22,212 91.9 44.9 55.1
1995 25,676 91.6 43.3 56.6
2000 27,453 88.8 37.1 62.9
2005 32,313 92.6 36.0 64.0
2006 32.640 92.6 35.0 65.0

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2007 33,560 92.7 35.0 65.0
Source: Department of Labor and Employment, BAS selected Agri Stat 2008
*Including fishery and forestry

Table 5. Philippine Employement in Agriculture (in Millions)

1990 1995 2000 2005 2006 2007


Employed
9,750 11,147 10,181 11,628 11,682 11,786
Persons
Source: National Statistics
Unit: [thousand persons]

State of Agricultural Crop Production

As stated above, agricultural crop comprise the bulk of country’s agricultural


production. More than 11 M hectares of agricultural lands are devoted to crop
production. Cereal crops such as rice and corn occupy more than 6 M hectares with
4 M hectares devoted for the country’s staple food. (see table 6). Almost 60% of
the country’s agricultural land is devoted to cereal production with rice production
its single biggest cereal crop.

Rice is the leading cereal produce of the country. Since 2000, land devoted to rice
production of the country was steady at 4 to 4.2 M hectares. Most of the rice lands
are not irrigated and continue to be rainfed. Land devoted to corn production is only
half of land dedicated for rice production averaging 2.5 M hectares. (Table 6)

Other agricultural crops comprised about 5.2 M hectares of the country’s


agricultural land. The country’s other agricultural crops range from traditional cash
crops (like coconut, abaca and banana), vegetables, root crops and fruits. Lands
devoted to coconut covers some 3.3M hectares or 60% of the land for other
agricultural crops. Second to coconut, banana and sugarcane plantations comprise
the third and fourth biggest chunk of the agricultural lands devoted to other crops.

Lands devoted to banana has steadily increase from 333,000 hectares in 1995 to
more than 400,000 in 2005 up to the present. Most of this land is situated in
Mindanao. Sugarcane plantations occupies more than 300,000 hectares situated
mainly in the Central Visayas.

Mango, Pineapples, Cassava, Rubber,Abaca and Tobacco are the other important
agricultural crops that are cultivated in the country. The rest are devoted to citrus
fruits, root crops and vegetables.

For the past two decades, the country’s agricultural land utilization reflects the
three main focus of agricultural namely to provide for staple food as reflected by
the large portion of land devoted to cereal production particularly rice. Second,
agricultural production of major cash crops that are for industrial and export
purposes. And last crops that are considered high value crops that are not mainly
for domestic market but are likewise promoted for export.

Table 6. Land Area Dedicated to Cereal Production (1995 – 2007) (in M ha.)

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Cereal Type 1995 2000 2005 2006 2007
Palay 3,758.69 4,038.08 4,070.42 4,159.93 4,272.89
Corn 2,692.33 2,510.34 2,441.88 2,570.67 2,648.32
Total Area 6,451.02 6,548.42 6,512.3 6,730.6 6,921.21
Source: BAS, country stat

Table 7 Area Harvested by Other Crops in Philippine Agriculture (1995 – 2007)


(ha)
Crop Type 1995 2000 2005 2006 2007
Abaca 105641 106816 135966 135883 136049
Banana 339398 382491 417755 428804 436762
Cabbage 8529 7672 7420 7323 8502
Calamansi 16972 19418 20209 20253 20544
Camote 145236 127682 120638 118829 117584
Cassava 225751 210208 204784 204578 209633
Coconut 3,094,504 3,143,909 3,243,278 3,337,378 3,359,776
Coffee 140897 136921 127975 126063 123975
Eggplant 17643 19949 21233 20901 21613
Garlic 6299 5269 4704 4448 3863
Mango 108144 133815 164101 171711 184174
Mongo 34781 39661 36115 35732 39011
Onion 8693 9579 8884 8442 15879
Peanut 47555 26866 27472 27642 28316
Pineapple 41580 42968 49215 49813 53978
Rubber 86668 81036 81925 94347 110972
Sugarcane 302005 383824 368944 392280 382956
Tobacco 56306 44042 29589 26323 23863
Tomato 17896 16692 17731 17128 17544
Total Area 4,806,493 4,940,818 5,089,943 5,229,884 5,297,001
Source: DA-BAS, CountryStat

However, in terms of volume of crop production cereal production is outpaced by


the production of other crops. Although both crops experience steady growth from
the same periods 1995 – 2005, in terms of volume, other crops reached 50M mt
while cereal production was only less than half of its produce with 22.9 M mt in
2007. See table 8 – 9.

