Fuzzy PH agriculture data leads to glut, confused farm sector

NEARLY a year after facing the wrath of avian influenza, the local poultry sector grappled with a familiar foe: price.

In August of 2018, in fact, the farm-gate price of broiler started to decline on the back of increasing output.

During that time, the sign of a glut seemed too early to call, United Broiler Raisers Association (Ubra) told the BusinessMirror.

However, prices maintained a downward trend and, indeed, an oversupply was confirmed by November.

The glut wasn’t the usual production spree by local raisers in anticipation of Christmas demand.

It was a glut that no poultry raiser saw coming and which persists until today.

The Ubra explained that the glut stemmed from aggressive loading by poultry raisers who thought that the market can absorb additional supply. Poultry raisers, Ubra said, were wrong on this.

Just as the local industry loaded more and more day-old chicks unto the market, imported poultry meat products were surging. The market eventually choked on an oversupply that even big poultry producers like San Miguel Corp. and Bounty Fresh Food Inc. were forced to sell at a bargain.

Could the glut have been averted?

Yes, if only timely and updated data on the country’s supply and demand situation was available to guide farmers on their production cycles, Ubra said.

But the data, which could have saved small poultry raisers from a gloomy Christmas, came months after the industry had already incurred losses.

And the chance of it repeating again, sans this updated and timely data on the country’s supply and demand situation, is likely, Ubra President Elias Jose Inciong said. Lapse

IN January, Agriculture Secretary Emmanuel F. Piñol admitted that the government was partly to blame for the oversupply.

“We had a lapse in issuing guidance to the stakeholders on the current chicken supply situation, which we have to do actually to guide farmers on the volume they should raise in their farms,” Piñol said in a January 8 interview. “So, we will be updating our data on our supply situation.”

The broiler wasn’t the only farm commodity that was hit by oversupply last year. Tomatoes being dumped on the roadside in Laguna and truckloads of vegetables being rejected in Baguio also made headlines.

Situations like these could have been easily prevented if farmers were properly guided on market demand and production trends in the country, according to economists and policy-makers interviewed by the BusinessMirror.

The lack of data hampers policy-making as the absence of empirical evidence could cause government to undertake ungrounded decisions, economist Rolando T. Dy said.

“If data shows we lack pork fat, or pork skin, then we must import,” Dy, executive director of the University of Asia and the Pacific’s Center for Food and Agri Business, said in an interview.

“But if we do not have data, which could be used to forecast or project supply and demand situation, and we are blind, then it is likely that we would have oversupply or undersupply because our decisions do not have any basis,” he added.

Verification

DY said the verification of data adds veracity to the collected information to ensure that accurate figures are being used in policymaking.

Such process is presently absent from the country’s data system.

For example, Dy pointed out, the government could cross-check data sets on rice and palay production with rice millers.

He further explained that these millers are the ones on the ground and could verify if estimates on production and projections are realistic.

For one, the government still uses 65 percent as the average milling recovery rate (MRR) of palay to rice—a figure that, Dy said, has been disputed by local stakeholders for some years now.

Citing rice millers, he added that the average MRR right now in the Philippines could be around or below 62 percent. And the 3-percent difference could mean thousands of metric tons of rice that could spell an oversupply or shortage.

(The BusinessMirror published a Broader Look last year that reported the “grainy” data that government uses in rice policy-making: https:// businessmirror.com.ph/2018/08/30/ snapshot-of-rice-consumption-data-remains-grainy-as-pinoys-grapple-withsupply-prices/)

Technology

DY said it is high time the government adopted modern technology, such as drones and satellite images, in collecting and validating data.

The use of such equipment, he added, would reduce errors committed by humans in statistical work as they provide opportunities for cross-checking manually gathered data.

However, Dy pointed out, having such statistical system or process is easier said than done, especially when the government doesn’t have an “appreciation” for “good” data.

“But the problem is that it would entail big investments. And the government does not appreciate good statistics,” he said. “We have capability to conduct such data collection and verification but we do not have the funding.”

More so, Dy proposes that the government create a tripartite body or board that will focus on data verification.

This board could include representatives from the government and private sector to ensure that there is timely updating in the data covering food supply situation in the country.

Other Southeast Asian countries, such as Thailand and Malaysia, have these types of boards to monitor the supply and demand situation of their key crops, Dy said.

He added that the government could even look at putting up a separate agency to focus on analyzing data. However, Dy noted this may entail amending the charter of the Philippine Statistics Authority (PSA).

The government could even tap professors in state universities and colleges (SUCs) to conduct the data validation to easily boost the manpower or staff in such process, he added.

The professor said it is only a matter of investing in a “good” and “sound” data system, which could be even beneficial to the government in the long run.

“For example you have P2 billion, that would be equivalent to 200 kilometers of rural road at a P10 million per kilometer cost. That’s the favorite thing the government does,” Dy explained.

“But if you invest that P2 billion in a data system and do a cost-benefit analysis versus the construction of rural roads—the benefit of good data would be double or triple of that road construction.”

According to Dy, the government can have a sound data system if it wants to.

“Kung gusto may paraan; kung ayaw maraming dahilan [We can find means if we want something but if we don’t, we can only find excuses not to do it],” he said. “The corporate sector is even willing to pay more than P2 billion to have an information system [where] the benefits are multifold. Look at it, they even have ‘Big Data’ analytics and Blockchain.”

