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STATE OF PHILIPPINE AGRICULTURE
Domingo E. Angeles
Dean, College of Agriculture UPLB
March 16, 2009
A. Agriculture as pillar of
Philippine economy
•Employment – 37% of labor force is
engaged in agriculture (Balisacan et
al 2006), down from 60% in 1960,
44% in 1990
•Source of food and livelihood of rural
poor
I. Agriculture Through the
Lenses
•Land area - about 30 million ha
•About 40% (12million ha) is
devoted to agriculture
•85% are small scale farms in
rural areas
B. Land Area
Labor productivity in
Agriculture declined( Balisacan et al 2008)
1975 – 8.0%
1985 - 1.8%
1995 - 2.4%
2006 – 2.8%
Low investment in agric
Slow labor absorption
Slow diversification of rural income
Industry 2003 2008
Agriculture, Fishery and
Forestry
14.64 14.86
Industry 31.94 31.65
Service 53.41 53.49
Total 100.00 100.00
GDP by Sector at Current Prices (%)
Crops subsector continue to dominate
Philippine agriculture with aggregate
GVA of 72% against 22% the livestock
sector
GVA in Agric, Fishery and Forestry (%)
Industry/Industry Group 2000 2008
1. AGRICULTURE INDUSTRY 99.36 99.61
a. AGRICULTURE 85.07 84.49
Palay 19.47 20.88
Corn 5.54 6.83
Coconut 4.42 6.83
Sugarcane 3.24 2.86
Banana 3.83 6.30
Other crops 32.26 28.32
Livestock 16.16 14.22
Poultry 9.71 8.21
Agricultural activities & services 5.37 5.55
b. FISHERY 14.93 15.51
2. FORESTRY 0.64 0.39
Total 100.00 100.00
Average growth rates of GVA in
agriculture by commodity (%), 2000-
2005
Commodity Growth rate
Total 3.3
Crops 1.9
Livestock 3.1
Fishery 6.9
Forestry -5.3
Source: NCSB
Aquaculture has the highest growth
rates among the agriculture sub-sector
due to improved fish species used,
stocking system and supplemental
feeding, loc cost integrated fish farm
system (Balisacan et al 2008)
Positive growth in livestock is due to
adoption of new technologies such as
•imported breeds
•veterinary medicines
•feed ingredients
This happens among backyard growers
adopting mixed crop-animal systems
(Sombilla 2005).
hog industry which accounts for 3/4 of the total
livestock production in terms of volume contributed
the strong performance of the sub-sector
Rice is staple food. It has increased
its yield until the 1980’s but not as
significant in the 1990’s
Rice represents 35% of the caloric
intake of the average Filipino
It also accounts for 10-30% of overall
household expenditures (Serrano et
al., 1995).
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
1992 1994 1996 1998 2000 2002 2004 2006 2008
Year
Yield(metricton/ha)
Irrigated Rainfed Total
Philippine Rice Yield (metric
ton/ha), 1994-2006
Nature of SUCs functions
Philippine Palay Area
Harvested (‘000 ha), 1994-2006
0
1,000
2,000
3,000
4,000
5,000
1992 1994 1996 1998 2000 2002 2004 2006 2008
Year
Area('000ha)
Irrigated Rainfed Total
Rice Supply Surplus/Deficit
(metric ton) 1990-2006
-1500
-1000
-500
0
500
1000
1500
1990 1992 1994 1996 1998 2000 2002 2004 2006
Year
Surplus/Deficit(metricton)
Percent of Import to Total
Supply, 1990-2006
0.0
5.0
10.0
15.0
20.0
25.0
30.0
1990 1992 1994 1996 1998 2000 2002 2004 2006
Year
Percent
Philippine Rice Supply, Consumption
and Importation (‘000 metric ton),
1990-2006
0.0
2,000.0
4,000.0
6,000.0
8,000.0
10,000.0
12,000.0
14,000.0
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Year
Quantity('000metricton)
Total Supply Consumption Imports
• Growth rate in 1990-2006 - about 2.6%. Low compared to the other
Asian countries due to:
 Inadequate resources
 Limited capabilities of national and local governments
 Weak coordination among key stakeholders
 Natural disasters, and;
 The international market crisis
• 1992-2004, Philippines and Thailand’s crop production grew by 20
index points, Malaysia, 35 index points and the rest of SEAsia by 48
index points.
