Farmers yet to feel benefits of improved agricultural trade balance, analysts say
By Vonn Andrei E. Villamiel
THE Philippines’ agricultural trade deficit narrowed to a 21-month low in November, driven by a surge in exports and a pullback in imports, but analysts said the improvements have yet to trickle down to farmers, who continue to grapple with persistently low farmgate prices.
The Philippine Statistics Authority, citing preliminary data, said the trade deficit in agricultural goods shrank 20% year on year in November to $806.34 million. Agricultural exports rose 18.9% to $806.18 million.
Imports of farm commodities dipped 4.4% year on year to a five-month low of $1.61 billion. The decline was driven largely by a 51.5% drop in cereal imports, following a four-month rice import ban that began in September.
For the first 11 months, the agricultural trade deficit totaled $10.3 billion, narrowing about 4.6% from a year earlier.
Agricultural exports in the year to date amounted to $8.33 billion, up 18.8%, exceeding the full-year 2024 total of $7.75 billion.
Despite the narrower deficit and stronger export performance, an analyst said there is little reason to celebrate, particularly from the perspective of producers.
“There is an expected slight decrease in our agriculture trade deficit last year, given the unprecedented volume of imports of rice, pork, and chicken in 2024,” Jayson H. Cainglet, executive director of the Samahang Industriya ng Agrikultura, told BusinessWorld via Viber.
In 2024, the Philippines imported a record 4.8 million metric tons (MMT) of rice, up from around 3.6 MMT in 2023, as traders accelerated purchases amid concerns over weaker harvests caused by El Niño and La Niña.
The Bureau of Animal Industry also reported that the Philippines imported a record 1.45 MMT of meat in 2024, up 20.43%, driven by higher pork and chicken meat purchases.
“The narrower deficit can be attributed to a higher base in 2024, and its impact was felt by producers last year through the huge drop in farmgate prices,” Mr. Cainglet said.
He added that improvement in the trade balance should be felt by domestic producers through strong farmgate prices, especially for commodities that directly compete with imports.
“From the producers’ perspective, the tangible measurement of our trade deficit in agriculture is how traders and trader-importers are setting prices at the farmgate for import-favored commodities like rice, pork, chicken and vegetables,” he said.
Mr. Cainglet said that with cheaper imports and a lowered tariff regime, however, farmgate prices of major agricultural commodities have been pushed close to, or even lower than, production costs.
Danilo V. Fausto, president of the Philippine Chamber of Agriculture and Food, Inc., also said gains from improved trade balances have yet to be felt at the farm level.
Improvements in farmgate prices and farmer incomes are not yet apparent, he told BusinessWorld via Viber.
Still, Mr. Fausto said a healthier trade balance could eventually support demand and productivity, especially if accompanied by stronger support for farmers.
“The improved trade balance will steer up demand and productivity. Therefore, there is a need to increase support for agricultural export champions,” he said.
Mr. Fausto added that reforms should focus on strengthening backward linkages, including more efficient access to raw materials and improved logistics, to bring down production costs.
