CHAPTER 14 – THE AGRICULTURAL
SECTOR
These chapters present a
comprehensive treatment of the
different sectors of the economy. It
emphasizes their important role in the
country’s development. Thus it is
imperative that both the public and
private, and the foreign and domestic
sectors implement policies that will
promote and overall stability.
WHAT IS AGRICULTURE?
Agriculture is defined as the
science and art of crop and livestock
of activities associated with the
production of useful plants and
animals, including soil cultivation,
crop, and livestock management, and
processing, marketing activities.
The agricultural sector is a
critical sector in the economy which
deserves a moral serious attention
from the government. Of the various
sectors propelling the economy, it is
the least-import dependent. It also
provides the necessary human and
natural resources which give
potentials to development.
Actually, I have read that
statistics show that agricultural sector
contributes greatly to the country’s
development. From 1984 to 1987, the
agricultural sector’s contribution to
the country’s gross national product
(GNP) at current prices ranged from
17.56% to 20.80%. In 1989, its
contribution amounted to 16.95% of
the total GNP value of P 823 767
million.
There are factors that influence
the kind of agriculture practiced in
particular areas. These are climate,
soil, topography, nearness to market,
transportation facilities, land costs,
and other economic variables.
Examples are the Ifugaos and the
Bontocs in the Mountain Provinces
developed their famous rice terraces
in harmony with the terrain. The
farmers in Central Luzon and the Bicol
region have made these areas ideal
for planting coconut and abaca. The
farmers in the uplands cultivate their
lands for subsistence because of their
distance from markets and the lack of
transportation facilities.
There are three major patters of
agricultural development: traditional
agriculture, modernizing agriculture,
and modern agriculture.
The traditional agriculture is
also known as subsistence farming. In
this pattern, farmers cultivate land
and plant crops primarily to feed the
members of their households. They
also use traditional methods of
cultivation, planting, and processing.
Included in traditional agriculture are
hunting, animal husbandry, kaingin or
slash-and-burn farming, and fixed
cultivation.
The second stage of agricultural
development is the modernizing
stage. Its main feature is the
increased importance of commercial
production in farming. In this stage,
farmers produce not only to feed their
households but to produce enough
surplus to be traded in the market for
cash or in exchange for other
commodities.
 The third level of agricultural
development is the modern
agricultural stage. In this stage,
agricultural processes are specialized
and are characterized by a large
portion of the product being produced
for commercial purposes.
The labor productivity at this
level is very high and production
techniques involve the use of modern
implements and improved technology.
This stage is also characterized by the
use of fertilizers, intensive cultivation,
and high-yielding varieties of seeds to
make farming maximally productive.
PART II – PHILIPPINE
AGRICULTURE
The major crops being produced
in the country are palay, corn,
coconut, sugarcane, banana,
pineapple, coffee, mango, tobacco,
and abaca.
There are other crops which
helps diversify agricultural activities.
These are peanuts, mongo, cassava,
camote, tomato, garlic, onion,
cabbage, eggplant, calamansi, rubber,
cotton, and other fiber crops
PART III – IMPORTANCE OF
AGRICULTURE
It would be the advantage of
the country if both agriculture and
manufacturing sectors are given the
proper attention. The agricultural
sector is important for the following
reasons:
1. The agricultural sector is
an important economic
sector in a developing
country because of its size
and contributions to the
economy.
- The agricultural sector
provides additional
resources to other sectors of
the economy
- Export earnings from
agriculture may be used in
the importation of raw
materials needed by the
industrial sector
2. Agriculture is important
because it is the source of food
for the economy.
- The agricultural sector
provides the basic needs
such as food. Rice is till the
staple food in the country as
well as rootcrops such as
camote, cassava, and other
necessities of life. It is also
the source of raw materials
needed by industries.
3. The agricultural sector is also
the source of cash crops used
by households, industries, and
foreign buyers.
