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Term Paper
Presented to:
Ijy James Lomibao
Instructor
Presented by:
Ryan Carlo Conde
Viverly Joy De Guzman
Rose Mel Mergilla
Level of Mechanization
Spraying 100 0 0
Harvesting 98.79 0 0
Milling 0 0 100
b. Thresher 0.34
Total 1.68
Source: Agricultural Mechanization Development Program (AMDP), 1997
Table 6 shows the data of the census of major farm machinery in the
Philippines in 2002. There had been a rapid increase in the utilization of hand
tractors from about 200,000 units in 1998 to 1.5 million units in 2002
because of the need at that time to produce more food for the increasing
population.
Industry Concerns
One of the main concerns of the industry is the poor quality of local
steel materials which is due to the absence of a truly integrated steel mill
complex in our country and the lack of forging and foundry facilities (AMDP
1990). Whereas, according to Manaligod (1988), the metallurgical properties
of our local steel materials do not follow the standard softness and hardness
required for the specified metal classification. Thus, this problem in effect
translates the manufacturing into a time-consuming and costly fabrication
process. Another problem is the high cost of raw materials, especially
imported materials and components that are subjected to high tariff rates.
The need to upgrade the present production technology is also a main
concern of the industry. Since its introduction in the early 1970s by
International Rice Research Institute (IRRI), major changes have not been
made in the fabrication technology. Moreover, low demand for agricultural
machinery and equipment is another problem which may be due to the
following reasons: (a) low economic viability of farmers brought about by
high cost of some agriculture inputs; (b) inadequate financing and credit; and
(c) unfavorable natural calamities such as droughts, typhoons, floods, and
pests (Resurreccion 1991).
Extension workers are the key persons in this technology transfer. They
need not only interpersonal communication skills, but technical qualifications
as well. With very limited number of extension staff in a big number of client-
farmers, the result would end-up in the non-adoption of some technologies.
Another is that these workers might be lacking the capability to integrate the
mechanization technology in the total farming system. Since, they too, might
be lacking in trainings particularly dealing with agricultural mechanization
(Paras, 2005).
Policy Constraints
According to PCARRD (2015), one of the reasons for the proliferation of
imported equipment in the Philippines is the adoption of liberal import
policies and the lack of import restrictions on the agricultural machinery.
Thus, being an addition to the unstructured tariff and taxation systems,
which had negative effects on the viability of the local agricultural machinery
industry. Import duties on agricultural machinery in the Philippines ranges
from 10% to 30% for completely built-up (CBU) engines, 10% for completely
knocked down engines (CKD) and 50% for raw materials. As stated in the
National Emergency Memorandum, tariff of machinery and equipment was
pegged at 10% and none for engines. Hence, lowering of tariff was reported
effective in the changes of output prices and increased production (Cruz,
1990).
Process of Distribution
Figure 1. showing the schematic diagram and the total processes of the
Agricultural Machinery Industry from Business sector to Individual Farmers.
This figure shows that there is a long and continuous interaction being done
before individual farmers can acquire it (Kahn. A.U., 1979).
Fig. 1 Proposed machinery development Sequence in the Agricultural
Mechanization Research Institute.
Consumption:
Possible Solutions:
Capacity Building
Book/Journal:
Amongo. R.M., L.D. & Larona. 2011. Mechanizing Philippine Agriculture for
Food Sufficiency. UNAPCAEM and FAO Joint Roundtable Meeting on
Sustainable Agricultural Mechanization in Asia held in Bangkok,
Thailand, 8 - 9 December 2011.
A.F. El Sahrigi and Khan, A.U. 1990. Machinery Development Program: The
Agricultural Mechanization Research Institute. National Agricultural
Research Project. Annual Report 1988. Arab Republic of Egypt.
Cruz, Feliza, P.L. Effects of industrial policies on the farm machinery industry
in the Philippines. RNAM Newsletter, No. 39, December 1990.
G.F. Ortman and R.P. King. 2007. Agricultural cooperatives II: Can they
facilitate access of small- scale farmers in South Africa to input and
product markets. Agrekon, Vol. 46(2): 6,2007.
Khan, Amir U. 1979. Small Scale Machinery Development for Labour Surplus
Economies. International Association of Agricultural Economists. 1979
Conference, September 3-12, 1979, Banff, Canada. Pp. 88 101.
Khan, Amir U. Critical issues in transferring agricultural mechanization
technologies in the developing world. Philippine Agricultural
Mechanization Bulletin, 5(2): 3-11, 1991.
Paras, F.O.; Amongo, R.M. Technology transfer strategies and experiences for
small farm mechanization technologies in the Philippines. Paper presented
during the FFTC International Workshop on Small farm mechanization
Systems Development, Adoption, and Utilization, June 14-16, 2005, Oasis
Hotel, Los Baos, Laguna.
Rodulfo, V.A.; Amongo, RM, C.; Larona, MV. L. Status of Philippine agricultural
mechanization and its implication to global competitiveness. Philippine
Agricultural Mechanization Bulletin, 5(1):3-13, 1998.
Figure 3. Philippine producer price indexes and percent changes for final
demand