By Maria Mikaela H. Tormon
AGRICULTURAL PRODUCTION growth likely slowed in the third quarter amid erratic weather, elevated fuel prices and farmers’ reluctance to expand planting, potentially pushing food prices higher ahead of the holiday season.
Former Agriculture Secretary William D. Dar said that production of crops, fisheries and hogs is expected to have weakened in the July to September period amid the government’s failure to take early action.
“The third quarter is a very challenging quarter for the year. Not only were there big weather events like strong typhoons, the habagat (southwest monsoon), flooding and the like. So, that’s almost what will affect our third quarter,” he said.
In August, agricultural damage caused by tropical cyclones Luis, Maymay, Neneng, and Pilandok, as well as the enhanced southwest monsoon reached P4.38 billion, according to the final bulletin from the Department of Agriculture’s (DA) Disaster Risk Reduction and Management Operations Center.
Mr. Dar said El Niño, which emerged in June, has already started to affect the agriculture sector.
“El Niño has already impacted almost P9 billion worth of agricultural goods. I can foresee that third-quarter growth will be much weaker compared to last year (2.8% growth in third quarter),” Mr. Dar said.
In an Oct. 21 report, the DA estimated agricultural sector has so far incurred P8.57 billion in damage and losses due to El Niño. It has also affected 288,058 farmers with 291,154 hectares of agricultural areas.
The state weather bureau last month said that a strong to very strong El Niño is active in the Tropical Pacific, and is expected to peak before the year ends and last until the first quarter of 2027.
Crops such as palay (unmilled rice), corn, and vegetables are expected to reflect the impact of flooding and the early months of El Niño.
Higher fuel and fertilizer prices, mainly due to the Middle East war, is likely to be reflected in the third-quarter data as farmers applied less fertilizer while fisherfolk cut down on their trips to the fishing grounds.
Mr. Dar said the high levels of pork imports will also have an impact on hog raisers who likely cut back on operations due to competition from foreign pork. Pork imports also had the effect of lowering farmgate prices for their animals, delaying their recovery from African Swine Fever. He estimated that the hog industry has lost P350 million under the current market conditions.
Mr. Dar also blamed a lack of productivity in fisheries on marine degradation due to climate change and mining practices that are polluting fishing grounds. He noted that fishery resources need regeneration over and above the government’s declarations of closed fishing seasons.
Mr. Dar said poultry remains “resilient” despite persistent challenges with the cost of feed.
“Maybe this is one area (that will not have) much disturbance. There will be continuing production, even higher production,” he said.
Mr. Dar expects food prices to soar due to shortages during the holidays.
“With all that is happening, everything is converging. Food inflation will increase because of lack of supplies (due to) all the forces (holding back) increased production,” Mr. Dar said.
Ateneo de Manila Economics lecturer Robert Lance C. Chua said farm production likely slowed in the third quarter due to farmer pessimism as reflected in planting decisions, high distribution costs, irrigation challenges and elevated oil prices.
“The increase in distribution costs has made locally produced fruits and vegetables less competitive compared to imported goods. The prices of agricultural inputs, such as seed, fertilizer, and pesticide, have also increased,” Mr. Chua said via e-mail.
Mr. Chua has noted that of the communities he has tracked, continuous rains caused landslides for farmers in Bulacan. Meanwhile, flooding in Zambales submerged rice fields, while farmers in Antipolo struggled with irrigation due to rising operating costs for water pumps.
He is also positive on poultry production, which will remain “relatively resilient” due to the containment of avian influenza. However, rising oil prices may contribute to higher feed and transportation costs.
Food imports often substitute adequately for weak domestic food production, he said, though the skid in the peso will likely limit the effectivity of this strategy, he said.
“The combination of these two factors, a vulnerable domestic agricultural sector and an unfavorable foreign exchange rate, will likely exert continued upward pressure on food prices until the end of the year,” he said.
Mr. Chua said the holidays bring higher food consumption because of parties and get-togethers, adding that the decline in agricultural output will exert “upward pressure” on food prices.
“Households will continue to purchase and consume food products, albeit in smaller quantities, as rising prices constrain their purchasing power,” he added.