Economy



By Victor V. Saulon


Single-digit falls seen in 2015 palay, corn output




Posted on December 14, 2015


THE DEPARTMENT of Agriculture expects palay and corn production this year to decline by single-digit levels because of the adverse effects of El Niño and the three typhoons that hit the country in the second half.

For 2015, palay output is expected to decrease by 3.54% to 18.30 million metric tons (MT) from actual 2014 levels. Corn production is also projected to drop by 2.8% to 7.55 million MT.

Edilberto M. De Luna, Agriculture assistant secretary for field operations, said in a briefing on Friday that the department expects “substantial losses” because of the calamities.

He said that were it not for the calamities, palay production could have reached 19.5-19.8 million MT during the year, or near the target of about 20.06 million MT.

The farm sector accounts for about 12% of the country’s gross domestic product (GDP). Palay and corn output are among the sector’s biggest contributors apart from being important to the food supply.

Rolando T. Dy, professor at the University of Asia and the Pacific (UA&P), in an e-mailed response said he expects agricultural output this year to be at “low negative.” Factoring farm production into the prediction, he said full year GDP would not reach 6%. Mr. Dy, who is also executive director of the university’s center for food and agri business, said the World Bank forecast of 5.8% “looks more like it.”

“We expect first quarter [2016] agri growth to be at low negative (levels),” he said.

On a positive note, the Agriculture department expressed optimism about early prospects next year. It sees palay and corn production to increase during the first quarter of 2016, the period when the full intensity of the El Niño phenomenon is forecast to be felt.

In a statement yesterday, Agriculture Secretary Proceso J. Alcala said that based on farmers’ planting intentions, palay production might reach 4.38 million MT in the coming quarter, up 0.31% from P4.37 million MT in the first quarter of 2015.

He said the increase for rice could come from the expansion in the harvest area by 1.15% even as yield per hectare might decrease to 3.77 MT from 3.8 MT in anticipation of the adverse effects of El Niño, which is seen causing extreme dry spells in many parts of the country’s farming areas.

Corn production in the first-quarter of 2016 is expected to increase by 0.48% year on year to 2.38 million MT.

Mr. Alcala said almost all regions expect increases in corn production, noting probable higher output in the Ilocos, Davao and Northern Mindanao regions as well as the region representing South Cotabato, Cotabato City, Sultan Kudarat, Sarangani and General Santos City (Soccsksargen).

During the briefing, Mr. De Luna said that funding of about P2.1 billion would be released within the year to counter the adverse effect of the weather event. The funds will be used for mitigating activities, including water management, repair of small-scale water impounding facilities, procurement of seeds and cloud-seeding operations, he said.

A separate P900 million that was meant for recovery activities after typhoon Lando in October could augment the awaited funding, he said.

Mr. De Luna also said the department had advanced P400 million as production support funds. This is apart from at least P200 million as cost of a buffer stock for seeds after the typhoon.

He said the forecast for the first quarter of 2016 is higher because farmers had anticipated that El Niño would intensify. He also said the National Irrigation Administration (NIA) had released water to enable planting a month ahead of the usual Dec. 15 schedule.

“That’s a good development for the NIA-service area especially Central Luzon,” he said, adding that the move enabled farmers to plant earlier.

Planting in November means palay will mature in February, the month when El Niño is expected to be at its worst. Crops would not need a big volume of water by then.

UA&P’s Mr. Dy said he was not as bullish. “Water supply from rains and irrigation in the next few months will be key factors for palay, and rainfall for corn to attain good yields. It also depends on what areas,” he said.

“Cagayan Valley (Isabela), Central Luzon, West Visayas (Iloilo), and Central Mindanao are major rice areas. Cagayan Valley (Isabela), Pangasinan and parts of Mindanao (Bukidnon, South Cotabato) are main yellow corn areas,” he said.

Mr. De Luna also downplayed the possible impact on production of a Supreme Court decision that called for a ban on the testing of genetically modified eggplant. The ruling also declared null and void a Agriculture department order in 2002 that approved the use of a similar technology for corn.

He said there are other technologies that can be used instead of biotechnology. “We have many remedies. We have biological control agents against corn borer,” he said.

On Friday, Roger V. Navarro, president of the Philippine Maize Federation, Inc., said the ruling could result in losses amounting to P1 trillion. This includes foregone revenue in the corn industry at P90 billion, and livestock and poultry at P700 billion, as well as the economic impact of farm closures, opportunity losses, logistics and livelihood.