ST 103- Agribusiness

Part I Introduction to Agribusiness

1. Agribusiness defined

Agribusiness is generally the commercial aspect related to

agriculture or agricultural activities and its products. The
Agribusiness sector is engaged in the production and operations of a
farm, the manufacture and distribution of farm equipment and
supplies, and the processing, storage, and distribution of farm
commodities. The very core of the industry is agriculture, which is
supported by the manufacturing sector and service sector. As a
whole, the Agribusiness sector is quite diverse as it encompasses
input production, farm operations and management, equipment and
supplies manufacturing, food/non-food processing, trading, and
retailing.

Being a country rich in natural resources, the Philippines rely heavily

on agriculture to provide for its people and to drive its economy.
With approximately 32 percent of total land area dedicated to
agriculture and agricultural activities, 51% and 44% are arable and
permanent croplands, respectively. This shows a clear picture as to
how large and significant the agriculture industry is.

The Philippine Agribusiness sector is roughly composed of five (5)

subsectors; these are:
1. Crop production- includes farms that mainly grow crops and
fruits that are eventually processed for food and fiber. It
remains the major activity of the industry with 49% of the
overall production. Following crop production is the Fishery
subsector occupying 25% of the overall production. Fishing
activities include local and commercial fishing, fish cage/pen
operations and seafood production.
2. Animal production (includes livestock and poultry)- Animal
production comes third capturing 21% (11% livestock; 10%
poultry), which activities range from small farming to large
ranches that raise animals for sale or for animal products.
3. Forestry and Logging,
4. Fishery (including aquaculture) and
 5. Agri-support services and manufacturing.
The orientation of the Philippines’ economy has shifted from
agriculture to services over the past years. In the first quarter of
2016, the services sector grew by 2.4% while agricultural industries
fell by 4.4% (PSA, 2016). Although this is often seen in a favorable
light as the global economy shifts toward services industries, the
country is missing out on important opportunities to leverage its
diverse geographic and climatic conditions to generate better quality
employment and income opportunities for a large segment of the
population based in rural areas and which continues to depend on
agriculture for livelihood. It is estimated that in 2015, the sector
accounted for 10.26% of the country’s GDP (World Bank, 2016) and
employed 29% of the Filipino workforce.

Performance Task Assessment (Individual Activity):

Make a documentary about agribusiness in your community, the
contribution of this agribusiness in your community, the problems
encountered by the individuals doing agribusiness. Enumerate the
different agribusiness in your community in this report.

This will be presented during the face to face classes.

2. The Importance of Agribusiness in the economy

Importance of Agribusiness
Agribusiness is a sector that supports the growth of the agricultural
industry, which is pivotal to economic growth. It also continues to
play a crucial role in the growth of developing countries.
Agribusinesses can potentially improve agricultural productivity,
which is why governments often offer subsidies to agricultural
businesses.

Agricultural activities also contribute to an improved system of food

security and sustainable food production, as well as income for a
majority of the poor in developing countries. However, the activities
increase the emission of greenhouse gases and contribute to global
 warming – which is why innovation is important to the sector to
address such problems.

For many years, the Agribusiness sector played a significant role in

the Philippine economy. It steadily contributed to the country’s Gross
Domestic Product (GDP), boosting production and employment.
Being rich in natural resources, the Philippines relies heavily on the
activities of the agriculture industry which produces and transforms
farm goods and services for its people.

The wide variety of products produced from this sector helps

nourish even the most remote communities in the country. Recently
though, trends in the shifting of global production networks have
affected the performance of Philippine agriculture. For example, the
booming electronics and services industry has shifted the overall
production of the Philippines from highly agricultural to becoming
industrial. It is a challenge for the Philippine government and its
related institutions to revive the agriculture industry and continue to
respond to the need of many local communities. At present, the
Philippine government, through the Department of Agriculture (DA)
and related bureaus, pushes for the implementation of many
programs including the “Farm to Plate” strategy for the Agribusiness
sector thereby broadening its scope and services to all the
consumers.

The overarching agenda is about food security which entails meeting

the food requirements of the present and future generations of
Filipinos in substantial quantity, ensuring the availability and
affordability of food to all, at all times.

Performance Task Assessment (Individual Activity):

Create a powerpoint presentation in your own version of importance
of agribusiness in our economy, inserting pictures is highly
recommended in your powerpoint.

This will be presented during the face to face classes.

