BPhilippine agriculture posted a major comeback in 2007, growing faster than expected on the strength of the Arroyo government’s unmatched spending in this cash-challenged sector plus its decisive measures to deal with both natural and manmade afflictions such as climate change, animal diseases, global supply shortfalls and market distortions.

Agriculture Secretary Arthur C. Yap said that despite a dry spell that lingered till late into the year, the sector expanded by 5.7% in the third quarter and buoyed government hopes of a much higher full-year economic growth for the country—thanks in large part to the quick turnaround (QTA) program and other well-timed intervention measures put in place by the Department of Agriculture (DA) to contain the devastating impact on farms of this climate change.

With the farm sector projected to hit the DA’s original target of 4.5%-5% for 2007, President Arroyo’s economic team along with international institutions like the Asian Development Bank (ADB), World Bank and International Monetary Fund (IMF) are now bullish on the Philippines’ joining the club of the region’s fastest growing economies this year and in 2008.

Higher Eco Growth, Lower Inflation

The National Economic and Development Authority (NEDA), foresees the Philippine economy growing by 6.9% to 7.3% this year while the World Bank sees an expansion of 6.7%, which is its highest projection in 2007 among the four largest Southeast Asian countries that include Indonesia (6.3%), Malaysia (5.7%) and Thailand (4.3%). The ADB is even more optimistic, raising its growth forecasts for the Philippines from just 5.8% to 7% this year, and from 5.7% to 6.4% in 2008.

Official growth projections were downgraded midway through the year amid fears at that time that the dry spell forecasted by the Philippine Atmospheric, Geophysical and Astronomical Services Administration or PAGASA would ravage Philippine farms and prune crop and fishery harvests in the second semester.

Better-than-expected harvests despite the dry spell, along with the DA’s aggressive efforts to deliver these commodities to ordinary consumers by way of opening more bagsakan or drop-off centers, barangay food terminals (BFTs) and Tindahan Natin outlets, have also stabilized food supply and prices, prompting the government to predict a lower inflation rate of 2.6 to 2.9% this 4th quarter.

Synergy with Private Sector, LGUs

Better synergy with the private sector and local government unit (LGU) executives ever since Yap was reappointed as agriculture secretary in November 2006 enabled the DA to pursue its key initiatives this year with the full backing of major stakeholders in farming and fishing.

To illustrate this closer partnership, agriculture officials held a summer workshop with over 50 industry leaders at the Seameo-Innotech in Quezon City to plot doable strategies for the government and the private sector to meet production and export targets for agriculture and fisheries this year.

As regards LGU officials, Yap and the rest of DA’s officialdom have been in constant coordination with local chief executives in finding urban buyers for the produce of their respective constituents and in untangling perennial problems like the unnecessary “checkpoints” that derail the speedy delivery of these goods to the metropolis and unduly jack up their retail costs.

“The Arroyo government has matched with action—and cash—its rhetoric on agricultural modernization and food security in the face of major threats like climate change and its jarring effects on global food supply patterns,” says Agriculture Secretary Arthur Yap. “As a result, the DA has been able to pursue with greater vigor and enough financial muscle its key programs meant not only to boost farm production despite these threats but also to make farming and fishing a lot more profitable, especially for its small stakeholders.”

Although private-sector stakeholders and LGUs have indeed played pivotal roles in the impressive comeback of the agriculture sector in 2007, consensus is wide and deep that the principal growth driver this year was the record level of farm spending by the Arroyo government—and the DA’s judicious funnelling of such public funds into its major initiatives beneficial to producers and consumers alike.

5-Pt Farm Agenda

With the economy on a roll halfway through the Arroyo watch, Yap says that Malacañang has managed to raise farm spending to unprecedented levels, thereby enabling the DA to bankroll the five pillars of its paramount agenda to raise both the productivity and profitability of farming, fishing and agribusiness ventures.

These five pillars comprise higher investments in irrigation and other infrastructure, in postharvest facilities like cold storage plants and dryers, and in research and development (R&D) and agricultural extension work; easing the tight credit squeeze in the countryside; and opening more markets here and abroad for local produce.

“Higher public spending by Government is testament that our farmers, fishermen and agribusiness entrepreneurs have began reaping the fruits of the tough reforms that President Arroyo and her economic team had effected to strengthen our country’s macroeconomic fundamentals,” Yap says.

