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21-January-2007 The Philippine STAR

The rebounding agriculture sector, which managed to grow 3.88 percent in 2006 despite the spate of super typhoons over the September-December period, is projected to grow four percent to five percent this year, and a higher seven percent to eight percent in 2008 on the back of higher public spending on rural infrastructure and seed technology, Agriculture Secretary Arthur Yap said.

A climate more conducive to foreign investments will also sweep the farm sector this year and onwards, Yap said, owing in large part to a wave of investments from China that will develop an estimated 1.2 million hectares of farmlands.

Yap, who described 2007 as an "investment year" for the farm sector, said the forecast is anchored on the congressional approval of the General Appropriations Act (GAA) for the year, which provides for a higher allocation for the Department of Agriculture (DA) for rural infrastructure and other key programs, and takes into account the possible resurgence of the El Niño dry spell and other adverse weather conditions that could hurt farm output.

The solid performance of the agriculture sector in the first eight months of 2006 pulled its growth rate to 3.88 percent in 2006, with the fisheries subsector remaining the top gainer, despite the onslaught of five super typhoons during the last four months of the year.

Because of the severe damage wrought by five typhoons on farmlands and fishery areas last year, the agriculture sector would be on a "recovery phase" in 2007, with growth "peaking" in 2008 to seven to eight percent as the Arroyo administration pumps more money into infrastructure projects such as irrigation and postharvest facilities and into seed technology, in order to further boost crop yields and cut farmers’ losses or wastage arising from inadequate storage facilities for their produce.

Yap said the DA is banking on the infrastructure buildup and other major DA initiatives to start reaping benefits for farmers and fisherfolk in the form of increased yields, wider market access for their produce, and higher incomes for them in 2008.

"The Arroyo administration is pumping more money into hard infrastructure like irrigation and postharvest facilities and into programs using hybrid or high-yielding seed varieties, in order to further raise yields and cut crop wastage or losses arising from poor or inadequate storage of their harvests," Yap said.

Seventeen memoranda of agreement providing for the development of a million hectares of land were sealed in Manila during the two-day state visit of Chinese Premier Wen Jiabao, and two more MOAs are due for signing this year and that will cover another 200,000 hectares of land.

Among the investment deals that will funnel more foreign money into local farms, he said, are the MOA allowing the Fu Hua Co. of China to invest $3.83 billion (30 billion RMB) in one million hectares for the cultivation of hybrid corn, hybrid rice and hybrid sorghum; and the MOA setting up of four bio-ethanol plants by the Nanning Yongkai Industry Group with several local companies that would entail a total of 40,000 hectares for feedstock production.

Many of these projects were worked out during a Yap-led investment mission to China last November.

These DA-initiated projects include the MOAs on the provision of small mobile ice plants and transport facilities to municipal fishery cooperatives and associations; the breeding and culture of grouper and other high-value species; the construction of a shipyard, establishment of a cold storage facility, and the rehabilitation of the Navotas Fish Port Complex; the development of an initial 40,000 hectares of agribusiness lands for cassava and sugar for ethanol production for China’s domestic consumption; and the development of the Candaba swamp area as an alternative source of irrigation and potable water.

"We can say that 2007 is an investment year for the agriculture sector," Yap said. "We would be expecting an array of investments in this sector and the government itself, through the DA, would be pouring more money in hard infrastructure this year."

In the fisheries sector, Yap said the recent lifting of the ban on Peneaus vannamei or Pacific white shrimp will energize the fisheries subsector and help the country recapture in two years’ time its previous status as the world’s number three global shrimp producer.

The Philippines had slid to 10th place in 2003 as a world leader in shrimp production. After being overtaken by the likes of Mexico, Brazil, Vietnam and Bangladesh .

Yap said the Bureau of Fisheries and Aquatic Resources (BFAR) will put up more mariculture parks in coastal areas to better sustain the impressive performance of the fisheries subsector this year by raising production to 4.7 metric tons in 2007 and creating some 190,000 jobs in marginalized fishing communities.

Aquaculture accounted for the bulk of the growth of this subsector, expanding by 10.42 percent in 2006.

The fisheries subsector registered the biggest gain at 6.31 percent, accounting for 24.92 percent of the total agriculture output, with its gross earnings of P163.4 billion representing an 11.62 percent hike compared to the 2005 level.

In the livestock and poultry subsectors, Yap said the DA will continue to market the Philippines as the only avian flu-free country in Asia and bank on its newly acquired status as an entirely foot-and-mouth-disease free area to open more markets for producers.

As for the coconut industry, which was the worst hit by the spate of super typhoons in the last quarter of 2006, Yap said production is expected to remain flat at 2.1 million metric tons (MT) in 2007.

But after the DA’s replanting, refertilization and rehabilitation programs for the industry have been put in place this year, the coconut subsector will post a turnaround, with production projected at 2.4 million MT in 2008, and reaching three million MT in 2010.

Yap, who visited typhoon-ravaged Bicol this week, also said the DA would put in place mitigation measures to offset the damage wrought by typhoons last year in the region on the abaca industry, to ensure that the Philippines remains a world leader in the production of Manila hemp.

The Philippines accounts for 85 percent of the world’s total production of abaca.

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