- Table 14.1 lists down other
products of the agricultural
sectors such as coconut,
sugarcane, abaca, tobacco,
rubber, and other
commercial crops. In 2001,
3.1 million hectares were
planted with coconuts
yielding 13.2 million metric
tons; 387.1 thousand
hectares were used as sugar
plantation, producing close
 to 25 million metric tons;
and 107.1 hectares were
planted to abaca resulting to
a production of 74.6 million
metric tons.
4. Another important contribution
of agriculture to the economy is
the number of laborers it is able
to absorb
- Around 10.4 million workers
are estimated to work for the
agricultural sector or
agricultural related
industries
- Besides, agriculture is the
main source of livelihood
especially for developing
countries.
5. Agriculture is also an important
source of foreign exchange.
- Seven of the ten principal
exports of the Philippines are
products of the agricultural
sectors. These are copra,
sugar, banana, desiccated
coconut, coconut oil,
pineapple, and abaca.
CONCLUSION: It is therefore
important to develop the agricultural
sector and improve its productivity in
order to increase its purchasing power
of farmers.
PART IV – LAND TENURE IN THE
PHILIPPINES
One of the key factors that have
slowed down the progress of the
agricultural land is the land tenure
system. Large numbers of these
individuals worked in fields which they
did not own and they were subjected
to various forms of exploitation. It is,
therefore, necessary to be familiar
with the tenure system in the
Philippines in order to understand the
agrarian problems of the country and
to get a proper perspective of agrarian
reform undertaken by the government
to promote agricultural development.
There are five classifications of
land tenure in this country: full
owners, tenants, farm managers, and
those engaged in other forms of land
tenure. Table 14.2 shows the
distribution of various kinds of land
tenure and the land area covered in
the Philippines in 1971 and 1980.
Full owners are those who own
all the land which they work on.
Part owners, on the other hand
are farm operators who own part of
the land they work on while they hold
the remaining portion as tenants
Tenants are farm operators who
rent or lease from others the land they
cultivate. They fall under six kinds
according to their tenancy agreement
with the owners of the land.
Cash tenants are farmers who
pay cash as rent for their uses of the
land. The rent is usually computed
per hectare of land.
Share of produce tenants are
tenants who give the owner of the
land a share of their harvest as agreed
upon beforehand. These tenants
include those who raise livestock or
poultry for the landowner on condition
that the latter will get a share of the
product.
Fixed amounts of produce
tenants are farmers who pay rent in
the form of a fixed quantity of the
harvest agreed upon by the owner and
the tenant.
Cast and fixed amount of
produce tenants are tenants who pay
rent for using the land in a mix of cash
payment and a fixed position of the
harvest agreed upon.
Cash and share-of-produce
tenants are tenants who pay the
owner of the land a combination of
cash and a portion of the harvest
agreed on beforehand by both parties.
Rent-free tenants are tenants
who till land with the consent of the
owner without having to pay rent in
cash or in kind. Marginally productive
lands are generally involved here.
Farm managers comprise the
fourth classification of land operators
these individuals supervise the day-to-
day operators of large farms and
receive wages, a salary, or part of the
harvest for their services.
Farm operators under the
conditions fall under fifth
classification. They operate farms
under the conditions other than those
previously mentioned.
LAND REFORM IN THE
PHILIPPINES
Because of the unequal
distribution of wealth, particularly in
land resources, thousands of farmers
till land which they do not own. Fixed
amount-of-produce tenants are
particularly vulnerable because of the
nature of their agreement with
landowners. When harvest is poor,
they have to borrow from the
landowner to pay their rent and for
their daily subsistence and that of
their family. These tenants are
trapped in debt and are subject to the
whims of unscrupulous landowners.
In view of this situation, the
government introduced programs to
alleviate the conditions of tenant
farmers. Wide-ranging agrarian
reform programs were introduced to
remedy the deficiencies of the
landholding system in the country and
to create conditions for agricultural
progress.
