Subject: AGECON 1 Date: Dec.

22 2024

MEMBERS:
Keith Jaspher Costuya
Avegiel C. Velasco
Arcie T. Leopardas
Janine Cuaysing
Juniel Polangco

THE SIGNIFICANCE OF AGRICULTURE AS AN ECONOMIC SECTOR IN THE PHILIPPINES

The Philippines is a country that has 47% of it is an agricultural land. Farming is a
main source of living especially in the poor rural area or in provinces. Luzon contributes at
39.2 percent and meanwhile, Mindanao contributes 33.4 percent followed by Visayas at 27.4
percent. In 2022, the main crop produced in the Philippines by volume of production (in
million metric tons) is sugarcane (23.46 metric tons), rice (19.76 metric tons), coconut (14.93
metric tons) followed by banana (9.01), corn (8.26).
On the other hand, by 2022, the agricultural industry employed about 20 percent of
the population and contributed 10 percent of the GDP to the overall economy. However,
small-scale farming and conventional production techniques are crucial to this industry.
A. THE CURRENT VALUE OF AGRICULTURE SECTOR
The value of crop production, which was PhP 222.69 billion, decreased by 0.4
percent. It represented 54.0% of the overall production value in fishing and agriculture.
Gains in the palay and corn production values were noted at 0.2 and 5.0 percent,
respectively.
The value of livestock production at PhP 66.11 billion was 2.5 percent higher than
last year’s same quarter level. It made up 16.0% of the overall production value in the fishing
and agricultural industries. Hog reported an increase in production value of 3.3%. Poultry
grew by 2.9 percent, accounting for PhP 64.89 billion, or 15.7 percent, of the total value of
production in agriculture and fisheries. All poultry commodities showed increases in
production value, with the exception of duck eggs.
Poultry grew by 2.9 percent, accounting for PhP 64.89 billion, or 15.7 percent, of
the total value of production in agriculture and fisheries. All poultry commodities showed
increases in production value, with the exception of duck eggs.
For fisheries, value of production, which amounted to PhP 58.72 billion, decreased
by 6.1 percent. It shared 14.2 percent to the total value of production in agriculture and
fisheries. In particular, decreases were noted for tiger prawn (sugpo) at 49.0 percent and
bigeye tuna (tambakol/bariles) at 41.1 percent.

At current prices, the value of production in agriculture and fisheries amounted to PhP
522.58 billion, which was 4.3 percent higher than its level in same quarter last year.

B. THE SUBSECTOR OF AGRICULTURAL SECTOR

Agriculture, which includes four sub-sectors (crops, livestock, poultry and fisheries),
is the main source of income for 25 to 30% of the working population. Its contribution to the
gross national product is about 10%.

C. THE MAJOR COMMODITIES PRODUCED AND EXPORTED

Exports in the Philippines mark nearly third in the country’s GDP (Gross Domestic
Product). The major exports are electronic products (42 percent), other manufactures (10
percent) and woodcrafts and furniture (6 percent). Philippines is also the world’s largest
producer of coconut, pineapple and abaca. Philippines's main export partners are Japan (21
percent), the United States (15 percent), China (12 percent) and Hong Kong (8 percent).

Agricultural systems are composed of upland irrigated agriculture, lowland

agricultural systems, and crop agriculture. Most of the farm's surface are irrigated with rice
and sugarcane, while the other areas are used for the cultivation of coconut, corn and
cassava. Philippines major agricultural crops include rice, coconut, wheat, sugar, bananas,
pineapples and mangoes.

D. THE REGIONS AND PROVINCES PRODUCING THE MOST OF THE MAJOR

COMMODITIES PRODUCED AND EXPORTED

Davao Region Recorded the Fastest Growth in the Value of Production in Agriculture
and Fisheries. Davao del Sur produce most major commodities in Davao region, Davao del
Sur produce such as such banana, coconut, mango and pineapple.
 E. THE TOTAL VALUE OF AGRICULTUREAL PRODUCE AND EXPORTS BY COMMODITY
OR COMMODITY GROUPS OVER THE PAST 5 YEARS

Total value of agricultural exports from the Philippines from 2018 to

2022

In 2022, the Philippines exported agricultural products worth approximately $7.5

billion, an increase from the previous year. Among the commodity groups, edible fruits and
nuts were the country's main agricultural exports this year.
 F. THE LOCAL DESTINATIONS OF AGRICULTURAL PRODUCTS AND THE INTERNATIONAL
DESTINATIONS OF THE PHILIPPINES
The Philippines is the seventh-largest market for U.S. agricultural exports and the top
market in Southeast Asia.

