1. Marites M. Tiongco
De La Salle University
Manila, Philippines

2.  Profile of the agriculture sector
 Evolution of agricultural input policies, highlighting
the seed and fertilizer policies
 Policies that facilitated the transformation of the
Philippine agricultural sector

3. -10.00
-5.00
0.00
5.00
10.00
15.00
AnnualChange,Percent
GDP Agriculture Industry Services

4. Employment by Industry Group
Average
2009 2010 2011 2012
ALL
INDUSTRIES
100% 100% 100% 100%
AGRICULTUR
E
34% 33% 33% 32%
INDUSTRY 15% 15% 15% 15%
SERVICES 51% 52% 52% 52%

6. 0
200,000,000
400,000,000
600,000,000
800,000,000
1,000,000,000
1,200,000,000
1,400,000,000
1,600,000,000
1,800,000,000
2,000,000,000
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Total
Agriculture

7.  High cost of production inputs; quantitative restrictions
 Inefficient supply chains—high transaction and
distribution costs; poor infrastructures and lack of
transport facilities
 Weak agricultural extension service—links between
technology producers and extension workers and
farmers
 Financial or capacity constraints of intended users—
lack of credit facilities
 Inappropriate government regulations—lack of
incentives
 Climate change

8. 0
20
40
60
80
100
120
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
20,000,000
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Riceself-sufficiency(%)
RiceProductionandconsumption(mt)
Rice Production (mt) (paddy) Rice Consumption Self-sufficiency ratio
Note: Self-sufficiency ratio=Production/Production + Exports-Imports*(100); ratios
closer to or over 100.00 indicate the country’s capability to produce its own
requirements and generate export earnings

9. Country 2005-
07
2006-
08
2007-
09
2008-
10
2009-
11
2010-
12
Brunei Darussalam < 5.0 < 5.0 < 5.0 < 5.0 < 5.0 < 5.0
Cambodia 34 32.5 32 31 29.3 27.1
Indonesia 24.6 23.2 21.7 19.7 17.8 15.8
LaoPeople's
Democratic Republic
41.9 40.9 39.1 38.3 38 38.3
Malaysia 7.1 7 6.8 7.1 7.1 6.9
Myanmar 34.6 33.4 32.9 31.7 31 29.5
Philippines 25.5 23.5 22.5 22.7 23.4 23.8
Thailand 18.8 19 19.1 18.5 16.6 15.5
Timor Leste 37.9 39 38.6 37.7 42.1 46.1
Source: Food and Agriculture Organization
(FAO)

10. Indicators Urban Rural Overall
Households with sufficient food for the past
6 months (as % of total) 19.73 37.69 28.74
Cereal self-sufficiency (%) 4.40 14.42 9.32
Rice self-sufficiency (%) 4.84 14.57 9.67
Per capita food expenditure (%) 28.43 27.98 28.20
Share of nonstaples in food (%) 65.34 60.12 62.72
Share of animal products in food (%) 32.73 29.53 31.13
Per capita food expenditure (Php/mo) 3,688.07 2,274.55 2,979.02
Source: Analysis of data from the 2009 FIES.
Note: Three indicators of food self-sufficiency using the FIES 2009 are shown: 1)
home-produced food as share of all food consumed; 2) home-produced cereals as a
share of all cereals consumed; and 3) home-produced rice as a share of all rice
consumed

11.  Government efforts during this regime include
imposing tariffs on manufactured goods, overvaluation
of the currency, export taxes on agricultural
commodities, and price controls, which had a
deleterious effect on the agricultural sector, making the
sector relatively unprofitable.
 It was during this time when the Philippines briefly achieved
self-sufficiency in rice and became one of the rice exporters
in Asia (Rosset, Collins & Lapp, 2000).
◦ High adoption rate of MVs of rice
◦ Increased Productivity and Profitability of farmers
◦ Brought by the introduction of the green revolution technology (Increased
use of fertilizers & pesticides, Improved irrigation systems, adoption of
MVs, associated management skills)
◦ But Large farmers were the main beneficiaries.

12. This regime is characterized with a growth in participation of the
private sector, reduced public sector roles, market interventions, and
protection of local industries from imports through tariff or non-tariff
policy such as the tax exemption for fertilizer import.
The Agricultural and Fisheries Modernization Act (Republic Act 8435)
 Objectives: Food security; Poverty alleviation and social equity;
Income enhancement and profitability, especially for farmers and
fisherfolk; Global competitiveness; Sustainability
 Strengths: Amended to further strengthen the expected impact;
amendment included exemptions for enterprises engaged in agriculture
from paying tariffs and import duties on importations of all types of
agriculture and fisheries inputs until 2015; Fertilizer imports as well as
hybrid seeds by direct users were granted total tax exemption
 Weaknesses: Hybrid rice technology is 'quite new' to farmers and
'difficult' to follow; Rice is susceptible to pests and diseases, has high
cost of production and is prone to seasonal variations in yield