Competitiveness with other Asian Countries
Competitiveness with other Asian Countries
• Livestock production is one of the strongest in the
region.
• Export in banana, pineapple, and papaya are
international benchmarks in global trade.
• Phil has competitive advantage in the export of
banana chips, coconut oil, sugar and abaca.
Industry Clusters/Products Return on Investment Levela
Farmgate Wholesale
1. Rice and White Corn
Milled Rice - hyrid
- inbred
White Corn
High
Medium
Medium
Medium
Medium
Low
2. Sugarcane
Sugar Medium Medium
3. Coconut and Palm Oil
Coconut Oil
Palm Oil
Medium
4. Export Crops
Mango
Banana
Pineapple
Papaya
Medium
Medium
High
High
High
High
High
Medium
5. Coffee
Robusta High High
ROI of Commodity Industry, 2004.
Industry Clusters/Products
Return on Investment Levela
Farmgate Wholesale
6. Abaca
Abaca Fiber Low Medium
7. Vegetables, Legumes and
Root Crops
Mungbean
Peanut
Sweet Potata
Medium
Low
Medium
Medium
Medium
Medium
8. Ornamental Crops
Orchid
Anthurium
Rose
High
Low
Low
High
Medium
Low
9. Medicinal
Medicinal Products
10. Feed Corn-Livestock-Poultry
Corn
Poultry Broiler
Poultry Layer
Swine Meat
High
Medium
Low
Medium
High
Low
Medium
Medium
A. Climate change
Estimated loss to El Nino -P10billion
(DA, PDI, March 2010)
I also happened in 1998 when rice
production was reduced by 20%
(Bensel, 2005, Phil Geog J 49(1-4)
II. Problems Confronting
Philippine Agriculture
Figure 2. Philippine Rice Production
(‘000 metric ton), 1994-2006.
0.0
2,000.0
4,000.0
6,000.0
8,000.0
10,000.0
12,000.0
1992 1994 1996 1998 2000 2002 2004 2006 2008
Year
Production('000metricton)
Irrigated Rainfed Total
In 2009, Typhoon Ondoy and
Pepeng destroyed agricultural
crops (DA estimate, 2008)
Ondoy: P5.5 billion
Pepeng: P453 million
B. Environmental degradation
With increasing population, land
conversion and intensive agriculture
the soil and water have been
degraded inevitably affecting
agricultural productivity.
3. Low productivity
Brought about by intertwining
technical, social, political and
environmental factors
4. Unemployment and poverty
In 2006- poor accounts to 33% (27.6 million) of
the population and hungry- 20.3%
(PDI Mar 9, 2010),
Unemployment – 7.5% (Balisacan et al 2008)
ADB said it is rural phenomenon
Agriculture share in employment (PDI, Mar 10,
2010)
1960- 61.2%
1980- 51.4%
2007- 36.1%
About 3/4 of the rural poor depend on agriculture for
employment and income.
5. High Population Growth
In May 2009 population growth
reached 2.1%. This means that 1.8
million is added to the population
annually
The combined effect of population
growth, strong income growth and
urbanization is expected to result in
almost the doubling of demand for
food, feed and fiber.
- Director-general Jacques Diouf FAO
III. Constraints in Attaining
Higher Agricultural
Productivity
1. Land conversion
As of 2000, 289,000 ha of rice
was converted (legal & illegal)
Year Ha Year Ha
1979-87 27
1988 335 1999 5889
1989 551 2000 2362
1990 1,791 2001 1096
1991 3,230 2002 1091
1992 1,993 2003 4354
1993 1,534 2004 1129
1994 4,189 Undated 240
1995 2,443
1996 3,249
1997 2,997 Residential- 37%
1998 5,889 Mixed use with
residential –31%
TOTAL 43,141.64
Table 1. Summary of Approved
Applications for Land Use Conversion
as of September 30, 2005
Source: Center for Land Use Policy
Planning and
Implementation (CLUPPI)
Land conversion shifts production
pressure to marginal uplands
whose productivity is only about
1/3 of the lowland. This is due to:
shallow top soil
infertile soil
soil disturbance
lack of access to irrigation
2. Implementation of AFTA
which will remove the tariff
and quantitative restrictions
for certain commodities. The
objective is for export
competitiveness.