Yet, in terms of growth rate cereal production grew faster than other crops
averaging 16% growth from 1995 -2005 while the latter grew only by an average of
11% for the same period. For the past two years, other crops suffered a negative
growth while cereal crops continue to experience growth of 7.5%.

Table 8. Volume of Cereal Production in the Philippines (in ‘000MT)


Cereal Type 1995 2000 2005 2006 2007
Produce
(‘000MT)
Palay 10,560.65 12,389.41 14,603.01 15,326.71 16,240.19
Irrigated 7,598.55 9,412.68 11,233.79 11,594.93 12,269.39
Rainfed 2,942.09 2,976.74 3,369.21 3,731.77 3,970.80
Corn 4,128.51 4,511.10 5,253.16 6,082.11 6,736.94
White Corn 1,862.42 1,889.34 2,251.62 2,360.84 2,527.63
Yellow Corn 2,266.09 2,621.77 3,001.54 3,721.27 4,209.31
Total Cereal 14,689.16 16,900.51 19,856.15 21,408.82 22,977.13

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Production

Table 9. Volume of Selected Agricultural Production (Other than cereals) in (MT)


1995 2000 2005 2006 2007
Abaca 64833 77180 74014 69802 66437
Banana 4,236,253 4,929,570 6,298,225 6,794,564 7,484,073
Cabbage 129,989 87576 91439 91243 123443
Calamansi 161,454 180844 200808 196595 201619
Camote 667,946 554003 574629 566773 573734
Cassava 1,905,903 1,765,712 1,677,564 1,756,856 1,871,138
Coconut 12,790,840 12,994,654 14,824,585 14,957,910 14,852,927
Coffee 127412 107557 105847 104093 97877
Eggplant 130702 166146 187793 191911 210156
Garlic 17227 13688 13234 12581 11285
Mango 697,066 848,328 984,342 919,030 1,023,907
Mongo 26651 27465 26748 25952 29067
Onion 88427 84216 82019 75978 146108
Peanut 36200 26827 28437 29151 31205
Pineapple 1,646,268 1,559,563 1,788,218 1,833,908 2,016,462
Rubber 181,619 216,309 315,636 351,556 404,072
Sugarcane 17,774,401 21,223,438 22,917,674 24,345,106 22,235,297
Tobacco 63,705 49,529 45,093 38,368 34,289
Tomato 155823 148101 173740 175596 188761
Total 40,904,714 45,062,706 50,412,050 52,538,979 51,603,864
Production

In terms of yield per hectare, agricultural crops other than cereal command the
highest yield per hectare. Among the other agricultural crops sugarcane production
has the highest average yield per hectare of 62.1mt in 2001 – 2005. Second to
sugarcane, pineapple plantations commands the next highest yield per hectare of
36.33mt although still lower to its yield per hectare in 1995 of 39mt. Coconut
plantations although commanding the biggest share of land for cultivation has a low
productivity yield of only 4.5% in 2005. (see table 11)

Table 10. Cereal Production Yield per Hectare


1995 2000 2005 2006 2007
Rice
Area Harvested (Mha) 3,758.69 4,038.09 4,070.42 4,159.93 4,272.89
Production (M mt) 10,540.65 12,389.41 14,603.01 15,326.71 16,240.19
Yield/ha (mt/ha) 2.8 3.0 3.6 3.7 3.8
Corn
Area Harvested (Mha) 2,692.33 2,510.34 2,527.14 2,441.79 2,570.67
Production (mt) 4,128.51 4,511.10 5,413.39 5,253.16 6,082.11
Yield/ha (mt/ha) 1.5 1.8 2.1 2.1 2.4
Source of data: BAS and ASEAN

Like coconut, despite having vast track of land devoted to its production, cereal
crops also suffers from low productivity increasing slowly for two decades from 2mt
per hectare in 1995 to 2.8 mt per hectare as mere .8 mt increase in 2005. (See
table 10) Among the cereal crops rice, has showed a much bigger increase in yield
per hectare of 3.7mt/ha from 2.8mt in 1995 while corns productivity lingers at 2mt.