3. Barriers of agribusiness growth in the Philippines

Despite erratic weather conditions and declining number of

graduates of agriculture-related degrees

A number of irrigation infrastructures is also being established and

improved in many regions (especially in Bicol and Negros) to help
farmers boost their production. This has been implemented to secure
enough water for farms during drought seasons. In the area of
livestock production, Philippines was declared to be free from foot
and mouth disease (FMD) without vaccination by the Office
International des Epizooties (OIE) or World Organization for Animal
Health.

Given the physically demanding tasks, uncommon working schedule,

and working environment in the Agribusiness sector, risks on
injuries/hazards are inevitable. For example, farm workers are
commonly exposed to pesticides and other hazardous chemicals
sprayed on crops or plants. Some of these chemicals can cause minor
irritation or even impotence. Those who work with machine in the
farm or processing plants can have injuries when working with their
tools and heavy equipment. Those who work directly with animals
risk being bitten or being exposed to animal diseases.

As the Philippines dealt with the ‘perfect storm’ – the COVID-19

pandemic, African Swine Fever (ASF), and the ongoing Ukraine-
Russia war – agriculture is among the sectors to receive the hardest
blow, feeling every inch of strain, horrifying the entire food system
altogether.

While the country is slowly going back to its normalcy after battling
the COVID-19 pandemic for more than two years now, the current
health crisis continues to dampen global goods trade, amplifying job
and income losses of most middle- and low income Filipinos. At the
onset of the crisis, food supply chains were shackled, imposing
restrictions on the movement of goods as well as people. These
protection measures resulted to food price inflation, further
increasing hunger and poverty incidences.

The persistence of the ASF is still holding the country hostage, where
the speed and severity of its damage has collapsed the hog industry.
The DA took strides to stop the spread of the ASF virus through
precautionary culls while compensating local hog raisers. The DA
distributed more than P2 billion as indemnification to affected swine
farmers.

To prepare the country in trans-boundary animal diseases and its

proliferation within Philippine borders, the DA has put in place
stricter biosecurity control measures in tandem with the Philippine
Ports Authority, Bureau of Customs, and the local government units
(LGUs). According to the Secretary, this will be a common practice to
prevent or at least minimize the future risks of transboundary animal
diseases. The Department has also collaborated with public and
private partners in the development of a vaccine against ASF – a first
of its kind in the Philippines.
While the country has only been slowly recovering from these crises,
it took another disaster for the Philippines to plunge into another
devastation – probably the greatest of them all – the Ukraine and
Russia conflict. This ongoing war has fueled food insecurity to the
highest power.

Food insecurity is now inclined to be an even more threatening

trend, with the two power countries at war being among the
breadbaskets of the world. This means that export activities are
challenged, putting other dependent countries vulnerable, including
the Philippines.

The rising prices on energy, oil, fertilizer, wheat and wheat products,
and add to that the export bans being imposed by other countries to
“protect their own people” continue to put many countries at risk,
especially the Philippines, who is reliant on these key producing
countries to fill local production gap.
 Needless to say, the Ukraine crisis accentuated the discrepancies and
inequalities in food production, thus the humane necessity to fill the
gap through importation.

In the most basic sense, importation is allowed for an economy to

thrive – to supply nonexistence and scarcity of products and goods,
reduce domestic food prices, and provide wider choice in consumer
goods, to name a few. Agricultural trade does not only happen in the
Philippines, rather it is a global phenomenon that helps stimulate
economies.

Food production cannot keep up with the immense population

growth. While the measures to control population growth are
implausible as of the moment, the government must focus on
boosting local food production instead.

Performance Task Assessment (Individual Activity):

Create a powerpoint presentation in your own version of barriers of
agribusiness growth in the Philippines, inserting pictures is highly
recommended in your powerpoint.

This will be presented during the face to face classes.