In the field of infrastructure like irrigation, which is crucial to the production of palay, corn and other major crops, government spending this year rocketed to P3.1 billion—or 10 times the average annual outlay of P 300 million in the past—inclusive of funds for both foreign-assisted, locally-financed projects and other sources.

As a result, the National Irrigation Administration (NIA) was able to rehabilitate or repair irrigation facilities covering 53,758 hectares which represents 98% (as of December 3) of the target of 55,000 has for 2007.

Higher Public Spending

As for farm-to-market roads, the DA built this year a total of 1,616.76 kilometers of FMRs worth a total of P3.2 billion, with the biggest beneficiary being Agribusiness Mindanao.

To guarantee the quality of Philippine farm products and reduce postproduction losses that have undercut farm production and led to undue price spikes in basic commodities., the DA had also programmed P1 billion for about 1,000 units of various types of mechanical grain dryers, three (3) integrated post harvest processing centers has been completed and the DA is targeting n additional 50 centers all over the country, as well as about 50 assorted cold-chain facilities in major trading points.

In the area of R&D and rural extension work, the DA had embarked on extensive studies on new technologies to further raise yields and planting areas via its various Ginintuang Masaganang Ani (GMA) programs, and on promoting new varieties or reintroducing existing ones.

The DA sustained its hybrid certified and OPV seed subsidies to rice and corn farmers, which led to total palay production of 16.3 million metric tons and corn yields of 6.72 million MT this year.

GMA Programs

The outlay, for example, for the GMA Rice Program reached P1.78 billion, enabling the DA to provide P1.05 billion-worth of assistance to 1.07 million farmers in the form of production support services (hybrid and certified seeds coupled with locations specific interventions), and leading to an expansion in the total area planted to this staple to 4.27 million hectares.

As for the GMA Corn Program, its P819 million allotment enabled the Department this year to extend P752 million-worth of aid to corn farmers by way of improving production technology, production support, postharvest and irrigation development services, reducing postharvest losses and strengthening extension activities with local government units, and expand the total area planted to this cereal to 45,997 hectares.

With regard to the DA’s R&D commitment, one example is the culture of the Pacific white shrimp or Peneaus vannamei. a project that Yap had directed BFAR to undertake in tandem with the Southeast Asia Fisheries Development Center (SEAFDEC) in a bid to have this now sluggish sector regain its previous status as one of the world’s top shrimp producers.

After Yap ’s lifting of the ban on the importation and culture of this species earlier this year, industry leaders became optimistic that the retail cost of this shrimp variety could eventually go down to as low as P180 to P200 a kilo.

In the area of rural credit, the DA strengthened the Agricultural Credit and Policy Council (ACPC) to support the micro-financing programs for small farmers and fisherfolk.

New Markets

This year, Yap put up agricultural trade desks locally to complement the work of overseas-based attaches in tapping more investments for Philippine agriculture, and in keeping with the DA pillar to expand markets in the country’s traditional trade partners overseas and to explore new ones for local goods elsewhere across the globe.

The DA also spearheaded the country’s participation in several food exhibits and trade shows in Asia and Europe , which led to buying commitments for Philippine fruits, vegetables, and processed food products. Earnings from food exports like fresh pineapples totalled $44,995,220 as of Sept. 2007, representing a 6.96% jump from the $42,068,750 (Jan-Sept 2006) total on the same period last year, based on the National Statistics Office data.

New markets for non-traditional Philippine exports like carageenan include the Bahamas, Cambodia , Curacao , Greece , Guatemala , Jordan , Nicaragua , Nigeria and Ukraine .

Export winners like mangoes and other high-value commercial crops were able to penetrate more overseas markets this year, following the DA’s efforts to ensure compliance with internationally accepted sanitary and phytosanitary standards. In the case of mangoes, the DA was able to pave the way for the opening of new markets for this prime Philippine fruit export in the United States and China , following its initiatives to secure the approval of these foreign governments in accepting Philippine safety and quality protocols for mango exports.

On the local front, the DA set up a total of 25 BFTs in Metro Manila and another 17 in the regions, and 12 bagsakan points for farm products to help secure more markets and guarantee higher incomes for small farmers and fisherfolk and at the same time make quality food more accessible and affordable for the benefit of low-income families .

Greater Profitability

To further increase profits for palay growers, Yap was able to get the nod of President Arroyo and her Cabinet behind his recommendation for an increase in the palay procurement rate of the National Food Authority (NFA) from P10 to P11 a kilo.