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Table 11. Selected Other Crops Yield per Hectare

1995 2000 2005 2006 2007


Coconut
Area Harvested (Mha) 3,094.50 3,143.91 3,243.28 3,337.38 3,359.78
Production (M mt) 12,790.84 12,994.65 14,824.58 14,957.91 14,852.93
Yield/ha (mt/ha) 4.1 4.1 4.5 4.5 4.4
Sugarcane
Area Harvested (Tha) 302.00 383.82 368.94 392.28 382.96
Production (Tmt) 17,774.40 21,223.44 22,917.67 24,345.15 22,235.30
Yield/ha (mt/ha) 58.8 55.3 62.1 62.0 58.06
Banana
Area Harvested (Tha) 339.40 382.49 417.76 428.80 436.76
Production (Tmt) 4,236.25 4,929.57 6,298.22 6,794.56 7,484.07
Yield/ha (mt/ha) 12.5 12.8 15.1 15.8 17.1
Pineapple
Area Harvested (Tha) 41.58 42.97 49.22 49.81 53.98
Production (Mmt) 1,646.27 1,559.56 1,788.22 1,833.91 2,016.46
Yield/ha (mt/ha) 39.6 36.1 36.33 36.8 37.4
Rubber
Area Harvested (Tha) 86.67 81.04 81.92 94.35 110.97
Production (Tmt) 181.62 216.31 315.64 351.56 404.07
Yield/ha (mt/ha) 2.1 2.7 3.8 3.7 3.6
Source: BAS
Computation of Yield by author

State of Farmers and Agricultural Workers

Table Agricultural Wage Rates of Farm Workers


Agricultural Wage Rates of Farm Workers
1990 1995 2000 2005 2006 2007
Philippines
Nominal Wage Rates
All Farm Workers 50.53 92.27 132.50 165.28 158.60 171.79
Palay Workers 51.50 96.09 137.06 171.87 162.51 184.07
Corn Workers 46.93 86.98 120.97 148.59 142.98 153.85
Coconut Workers 53.97 90.35 125.34 166.15 161.69 168.03
Sugarcane Workers 49.88 88.19 154.69 184.15 175.56 184.71
Real Wage Rates
All Farm Workers 39.45 43.90 87.00 119.86 122.19 121.15
Palay Workers 40.20 45.71 90.02 124.63 125.20 129.81
Corn Workers 36.64 41.38 79.43 107.75 110.15 108.50
Coconut Workers 42.13 42.98 82.30 120.49 124.57 118.50
Sugarcane Workers 38.94 41.96 101.57 133.54 135.25 130.26
[..] Data not available Type of Wage Rates Real Wage Rates 1990-1996 (CPI:1988=100)
1997-2001 (CPI:1994=100)
2002-present (CPI:2000=100)
The CPI of Southern Tagalog was used for CALABARZON and MIMAROPA, Western Mindanao for Zamboanga

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Peninsula, Southern Mindanao for Davao Region, and average CPI of Southern Mindanao and Central Mindanao.
Source: Bureau of Agricultural Statistics (BAS)
Unit: [pesos/day]

Farmgate Prices of Cereals by commodity and year


1990 1995 2000 2005 2006 2007
Annual Annual Annual Annual Annual Annual
Philippines
Palay [Paddy]
Fancy, dry (conv. 5.11 8.20 . 11.08 11.05 12.39
to 14% mc)
Palay [Paddy]
Other Variety, dry 4.74 7.24 8.42 10.43 10.46 11.22
(conv. to 14% mc)
Corngrain [Maize]
4.26 6.20 6.37 7.54 9.11 10.09
Yellow, matured
Corngrain [Maize]
4.24 6.47 6.90 8.41 9.03 9.62
White, matured
Green Corn (Maize,
4.50 1.01 . 10.45 11.10 11.07
green), White
Green Corn (Maize,
4.55 1.87 . 14.34 26.05 29.86
green), Yellow
[..] Data not available
[...] Data not yet available
Source: Bureau of Agricultural Statistics
Unit: [peso per kilogram]

Distribution of Agricultural Employment by Class of Workers

Employment 1995 2000 2005 2006 2007


by Class of
Workers
Wage and
Salaried
Workers
Own-Account
Workers
Unpaid Salary
Workers
Total
Employed
Workers

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