Land reform refers to the “full
range of measures that may or should
be taken to improve or remedy the
defects in the relations among men
with respect to their rights in land and
involves the transformation of
agrarian structure.
Agrarian reform, on the other
hand, comprises not only land reform
but also the reform and development
of complementary institutional
frameworks such as the administrative
agencies of the national government
created to undertake land reform,
local governments, rural educational
and social welfare institutions, and
voluntary associations, particularly
farmer’s organizations.
Land reform and agrarian
reform, therefore, involve a body of
programs, policies, mechanisms, and
laws sponsored by the government to
improve the status of land ownership
and the economic life of farmers in the
Philippines.
Land reform and agrarian
reform, therefore, involve a body of
programs, policies, mechanisms, and
laws sponsored by the government to
improve the status of land ownership
and the economic life of farmers in the
Philippines.
The goals of the land reform
program of the government are
sixfold:
1. To establish owner-cultivator
ship and make family sized
farms the basis of Philippine
agriculture
2. To achieve dignified
existence for small farmers
and free them from harmful
institutional restraints and
practices
3. To establish a social and
economic structure in
agriculture conducive to
greater productivity and
improved farm incomes
4. To apply all labor laws
without discrimination to
both industrial and
agricultural wage earners
5. To provide a more
systematic resettlement and
land distribution program
6. To make the small farmer a
more independent, self-
reliant and responsible
citizen, and a source of
genuine strength in our
society
The first comprehensive land
reform program was initiated
under the administration of
President
Diosdado Macapagal with the passage
of the Agricultural Land Reform Code
on August 8, 1963. The law laid down
the foundation of an ideal tenure
system in the Philippines with the
abolition of tenancy and replaced it
with long-term leasehold. Under the
law, the government will buy the lands
tilled by the farmers from the owners
and sell it back to the farmers through
a long-term repayment scheme.
The program was not successful
in eliminating tenancy because land
coverage was very limited. Moreover,
the slow implementation of the
provisions of the law allowed owners
of tenanted farms enough time to
eject their tenants in order to be
exempted from shifting to leasehold
tenancy.
When President Marcos
declared martial law in 1972, he also
declared the entire country a land
reform area under Presidential Decree
No. 2. Moreover, Presidential Decree
No. 27 emancipated the tenants “from
the bondage of the soil, transferring to
them the ownership of the land they
till. This emancipation decree
provides that each tenant farmer of a
private agricultural land devoted to
rice and corn under a system of share-
crop or lease tenancy should be the
owner of a portion of the land
consisting of a family-sized farm of
five hectares.
In June 10, 1988, President
Aquino signed into law republic Act
No. 6657, also known as the
Comprehensive Reform Law. The law
conceived agrarian reform as
redistribution of all public and private
agricultural lands, regardless of crop
or tenurial arrangement, to landless
farmers and regular farm workers, to
include all the necessary support
services designed to improve the
economic status of beneficiaries and
increase land productivity, and all
other arrangements which will provide
the beneficiaries a just share of the
fruits of the land they work.
The coverage includes: (1) all
alienable and disposable lands of the
public domain devoted to or suitable
for agriculture; (2) all lands of the
public domain in excess of the specific
limits; (3) all other lands owned by the
government devoted to or suitable for
agriculture; and (4) all private lands
devoted to or suitable for agriculture
regardless of the agricultural products
raised or that can be raised thereon.
Lands covered by the
Comprehensive Agrarian Reform
Program shall be distributed as much
as possible to landless residents of the
same barangay or in the absence
thereof, landless residents of the same
municipality in the following order of
priority:
1. Agricultural lessees and
share tenants
2. Regular farm workers
3. Seasonal farm workers
4. Other farm workers
5. Actual tillers or occupants of
public lands
6. Collectives or cooperatives
of the above beneficiaries
7. Others directly working on
the land
The planning and
programming of the acquisition
and distribution of all
agricultural lands will be
undertaken by the Department
of Agrarian Reform (DAR) in
coordination with the
Presidential Agrarian Reform
Council.
