AGRICULTURAL production is estimated to have contracted in the first quarter of 2020 as logistics issues disrupted the industry during the lockdowns ordered to contain the coronavirus disease 2019 (COVID-19) outbreak, analysts said.
The Philippine Statistics Authority (PSA) is scheduled to report the first quarter performance on May 6, Wednesday.
“My guess is low negative for agricultural growth. The lockdown affects logistics from farm to market and perishables like chicken, vegetables, fruits and fish can be affected,” Rolando T. Dy, executive director of Center for Food and Agri-Business of University of Asia and the Pacific (UA&P) said in a mobile phone message.
In an e-mail interview, Pampanga State Agricultural University professor Roy S. Kempis said that he believes the agriculture sector posted a contraction in output.
“For 2020, and starting in the first quarter of 2020, the pandemic shall be the central ‘pile’ that will level the economy and agriculture sector to the ground and/or bury these, even below ground. The changes from the fourth quarter of 2019 to the first quarter of 2020 would be a range from a conservative estimate 0.1% drop to a pessimistic estimate 0.5% drop,” Mr. Kempis said.
The Department of Agriculture (DA) initially said that its growth target for the quarter is around 2%.
In a virtual news conference Thursday, DA Spokesman Noel O. Reyes said that the DA is awaiting the results of the review being conducted by the department’s planners.
“Hintayin po natin ang data (Let us wait for the data),” he said, noting that the agriculture sector consists of “halos kalahati crops, 25% livestock, at 25% fisheries. (Nearly half of agriculture output is crops, 25% livestock, and 25% fisheries),” Mr. Reyes said.
The last previous contraction in agricultural output came in the second quarter of 2019. The PSA reported a 1.27% contraction, the biggest decline since the minus 2.21% posted in the second quarter of 2016.
In the fourth quarter of 2019, the PSA reported that agricultural production rose 0.4%, led by crops, poultry, and fisheries, while livestock production contracted.
In the first quarter of 2019 output rose 0.67%, driven by livestock, poultry, and fisheries, while crop production declined.
Agriculture accounts for around a quarter of the Philippine workforce but about 10% of gross domestic product.
“I expect rice and poultry production to have grown while livestock, primarily hogs, will experience a contraction. Fisheries will remain flat,” Mr. Dy said.
The PSA downgraded its estimates for the production of palay, or unmilled rice, in the first quarter to 4.25 million metric tons (MT), which if borne out by the data points to a 3.8% decline in output year on year.
It aso estimated a decline in corn production of 0.9% year-on-year to 2.40 million MT.
Mr. Kempis said the contraction in agricultural output will be across all sectors, with crops, vegetables, and fruits most affected by logistical issues.
“Rice and corn production will also decline but this could remain in a precarious (state of) positive growth because localized lockdowns still offered farmers a window to farm plus the fact that well-milled rice and corn can be stored longer and is going to be less affected by logistical issues, compared to vegetables and fruits,” Mr. Kempis said.
He noted that livestock and poultry may post growth while fisheries could go positive or negative.
UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion was a dissenter from the negative consensus, saying that agriculture could have “outperformed” despite the Taal and COVID-19 calamities.
The first quarter “may have outperformed year-on-year. Despite the momentary Taal eruption and the initial days of ECQ, agriculture production output momentum may have carried on because of largely favorable weather throughout the country,” he said in an e-mail interview.
“In Q1 2020 and growth is projected to be better than Q4 2019 and Q1 2020. Despite the COVID-19 pandemic wreaking havoc on consumption demand, agricultural products are basic (essential) commodities and are important inputs to other products. I do expect agriculture to have an added growth bump minus the usual impact of bad weather mid-year and toward the end year on its output as long as general supply corridors are not hampered by health care intervention measures (such as) ECQ-like checkpoints and travel bans.”
Mr. Kempis said that 2020 agricultural production will not be an improvement on 2019’s, but noted that are still positive signs to look forward to as the economy and the agricultural sector slowly open up after the ECQ (enhanced community quarantine).
“With the no work-no pay working population starting to earn wages as the economy is opened up for business and work, their purchasing power is also energized that would be welcomed by a revitalized agricultural production and manufacturing sector,” Mr. Kempis said. — Revin Mikhael D. Ochave