This increase is on top of the ongoing incentives being enjoyed by farmers, which is P0.25/kg for drying and delivery and another P0.25/kg as Cooperative Development Incentive Fund (CDIF), thus raising the effective palay-buying price to P11.25/kg for individual farmers and P11.50/kg for farmer cooperatives.

In pursuit of sustainable development, the DA also secured tie-ups with church groups like the Catholic Bishops Conference of the Philippines (CBCP) to help promote pro-environment agricultural practices. These CBCP-backed projects in Bohol and the Agusan and Surigao provinces aim to boost farm productivity while ensuring the sustainability of agricultural resources in these areas.

More Foreign Investments

To convert Philippine farms into magnets for foreign investments, the DA made a far more aggressive pitch for joint ventures with foreign partners in sunrise sectors like the biofuels market, as exemplified by the array of agreements that agriculture officials and private Filipino businessmen have signed with Spanish investors on the sidelines of President Arroyo’s recent state visit to Spain .

Topping these multibillion-peso, RP-Spain deals were the agreements forged with Bionor Transformacion and Abengoa Bionergy, which involve over $400 million in investments in the Philippines’ biofuels sector; the pact with the Ministry of Agriculture and Fisheries and the Fundacion Codespa involving the cooperation in the areas of microfinance for farmers and fisherfolk and technology transfer of Spanish agricultural technologies, among other projects; and a contract with the Basque regional government to boost cooperation with the Philippines in the fields of sustainable fisheries development, aquaculture and marine biotechnology.

A landmark agriculture and fisheries cooperation agreement was also struck by the DA with its Spanish counterpart—the Ministry of Agriculture and Food--along with a commitment from Spain to carry out a one-million Euro Spanish grant for the development of the agro-industrial sectors in the Bicol and Caraga regions.

Alongside its five major programs, the DA had acted swiftly in addressing not only the dry spell but other new and recurring woes like the hog cholera and swine flu in Bulacan; the Brontispa or leaf beetle pest that has buffeted the coconut industry, and market supply and price warps brought about by production shortfalls here and abroad.

Bird Flu-, FMD-free

Furthermore, the DA had sustained programs meant to keep the Philippines free of the dreaded avian influenza or bird flu and the foot-and-mouth (FMD) disease. Early next year, the DA will seek a declaration by the Office Internationale des Epizooties (OIE) or Animal Health Organization of the country as an FMD-free country, a move that will brighten prospects for the country to win new overseas markets for pork exports.

As regards the price spiral of sugar during the last quarter, the DA teamed up with private sugar suppliers to ensure the steady supply and stable cost of this commodity, through an agreement that would peg its retail price at a range of P36-P38 a kilo.

Yap had forged this agreement with the National Food Authority (NFA) along with the Sugar Regulatory Administration (SRA) and its subsidiary, the Philippine Sugar Corp. (Philsucor), and the Confederation of Sugar Producers Association Inc. (Confed) last month following a spike in local prices arising in part from a global supply deficiency. Earlier, he had directed the SRA to revise its system of supply quotas for domestic consumption and US exports in order to increase the supply for local consumers and help stabilize retail prices this yuletide.

War on Smuggling

To further protect local growers, the DA also entered into agreements with the Bureau of Customs (BOC) to help stop the smuggling of onion and other agricultural products; and with LGUs and the Philippine National Police (PNP) to ensure the unhampered and efficient 24-hour delivery and distribution of perishable farm goods to urban markets.

The DA likewise tapped alternative production sites to grow upland crops in anticipation of abrupt climate changes that could cut production and pad commodity prices in urban markets.

For instance, Yap spearheaded efforts to tap alternative planting sites in the uplands of Quezon, Laguna and Northern Mindanao to supplement yields in the Cordillera Administrative Region (CAR), where harvests and transport of lettuce, carrots, cauliflower, broccoli, sweet pepper and other vegetables have been hurt on occasions by cold frosts and storm-induced landsides that bury road networks.

QTA Program

But this year’s defining moment for agriculture officials was certainly their mobilization of the DA’s manpower and resources in taking the edge off the effects of the dry spell by crafting an action program designed to ease the impact of this climate change on farmers on four affected Luzon regions and at the same time further increase yields in the non-affected farms of the Visayas and Mindanao.
Following PAGASA’s warning of a dry spell that could turn into a drought lasting till the yearend, Yap made use of the DA’s quarterly performance workshop last June to craft with officials of Department-attached units, bureaus and corporations a master plan to keep up the sector’s growth momentum despite the uncooperative climate.