Phase one covers rice and corn
lands under Presidential Decree No.
27, idle or abandoned lands, all
private lands voluntarily offered by the
owners for agrarian reform, all lands
foreclosed by the government
financial institutions, all lands acquired
by the Presidential Commission on
Good Government (PCGG), and all
other lands owned by the government
devoted to or suitable for agriculture
Phase two covers all alienable
and disposable public agricultural
lands; all arable public agricultural
lands under agroforest, pasture, and
agricultural leases; all public
agricultural lands which are to be
opened for new development and
resettlement; and all private
agricultural lands in excess of 50
hectares. This phase has a projected
area distribution of almost 7 million
hectares and 2.6 million beneficiaries.
Phase three covers all other
private agricultural lands commencing
with large land holdings and
proceedings to medium and small
landholdings. Phase three has 1.35
million hectares of land to be
distributed and 451 thousands
beneficiaries. The entire program will
cover some 9.8 million hectares of
land and some 3.7 million
beneficiaries. Table 14.3 shows the
land area and he number of
beneficiaries of the three phases of
the Comprehensive Agrarian Reform
Program while 14.4 shows the area of
land distributed from 1987 to 2001.
<SHOW TABLE 14.3 AND TABLE 14.4>
MAJOR PROGRAMS OF AGRARIAN
REFORM
Operation Land Transfer (OLT).
This major component of the land
reform program involves the orderly
and systematic transfer of lands
planted to rice and corn to the tenant
tillers. The operation involves a five
stage process: (1) identification of
tenants, landowners, and lands
covered; (2) mapping the actual area
cultivated by the tenants; (3) printing
and issuance of certificates of land
transfer; (4) valuation of the land
transferred; and (5) issuance of
emancipation patents to farmers who
have completed payment for the land.
Leasehold Operations.
Leasehold is an intermediate stage of
land tenure whereby tenant-farmers
are given protection by the law from
harassment, ejection, and other
practices which characterize share-
crop tenancy.
A leasehold arrangement
requires the lessee (the tenant-
farmer) to pay a fixed rent of not more
than 25% in cash or kind of the
average normal harvest for the three
crop years preceding the date in which
the leasehold was established, after
deducting the amount used for seeds,
cost of harvesting, threshing, loading,
and other processing costs.
Land Consolidation. This is the
process by which comparatively
irregular, small, fragmented, and
scattered farm lots are concentrated
and restricted for better management
and more efficient farm operations
and production.
Compact Farms. This involves
the voluntary grouping of famers to
enable them to properly combine and
utilize their resources for greater
productivity and efficiency.
Cultivation, harvesting, and other farm
activities, including marketing, are
supervised and directed in accordance
to a carefully prepared farm plan and
budget. An example of this is the
Kilusang Bayan, which serves as a
marketing arm of at least 250 persons
engaged in farming or related
agricultural activities. The purpose of
this voluntary association is to assist
the members in marketing their
produce as well as in the supply of
their production inputs.
AGRARIAN REFORM AND
COOPERATIVES
 One of the institutions which
has been identified as crucial in the
development of agriculture and
agrarian reform in particular is the
cooperative movement. A cooperative
is a group of persons who combine
their resources under the principle of
equality in order to attain objectives to
their mutual benefits.
The cooperative movement is
guided by four basic principles: open
membership, democratic control,
limited interest to capital, and
patronage refund.
Membership in a cooperative is
voluntary and available to everyone
without any social, political, racial, or
religious restriction or discrimination.
Members can avail of all the services
rendered by the cooperative and must
be willing to accept the responsibilities
of membership.