4. Careers in Agribusiness
The occupations in the Agribusiness industry are segregated according
to their involvement in the industry. They are categorized under
primary agriculture, agricultural manufacturing/processing, and agri-
entrepreneurial and support occupations. Under the primary
agriculture category, workers perform a whole spectrum of daily chores
involved in crop and livestock preparation and production, fishing and
processing, breeding and management in a farm. Agriculturists,
Biotechnologists, Agricultural engineers, Plant Pathologists and
Entomologists are usually in-charge of ensuring the quality of the
agricultural commodities in the farm. Animal farmworkers including
breeders and veterinarians tend to animals raised for animal products.
Under the Agri-Entrepreneurial and support occupations, workers may
not require agriculture related degrees and could encourage
professionals from different fields. This group connects the upstream
and downstream segments of the market for agricultural goods. Many
people are engaged in entrepreneurship which focuses on agricultural
products, which are a quick and cheap to source. This secures them
higher income, especially when their ventures are managed well.
Retailing of agribusiness products can vary greatly from local
establishments like public market stalls to big grocery stores in
shopping malls. Another type of establishment that exists in the
industry is cooperative organizations. Cooperatives could sometimes
combine all the functions of the four market entities. They form an
association among farmers and pool their resources together which
then caters to all the needs (from inputs, financing and marketing) of
every farmer member.
A significant prospect for working in the Agribusiness sector is the field
of entrepreneurship. Many students and professionals alike engage in
entrepreneurial activities derived from the agricultural production.
These activities are usually in the field of processing, buying and selling
and manufacturing. This may not give them minimum wage or secured
monthly income but if their enterprises are managed well, the income is
way higher than the usual employment contract with a particular
employer. Working in the agribusiness industry does not limit students
to become farmers, but rather become agricultural entrepreneurs,
agricultural engineers and scientists and agricultural systems
developers.

Performance Task Assessment (Individual Activity):

Create a powerpoint presentation in your preferred career in
agribusiness, state the reason why you choose this career, the
advantages and disadvantages, inserting pictures is highly
recommended in your powerpoint.

This will be presented during the face to face classes.

4. Agricultural Commodities in the Philippines

The lush tropical vegetation of the Philippines offers variety of crops
and fruits produced and processed by the Agribusiness sector. Palay or
rice is the most widely produced in almost all regions, especially in
Luzon. This is followed by sugarcane in Visayas, and corn, coconut, and
coffee in Mindanao. Fruits for exports such as pineapple and banana are
heavily produced in Mindanao while mango is the primary output from
Luzon. In the animal production subsector, hog/pork occupies the
largest volume of production followed by cattle/beef, carabao, goat and
dairy. For poultry, chicken being common followed by duck, and egg
products. Most of these livestock produce come from the Luzon. The
Fishery subsector produces heavily through Aquaculture by its
operation in fish ponds/cages/pens that produces bangus, tilapia,
prawns and other types of seafood (i.e. oyster, mussel) and seaweed.
The rest of the Fishery subsector generates other species of fish
including Tuna (best known for export), coming from municipal and
commercial fishing in Mindanao. Lastly, the Forestry subsector
primarily produces logs, followed by lumber, plywood and other types
of veneer. These agricultural produce are the main source of the activity
in the sector through its value-adding processes. The direct outputs of
these processes are food products ready for consumption or numerous
materials for different utilization.
There is much to be gained from the Agribusiness industry as Free
Trade Agreements with other nations are easing the flow of goods by
reducing tariffs on imports and exports. The recent ASEAN-ANZ, which
eliminates tariffs for import and export of agricultural products
between Philippines and Australia and New Zealand, will provide
exporters with greater market access to Australia and New Zealand.
Another opportunity for the industry is the rapid development of
biotechnology which is quickly developing the quality of agricultural
products by significantly reducing growth time and increasing yield in
crops and animal subsectors. In the past few years, breakthroughs in
biotechnology have created more nutritional and disease-resistant
strains of crops and livestock.

Performance Task Assessment (Individual Activity):

 Make a documentary on the different agricultural commodities in
your community, the people who cultivate or produce these
commodities, and their point of view while producing these
commodities.
This will be presented during the face to face classes.
.

5. World Food Supply

The challenges to ending hunger, food insecurity and all forms of
malnutrition keep growing. The COVID-19 pandemic has further
highlighted the fragilities in our agrifood systems and the inequalities in
our societies, driving further increases in world hunger and severe food
insecurity. Despite global progress, trends in child undernutrition –
including stunting and wasting, deficiencies in essential micronutrients
and overweight and obesity in children, continue to be of great concern.
The most recent evidence available suggests that the number of people
unable to afford a healthy diet around the world rose by 112 million to
almost 3.1 billion, reflecting the impacts of rising consumer food prices
during the pandemic. The ongoing war in Ukraine is disrupting supply
chains and further affecting prices of grain, fertilizer and energy. In the
first half of 2022, this resulted in further food price increases. At the
same time, more frequent and severe extreme climate events are
disrupting supply chains especially in low-income countries.
In low-income countries but also in some lower-middle-income
countries where agriculture is key for the economy, jobs and
livelihoods, governments need to increase and prioritize expenditure
for the provision of services that support food and agriculture more
collectively. This is crucial to bridge productivity gaps in the production
of nutritious foods and enable income generation to improve the
affordability of healthy diets, although it will require significant
development financing.