3. Low R and D investment
R and D investment (Moste, 2003)
1992- 0.22% of GDP
2003- 0.11%GDP
Korea – 0.69% (Mastic, 2004)
Thailand – 0.24%
Indonesia – 0.06%
4. Declining interest among
the youth in agriculture as
indicated by declining
enrollment. ACAP reported
that decrease in enrollment is
in the range of 5-15%
annually
Enrolment in Agriculture (CHED data)
School Year No of students
2002-2003 84,609
2003-2004 78,201
2004-2005 70,680
2008-2009 65,734
5. Poor quality of agricultural
education:
•Proliferation of SUCS now numbering
112 total
• Many could not meet the standards set
by CHED as Center of Excellence and
Center of Development
•Poor performance in kicensure
examination
Percent distribution of high enrolment institutions in
relation to passing averages in Agriculture
Licensure Examination, 2004-07 (Arboleda, 2008).
6. Reduction of farm size
which can result to production
inefficiency. Issue of scale
economy is contentious.
Family farm income may not
be attained unless high value
crops is used
6. Poor infrastructure like irrigation
resulting to low cropping intensity.
In rice cropping intensity was only
1.2
Current status in rice (Ordonez,
PDI Feb 27, 2010)
Irrigated:1.53 million ha
Not irrigated:1.6 million ha
Needs rehabilitation:368,000
7. Graying of farmers
US – 57 yrs (1998)
Philippines – 56 yrs (undated)
Japan – 60 yrs (1998)
Korea – 50 yrs (1998)
8. Weak extension delivery
system
Our extension workers cover a
larger area, lack logistic
support, poorly link with
technology generators and
system of governance is weak
Environmental degradation,
changing climate, poor
farming practices, weak
extension system altogether
lead to poor production. Many
crops in rural farms could
reach yield levels half that in
commercial farms
IV. Challenges
1. Food Security
PA 2020 projects: By 2025, we need 21
million tons of palay to feed 123 million
Filipinos.
•We need 6.65 M has to produce 4 metric
tons per hectare, or 4 M hectares to produce
6 metric tons per hectare to attain national
self-sufficiency
Strategies to attain food security
•Increase yield and quality through FIELDS
•Promote product diversification
•Expand area, if available and put on hold
land conversion
• Reduce pest and diseases
• Reduce population growth
• Increase rural income, increase
employment opportunities
•Increase support to R and D and
agricultural education
2. Agric-industry linkages
Relying on production of raw materials
alone would not spur agricultural
development in the countryside. We
need to link production with processing
and other value adding activities
Strategy
• Increasing production efficiency and
proper postharvest handling
technologies
• Provide investment incentives
• Shift in orientation from farming to
agribusiness
• Promote agri-entrepreneurship in agric
education
It advocates agricultural transformation (use of
appropriate tech, crop intensification and
diversification) through a market driven,
farmer focused agribusiness system;
favorable socio-economic and physical
environment; and product and market
transformation.
PA 2020 is clear in its
recommendations:
3.Promote environmental sustainability
Increase in population, crop
intensification, industrialization,
urbanization and shift in the production
pressure towards the upland threatens
the integrity of the environment. This is
a big challenge confronting agriculture.
