Prices of commodities will remain stable
The prevailing dry spell threatened the supply of major commodities such as rice and sugar in the first semester of the year but measures have been undertaken to keep prices stable and supply sufficient.
There still remains, of course, the question of whether self- sufficiency in food staples may indeed be attained within the remaining months of the current administration. For the meantime, at least, markets are well supplied with rice (even if new allegations of excessive importation have been raised) and sugar prices have remained leveled.
The weather bureau expects the El Niño phenomenon—a period of lower than average rainfall—to last until the end of the year. With the start of the rainy season, some cultivation areas were able to get a respite from the drought although it remains to be seen if production would pick up after planting delays.
“It’s a creeping El Niño, unlike what we have experienced in the past,” said Edilberto de Luna, Agriculture Assistant Secretary for field operations and concurrent head of the national rice and corn programs.
Palay ( unmilled rice) production in the first half of the year is seen to have fallen below expectations because of planting delays attributable to the dry spell. Output in the first six months of the year likely reached 8.3 million metric tons (MT), slightly lower than the semestral production target of 8.5 million MT and from the actual production level of 8.379 million MT in the same period last year.
First half corn production, meanwhile, is seen to have reached 3.4 million MT in the first semester of the year, lower than the semestral production target of 3.7 million MT and from the production level of 3.48 million MT in the same period last year.
Despite this, the Department of Agriculture (DA) is keeping its grains production target for the year as harvest of staple grains is seen to pick up in the second semester. For this year, the Philippine is expected to have an aggregate production of 8.4 million MT of yellow and white corn and 20 million MT of rice.
Domestic rice production and respective yield has risen steadily over the past fi ve years, an accomplishment that the department would be holding on to even if targets are not met this year. De Luna attributed this to increased irrigation, use of high performing seeds such as multi-stress varieties and new technologies.
Rice production has risen from 15.7 million MT in 2010 to 16.6 million MT in 2011, 18.02 million MT in 2012, 18.44 million MT in 2013 to 18.97 million MT in 2014. Yield per hectare has risen from 3.62 MT in 2010 to 3.68 MT in 2011, 3.84 MT in 2012, 3.89 MT in 2013 and 4.0 MT in 2014.
Corn production, meanwhile, has risen from 6.4 million MT in 2010 to 6.9 million MT in 2011, 7.4 million MT in 2012, 7.3 million MT in 2013, and 7.7 million MT in 2014. Yield per hectare has risen from 2.55 MT in 2010 to 2.74 MT in 2011, 2.86 MT in 2012, 2.88 MT in 2013 and 2.98 MT in 2014.
The lingering El Nino did not spare the sugar industry either, forcing the Sugar Regulatory Administration (SRA) to stop in June all sugar exports to the United States and the world market to protect domestic supply and stabilize prices as the dry spell cuts production below target.
The heat and drought stunted the growth of sugar canes in the Visayas region, especially in Negros province where more than half of the country’s supply is produced. Strong industrial demand and the speculation of traders who scrambled to secure supply in the event of a shortfall fueled fears of a shortage.
The SRA thus allowed the diversion to the domestic market of 70, 669.9 MT of unshipped world market sugar represented by “D” quedans and some 78,800 MT of US quota sugar.
Incurring an export shortfall to the US for the closing crop year, however, did not affect the export allocation for the Philippines for the new crop year that starts in October.
Having been a reliable supplier of the sweetener to the US for so long, the Philippines even received an increase in export allocation under the tariff-rate-quota (TRQ) system to 142, 160 metric tons raw value (MTRV) for crop year 2015- 2016, up from the export allocation of 138, 800 metric tons (MTRV) in the current crop year.
This is the third largest allocation provided by the US for the new crop year after allotments for Dominican Republic 185,335 MTVR and Brazil 152,691 MTVR.
The SRA has yet to release production expectations for the next cropping season. Overimportation? As the Philippines is still on the road to attaining self-sufficiency in rice, importation is still deemed necessary to ensure sufficient buffer stocks in the event of calamities and climatic conditions that may affect production.
The National Food Authority (NFA) has so far directly imported through governmentto-government deals 750,000 MT of rice since February.
In June, the state grains procurement agency also opened to the private sector importation under the Minimum Access Volume (MAV) Country Specific Quota and Omnibus Origin that comprises an aggregate volume of 805,200 metric tons (MT) of rice, 755, 200 MT of which is for the country-specific quota (CSQ) and 50,000 MT for the omnibus origin volume.
A standby supply of 250,000 MT was also approved for importation as needed should domestic production and supply be hit by the dry spell until the end of the year, although the NFA is no longer expected to import this volume within the year.