Most of the food and agricultural policy support currently implemented

is not aligned with the objective of promoting healthy diets and in many
cases is actually inadvertently undermining food security and nutrition
outcomes. Furthermore, much of the support is not equitably
 distributed, is market distortive and environmentally harmful. It is
possible to allocate public budgets more cost-effectively and efficiently
to help reduce the cost of healthy diets, thus improving their
affordability, sustainably and inclusively, ensuring no one is left behind.

The effects of inflation in consumer food prices stemming from the

economic impacts of the COVID-19 pandemic and the measures put in
place to contain it, are clear and significant. Global consumer food prices
were higher by the end of 2020 than they were during any month in the
previous six years. This translated directly into an increased average
cost of a healthy diet in 2020 for all regions and almost all sub-regions
in the world. The affordability of a healthy diet measures the average
cost of the diet relative to income; therefore, changes over time can be
the result of changes in the cost of the diet, people’s income, or both.
Performance Task Assessment (Individual Activity):
Watch SEASPIRACY in the Netflix and make a movie review about
this documentary. Discuss how this documentary relates with the topic
“world food supply”. Selected movie review/s will be required to read
his/her movie review in the class. This will be presented during the face
to face classes.
Part II Production and Innovation of Agribusiness products
8. The necessity of agribusiness managers to integrate rapidly
changing technology in their operation
The use of new technologies and the opportunities they offer help
agriculture in the process of adapting to the new demands of marketing,
sales and crop profitability. The technological and digital revolution that
is transforming agriculture and its processes is helping to achieve
optimal production yields, which, while traditionally calculated in terms
of quantity of product or kilograms obtained per hectare, today, yields
have come to be calculated in terms of the amount of money produced
per hectare. In addition to applying good, efficient cultivation practices,
such as better quality seeds, or lowering production costs through
partnerships between farmers, technological change is essential to
achieve this profitability. With the use of new technologies applied to
agriculture, it is possible to:
1. Greater efficiency in the use of scarce resources, such as water or
energy.
2. Reduction of environmental pollution.
3. Improved profitability of agricultural activity, producing higher
quality food, healthier and oriented to the tastes and preferences of
consumers.
4. Advice on the most efficient management of irrigation, climate and
fertilization.
5. Crop monitoring from drones, satellites or field sensors.
6. Generate harvest forecasts, or probability of pest incidence..

Performance Task Assessment (Individual Activity):

Create a powerpoint presentation on the importance of
incorporating technology in agribusiness, enumerate and discuss the
advantages and disadvantages, inserting pictures is highly
recommended in your powerpoint.
This will be presented during the face to face classes.

9. Importance of Innovation in agribusiness in the present times

Innovation in Agribusiness
Innovation is a continuing endeavor among agribusinesses, as the
industry seeks improved and efficient methods of production and
processing. New and improved types of machinery are being engineered
and manufactured on a large scale, such as robotic harvesters,
automated pesticide sprayers, and driverless tractors.
Ultimately, the aim of innovation in agribusiness is to improve
agricultural productivity and make agricultural activities easier for
farmers. It aims to lower the costs of production and increase
profitability for farmers, who often endure volatile market conditions as
crop prices fluctuate with changing economic conditions.
 7. Determining raw materials available in the community

Performance Task Assessment (Group Activity):

Create a powerpoint presentation on the available raw materials
in your community, and what is the role of innovation in converting
your available raw materials into finished products, inserting pictures is
highly recommended in your powerpoint. This will be presented during
the face to face classes.

8. Identifying Opportunities of Agribusiness Products

a. Food
b, Non-Food Products
Performance Task Assessment (Group Activity):
Create a one food product and one non-food product for the group
product presentation, remember that this product will be your sideline
business in your business plan implementation. This will be presented
during the face to face classes.

Part III Creation of Agribusiness Products (Class Presentation per

Group) – MIDTERM EXAM
9. Significance of the agribusiness food product in the local market
10. Usability and functionality of the non-food product
11. Product logo creation
12. Business design and packaging designs
Part IV Product Exhibit (FINAL EXAM)

References:

1. Bugador, Roderick. Industry Career Guide: Agribusiness

https://www.dlsu.edu.ph/wp-content/uploads/2019/03/2015-
26.pdf.
2. The State of Food Security and Nutrition in the World
https://www.fao.org/3/cc0639en/cc0639en.pdf