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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 the
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 chemical-
based 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
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.

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, 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 will be mangoes, bananas, coconut, pineapple, seaweeds and
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 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, 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


groups 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 Philippines is divided into three major island groups:
2. Luzon, with an area of 141 thousand square kilometers;
3. Mindanao, with an area of 102 thousand square kilometers; 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 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 ending in 1996, the
proportion of small farms had been 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 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
1. Removal of Quantitative Restrictions (QRs) and Conversion of QRs into
their Tariff Equivalents.
2. Reduction of Tariffs on Agricultural Products. Developing 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 Access Volume (MAV). The allowing of annual imports 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 Bindings. Countries will bind tariff rates at levels beyond which no
further increases will be imposed.
6. Prohibition of Additional Non-Tariff Measures. No new non-tariff measures,
such as import licensing, variable import levies, import quotas, and import
bans may be imposed.
7. Plant Variety Registration and Protection. Intervention and 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 Reduction on Inputs. For those inputs directly used for agricultural
modernization, the tariff rates were reduced to zero.
2. Trade Remedies. These are measures that provide industries relief from
import surges, declining import prices and/or dumping.
3. Reforms in the VAT for Agricultural Processors. Exemptions from the
value-added tax (VAT) of food and non-food agricultural products and
marine commodities.
4. Budgetary Support in Agriculture. Under the Uruguay 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 export-
competitive 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
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.
• 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)