2021: A challenging year for agriculture

MANILA, Philippines — The country’s agriculture sector faced numerous challenges this year.

As the government implemented policies on the importation of some agricultural products amid supply and price pressures, local producers were left hurt and discouraged.

“Agriculture has flatlined from the logistical and other restrictions due to the pandemic and from the unceasing deluge of imported commodities,” Federation of Free Farmers (FFF) chairman Leonardo Montemayor said, when asked about his assessment of the sector’s performance this year.

As prices of pork skyrocketed in the early part of the year, the government pushed for the increased pork imports under the minimum access volume (MAV), which local producers strongly opposed.

In May, President Duterte issued Executive Order (EO) 133, which increased the MAV for pork meat to 254,210 metric tons for 2021 from 54,210 MT, as one of the measures to augment local pork supply and stabilize prices in the market.

Duterte also signed EO 134, which provides that in-quota pork imports or those under the MAV are imposed a 10 percent tariff for three months and then 15 percent in the remaining months. This is lower than the original rate of 30 percent.

Out-quota pork imports are slapped with a 20 percent tariff for the first three months, which is raised to 25 percent in the remaining months. This is lower than the original tariff of 40 percent.

Latest data from the Bureau of Animal Industry (BAI) showed that pork imports reached 483,422 MT from January to October this year, 135 percent higher than the 205,535 MT in the same period a year ago.

The figure is also 89 percent more than the 256,017 MT of pork imported for the whole year of 2020.

“For the swine sector performance this year, I would say it’s not really good because of a lot of factors, including low demand due to the effects of COVID-19, the pork import policy of the government, which resulted in low confidence of the industry stakeholders to re-invest to improve the supply shortage gap, and the continued spread of African swine fever (ASF) though at lesser incidence than last year,” Pork Producers Federation of the Philippines Inc. president Rolando Tambago said.

The United States Department of Agriculture (USDA) pointed out that while pork prices declined in the months following the issuance of the additional MAV and lower tariffs, prices began to rise again in November. Pork belly prices registered a low of P341 a kilo in October.

The USDA attributed the increase to high gasoline prices, increasing demand towards the Christmas holiday season, policies that prevented the full utilization of pork MAV and disruptive meat labeling requirements.

Aside from pork, Duterte also lowered tariffs on rice imports in May.

EO 135 lowers the tariff for both in-quota rice imports or those under the MAV, and out-quota imports to 35 percent for one year to diversify the country’s market sources, increase rice supply and maintain stable prices.

Based on the DA’s latest rice supply outlook, rice imports are forecast to hit as much as 2.95 million MT this year.

Figures from the DA showed that rice imports reached 2.1 million MT in the first three quarters of the year.

However, the volume of locally produced rice is still higher as it is forecast to hit 13.46 million MT, with 8.2 million MT already produced from January to September.

Meanwhile, the DA also turned to the international market to augment fish supply during implementation of the closed fishing season in the country’s major fishing grounds in the last quarter of the year.

Philippine Tilapia Stakeholders Association president Jon Juico earlier said the policies on importation could hurt fisherfolk and discourage them from continuing production.

“Tilapia farmgate price in Central Luzon plays between P64 to P65 as compared to the P80 to P85 last year. That’s why so many fishermen here in Central Luzon cannot compete and are driven further to debt,” Juico said.

“We used to harvest twice a year, but now due to the pandemic we only harvest once a year. Tilapia is always abundant here in Central Luzon, but if this trend continues, many fish farmers will stop producing,” he said.

The country’s agricultural output continued to drop in the third quarter driven by declines in the livestock, crop and fisheries sectors.

Data from the Philippine Statistics Authority (PSA) showed that the value of production in local agriculture declined by 2.6 percent to P406.8 billion in the third quarter. This is a larger decline compared to the 1.5 percent drop in the previous quarter.

PSA data showed that the value of agricultural production dropped by 2.52 percent in the nine months of the year to P1.26 trillion.

The livestock sector led the decline in the third quarter as it registered a 15.2 percent reduction in production, which accounted for 15.3 percent of the country’s total agricultural production.

Despite the decline, Agriculture Secretary William Dar said the sector still showed resilience amid the pandemic.

“The crops sub-sector is showing the way, particularly rice with again a new record harvest. Without ASF we could have reached significant growth in the sector this year,” Dar said.

Production of palay or unhusked rice went up by 5.45 percent in the nine months of the year despite posting declines in the third quarter.

Dar earlier said he was targeting palay production to hit 20.4 million MT, higher than the 19.4 million MT in 2020.

With the production decline in the third quarter, the DA now expects a modest agricultural growth of around one percent for the year, lower than its earlier target of two percent.

“There might be some difficulty in meeting the target of two percent given the contraction of the sector,” Agriculture Undersecretary for Policy, Planning and Research Fermin Adriano said in November.

Agriculture stakeholders are hoping that the new administration will focus on local production instead of supporting importation.

“It has been a very difficult and frustrating year as the DA leadership is not attuned to the needs of the sector,” said United Broilers Raisers Association (UBRA) president Elias Jose Inciong

“For next year, we hope that there will be a new secretary of agriculture,” he said.

Tambago also expressed hope for the next administration to have a change in policy direction.

“We are just hoping the coming administration will have a policy change related to addressing the problems of the whole swine industry - only then, we can determine the future of our beloved swine industry,” Tambago said.

Moreover, Montemayor said he hopes for a real implementation of Go Local, Buy Local policy.

He also expressed hope for the review and amendment of the Rice Tariffication Law (RTL).

Various agriculture groups have expressed hope for the next administration to focus on local production.

“Agriculture and fisheries should be recognized as the main guarantor of food security and foundation for economic recovery. Our farmers and fishers (including indigenous peoples) should be treated as saviors and lead actors, not as mendicants or targets of assistance,” agriculture groups said in a joint policy recommendation.

Among these groups are the FFF, Bayanihan sa Agrikultura, Alyansa Agrikultura, Philippine Chamber of Agriculture and Food, and the Coalition for Agriculture Modernization in the Philippines.

They said the emphasis must be placed on self-reliance in domestic production, coupled with farmers’ productivity, profitability and protection from future pandemics, calamities and climate change events.

“Government should implement safeguard and other trade measures to protect local producers from serious market disruptions and unfair trade practices,” the groups said.

“Importation must be a last resort; and any benefits therefrom, equitably shared among producers and consumers,” they said.