13. FIELDS Program
 Objectives: Beef up rice production; Attain self-
sufficiency in rice by 2013
 Strengths: Provision of subsidized fertilizer; Specified
budget for roads, irrigation facilities, labor and research
development, agriculturual credit, and post-harvest
facilities; Seed subsidy and stock procurement of fresh
harvest
 Weaknesses: Use of certified rice seeds and hybrid
seeds over good seeds

14. Food security policy thru the Food Staples
Sufficiency Program (FSSP)
 Objectives: Self-sufficiency; Food security; Raising
rural incomes; Improve farm productivity; Enhance
economic incentives; Enable mechanisms; Manage
food staple consumption
 Strengths: Provision of adequate economic incentives
and access to credit and crop insurance; Guaranteed
reasonable returns for farmers; Less government
intervention on retail prices
 Weaknesses: NFA’s role will be reduced to rice
distribution and importation; Focus on buffer stocking
and domestic procurement

15.  Green Revolution (1960s-1980s): Fertilizer manufacturing
was subsidized; Increased use of fertilizers due to adoption
f modern rice varieties and expansion of other crops:
(including sugarcane)
◦ Growing fertilizer demand was mostly met by increasing domestic
production supported by incentives and price policies
 Fertilizer Industry Authority was established in 1972 to regulate prices,
imports, production, and marketing, quality and safety of agricultural
chemicals
 Two-tier pricing of fertilizer, with producers able to access fertilizer at a lower
administered price
 Government subsidy (thru Masagana 99) in the form of distribution of
discounted fertilizers to rice producers and sugar planters coops
Two-tier policy was abolished but price-targeting policy remained, i.e., control
imports thru QRs allocated to domestic producers and authorized importers;
producers of fertilizer were exempted from control sand import duties of raw
materials.
Government paid cash subsidies to losses of local fertilizer producer incurred
from administered pricing
 Tax exemption for the importation of all kinds of fertilizers but later
limited to imports of capital equipment

16.  Liberalization (1990s to 2000s): Deregulation of fertilizer trade
(cheaper fertilizer)
◦ Discontinuance of the issuance of FPA Import Permit for fertilizer
importations and FPA focused on developmental support and maintaining
product quality and standards
◦ Tariffs reduced (1%-3% if from ASEAN country 0%; superphospahtes at
7%)
◦ AFMA allowed tax-free importation of fertilizers by agricultural enterprises
◦ No more subsidies, but sale and importation of fertilizers are exempted
from the 12% value added tax
◦ Removal of procurement control (i.e. determination of import
requirements, conduct of bidding and allocation of import volume);
◦ Scrapping of the price-setting function of the government;
◦ .
 Post Global Food Price Crisis (2008-present): Improvement of
organic fertilizer production; Maximize and develop what is
currently available and affordable for the local farmers;
Subsidized Fertilizer with budget of 0.5 Million pesos

17.  Green Revolution (1960s-1980s): Direct Subsidy on
seeds; Free Distribution of MV Inbred Seeds;
 Liberalization (1990s to 2000s): Granted total tax
exemption on Hybrid seeds by direct users; Adoption
of Hybrid Rice Seeds; Provide incentives to hybrid
seed producers
◦ Additional subsidies for other farm inputs; Government buys at
guaranteed price; Government sells hybrid seeds at half the
price during purchase, with the remainder to be paid after
harvest
 Post Global Food Price Crisis (2008-present):
Removal of direct subsidy on seeds; Promotion of use
of certified rice seeds and hybrid seeds over good
seeds; Seed subsidy through community seed banks;

18.  Agricultural input policies of the Philippines are
geared to achieving high agricultural productivity,
food staples sufficiency and food security, and
sustainability
 Open trading system; greater dependence on market
 Tariff exemptions for a wide range of imported items
generally used as production inputs; lowest applied
tariffs on some goods
◦ High sugar protection prevented the inflow of lower priced
sugar imports, and resulted in high domestic sugar prices.
Reduction in sugar tariffs in the Philippines and in the rest of
the ASEAN may potentially increase the flow of sugar trade
within the region (Cororaton, 2013) because some countries
are net sugar exporters (Thailand) while others are net
importers (Indonesia)


19.  The government has developed a policy
environment that strongly supports private sector
participation
◦ Economic structural adjustments geared toward opening
the economy to competition and leveling the playing field
of enterprise.
◦ A clear policy and institutional framework to permit
tangential flow of private resources into the governments
development program—esp. for the infrastructure sector
 Examples: improvement of existing postharvest processing
and trading centers; establishment of a cold chain system;
multipurpose reservoir dam

20. 1. Increase (and sustained) investment in
agriculture , esp. R&D, infrastructures, and
smallholder productivity
◦ resource-efficient technologies, such as integrated soil
fertility management using a combination of fertilizer
and manure/compost; low-cost irrigation
◦ Public-Private Partnership infrastructure initiative
◦ Capacity building: education, training and extension
2. Improve access to inputs such as fertilizer
and seeds—seed and fertilizer prices must
be low enough for the farmers to afford and
for the distributers to offset their costs and

21. 1. Overcome institutional constraints
◦ Land titling and use; safeguard rights of
farmers
◦ Access to credit—a new paradigm of
community banking (with private actors)
◦ Effective regulations or control mechanisms on
input and output markets: privatization of SOEs