Exports increased by 11 percent during 2020, surpassing Vietnam and making the
Philippines the largest market for US products in Southeast Asia for the first time since 2015.
Despite customs and logistics shortfalls, the US has long been the largest supplier of
agricultural products to the Philippines compared to neighboring suppliers in Asia. In 2021,
imports from the United States, which accounted for 21 percent of the market, were almost
double those of the second largest supplier, Indonesia.
Consumer goods were the largest category of US agricultural exports to the
Philippines in 2021 at $1.4 billion, up 23 percent from 2020. The Philippines has been the
largest destination for US consumer goods in Southeast Asia since 2006. The top products in
this category include dairy products ($437 million), pork and pork products ($204 million),
and poultry and poultry ($147 million, excluding eggs). Annual growth was particularly
strong for US meat and poultry products, with pork exports up $90 million and poultry
exports up $83 million. Exports of meat and poultry products have increased significantly in
recent years to compensate for the shortfall in domestic pig production caused by African
swine fever. Pork exports temporarily benefited from lower tariffs and higher quotas, while
demand for substitute proteins such as poultry increased.
Intermediates were the second largest category of US agricultural exports to the
Philippines in 2021 at $1.2 billion, up 4 percent from 2020. The main products in this
category are soybean meal ($960 million); compound foods, meals and meals ($86 million);
and ethanol ($51 million). As soybean meal makes up a large portion of exported
intermediates, its annual growth of $60 million will account for a large portion of the
category's overall growth in 2021.
 Wholesale products were the third largest category of US agricultural exports to the
Philippines in 2021 at $1 billion, up 4 percent from 2020. The top products in this category
are wheat ($871 million), soybeans ($65 million) and legumes ($10 million). More than 90
percent of 2021 wholesale exports to the Philippines were wheat, up $44 million from 2020.
About half of the Philippines' wheat demand is for bread production, making it an outlier in
Southeast Asia, where wheat is more commonly used to make noodles. US exports account
for more than 90 percent of the Philippines' milled wheat market, although other countries
supply significant amounts of feed wheat.

G. THE LABOR PROFILE AND PARTICIPATION RATE IN AGRICULTUE.

The number of persons who were in the labor force was reported at 45.4 million of
the estimated 73.1 million population 15 years old and over in July 2019. This translates to a
labor force participation rate (LFPR) of 62.1 percent, which means that six hundred twenty-
one in one thousand of the population aged 15 years and over were either employed or
unemployed. Region X (Northern Mindanao) had the highest reported LFPR with 72.5
percent while the lowest LFPR reported was in Autonomous Region in Muslim Mindanao
at 53.3 percent

H. THE WOMAN’S PARTICIPAITON IN AGRICULTURE.

The relationship between women's labor force participation and economic

development is much more complex than is often presented in the academic literature
and policy debates. Due to various economic and social factors such as growth patterns,
education levels and social norms, trends in female labor force participation do not
 consistently follow a U-shaped relationship with GDP. In addition to participation rates,
policymakers should focus on improving women's access to quality work..

I. THE SHARE OF AGRICULTURE IN THE PHILIPPINE GROSS NATIONAL PRODUCT(GNP)

AND GROSS DOMESTIC PRODUCT(GDP)
In 2022, the share of agriculture in the Philippines' gross domestic product was
9.55 percent, industry contributed approximately 29.23 percent and the services sector
contributed about 61.22 percent.

