Farm output contracts in Q1 on 'Odette' aftermath, expensive fertilizer

MANILA, Philippines — Farm production shrank in the first quarter partly as the sector still grappled with the twin effects of typhoon "Odette" and expensive fertilizer.

What's new

Data from the Philippine Statistics Authority on Wednesday showed that at constant 2018 prices, the value of agriculture and fisheries production dropped 0.3% year-on-year in the January-March period.

Crop production, which comprised more than half of total farm output, took a hit, declining 1.6% on-year in the first quarter. The production of palay (unhusked rice) and corn contracted by 1.9% and 0.2% respectively, due in part to decimated farmlands in several areas around the country as a result of Odette's devastation.

The fisheries subsector saw production sag by 5.8% on-year in the first quarter. Data showed troubling annual declines in alimango (mudcrab) (24.8%), gulyasan (skipjack) (20.2%), tunsoy (fimbriated sardines) (13.5%), bangus (milkfish) (12.7%), sugpo (tiger prawn) (11.3%), and sapsap (slipmouth) (10%).

Why this matters

Historically, agriculture accounts for 10% of the country’s GDP employs about a quarter of Filipino workers. But despite its important role to the economy, the farm sector has been left behind by other industries while agriculture workers live in abject poverty. And the outgoing Duterte administration has struggled to revive it.

Farm output in 2021 missed the Department of Agriculture’s watered-down target of 1% growth for last year.

What an analyst says

Michael Enriquez, chief investment officer at Sun Life Investment Management and Trust Corp, projected output to improve in the coming months.

"We expect output to recover in the second quarter due to the summer harvest season," he said in a Viber message.

"However, high prices of fertilizers have also been a cause of the drag for first quarter output," he added. Fertilizer prices has grown expensive amid Russia's invasion of Ukraine. Those two countries are considered major suppliers and producers of fertilizers.

Data also showed poultry production fattened 12.3% year-on-year last quarter, save for duck raising which recorded a decline.

Hog production moderated its slump to 1.2% in the first quarter amid the subsector's recovery from the African swine fever epidemic that ravaged pig populations around farms since 2020.