Farm output likely shrank in 2nd quarter

Advertisement
Font Size

In the first quarter, agricultural output shrank by 1.2%, with fisheries and crops production taking a hit. — BLOOMBERG

By Revin Mikhael D. Ochave

LOCAL agricultural production likely contracted, albeit at a slower pace, in the second quarter, as the strict lockdown affected the employment of farm workers and prevented them from transporting their harvest, economists said.

The Philippine Statistics Authority (PSA) is set to release farm sector data for the second quarter on Aug. 5.

Rolando T. Dy, executive director of Center for Food and Agri-Business of University of Asia and the Pacific (UA&P), said the agricultural sector may have shrank in the April to June period as demand was hurt by rising unemployment and lower consumption.

“My guess is negative for the second quarter’s agricultural growth. Further, lockdown protocols have affected farm to market logistics,” Mr. Dy said in a mobile phone message.

Luzon was placed under an enhanced community quarantine (ECQ) from mid-March until May 1, although Metro Manila remained under an ECQ and modified ECQ until end-May. A general community quarantine was implemented starting June 1.

Pampanga State Agricultural University professor Roy S. Kempis said he estimated farm output growth at 0.5% to a “pessimistic” contraction of 0.75% in the second quarter.

In the first quarter, agricultural output shrank by 1.2%, with fisheries and crops production taking a hit.

In an e-mail interview, Mr. Kempis said the possible agricultural output growth can be pointed to slight improvements in crops, livestock, poultry, and fisheries as lockdown restrictions eased.

“Vegetables and fruits shall rebound because of the opening of the economy and overcoming logistical issues, while livestock and poultry supply shall continue to be robust in the market,” Mr. Kempis said.

“Fish supply in the market would turn around as fishing grounds in the seas and in-land areas have become accessible to fishermen and fish growers.”

However, Mr. Kempis had a dimmer projection for rice and corn production due to the lack of rainfall this year, with only two typhoons during the quarter.

“There will be continuing adverse effects on cereal production of rice and corn because of lack of rain. This is unprecedented that we are already at the start of the second half of 2020 but there are still no substantial rains to feed the water requirements of crops,” Mr. Kempis said.

In an e-mail interview, Glenn B. Gregorio, director of Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), said their study projected a 2.97% reduction in the volume of Philippine agricultural production for the first and second quarters.

Mr. Gregorio said the decline in agricultural production volume is equivalent to 97.01 million tons (MT), and is attributed to an estimated 1.4% drop in the country’s agricultural labor force resulting from community lockdowns.

“At the macro level, results of the projection shows that this would have translated to an estimated 1.4% reduction of the gross domestic product (GDP) of the Philippines, which in turn could have resulted to an increase of 3.23 million individuals living below $1.90 (P93.36) per day poverty thresholds,” Mr. Gregorio said.

According to PSA data, the farm sector contributes about a 10th of the country’s GDP and a fourth of the country’s jobs.   

Aside from fewer workers, Mr. Gregorio said the country’s agricultural performance may have been hampered by mobility restrictions and logistics issues across the supply chain.

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said farm output for the second quarter may have been “unexpectedly” positive.

“Compared to the same period last year, agriculture may have had a bump in the second quarter. Much of the quarter, people stayed at home and essentials were high on demand,” Mr. Asuncion said in an e-mail.

ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said he expects a marginal growth for the country’s agriculture sector due to good weather.

On the other hand, farmer group Samahang Industriya ng Agrikultura (SINAG) Executive Director Jayson H. Cainglet said that regardless of the second-quarter result, this does not automatically mean that local agricultural producers benefited.

“Even if we achieved growth for the quarter but cost of production also went up and farmgate prices are going down, it is useless. Agricultural output data is empty data if there is no context,” Mr. Cainglet said in a mobile phone message.





Advertisement