Dy said the Philippines is not lagging in terms of data coverage but it has to catch up in terms of analytic responsiveness.

For example, the government has no data monitoring on new emerging crops in the country, such as avocado and durian, he said.

The demand for these commodities, Dy explained, is growing fast in countries such as China and Vietnam. Regularity

PHILIPPINE Institute for Development Studies (PIDS) Senior Research Fellow Roehlano M. Briones told the BusinessMirror that the PSA faces a lot of challenges when it comes to data. Foremost among these challenges is the issue of regularity.

Briones said data from the PSA “comes intermittently,” leaving little or no room for policy adjustment. This is a function of money because it is costly to fund annual or monthly surveys. This is partly because official data usually has larger sample sizes.

A case in point is the conduct of the Family Income and Expenditure (FIES), which is done only every three years. This survey is being used as the basis for the government’s poverty data. The information that is collected is always three years late.

Speeding up the conduct of such surveys, including agriculture data, could involve the local government units (LGUs) to get updated data, especially on the consumption side. However, Briones said this is difficult when it comes to production because, oftentimes, there is underestimation or overestimation, depending on what suits the LGU concerned.

This is the same reason, Briones said, why the government does not entrust the LGUs with funds for conditional cash transfers (CCTs) since these can be used for patronage politics. This is the reason for the emphasis on the need to have an independent body to handle the CCTs.

“For consumption, that might be less problematic. Why am I saying this? There’s always a debate between PSA and LGUs especially with respect to production figures. So LGUs are always debating [against], either seriously overestimated PSA [data] or seriously underestimated; often it is underestimated,” Briones said.

“For its part, the PSA says once you link production with government programs or whatever data, consumption or production, to government data from the national government, and then you ask LGUs who could potentially benefit from these programs, ask them to collect the data, you’re undermining the integrity of the data-collection process,” he explained.

Briones added that LGUs are not set up as data-collection agencies and thus have no capacity to undertake data gathering for official statistics. He said that government does not allocate plantilla positions for LGUs. However, should government decide to create these positions, the people who will be assigned to fill them will have to go through years of training. Experience

EXPERIENCE and technology are also factors that can spell the difference between good and bad statistics. He said the PSA had to go through years and decades before they reaching a certain standard in data collection and processing efforts.

“This is all part of the infrastructure I’m saying. It takes a long time to accumulate this expertise and capacity,” Briones said.

He added that while the PSA has become an independent agency capable of undertaking the task of collecting and processing quality data, there are other practices done by countries that are helping them come up with the data they require.

Briones cited as example the Thai government, which uses a cropcutting methodology that allows the government to take a sample of the harvest and from there extrapolate how much will be produced based on the yield and the size of the harvested area. The government will visit farmers, select random plots, cut the produce and compensate the farmers for their trouble.

In the Philippines, he said, the Philippine Rice Information System (Prism), which is helping the country monitor rice production and prepare for and mitigate the effects of disasters such as typhoons and El Niño to rice areas, was introduced.

The Philippine Rice Research Institute (PhilRice) explained that Prism evaluates crop health and damage in the event of typhoons, flood, or drought. For instance, damage caused by Typhoon Glenda and Typhoon Marion in 2014 was assessed using SAR images.

The PhilRice said flooded rice area maps were also produced and used to validate the reports from the LGUs. This also helps assess drought-affected areas in Mindanao due to the prolonged El Niño.

Prism, PhilRice said, involves remote sensing, crop modeling, standardized procedure for crop health assessment, and smartphone-based surveys to provide information on where, when, and how much rice is grown in the country.

PhilRice said that since 2014, this monitoring and information system has been generating timely seasonal data on rice areas and yield, and assessment of crop health and damage in the event of typhoons, flood, or drought.

However, Briones said, these remote-sensing technologies are more widely used in OECD countries like Australia and the United States. The Philippines got its remote-sensing technologies from the National Oceanic and Atmospheric Administration (NOAA). PhilSys

ONE powerful tool that is under the disposal of the PSA is the PhilSys, or the national ID. Briones said the national ID, which assigns “student numbers” to each Filipino, will give the PSA the wherewithal to cross reference with data such as the farmer’s registry or the list of those who have availed themselves of crop insurance. This will enable the government to ensure that those included in the registry are one and the same person.

However, the only limit in this system right now is the fact that it is still voluntary. Whereas countries like South Korea, Indonesia, Thailand and Vietnam have long had national IDs in place, the Philippines’ system is still voluntary.

Having a system that has less human intervention is more advantageous and will prevent inaccuracies that could lead to overestimations and underestimations.

“‘Personalistic’ interactions are prone to inaccuracies especially if there are incentives or money at stake in those interactions,” Briones said. “But there’s a greater hope of more objective assessment if you use technology.”

He said that in order to avoid gluts in the case of chicken or tomatoes, Briones said the private sector can explore creating a “Grab-like” application that can show farmers and buyers the prices of certain commodities per locale.

This gives farmers and consumers the power to choose the best produce at the best price. It can also inform farmers about the commodities that are in demand and at what price they can be sold.

While technology is not the best suit of farmers whose average age is 52, Briones said when it comes to these technologies, older farmers would usually involve