Agricultural output edges up in Q2

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Agricultural output rose 0.5% in the second quarter, thanks to growth in crops and fisheries sectors. — BLOOMBERG

By Revin Mikhael D. Ochave

THE country’s agricultural output picked up slightly in the second quarter, driven by growth in crops and fisheries sectors, the Philippine Statistics Authority (PSA) said on Wednesday.

The PSA said the value of production of the farm sector — which contributes about a tenth to the country’s gross domestic product (GDP) and a fourth of jobs — grew by an annual 0.5% in the April to June period from -1.4% seen in the same period in 2019. It was also an improvement from the -1.7% in the first quarter, which was revised from the initial -1.2% reported last May.

For the first half, agricultural output contracted by 0.6%.

“Production increases were noted for crops and fisheries during the period. On the other hand, livestock and poultry posted decreases in outputs. At current prices, the value of agricultural production amounted to P439.8 billion. This was 4.6% higher than the previous year’s record,” the PSA said.

Glenn B. Gregorio, director of Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA) said the second-quarter result, despite being positive, must be taken with a grain of salt.

“Despite the expected contraction due to coronavirus disease 2019 (COVID-19) pandemic, the positive growth, albeit at 0.5%, is a good sign as it points to the need for the agriculture sector not to just simply ‘weather the storm’ but ensure that it provides enough food for everyone for the long haul,” Mr. Gregorio said in an e-mail.

LOWER TARGET
Even with the improvements seen in the second quarter, Agriculture Secretary William D. Dar said they are now targeting 1.5% agricultural output growth for the entire year..

“But with this pandemic, reaching our (original) 2% growth target for the year is difficult. We hope that we can at least reach 1.5%. If the situation permits and the country’s agricultural sector will continue to work hard, combined with the help of our farmers, fishers, and the agriculture business sector, we will almost reach 2%,” Mr. Dar said in a virtual briefing.

However, Finance Secretary Carlos G. Dominguez III said the Agriculture department should still strive to achieve the original 2% annual growth target.

“I leave this challenge to Secretary Dar and the Department of Agriculture (DA): you must fulfill the target of an annual growth rate of at least 2% for the agriculture sector. This is needed to keep ahead of the country’s annual population growth rate, which is estimated to be around 1.4% in 2019 based on the Philippine Statistics Authority data. The steady growth of our agriculture sector is crucial to achieving stable food prices for all Filipinos,” Mr. Dominguez said in a speech at a DA event.

BRIGHT SPOTS
Crops output, which accounted for over half of the sector’s total production, grew by 5% in the second quarter, as palay and corn production jumped by 7.1% and 15.4%, respectively. For the first six months of 2020, crop production went up by 1.1%.

Bangko Sentral ng Pilipinas (BSP) Monetary Board Member V. Bruce J. Tolentino said the 7.1% growth in palay production may be attributed to the positive impact of the DA’s Rice Competitiveness Enhancement Fund (RCEF) program.

“However, rice prices increased 10.1% in the second quarter of 2020 compared to the same period in 2019, most likely due to the transport and logistics constraints arising from the lockdowns imposed due to the pandemic,” Mr. Tolentino, former deputy director-general of the International Rice Research Institute, said in an e-mail.

For Rolando T. Dy, executive director of Center for Food and Agri-Business of University of Asia and the Pacific (UA&P), the second-quarter result was not a surprise.

“The country’s palay production is up, plus our rice stocks are well supplied with imports, while hog and poultry production are down,” Mr. Dy said in a mobile phone message.

Mr. Dy also noted the increase in local corn production during the quarter was surprising because its peak season is during the third quarter.

Fisheries output edged up 0.9% in the April to June period, accounting for 16% of total agricultural output. However, fisheries production slipped 0.7% for the first half.

Pampanga State Agricultural University professor Roy S. Kempis attributed the improvement in the fisheries sub-sector to the National Government’s efforts in opening up the economy despite the pandemic.

“The opening up of the economy made fishing grounds in the seas and fish areas accessible. More fish could now be caught and/or produced,” Mr. Kempis said in a mobile phone message.

Meanwhile, the country’s livestock production, which contributed 17.3% of total farm output, fell 8.5% in the second quarter. Hog production slipped 5.2%, while cattle and carabao production dropped 29.5% and 26.5% respectively.

“With the rising prices in meat, this was a result of the consequential decline in production especially on pork due to the closure of pig farms and operations brought about by the African Swine Fever (ASF),” Mr. Kempis said.

The country’s poultry sub-sector, which accounted for 13% of total agricultural output, also slid 4.7%. Chicken and duck production both declined by 7.8%.

“In chicken, oversized dressed chickens abound in markets may be a consequence of the delaying release of production from 28 to 32-35 days. This may have happened because of the limited or restricted operations of restaurants and carinderias,” Mr. Kempis said.

UA&P’s Mr. Dy said the agriculture sector may be able to sustain growth into the third quarter, although it will be minimal.

“The stricter lockdowns across the country are hurting demand, coupled with many Filipinos with no jobs and no income. This will result in less food demand,” Mr. Dy said.

Mr. Kempis said the agricultural output growth may be better than 0.5% in the third quarter.

Meanwhile, SEARCA’s Mr. Gregorio said the country’s agriculture sector still has much work to sustain the growth for the rest of the year.

“May I rally for more technological innovations, such as tunnel ventilation technology, to support the swine and poultry sector to allow them to bounce back with its production for the rest of the year,” Mr. Gregorio said.

“There is also a need to support the government in its efforts to control and eradicate ASF, among other challenges the livestock sector is facing,” he added.

The government is scheduled to release second-quarter gross domestic product (GDP) on Thursday (Aug. 6). Agriculture typically accounts for not more than 10% of overall economic output.

Performance of Philippine Agriculture





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