Sources from the Department of Agriculture (DA) privy to the deliberations of the Food Security Committee ( FSC) said current stockpiles are already sufficient for domestic consumption needs, even leaning towards a surplus.
Oversupply of imported rice depresses local rice prices. Traders have been known to exploit this situation to drive the farmgate price of palay to its lowest level to corner a sizeable volume.
Since last year, the oversight of the NFA had been placed under the Office of Presidential Assistant on Food Security and Agricultural Modernization ( OPAFSAM) headed by The weather bureau expects the El Niño phenomenon—a period of lower than average rainfall—to last until the end of the year. With the start of the rainy season, some cultivation areas were able to get a respite
from the drought although it remains to be seen if production would pick up after
planting delays. Secretary Francis Pangilinan who also now oversees the Philippine Coconut Authority (PCA) and the Fertilizer and Pesticide Authority (FPA).
Allegations now abound that the NFA had miscalculated the buffer stock requirement for the lean season. Several lawmakers are also suggesting that Pangilinan, who is eyeing reelection in the Senate, is already amassing funds for his campaign.
Pangilinan has denied this. “We will not allow the NFA to be used for fund raising. In fact during our watch the NFA has rejected rice tenders three times for being too high. I have been told that it this is the first time that bid offers have been rejected repeatedly by the NFA for being too high,” he said, referring to the results of the last rice tender.
“The record will also shown that we have been sparing in our rice importations. While the Arroyo administration imported a total of 11.8Million metric tons from 2004 to 2010, the Aquino administration has imported a total of 3.5 million metric tons from 2010 to 2015,” he added. Elsewhere in the farm sector Agriculture is not all grains. It’s also fisheries, animal husbandry and crops.
On the fisheries front, the DA is confident that the series of closed season on selected fish species it has been imposing since 2011 is contributing to the creation of a sustainable fisheries sector.
“This administration inherited overfished waters and overbuilt cage areas that contributed to fish fills and dwindling fishery yields,” said Agriculture Secretary Proceso Alcala.
The Bureau of Fisheries and Aquatic Resources ( BFAR) has implemented four closed fishing seasons from 2011 to 2015 that led to increase in population of tamban and galunggong as well as tuna that feeds on these small fish.
The success of the closed season persuaded the Western and Central Pacific Fisheries Commission to allow the Philippines to fish in the tuna-rich High Seas Pocket 1 of the Pacific Ocean.
The first half of the year also saw the introduction of amendments to the Fisheries Code of 1998 to satisfy the country’s trade commitments to the European Union and to curb the proliferation of illegal fishing activities.
Operators of commercial fishing vessels opposed the amendments because of the imposition of harsh penalties for violations and the requirement to invest in in monitoring equipment that are too expensive to procure and maintain.
The government and the industry locked horns for a while before eventually reaching an agreement to make the implementing rules and regulations of the law work for the industry.
As amendments were introduced into the fisheries law, the EU eventually lifted the yellow card warning imposed on the Philippines, paving the way for increased fisheries exports for the country.
Within the first semester of the year, The World Organization for Animal Health has also recognized the Philippine livestock industry as being free from both foot-and-mouth disease ( FMD) and goat plague, are economically damaging animal diseases leading to significant production losses.
The DA said this pronouncement would open up more trade opportunities for Philippine meat products.
The Philippines was recognized as being free from FMD without vaccination and free from goat plague—peste des petits ruminants (PPR)— following the recommendation of the OIE Scientific Commission for Animal diseases, which was based on documentation submitted by the Philippines.
In line with being recognized as being free from such animal diseases, the Philippine government is obligated to immediately notify the OIE in the event of an outbreak.
Elsewhere in agriculture, the DA continues to implement the World- Bank supported Philippine Rural Development Project (PRDP).
The PRDP, rolled out beginning the second semester of 2014, is a six- year program implemented by the DA with the World Bank for the creation of an inclusive, value-oriented and climate-resilient agriculture and fisheries sector.
The total project cost for the PRDP is P27.5 billion consisting of a P20.5 billion loan from the World Bank, P3.58 billion counterpart funding from the national government, P3.112 billion equity of local government units, and P287 million grant from the Global Environment Facility (GEF).
The PRDP builds on the innovations introduced by the Mindanao Rural Development Program (MRDP) that was concluded in 2013. It will cover 80 provinces in 16 regions.
The program has components for providing support in production and establishment of enterprises to enable farmers to maximize gains from the entire agriculture value chain.
Local government units that choose to participate in the project are required to provide counterpart funds of 10 percent of the project cost for production support for commodities and 20 percent of the project cost for infrastructure projects.