The centerpiece of this comprehensive plan to deal with the dry spell was the QTA program that had, among others, managed to raise harvests of palay to 350,000 MT and of corn to 200,000 MT. As part of this emergency program, the DA had provided P153-M worth of aid to about 67,000 affected farmers in the form of small water-impounding facilities, seed subsidies, shallow tube wells, cloud-seeding operations and repair of irrigation facilities.

Strong Q3 Growth

Given these DA-initiated intervention measures, the dry spell failed to stop agriculture from growing 4.3% in the nine months to September, with the fisheries subsector posting the biggest expansion at 7.92% increase, arising from a production volume of 3.3 million MT worth P134.6 billion. Palay output reached 9.87 million MT for a 3.45% increase and a total value of P 94.08 billion while that of corn expanded 9.5%, as harvests totalled 5.29 million MT valued at P52.9B.

As for the other subsectors, livestock production increased by 2.06% during the period, making up 13.08% of the total agricultural production for the first nine months of 1007. Livestock grossed P117.9 billion at current prices, or a 4.39% more than last year’s record.

The poultry subsector posted a modest 0.41% growth in the January-September period, with its gross value estimated at P80.8 billion at current prices, which is 6.45% more than the 2006 record. The chicken industry managed to grow 0.62% owing to the slight increase in commercial broiler production in Luzon , while production of chicken eggs increased by 1.18%. The sector’s share in total agricultural output was 13.8% in the third quarter.

Plaudits

For its heightened efforts to boost farm yields and keep agriculture problems in check, the DA earned plaudits this year from lawmakers and foreign governments and organizations.

Sen. Edgardo Angara, who chairs the Senate agriculture committee and himself a former DA secretary, lauded Yap for his timely action to contain the spread of the Brontispa pest in coconut – the country’s main agricultural export and, later, for the successful agricultural trade and investment mission to Spain .

Sen. Juan Miguel Zubiri, the author of the Biofuels Act, and Rep. Abraham Mitra, the chairperson of the House food and agriculture committee, also lauded Yap for his efforts to bring investments into the emerging Philippine biofuels sector.

The Bagong Buhay Multi-Purpose Cooperative (BBMC) in Mabini, Sto. Domingo, Nueva Ecija commended the DA for carrying out an array of timely intervention measures during the dry spell that helped them and the rest of the palay sector cope with this abrupt climate change and keep growth targets on track for the 3rd quarter and the entire year.

Also, the PhilMaize Federation Inc., representing the corn industry, also thanked the DA for ensuring that growth targets were met for this critical sector.

The Rome-based United Nations Food and Agriculture Organization (FAO) meanwhile, cited President Arroyo’s “dynamic leadership,” commitment and level of political will as the key to the success of the Philippines’ ongoing initiatives to mitigate hunger and reduce poverty, while the US Department of Agriculture recently praised Yap for clearing the way to the full access of all American beef and beef products to the Philippine market in compliance with international trade standards.

Sustaining Growth in 2008

But Yap , one of a few Cabinet members already confirmed by the Commission on Appointments (CA), believes that despite agriculture’s relatively impressive showing this year, the DA still has a lot to do in 2008 to sustain the growth momentum in the face of various threats to the country’s food security.

For Secretary Yap, the DA has just started laying the groundwork for an ambitious, 10-year program for the country to attain self-sufficiency in most, if not, all indigenous crops. “The Philippines will never become globally competitive in the real sense for so long as we depend on imports for a sizeable chunk of our national food requirements. Agricultural modernization and self-sufficiency have to be the buzz words of the DA,” he says, “in the face of serious threats to global food production and supply such as the ever-increasing food demand by countries like China and India and the rising conflict in certain economies between the production of crops for food and for biofuel feedstock.”

For starters, he adds, the DA is incorporating the QTA program into the regular planting seasons as a way to increase yields, and is set to work anew with private-sector stakeholders and LGUs in crafting ways for the Philippines to hurdle these looming global challenges and drive the farm sector to an even faster pace next year.

“The strong comeback of Philippine agriculture does not end in 2007,” he says. “We are hopeful that with the continued support of Malacañang, Congress, LGUs and all other stakeholders, most especially our small farmers and fisherfolk, the sector can surmount all obstacles and grow at an even faster pace in 2008 and onwards.