Agri sector seen to grow 5% in 1st semester

Better rice yields and favorable weather should lead to a five percent rise in farm sector output in the first semester, Agriculture Secretary Domingo Panganiban said yesterday.

Panganiban said farm production in the first six months is being boosted by improved yields for major crops such as rice and corn. These two major staples account for 20 percent, respectively and five percent of total agricultural production.

"Agriculture may grow anywhere between 4.5 percent to five percent. Our advance indicators show that crop production may expand seven to 7.5 percent during this period. In particular, palay production is expected to post a growth of 8.19 percent and corn production by 31.5 percent."

Farm output grew a marginal 1.26 percent in the first half of 2005, with full-year growth at 2.24 percent.

Aside from favorable weather conditions, Panganiban attributed the growth of the agriculture sector to the timely release of funds, amounting to P6.5 billion which went mostly to the rehabilitation of critical national and communal irrigation systems, and the aggressive distribution of subsidized farm inputs such as hybrid rice and corn seeds and fertilizers.

Other subsectors such as livestock and fishery output, are also expected to post gains in the first semester.

Poultry production on the other hand, is down by one percent. Small backyard raisers said earlier that weak demand, along with rising production costs and concerns about bird flu discouraged producers from increasing production.

Panganiban said, however, that with the recent lifting of the ban on chicken exports to Japan, the poultry integrators led by San Miguel Foods Inc., Tyson Agro-Ventures and Swift Foods Inc. are preparing to re-enter the Japanese market.

"This will certainly encourage producers to increase their production," said Panganiban, adding that the Philippines will shortly start exporting Halal chicken to Malaysia and the Middle East.

Earlier, the DA reported that La Niña rains are boosting efforts to increase rice production with the January to September palay harvest projected to reach an all-time high of about 9.6 million metric tons (MT) and possibly reduce the country’s rice importations this year.

Panganiban said the full-year rice production target still stands at 15.1 million metric tons (MT).

Bureau of Agricultural Statistics data show that rice production in the first quarter at 3.6 million MT was seven percent higher from the same period in 2005, while the second quarter yield is projected to hit 2.9 million MT, 9.6 percent higher from 2.8 million MT in the previous year.

Moreover, the third quarter production spike is projected at 16 percent or 3.096 million MT from the 3.1 million MT level in 2005.

The early rains will be good for the third quarter crop which represents the lean months for rice production because this allows farmers to harvest rice earlier, and in the process, have enough time to replant for a "palagad" or second quick turnaround crop.

The higher yields bolster hopes of reducing the country’s rice imports this year. The NFA has been authorized to import as much as 1.8 million MT to fill the production shortfall and for buffer stocking.

To date, a total of 1.495 million MT has been contracted to come in by August, of which 1.43 million MT will come from Vietnam and Thailand, 65,000 MT from the US Public Law 480 commodity grant and 132, 000 MT from countries that supported the Philippines’ bid under the World Trade Organization (WTO) to maintain quantitative restrictions on rice. Another 100,000 MT could come from re-orders from Thailand and Vietnam suppliers which earlier won contracts to supply rice to the Philippines.

Under NFA’s rice import rules, it can request from its suppliers, a re-order of 25 percent of its original volume bought and get it at the awarded price. This would mean substantial savings for the National Food Authority (NFA) because its buying price will be based on the old price instead of the current market price.

NFA wants to bring in all of the volume required as early as possible so that it can bring in the commodity when prices are still relatively stable. – with AFP