Anything that happens to the
environment affects agriculture
Strategy
Reduce soil erosion, and promote
water conservation through
appropriate farming systems
Develop new crops tolerant to soil
acidity, and other soil infertility
problems
Proper waste management
Reduce pesticide residues
Address food related issues
4. Promote production sustainability
Accelerate technology
development
Promote effective extension
delivery system
Implement land use policy
Credit infrastructure
Strengthen marketing and trade
IV Recommendations
1. Address the challenge of
eradicating poverty and hunger
among rural communities through
intensified food production
providing employment and
livelihood opportunities and
needed infrastructures
IV Recommendations
2. Increase agricultural
productivity through intensified
technology generation and
promotion of yield and quality
enhancing technologies and
adoption of measures to improve
R and D budget, quality of
agricultural education, and labor
productivity
IV Recommendations
3. Confront the challenge of
climate change through the
development of varieties resistant
to stresses, green technologies,
and adoption of soil and water
conservation measures
Thank you

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State of Philippine Agriculture

  • 1. STATE OF PHILIPPINE AGRICULTURE Domingo E. Angeles Dean, College of Agriculture UPLB March 16, 2009
  • 2. A. Agriculture as pillar of Philippine economy •Employment – 37% of labor force is engaged in agriculture (Balisacan et al 2006), down from 60% in 1960, 44% in 1990 •Source of food and livelihood of rural poor I. Agriculture Through the Lenses
  • 3. •Land area - about 30 million ha •About 40% (12million ha) is devoted to agriculture •85% are small scale farms in rural areas B. Land Area
  • 4. Labor productivity in Agriculture declined( Balisacan et al 2008) 1975 – 8.0% 1985 - 1.8% 1995 - 2.4% 2006 – 2.8% Low investment in agric Slow labor absorption Slow diversification of rural income
  • 5. Industry 2003 2008 Agriculture, Fishery and Forestry 14.64 14.86 Industry 31.94 31.65 Service 53.41 53.49 Total 100.00 100.00 GDP by Sector at Current Prices (%)
  • 6. Crops subsector continue to dominate Philippine agriculture with aggregate GVA of 72% against 22% the livestock sector
  • 7. GVA in Agric, Fishery and Forestry (%) Industry/Industry Group 2000 2008 1. AGRICULTURE INDUSTRY 99.36 99.61 a. AGRICULTURE 85.07 84.49 Palay 19.47 20.88 Corn 5.54 6.83 Coconut 4.42 6.83 Sugarcane 3.24 2.86 Banana 3.83 6.30 Other crops 32.26 28.32 Livestock 16.16 14.22 Poultry 9.71 8.21 Agricultural activities & services 5.37 5.55 b. FISHERY 14.93 15.51 2. FORESTRY 0.64 0.39 Total 100.00 100.00
  • 8. Average growth rates of GVA in agriculture by commodity (%), 2000- 2005 Commodity Growth rate Total 3.3 Crops 1.9 Livestock 3.1 Fishery 6.9 Forestry -5.3 Source: NCSB
  • 9. Aquaculture has the highest growth rates among the agriculture sub-sector due to improved fish species used, stocking system and supplemental feeding, loc cost integrated fish farm system (Balisacan et al 2008)
  • 10. Positive growth in livestock is due to adoption of new technologies such as •imported breeds •veterinary medicines •feed ingredients This happens among backyard growers adopting mixed crop-animal systems (Sombilla 2005). hog industry which accounts for 3/4 of the total livestock production in terms of volume contributed the strong performance of the sub-sector
  • 11. Rice is staple food. It has increased its yield until the 1980’s but not as significant in the 1990’s Rice represents 35% of the caloric intake of the average Filipino It also accounts for 10-30% of overall household expenditures (Serrano et al., 1995).
  • 12. 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 1992 1994 1996 1998 2000 2002 2004 2006 2008 Year Yield(metricton/ha) Irrigated Rainfed Total Philippine Rice Yield (metric ton/ha), 1994-2006
  • 13. Nature of SUCs functions Philippine Palay Area Harvested (‘000 ha), 1994-2006 0 1,000 2,000 3,000 4,000 5,000 1992 1994 1996 1998 2000 2002 2004 2006 2008 Year Area('000ha) Irrigated Rainfed Total
  • 14. Rice Supply Surplus/Deficit (metric ton) 1990-2006 -1500 -1000 -500 0 500 1000 1500 1990 1992 1994 1996 1998 2000 2002 2004 2006 Year Surplus/Deficit(metricton)
  • 15. Percent of Import to Total Supply, 1990-2006 0.0 5.0 10.0 15.0 20.0 25.0 30.0 1990 1992 1994 1996 1998 2000 2002 2004 2006 Year Percent
  • 16. Philippine Rice Supply, Consumption and Importation (‘000 metric ton), 1990-2006 0.0 2,000.0 4,000.0 6,000.0 8,000.0 10,000.0 12,000.0 14,000.0 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 Year Quantity('000metricton) Total Supply Consumption Imports
  • 17. • Growth rate in 1990-2006 - about 2.6%. Low compared to the other Asian countries due to:  Inadequate resources  Limited capabilities of national and local governments  Weak coordination among key stakeholders  Natural disasters, and;  The international market crisis • 1992-2004, Philippines and Thailand’s crop production grew by 20 index points, Malaysia, 35 index points and the rest of SEAsia by 48 index points. Competitiveness with other Asian Countries
  • 18. Competitiveness with other Asian Countries • Livestock production is one of the strongest in the region. • Export in banana, pineapple, and papaya are international benchmarks in global trade. • Phil has competitive advantage in the export of banana chips, coconut oil, sugar and abaca.