J. THE SIGNIFICANT ADVANCES IN AGRICULTURE OVER THE PAST 5 YEARS

As of our last knowledge update in January 2022, we do not have specific

information on the most recent developments in Philippine agriculture from 2022 to
 2024. However, we can provide you with some general trends and areas of focus in
agricultural development that were relevant up to the last update:

1. Modernization and Technology Adoption:

The Philippines has been working towards modernizing its agriculture sector by
promoting the adoption of modern technologies. This includes the use of precision
farming, drones, and other smart farming practices to enhance productivity and
efficiency.

2. Crop Diversification:
There has been a push towards diversifying crops to ensure food security and
address the changing demands of the market. This involves promoting the cultivation
of a variety of crops to reduce reliance on a few staple foods.

3. Sustainable Agriculture Practices:

Sustainable agriculture practices, such as organic farming and integrated pest
management, have gained attention. Farmers are being encouraged to adopt
environmentally friendly practices to ensure long-term soil fertility and reduce the
environmental impact of farming.

4. Infrastructure Development:
Improvements in rural infrastructure, such as better irrigation systems and farm-to-
market roads, aim to facilitate the efficient transport of agricultural products and
reduce post-harvest losses.

5. Government Support and Programs:

Government initiatives and support programs for farmers, such as credit facilities,
subsidies, and training programs, play a crucial role in boosting agricultural
productivity.

6. Climate Resilience and Adaptation:

Given the vulnerability of agriculture to climate change, efforts are being made to
develop crops and farming systems that are more resilient to extreme weather
conditions. This includes the promotion of climate-smart agriculture.

K. THE ISSUES AND CONSTRAINSTS IN AGRICULTURE AND THEIR REASONS WHY

Agriculture faces various challenges and constraints, and these issues can vary across
regions and countries here are some common issues and constraints in agriculture and their
underlying reasons:

1. Land Fragmentation:
 Issue: Small and fragmented landholdings make it challenging for farmers to achieve
economies of scale and hinder the adoption of modern farming practices.
  Reasons: Inheritance practices often lead to land division among family members,
resulting in small and inefficient land parcels.
2. Lack of Access to Credit:
 Issue: Many farmers struggle to access affordable credit for purchasing seeds,
fertilizers, and modern farming equipment.
 Reasons: Limited financial infrastructure, high interest rates, and a lack of collateral
often restrict farmers' access to credit.
3. Outdated Farming Techniques:
 Issue: The persistence of traditional and outdated farming methods reduces overall
productivity.
 Reasons: Limited education and training opportunities, especially in rural areas,
hinder the adoption of modern and more efficient farming practices.
4. Post-Harvest Losses:
 Issue: Inadequate storage facilities and transportation infrastructure contribute to
significant post-harvest losses.
 Reasons: Insufficient cold storage, poor road networks, and a lack of proper handling
facilities result in the deterioration of agricultural produce.
5. Climate Change and Natural Disasters:
 Issue: Agriculture is vulnerable to the impacts of climate change, including extreme
weather events and changing rainfall patterns.
 Reasons: Global climate change and the Philippines' geographical location make it
susceptible to typhoons, floods, and droughts, affecting crop yields and livestock.
6. Water Scarcity and Irrigation Issues:
 Issue: Inconsistent water supply and inefficient irrigation systems hinder crop
production.
 Reasons: Limited water infrastructure, outdated irrigation systems, and
mismanagement of water resources contribute to water scarcity in some areas.
7. Market Access and Price Volatility:
 Issue: Farmers often face challenges in accessing markets, and there can be
significant price fluctuations for agricultural products.
 Reasons: Poor market infrastructure, lack of transportation options, and inadequate
information on market trends contribute to difficulties in selling products at fair
prices.
8. Limited Technology Adoption:
 Issue: Slow adoption of modern agricultural technologies hampers productivity and
efficiency.
 Reasons: Lack of awareness, high initial costs, and insufficient training prevent
farmers from embracing new technologies.
9. Policy and Regulatory Challenges:
 Issue: Inconsistent policies and regulations may create uncertainties for farmers.
 Reasons: Frequent changes in agricultural policies, bureaucratic hurdles, and a lack
of coordination among government agencies can create challenges for farmers.

Addressing these challenges requires a multi-faceted approach involving government

policies, investment in rural infrastructure, education and training programs, and the
promotion of sustainable and climate-smart agricultural practices.
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