DA Annual Report 2012 by roldangorgonio

Department of Agriculture

2012 ANNUAL REPORT

SOLID RESULTS, NEW COMMITMENTS

TABLE OF CONTENTS

Message from the Secretary 2012: Solid results, new commitments

Overall Agriculture Sector Performance

Agriculture and the Philippine Economy

Program Performance: Interventions and Innovations

The DA Action Teams and Service Units

The DA Budget in 2012

DA Directions and Priorities: 2013-2016

MESSAGE FROM THE SECRETARY Infrastructure for Rural Productivity Enhancement Sector (INFRES) Project. In January 2013, The World Bank website 2 featured, as a banner story, the MRDP's geotagging tool for tracking infrastructure projects. The farmers delivered record production of rice and corn in 2012 the highest in the country's history bringing our commitment for food staples sufficiency within reach. Thanks to the President and the legislature for the budget support for front loading investments in agriculture infrastructure. Thanks to the agriculture stakeholders for their understanding and support for the policy shifts a) from input subsidies to investment in public goods and b) from dependence on rice imports to expanded local procurement from our farmers.

n 2012, the policy shifts we initiated in the Department of Agriculture started to deliver results. We are grateful to the farmers, fishers and all agriculture stakeholders who trusted and cooperated with the DA to achieve them. We are happy that various authorities are affirming those outcomes. President Benigno Simeon Aquino III, in an interview during the ASEAN Summit last April 2013, cited the DA as one of the top two performing agencies of the government.1 Last December 2012, the DA received the National Economic Development Authority (NEDA) Good Practice Award for two of its foreignassisted projects: the Mindanao Rural Development Program (MRDP) and the

For our consumers, we are pleased to note that food prices have remained stable with the change in the food price index down to 2.2% in 2012 from 5.7% in 2011 -- at the same time farmers realized improved farm gate prices during this period.3 The DA National Rice Program managed various interventions including buffer stocking, 1

The Manila Times, page A3, 26 April 2013 and Philippine Star, page 6, 26 April 2013. http://maps.worldbank.org/content/article/geo-tagging-innovativetool-enhance-transparency-and-supervision-development-projects0 January 10, 2013 The average farm gate prices of palay increased to P16.20 per kilo, up by 6.3% and corn to P12.70 per kilo, up by 1%. Overall, other farm and fishery products have remained affordable, with the change in the food price index down to 2.2% in 2012 from 5.7% in 2011. Bureau of Agricultural Statistics (BAS), 2012 Report on Agriculture Performance.

community seed banking, starter seed packs, early replanting, farm mechanization, crop insurance and production credit to achieve its targets as laid out in the Food Staples Sufficiency Program (FSSP) 2011-2016. Throughout program implementation, the DA activated and successfully motivated irrigators' associations and local government units as key program partners who were all aptly honored during the annual Rice Achievers Awards. Also in 2012, fisheries successfully implemented a closed season in Zamboanga and replicated this in the Visayan Sea to regenerate our marine resources. The resulting increase in fish catch in 2012 arrested consecutive years of declining yields in previous years. The effectiveness of the policy shift from unrestrained fishing to the policy of regenerating and conserving fishery resources is best validated by the report of a 5.5% growth of the sector in the first quarter of 2013 compared to the same period in 2012. Coconut programs received additional budget support in 2012 to maximize the benefits to coconut farmers of the emerging nontraditional coconut-based products like coco water, virgin coconut oil, coco sugar, coco coir, coco milk and others. Within a rural agroindustrial development framework crafted in consultation with major coconut stakeholders the DA, primarily through the Philippine Coconut Authority, is leading in ensuring inclusive growth in the coconut industry.

We have much more to do in livestock and high value crops. We need to maximize our badges of honor as a country free of foot and mouth disease and avian flu. In high value crops, we have multiplied partners among farmers and corporate investors. But we have work to do and assignments to fulfill on assisting champion commodities to compete in local and global markets. We need our private sector partners to structure enterprises that allow producers to participate in the gains from value adding. The first half of our term looks good. Let us deliver, in the next three years, the fruits of our ongoing collaboration with various agencies such as the re-entry program for our overseas workers, the cash-for-work program for conditional cash transfer recipients, the fruit trees greening program and agri-tourism programs. Inclusive growth sama-samang pagsulong 'yan ang pagbubuhusan natin ng galing at gawa sa araw-araw ng panunungkulan!

Ipagpatuloy natin ang Agri-Pinoy!

PROCESO J. ALCALA Secretary 31 July 2013

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2012: Solid results, new commitments

Rice and fish for all!