  • 19. Industry Clusters/Products Return on Investment Levela Farmgate Wholesale 1. Rice and White Corn Milled Rice - hyrid - inbred White Corn High Medium Medium Medium Medium Low 2. Sugarcane Sugar Medium Medium 3. Coconut and Palm Oil Coconut Oil Palm Oil Medium 4. Export Crops Mango Banana Pineapple Papaya Medium Medium High High High High High Medium 5. Coffee Robusta High High ROI of Commodity Industry, 2004.
  • 20. Industry Clusters/Products Return on Investment Levela Farmgate Wholesale 6. Abaca Abaca Fiber Low Medium 7. Vegetables, Legumes and Root Crops Mungbean Peanut Sweet Potata Medium Low Medium Medium Medium Medium 8. Ornamental Crops Orchid Anthurium Rose High Low Low High Medium Low 9. Medicinal Medicinal Products 10. Feed Corn-Livestock-Poultry Corn Poultry Broiler Poultry Layer Swine Meat High Medium Low Medium High Low Medium Medium
  • 21. A. Climate change Estimated loss to El Nino -P10billion (DA, PDI, March 2010) I also happened in 1998 when rice production was reduced by 20% (Bensel, 2005, Phil Geog J 49(1-4) II. Problems Confronting Philippine Agriculture
  • 22. Figure 2. Philippine Rice Production (‘000 metric ton), 1994-2006. 0.0 2,000.0 4,000.0 6,000.0 8,000.0 10,000.0 12,000.0 1992 1994 1996 1998 2000 2002 2004 2006 2008 Year Production('000metricton) Irrigated Rainfed Total
  • 23. In 2009, Typhoon Ondoy and Pepeng destroyed agricultural crops (DA estimate, 2008) Ondoy: P5.5 billion Pepeng: P453 million
  • 24. B. Environmental degradation With increasing population, land conversion and intensive agriculture the soil and water have been degraded inevitably affecting agricultural productivity.
  • 25. 3. Low productivity Brought about by intertwining technical, social, political and environmental factors
  • 26. 4. Unemployment and poverty In 2006- poor accounts to 33% (27.6 million) of the population and hungry- 20.3% (PDI Mar 9, 2010), Unemployment – 7.5% (Balisacan et al 2008) ADB said it is rural phenomenon Agriculture share in employment (PDI, Mar 10, 2010) 1960- 61.2% 1980- 51.4% 2007- 36.1% About 3/4 of the rural poor depend on agriculture for employment and income.
  • 27. 5. High Population Growth In May 2009 population growth reached 2.1%. This means that 1.8 million is added to the population annually
  • 28. The combined effect of population growth, strong income growth and urbanization is expected to result in almost the doubling of demand for food, feed and fiber. - Director-general Jacques Diouf FAO
  • 29. III. Constraints in Attaining Higher Agricultural Productivity 1. Land conversion As of 2000, 289,000 ha of rice was converted (legal & illegal)
  • 30. Year Ha Year Ha 1979-87 27 1988 335 1999 5889 1989 551 2000 2362 1990 1,791 2001 1096 1991 3,230 2002 1091 1992 1,993 2003 4354 1993 1,534 2004 1129 1994 4,189 Undated 240 1995 2,443 1996 3,249 1997 2,997 Residential- 37% 1998 5,889 Mixed use with residential –31% TOTAL 43,141.64 Table 1. Summary of Approved Applications for Land Use Conversion as of September 30, 2005 Source: Center for Land Use Policy Planning and Implementation (CLUPPI)
  • 31. Land conversion shifts production pressure to marginal uplands whose productivity is only about 1/3 of the lowland. This is due to: shallow top soil infertile soil soil disturbance lack of access to irrigation
  • 32. 2. Implementation of AFTA which will remove the tariff and quantitative restrictions for certain commodities. The objective is for export competitiveness.
