Thursday's surprising report that the country’s domestic economy expanded by 6.4 percent in the first three months of the year was widely attributed to the strong performance of the agriculture sector. 


What factors are behind the 7.7-percent spurt in agriculture’s gross value-added that helped lift the country’s growth domestic product in the first quarter? Is it effective government intervention or plain old luck? Experts say it’s both. 


"The 7.7-percent growth rate for the agriculture, fishery, and forestry looks fantastic but that’s for real," commented agribusiness expert Rolando Dy, who teaches economics at the University of Asia and the Pacific. 


"It should not surprise us because the weather has been very cooperative so far," he said. 


Weather’s fine
The National Statistical Coordination Board (NSCB) admitted as much in its report when it attributed the rebound in palay production -- up a robust 13.1 percent in the first quarter from a negative 0.7 percent last year -- on good weather. 


"[The increase] was largely due to the expansion in harvest area and higher yield per area as a result of the intensive use of certified seeds, combined with adequate irrigation and favorable weather," the NSCB due to the expansion in harvest area and improved productivity. 


The weather factor benefited nearly the entire crops subsector -- particularly sugarcane and banana, which accounted for half of the gross value-added of the agriculture, fishery and forestry industry. 


Sugarcane output increased by 8.21 percent in the quarter due to the significant rainfall that favored planting and sugar content formation and allow bigger area to be planted in Bukidnon and some provinces in Luzon, the Bureau of Agricultural Statistics (BAS) noted in its first-quarter agricultural performance report. 


It also cited favorable weather for the 2.98-percent rise in banana production, which was also the result of the increase in area-harvested hills in the Cordillera Autonomous Region, Davao and Socksargen. 


Improving prices
The fine weather also came at just the right time for farmers given the high prices for agricultural products both in the local and international markets. 


Dy told Today that it was a happy coincidence that the good weather happened just when prices of most commodities were rising as a result of increased global demand from countries like the United States and China. A hike in global commodities prices is usually followed by a similar gain in the domestic market. 


"Prices of most commodities like copra, chicken, pork and corn were high,” Dy said, stressing that the price is the main reason farmers were encouraged to expand production. “Prices of palay, due to continued government support, are also good." Dy acknowledged that higher prices of commodities like copra, pork and chicken might have helped spike up the country’s inflation rate -- and thus hurting urban dwellers, but it was generally good for the agricultural sector. 


These observations on price trends are also reflected in the BAS first-quarter report. On average, prices received by agricultural producers in the first quarter of the year rose 5.24 percent. Commodities that particularly enjoyed better prices include palay, corn, coconut, banana, coffee, tobacco, abaca, peanuts, mongo, cabbage, eggplant, calamansi, and rubber. 


Higher production, coupled with better prices, naturally translates to more profits for farmers. 


"There’s a lot of money in the countryside among agricultural producers these days," Dy said. 

Fish profits
The rise in price of meat products like chicken and pork had another fortunate effect. Leonardo Gonzales, an agribusiness expert and a former economics professor at the University of the Philippines Los Baños, explained that when consumers began noticing that meat prices were increasing, many shifted to eating fish. Sensing profits, many farmers shifted to growing tilapia and bangus [milkfish]. 


"From Muñoz to Isabela, you will see that many farmers have converted their farms to fishponds, mostly tilapia,” Gonzales reported. “It’s a demand driven-thing; it’s profitable. In fact, the trend is practically all over the country." 


That, for him, explains the 19.5-percent growth rate of the fisheries sector in the first quarter. 


Dy added that the fishery sector was also boosted by the widespread production of seaweeds due to breakthroughs in technology -- a factor that was also mentioned in the BAS report. 


"Aquaculture exhibited a dramatic increase with output growing by 40.55 percent,” according to the BAS report. “A high market demand for seaweeds due to the opening of the Philippine Carageenan Processing Plant in Lanao del Norte and financial assistance extended by [local government units] and seaweeds traders encouraged more operators to venture and improve seaweed culture." 


Government’s impact
Both Gonzales and Dy, however, acknowledged that the timely intervention government made a significant impact on the country’s agriculture. 


For instance, the government poured resources in December in terms of fertilizer subsidy, certified seeds and repairs of irrigation facilities, Gonzales said. 


"The timing is perfect and that is why we have a good first-quarter performance," he said, crediting the efforts of Agriculture Secretary Luis Lorenzo. 


But another surprise in the first quarter is the 96.2-percent expansion of the forestry sector. 


"That growth rate also looks incredible but I know the reason behind that," Dy shared. 


"Last year, Secretary [Elisea] Gozun of the Department of Environment and Natural Resources [DENR] liberalized the harvesting and transport of privately-grown trees. That really caused the explosion in the harvesting and processing of wood and wood products particularly in Mindanao," he said. 


Moreover, the Paper Industries Corp. of the Philippines, or Picop resumed operations a few years ago, which helped boost demand for logs to be used for processing. 


"This demonstrates how good policies could work to boost economic growth," Dy stressed. "We have been pushing for this policy for the forestry sector since the time of DENR secretary Antonio Cerilles but he ignored this proposal. It’s only [during the term of] Gozun when DENR realized the importance of the said policy."


For Gonzales, the growth of the agricultural sector is proof enough that the government could boost the sector if only it would provide enough financial resources.