Philippine Farm Sector Growth Declined in 2009

Philippine farm sector posts lower-than-expected growth in 2009

The country’s farm sector posted a lower-than-expected production growth rate of 0.37 percent in 2009 as strong typhoons significantly slashed the output of farmers and fisherfolk from October to December.

The farm sector’s 2009 output was lower than the low-end of the 0.5- to 1.5-percent growth rate which the Department of Agriculture (DA) projected for last year. The increase in the sector’s production last year was significantly slower than the 3.8 percent recorded in January to December 2008. “The gains of the first three quarters were cut by huge production losses during the fourth quarter of 2009,” said Agriculture Secretary Arthur Yap in a statement.

Farm production for October to December 2009 declined by 2.43 percent, with paddy-rice production getting slashed by 13.88 percent to 5.36 million metric tons (MMT) during the period, as against the 6.22 MMT produced in October to December 2008.

“The heavily affected [rice-producing] regions were Ilocos, Central Luzon and Calabarzon,” said the Bureau of Agricultural Statistics (BAS) in its official report.

For the whole of 2009, palay production went down by 3.31 percent to 16.26 MMT. The sector accounted for 16 percent of total farm output in 2009.

The corn subsector fared better last year as production grew by 1.53 percent to 7.03 MMT.

“Output gains were realized in the second half of 2009, particularly in Cagayan Valley, Northern Mindanao and the Autonomous Region in Muslim Mindanao. Expansion in area harvested was recorded in Cagayan Valley as a result of recovery of corn farms from Typhoon Karen last year,” said BAS in a report.

Figures released by the DA showed that the crops subsector, which accounts for 46.8 percent of total farm output, registered a 1.42-percent decline in production in 2009.

Meanwhile, the livestock subsector recovered from last year’s downturn and grew by 1.24 percent last year. The subsector accounted for 12.47 percent of total farm output.

Hog production recovered from last year’s slump and grew by 1.16 percent while the outputs in cattle and dairy farms went up by 2.5 percent and 3.33 percent, respectively.

The poultry subsector’s production grew by 1.82 percent last year. The subsector accounted for 14.33 percent of total farm output. Chicken production went up by 1.53 percent. Chicken egg also put up a 5.04-percent production gain during the period.

The fisheries subsector, which accounted for 26.4 percent of total farm output, expanded by 2.45 percent during the period. The production growth rate in 2009 was slower compared with the 5.81 percent registered in 2008 due to the lower production in aquaculture and municipal fisheries. This, said BAS, is due to the damage caused by weather disturbances during the fourth quarter of 2009.

At current prices, the country’s farm sector grossed P1.2 trillion, representing a 2.18-percent increase from the 2008 level. The agriculture sector accounts for one-fifth of the country’s gross domestic product, or the total amount of goods and products produced within a country’s border.

By BusinessMirror

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Food Shortages Coming, Buy Commodities: Jim Rogers

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Impending Global Food Shortage

The financial crisis is likely to lead to food shortages in a few years because the agriculture sector is in dire need of funds, legendary investor Jim Rogers told CNBC Friday.

Buying distressed commodities is a better way to make money than investing in stocks, according to Rogers.

"The fundamentals (for agriculture) have gotten better," he said. "The inventories are now at the lowest they've been in decades, not in years."

"Sometime in the next few years we're going to have very serious shortages of food everywhere in the world and prices are going to go through the roof."

Cotton and coffee are good buys because they are very distressed, while sugar, despite the fact that it has gone up a lot, is still down 70 percent from its all-time high, according to Rogers.

"I don't think that the problems of the world are behind us yet," he said.

Investors shouldn't bother with stocks because commodities are likely to win in both the optimistic and the pessimistic scenario, Rogers said.

If the economy rebounds, commodities prices will rise because of increased demand, while if the economy continues to be weak, central banks will keep printing money and commodities will be used as a hedge against inflation, he explained.


By CNBC

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Rice Price Hike To Hurt the Poor

Rice-price hike to hurt the poor, make more people hungry.