  • 33. 3. Low R and D investment R and D investment (Moste, 2003) 1992- 0.22% of GDP 2003- 0.11%GDP Korea – 0.69% (Mastic, 2004) Thailand – 0.24% Indonesia – 0.06%
  • 34. 4. Declining interest among the youth in agriculture as indicated by declining enrollment. ACAP reported that decrease in enrollment is in the range of 5-15% annually
  • 35. Enrolment in Agriculture (CHED data) School Year No of students 2002-2003 84,609 2003-2004 78,201 2004-2005 70,680 2008-2009 65,734
  • 36. 5. Poor quality of agricultural education: •Proliferation of SUCS now numbering 112 total • Many could not meet the standards set by CHED as Center of Excellence and Center of Development •Poor performance in kicensure examination
  • 37. Percent distribution of high enrolment institutions in relation to passing averages in Agriculture Licensure Examination, 2004-07 (Arboleda, 2008).
  • 38. 6. Reduction of farm size which can result to production inefficiency. Issue of scale economy is contentious. Family farm income may not be attained unless high value crops is used
  • 39. 6. Poor infrastructure like irrigation resulting to low cropping intensity. In rice cropping intensity was only 1.2 Current status in rice (Ordonez, PDI Feb 27, 2010) Irrigated:1.53 million ha Not irrigated:1.6 million ha Needs rehabilitation:368,000
  • 40. 7. Graying of farmers US – 57 yrs (1998) Philippines – 56 yrs (undated) Japan – 60 yrs (1998) Korea – 50 yrs (1998)
  • 41. 8. Weak extension delivery system Our extension workers cover a larger area, lack logistic support, poorly link with technology generators and system of governance is weak
  • 42. Environmental degradation, changing climate, poor farming practices, weak extension system altogether lead to poor production. Many crops in rural farms could reach yield levels half that in commercial farms
  • 43. IV. Challenges 1. Food Security PA 2020 projects: By 2025, we need 21 million tons of palay to feed 123 million Filipinos. •We need 6.65 M has to produce 4 metric tons per hectare, or 4 M hectares to produce 6 metric tons per hectare to attain national self-sufficiency
  • 44. Strategies to attain food security •Increase yield and quality through FIELDS •Promote product diversification •Expand area, if available and put on hold land conversion • Reduce pest and diseases • Reduce population growth • Increase rural income, increase employment opportunities •Increase support to R and D and agricultural education
  • 45. 2. Agric-industry linkages Relying on production of raw materials alone would not spur agricultural development in the countryside. We need to link production with processing and other value adding activities
  • 46. Strategy • Increasing production efficiency and proper postharvest handling technologies • Provide investment incentives • Shift in orientation from farming to agribusiness • Promote agri-entrepreneurship in agric education
  • 47. It advocates agricultural transformation (use of appropriate tech, crop intensification and diversification) through a market driven, farmer focused agribusiness system; favorable socio-economic and physical environment; and product and market transformation. PA 2020 is clear in its recommendations:
  • 48. 3.Promote environmental sustainability Increase in population, crop intensification, industrialization, urbanization and shift in the production pressure towards the upland threatens the integrity of the environment. This is a big challenge confronting agriculture. Anything that happens to the environment affects agriculture
  • 49. Strategy Reduce soil erosion, and promote water conservation through appropriate farming systems Develop new crops tolerant to soil acidity, and other soil infertility problems Proper waste management Reduce pesticide residues Address food related issues
  • 50. 4. Promote production sustainability Accelerate technology development Promote effective extension delivery system Implement land use policy Credit infrastructure Strengthen marketing and trade
  • 51. IV Recommendations 1. Address the challenge of eradicating poverty and hunger among rural communities through intensified food production providing employment and livelihood opportunities and needed infrastructures
  • 52. IV Recommendations 2. Increase agricultural productivity through intensified technology generation and promotion of yield and quality enhancing technologies and adoption of measures to improve R and D budget, quality of agricultural education, and labor productivity
  • 53. IV Recommendations 3. Confront the challenge of climate change through the development of varieties resistant to stresses, green technologies, and adoption of soil and water conservation measures