Introduction:
Population
has
grown
exponentially.
Current
numbers
are
estimated
around
6,692,030,277(World Bank, 2009) and are expected to rise 9.3 billion in 2050. The worlds
population will double in the next 50 years, if the current growth rate of 1.3 percent continues
(Kendall and Pimentel 1994:198). International agricultural research has contributed enormously
to increasing world food supplies to their current state of plenty. Yet poverty remains a major
problem and the challenge for agricultural research now lies in developing strategies that more
explicitly address the needs of the poor. The Philippines, like many other Asian countries have
been facing A severe disparity in realized as well as prospective growth in the demand and
Supply of agricultural products. With population growth of approximately 2 1/2 percent per year
and with very modest growth in per capita incomes, the demand for basic foodstuffs has been
growing at roughly 4 percent per year. Over long historical periods no countries in Asia, or
elsewhere, have been able to achieve a growth in the supply of agricultural products to match
this. The U.S. and Japan, for example, have both averaged less than 2 percent per year in the
growth of agricultural supply over the past century. A number of countries in recent periods have
managed four to five percent growth rates, but not without major investment in irrigation and
other forms of land improvement, in public infrastructure and in the development of new
technology. Economists now have completed a considerable body of economic studies which
show very clearly that if low cost agricultural supply growth is to be achieved in Asia, investment
in the production of new technology must be a central, indeed the central focus of a growth
strategy. Something on the order of two hundred studies of the contribution of agricultural
research to growth has now been undertaken. Research programs in many commodities and in
many countries have been studied. With few exceptions these studies have shown that these
research programs have produced agricultural supply growth. Furthermore, they have shown
that the costs to an economy of producing such growth through research investment are a small
fraction of the costs of achieving growth through alternative means. Put differently, the returns
realized on investment in agricultural research have been estimated to be extraordinarily high
(Everson, Waggoner and Ruttan, 1979).
Objectives:
Our objective in this paper is to provide qualitative assessment of investment in agricultural
research in the Philippines when population growth reaches 100 million.
PERFORMANCE OF PHILIPPINE AGRICULTURE:
Review of Related Literature
Trends in Supply, Trade, and Demand
Growth in the Philippines exhibits a familiar boom-bust pattern. Growthin the early period was
respectable, comparing favorably to high-growth Asianneighbors (Balisacan 1993). The 1980s
witnessed a sharp slowdown, followed by arecovery in the 1990s, and then accelerated in the
2000s. Growth in the sector tracks overallGDP growth; in the 1980s, GDP growth averaged only
1.8 percent, whereas in the 1990s and2000s, growth climbed to 3.1 percent and 4.8 percent,
respectively. In general, agriculturalgross value added (GVA) grows at about one or so
percentage points below GDP growth.
Non-crop commodities account for nearly half of agricultural output (Figure 2). Amongthe crops,
rice, corn, coconut, sugarcane, and banana altogether account for 84 percent of thecountrys
agricultural area. Likewise, output is highly concentrated among these traditionalcommodities;
palay alone accounts for more than a third of crop value-added, matchingthe contribution of
miscellaneous other crops. The growth for crops and fisheries havefollowed the pattern of the
agriculture sector in generali.e., rapid growth, then a slump,followed by recovery (Figure 3).
The rebound was especially strong for fisheries. Duringthe 2000s, annual growth of fisheries
averaged 6.7 percent, crops was only 2.9 percent, andpoultry and livestocks were at 3.3
percent. The long-term growth (19672009), on the otherhand, was 4.3 percent, 2.8 percent,
and 3.9 percent, respectively.
Likewise, the individual major crops followed the boom-bust pattern (Figures 4 and 5).Palay,
although not escaping the 1980s slowdown, has seen its output rise more consistentlyover time,
as compared with those of other crops. One noticeable drop was in 19971998due to the El
Nio drought. In the 2000s, however, its growth rate averaged 4.6 percent,compared with the
historical average of 3.3 percent.The growth of corn has sharper fluctuations. During the 2000s,
corn's growth rateaveraged 3.1 percent, which is lower than its long-term average of 3.6
percent. Coconut'sgrowth was more volatile. Its has been fairly anemic since the 1980s and
then averaged atjust 2 percent during the 2000s. Like coconut, sugarcanes recovery in the
1980s slump wastepid, and its average growth rate during the 2000s was slightly higher than
coconuts at 2.2percent. On the other hand, banana showed spectacular growth in the early
period (albeitfrom a small base); its recovery in recent years has been very strong, averaging
nearly 10percent. Growth in other crops has failed to recover in any significant way from its
1980sto 1990s slump, suggesting that Philippine agriculture has resisted adaptation to changing
global and domestic conditions.Unfortunately, the GVA breakdown for the other crops
category over the extendedperiod (1970s to the present) was unavailable. Instead, this study
presents output trends forthree representative crops within this sector, namely, mango,
pineapple, and coffee (Figure6).Pineapple has performed robustly over the past several
decades, despite undergoing avolatile period in the 1980s. In contrast, mango output recovered
very rapidly followingthe 1980s slump, but the industry has limped through the remainder of the
1990s up to thepresent. In the last few years, output has been contracting. Coffee is likewise on
the decline, having failed to recover in any significant way after the initial commodity boom in the
1970s. Among the non-traditional crop category, success stories such as that of pineapple
aretoo few and far between to overcome general malaise in the rest of the sub-sector.Emerging
trends in global markets can be seen in world price movements (Figure 7).World prices started
out at high levels in the mid-1970s, owing to the commodity priceboom. Over the next two
decades, agricultural prices rode a secular downward trend; this isnoticeable even for banana,
which stands out due to its high volatility. However, since 2000,the trend has reversed (FAO
2004). Demand growth has caught up with supply; the forcesthat are driving world prices
upward in the latter part of the decade would likely persist overthe medium term (Dewbre et al.
2008).The foregoing world price trends are very helpful in understanding self-sufficiency
ratios for major importables such as rice, corn, and meat (Figure 8). Self-sufficiency ratiothe
share of domestic production in gross supply, based on the supply and utilizationaccounts of the
Bureau of Agricultural Statistics (BAS). The country is approaching selfsufficiencyfor pork and
chicken, and corn. Domestic production has accounted for justabout 8085 percent of gross
supply of rice since 1999. Self-sufficiency even fell over thecourse of the food crisis despite the
sharp increases in world prices of rice. This was due topolicy choices made by the government,
in defiance of basic market forces.Generally, per capita consumption of rice, corn, and meat has
an upward trend (Figure9). This is most striking for rice, in which per capita consumption now
approaches 130kilograms per year (kg/year), compared with about 100 kg/year in 1999. Per
capitaconsumption grew about 3.1 percent per year over that period, even though population
growth was only about 2 percent per year.
Abstract:
This paper reviews hypotheses about the industry of agriculture and natural resource
management that the government should focus relating to the impacts of population growth for
productivity, poverty, and natural resource conditions when it reaches 100 million in terms of
population.