Democratic control is
manifested by the equality of
members in making decisions for the
cooperative. Each member is eligible
to have one vote even if she/he has a
huge share in the capital of the
cooperative. The affairs of the
cooperative are administered by
persons elected or appointed in a
manner agreed upon by the members
and accountable to the general
membership.
Part of the requirement to
ownership of land by the tenant-
farmer under the agrarian reform
program is membership in a
cooperatives. Benefits of agrarian
reform can be fully realized by farmers
through cooperatives. The
cooperative can make a stronger
position for the farmers in securing
certain ends. The cooperative can
assist the farmers with regards to the
production and marketing of their
production and marketing of their
products as well as the provision for
credit. The cooperative is also in a
position to acquaint members with the
responsibilities that come with owning
lands.
PROBLEMS AND PROSPECTS IN
AGRICULTURE
While we always say with pride
that our country is rich in natural
resources, will our claim still hold true?
Today, the country is plagued with a
number of problems related to natural
resources, especially agricultural.
Among the most serious are the
following:
1. DEFORESTATION. Forests are
fast denuded due to illegal and
indiscriminate kaingin system
and forest fires which destroy
even young trees. Also alarming
is the destruction of forests in
mineralize areas as well as the
high rate of conversion of forest
lands into residential areas and
parks.
2. SOIL EROSION. This is a
problem caused by deforestation
and destruction of watershed.
3. POLLUTION. It is the process
that results in the change of the
physical, chemical or biological
characteristics of air, water,
land, and other environmental
resources that adversely affect
 human beings and other forms
of life. Pollution is caused by the
indiscriminate use of chemicals
which form domestic,
agricultural and industrial
wastes.
4. GLOBAL WARMING. “The
increasing emission of carbon
dioxide in the air
from burning more wood, coal and oil
every year will alter the transparency
of the atmosphere and heat up the
earth over time.” This warning which
was released as early as 1896 was
ignored that today it has become a
global concern especially to farmers.
5. For one thing, there is a
constraint in increasing the land
available for cultivation.
Between 1960 to 1970, the
cultivated area increased by only
1.5% per year, and the average
annual growth went down to 1%
during the 1970 to 1975. In rice
production, the major source of
growth has been the increase in
area under irrigation and the
increasing use of high yielding
varieties of seeds, fertilizers, and
other farm inputs.
6. The impact of government
policies on the agricultural sector
is another factor that has led to
the slower growth of this sector.
Government policies have been
biased against agriculture over
the years. The government has
been promoting low food prices
for political as well as social
reasons. The results of this price
policy have been to discourage
the production of food crops.
7. Another disincentive in
agricultural production has been
the high cost of fertilizers and
other agricultural inputs. The
government regulates the price
of fertilizers and grants direct
subsidies to fertilizer production,
but the tariff and sales tax
imposed on this agricultural
input make it costly to use.
PROSPECTS OF PHILIPPINE
AGRICULTURE, FORESTRY AND
FISHERIES
1. AN AGRICULTURE-FIRST
ECONOMIC POLICY. For
agriculture to become an active
participant in the economic
recovery program, it needs to
address, among others, the
need for export
competitiveness, effective peso
devaluation, and easing of
foreign exchange control.
2. FISCAL PROGRAMS. The
government, for its part. Needs
to provide the necessary
agricultural support services
such as increased investment in
rural infrastructure, research,
and development, effective
management and development
of cooperatives and
farmer/fisherman self-reliance,
programs; continuation and
expansion of rice, corn,
coconut, and fisheries
programs.
If agriculture is to be a vibrant
sector of the economy, there is
a need for it to grow faster than
is indicated by its previous
growth performance. A
dynamic agricultural sector will
mean a higher income for the
farmers, an increased demand
for the products of the other
sectors, higher export earnings,
greater employment
opportunities for the labor force,
and self-sufficiency in food
production. This will become
possible if government policies
are revised to promote
agricultural development, adopt
modern technologies, and
implement the agrarian reform
program.