Home Agribusiness Livestock sector seen weighing down on Q1 agriculture output
Livestock sector seen weighing down on Q1 agriculture output
AGRICULTURE SECTOR output growth in the first quarter will be weighed down by the performance of the livestock industry, with hog farmers still hampered by the African Swine Fever (ASF) outbreak, industry analysts said.
The year-earlier comparative was a 1.7% decline in the agriculture sector by value of production in the first quarter of 2020, according to the Philippine Statistics Authority (PSA).
The first quarter 2021 result is due for release on May 10.
In 2020, the farm sector posted a 1.2% decline in output. The Department of Agriculture (DA) has said that it is targeting 2.5% growth for this year.
Roy S. Kempis, Pampanga State Agricultural University professor, said in a mobile phone message that the first-quarter performance will be either a decline or a modest rise.
“My conservative estimate for the sector is (between) a 1.0% decline and 0.5% growth, while my pessimistic estimate is (between) a 1.5% decline and a 0.5% increase,” Mr. Kempis said.
Mr. Kempis expects both the livestock and poultry subsectors to decline for the period due to the ASF outbreak and various other issues.
“For poultry, there are issues among contract growers with the feed they get from their integrators, leading to poor growth performance of birds,” Mr. Kempis said.
“The hog industry has suffered a lot. ASF is still the primary concern. Many farms have closed, including those operated by backyard hog raisers,” he added.
Agriculture Secretary William D. Dar said the livestock subsector is performing below potential.
“I hope that the agriculture sector in general continues to show resilience. We know that the performance of the livestock sub-sector is below its potential due to the lingering ASF outbreak,” Mr. Dar said in a mobile phone message.
Mr. Dar would not give a projection, but noted that ASF cases are declining in the first four months of the year.
“ASF incidence is now significantly down, by 50% if you compare the first four months of 2021 (with) the last four months of 2020,” Mr. Dar said.
Earlier in the year, the DA projected a pork supply deficit of 400,000 metric tons (MT) due to the effects of ASF on the hog inventory.
The government has since moved to lower tariffs and expand the import quota for foreign pork, but following an outcry from hog raisers, the Senate and the economic team of President Rodrigo R. Duterte agreed to temper Executive Order (EO) No. 128, which had outlined the terms of the import expansion.
The compromise set the tariff on pork imports within the minimum access volume (MAV) at 10% in the first three months and 15% over the following nine months. Tariffs for out-of-quota pork imports were set at 20% and 25% for the corresponding periods.
EO 128, issued on April 7, had initially lowered the tariffs on pork within the MAV quota pork imports to 5% and 10%, while setting the rates for out-of-quota pork to 15% and 20%. Before the EO, pork imports within the quota were charged 30%, while out-of-quota pork imports paid 40%.
The compromise also reduced the expansion of the pork import MAV quota to 254,210 MT, from the previous 404,000 MT.
The MAV refers to agricultural commodities that can be imported at lower tariffs under the World Trade Organization trading system.
According to the PSA, as of January, the hog inventory fell 24.1% year on year to 9.72 million animals.
“I think livestock and poultry will go down, while the crops and fisheries subsector will be flat,” Rolando T. Dy, executive director of the Center for Food and Agri-Business at the University of Asia and the Pacific, said in a mobile phone message.
Meanwhile, Mr. Kempis said the crops subsector may be the only “bright spot” among the four subsectors due to favorable weather in the first quarter.
“I think we are good in terms of crops production, including rice, vegetables, and fruits because of improving weather and abundant sunlight,” Mr. Kempis said.
Glenn B. Gregorio, director of the Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), also expects growth in the crops subsector in terms of volume.
In a mobile phone message, Mr. Gregorio said there is a need for more resilient farming systems in order to reduce the impact of typhoons and floods on crops.
“These include improved access to climatic and weather data, stress-tolerant crop varieties, and good agricultural practices, among others,” Mr. Gregorio said.
Mr. Kempis said the performance of the fisheries subsector is difficult to project due to the lifting of the closed fishing seasons in major fisheries.
“There are also disruptions in the fish supply chain whenever there are changes in the quarantine classification not only in the cities but also the provinces,” Mr. Kempis said.
SEARCA’s Mr. Gregorio is projecting growth in fisheries by volume, but added that the industry could use a measure of improvement in terms of logistics support.
He said fisheries will benefit from investment in integrated infrastructure that reduces production and transportation costs across the various supply chains.
“Of urgent concern is the need to (attract) private sector investment in cold-storage facilities. This need is very urgent given that fishing communities remain among the most impoverished,” Mr. Gregorio said.
Raul Q. Montemayor, Federation of Free Farmers national manager, said in a mobile phone message that even a modest rebound in the first quarter will be a major achievement relative to the year-earlier performance.
“Unlike in other sectors where people have lost jobs, farmers are mostly self-employed so the coronavirus disease 2019 (COVID-19) pandemic has less impact on their production. However, COVID-19 could have a larger effect in the marketing of their products,” Mr. Montemayor said.
“Growth is not that meaningful to farmers if their income has gone down in the process, as a result of excessive imports for example,” he added.
The agriculture sector accounts for about a tenth of gross domestic product and a quarter of the workforce. — Revin Mikhael D. Ochave