History and Current Situation of

Agriculture in the Philippines

Brief background on agriculture

1. Farmers employ ⅔ of the Philippine workforce

2. Farmers earn the lowest average daily wage and salary.
3. 2013: the average daily wage of farmers was $6 or P300
 Though farming has been a job of poor income for
several decades, if not centuries, there have been
many laws and acts implemented by the government
that have further affected their income, such as the
TRAIN law and the Rice Tariffication Law.
Implications of TRAIN Law

1. Increased production cost by 50 centavos, diminishing income

by 10%.
2. Before the implementation of the TRAIN Law: farmers spent
P3.47 per kilo for fuel and earned P5.12/kg
3. After the implementation of the law: income was reduced to
P4.62/kg as the prices of fuel increased
 How did an increase in fuel greatly affect their
income?
1. It is a major resource needed by farmers.
2. On average, rice farmers consume 179 to 205 liters per hectare of fuel
which equates to 13 to 15% of their total expenses.
3. Agriculture is not yet advanced in the Philippines, however the prices of
fuel can only be compensated through mechanization and water-saving
technologies.
 Background on Rice Tariffication Law

1. Originally implemented as the Agricultural Tariffication Act to regulate the

Philippine membership in the World Trade Organization
2. World Trade Organization rules included the elimination of trade barriers,
but the Philippines was granted an exemption from this rule until 2004
a. PH implemented quantitative restrictions on the amount of rice
imported from foreign countries
3. The restrictions protected farmers from competition, but caused the
government to neglect agriculture.
a. They failed to advance and modernize agriculture, thus the Philippines
was left behind in agriculture as compared to other countries.
 Background on implementation of Rice
Tariffication Law
1. In 2018, the Philippines underwent inflation wherein rice prices reached as
high as P70 per kilogram. Rice became the highest contributor to inflation
in the country.
2. The inflation in rice was caused by a rice shortage.
3. The quantitative restrictions from the Agricultural Tariffication Act were
removed.
Implications of Rice Tariffication Law
1. Removal of quantitative restrictions of imported rice
2. Tariffs collected would go directly to the agricultural sector as additional
funding
3. Together with the passing of the law, 3.6 million bags of imported rice
would be released
4. P10B of the taxes would be given to the agricultural sector annually with
the purpose of modernizing agriculture
a. Seeds, mechanization, technical assistance, and credit would be
provided
b. Any amount above P10B generated from tariff would be used for cash
transfers and financial assistance to farmers
The contents of the law could have
been a win-win for all parties involved.
However, due to poor implementation,
there have been several negative
effects directly harming farmers.
Negative effects:
1. Farmers had spent a whole decade under the regime of the quantitative
restrictions, so the implementation came as a major shock to them
a. The Philippine rice industry never became truly competitive because of
this protection = no sense of competitiveness or awareness of how
advanced other countries were compared to them
b. Modernization of agriculture in other countries allowed them to
produce effectively at lower prices, resulting in lower priced crops as
well
i. Their prices are low by choice and does not kill their livelihood,
unlike that of the Filipino farmers
Negative effects:
c. Due to these, the Filipino farmers had a very difficult time adjusting
and competing with them.
d. Not to say that the quantitative restrictions were bad, but that the
government could have invested more in modernizing and advancing
agriculture while still under the restrictions.
 Negative effects:
2. Prices decreased as much as they increased, if not more.
a. Because the law was passed with the purpose of eliminating inflation,
prices dropped to an extreme.
b. The price range is now 17%-34% lower than that of 2018.
i. Some farmers sell palay a little over P17, as compared to the price
last year, which was around P22.
1. This P5 decrease deprived farmers of P95B in income
ii. At its absolute worst, farmers sell palay for P7-P8 per kilo, despite
the production cost being P12 per kilo.
c. This would mean that farmers are unable to provide for their needs, live
in heavy debt, and are bound by obligations to pay.
Negative effects:
3. There has now been an influx in foreign rice imports, which are cheaper
than domestically produced rice.
a. Around 2.4 metric tons of rice is said to be imported into the
Philippines in 2019.
b. This has been slowly killing and hurting the local rice industry.
i. Many farmers had complained that this influx would threaten to
weaken prices further.
Negative effects:
c. Influx caused a further glut in the market, resulting to even lower palay
prices.
i. Rice millers are opting to buy cheaper imported rice,
disincentivizing farmers to work.
d. This would mean that the P10B aid will not be enough to aid and help
the government with current conditions experienced by farmers.
i. P10B will only be implemented in 2020, the the implications of
the law cannot be compensated for in 2019.
ii. P10B will only be distributed to aggrieved farmers with interest
for 6 years.
How the farmers are struggling with climate
change
1. Farming is highly dependent on the state of the weather.
a. Heat in the Philippines threatens the Philippines with the
possibilities of drying out the crops.
b. Rain or typhoons could easily destroy the crops.
2. The Philippines is the most disaster prone country in the world
a. Said to experience an average of 20 typhoons annually.
How the farmers are struggling with climate
change
3. Global Climate Risk Index (CRI) ranked the Philippines as one of the
countries that experienced the greatest lost from weather
disturbances in 2011.
4. An eastern coast of Mindanao had an estimate of $663 million worth of
damage to agriculture
5. El Nino phenomenon gutted the rice sector of more than P4B, hurting
140,000 rice farmers.