A network of food-security advocates on Monday warned that the P1-P2 increase in the price of rice will hurt the poor and increase the number of hungry people in the country.

Task Force Food Sovereignty (TFFS) lead convener Arze Glippo said the increase in the price of rice is in fact “inhuman” considering that Filipinos have not yet recovered from the impact of the 2009 rice crisis, the global recession and the successive calamities that hit the country.

Worse, she said, it is preposterous that the Department of Agriculture (DA), led by Agriculture Sec. Arthur Yap, justifies the price increase as “reasonable and logical.”

“He cannot even explain the reason for the price hike aside from saying it is a ‘price correction’ and that rice retailers may be experiencing ‘constricted supply deliveries’,” Glippo said.

Increases in the prices of basic commodities, especially the staple food, at a time when hunger and unemployment are soaring and incomes are stagnant, will hurt the poor and will surely increase the number of hungry people, she said.

“How could rice traders and retailers experience ‘constricted supply deliveries’ when Secretary Yap is assuring us of a stable rice supply?” she asked.

As early as Nov. 7 and Nov. 10 last year, the government imported 850,000 tons of rice for 2010 “to get good prices and secure stocks of early 2010 when the effects of the recent typhoons are expected to be felt.”

The group believes that the recent increase in the price of rice has nothing to do with supply and demand.

“This is plain and simple profiteering on the part of rice traders, abetted by the government’s long neglect of the rice industry and its skewed policy on food and agriculture,” she said.

Rice traders have long wanted to increase the price of rice, but were constrained when government was forced to impose price control on basic commodities after the devastating calamities in September and October last year. As soon as the price control was lifted in December and when majority of harvests was already in the hands of private traders, the government is announcing its plan to raise the retail price of rice.

Instead of justifying the rice-price hike, TFFS said the government should reimpose price control on rice and other basic commodities and to stabilize the rice market by selling more rice at subsidized rates.

More strategically, TFFS reiterated the need to strengthen the rice industry and lessen the country’s dependence on imports and its vulnerability to rice supply and price manipulation of private rice traders. This will necessitate pouring in support for rice farming, including farm inputs, credit and marketing, the TFSS said.

By Business Mirror

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Philippine Senators Pushing for Farm Inputs Tax Exemption

Solons push for total farm-input VAT exemption.

Philippine House Deputy Majority Leader Juan Edgardo Angara is pushing for the approval of a bill seeking to exempt agricultural inputs from the value-added tax (VAT).

House Bill 123, authored by Angara, seeks to amend the Agricultural and Fisheries Modernization Act (Afma), or Republic Act 8435, to help farmers and consumers.

“The need to exempt from VAT coverage all agricultural inputs cannot be overemphasized,” said Angara.

Angara said agricultural inputs are key ingredients or elements that contribute or make up agricultural products used, traded and consumed by the Philippine economy.

“More taxes imposed on the factors of production in the agricultural sector imply costs for everyone,” Angara said.

Angara’s measure seeks the exemption from VAT of all agricultural inputs as defined in the current Afma. It also aims to expand the definition of agricultural inputs.

Relatedly, Lakas-Kampi-CMD Rep. Edgar Chatto of Bohol, in a separate bill, sought the exemption of all agricultural inputs from VAT.

In filing House Bill 4908, Chatto said that at present, “Only certain agricultural inputs are exempted from the imposition of the VAT.”

As embodied in House Bill 4908, agricultural inputs shall also include fertilizers, insecticides, pesticides, tractors, trailers, trucks, farm implements and machinery harvesters, among others.

Chatto said all agricultural inputs should be exempted from VAT coverage, because these tools “constitute the production of agricultural products utilized, traded and consumed by the Philippine economy.”

“Exempting these vital inputs from the VAT system will result in lower agricultural production costs, giving rise to more farm products with improved quality control for market consumption at reasonable selling prices for the consumers,” Chatto said.

He said, “Because of the limited coverage of the exemption, the farmers are made to pay the burden of the tax by the seller or importer, forcing the farmers to pass on to the consumers the payment of the tax when they sell their products to them, to defray high production costs.”

By Business Mirror

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