Ensuring sufficient and affordable food for our people is the agriculture sector's key mission result area. The Food Staples Sufficiency Program (FSSP) 2011-2016 lays out the policies and programs to carry out this mission. The policy shifts related to food staples production, as directed in 2011, achieved tangible results in 2012. Most prominent among these results was the record production achieved by the rice and corn subsectors: 8% increase for rice and 6% for corn. The harvest of 18.03 million metric tons (MT) of palay and 7.41 million MT of corn are the highest reached in the Philippines' farming history.

The significant reduction in rice imports from 2.4 million MT in 2010 to 860,000 MT in 2011 and 500,000 MT in 2012 is a direct consequence of the policy decision to prioritize palay procurement from local producers. This reduction in rice imports translated to some US$ 1.4 billion in foreign exchange savings, resulting in a decrease in National Food Authority borrowings. Based on FSSP targets, rice imports shall be down to zero after 2013. However, following Minimum Access Volume (MAV) commitments as provided in the General Agreement on Tariff and Trade with the World Trade Organization (GATT-WTO), traders may procure up to 350,000 MT from other countries after 2013. Such imports, however may be compensated by exports of higher value, fancy rice varieties produced in the Philippines.

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Rice and fish make up the basic diet of most Filipinos. In 2012, the agriculture and fishery sector worked to provide Filipino families the rice and fish they require.

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Regenerating the country's fishery resources was a huge challenge in 2010. With five preceding years (2005 to 2009) of declining yields, destructive and unsustainable fishing had to stop.

out in partnership with 62 state colleges and universities in 30 coastal areas throughout the country. With this, more small fishers can engage in raising fish for the table and for the market in the rehabilitated fishing grounds.

Also a first in the country's fishing history, the fishery sector successfully implemented a closed season in the Zamboanga Peninsula from December 2011 to February 2012. Although initially met with protests, information campaigns and advocacy eventually convinced stakeholders to collaborate. The results were so positive that the closed season was replicated in the Visayan Sea in December 2012 to February 2013. More galunggong and tamban in the regenerated areas did not only led to more and bigger fish for sardines processing, this also resulted in an increase in tuna catch in these areas as the two species also serve as feed for tuna.

Various agencies and key stakeholders participated to deliver these results. The key interventions and innovations that made these possible are cited in the full report so that the right lessons are derived from focused program implementation.

Programs for mangrove reforestation and multi-specie hatcheries have also been rolled

Commitment to achieve inclusive growth

The DA is committed to make this sector contribute its share to the overall growth of the economy. Eight commodity subsectors account for 80% of the agri-fishery s contibution to the national economy. Doing well and pursuing inclusive growth in these commodities require the same intensity and focus that have been mustered in the first half of this administration. The framework for pursuing broad-based rural agro-industrial development in the coconut industry has been developed and presented to the cabinet s Economic Development Cluster. Through enterprises that will engage coconut farmers in value adding ventures, we aim to enable farmers to benefit from gains in other coconut-based products in addition to copra. We also expect to increase their incomes by continuing to promote intercropping.

Product standards and market linking for livestock and high value crops are key to transforming bright prospects to real gains. The agencies concerned have received their marching orders to put these measures in place and begin to realize increased export volumes and greater product flows throughout the country. The necessary infrastructure support in terms of farm-to-market roads, tramlines, water impounding systems, packing houses, trading posts, mechanization are either in place or have been proposed. Commodity road maps will guide the efforts and investments in various commodities. All told, focusing on results in coconut, fisheries, livestock and high value crops are commitments that require more vigorous effort in the next three years.

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Inclusive growth continues to be a challenge, particularly for the agri-fishery sector that employs about one-third of the labor force.

Overall agriculture sector performance Top Contributors to Agriculture Performance Eight commodities account for 80 percent of the gross value added (GVA) of agriculture. These are palay, fishing, livestock, poultry, corn,

banana, coconut (including copra), and sugrcane (Table 1). The performance of each subsector impacts significantly on the contribution of the agri-fishery sector to the whole economy and requires close tracking.

Table 1. Eight commodities that make up 80% of total agricultural output, 2012. COMMODITY

GVA in million pesos

% SHARE

(at constant prices)

1. Palay

140,737

2. Fishing

20.14

page 5

129,910

18.59

3. Livestock

93,268

13.34

4. Poultry

74,520

10.66

5. Corn

40,250

5.76

6. Banana

33,774

4.83

7. Coconut (including copra)

30,544

4.37

16,630 559,633

2.38 80.07

8. Sugarcane TOTAL Source: National Statistical Coordination Board, 2012.

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Highest in Growth Rate The following commodities recorded the highest rates of increase last year: dairy, palay,

tobacco, pineapple, corn, rubber, duck eggs, chicken, chicken eggs, and coconut (Table 2).

Table 2. Top ten commodities that recorded highest production growth, 2012. COMMODITY

VOLUME (IN THOUSAND METRIC TONS) 2011

2012

1. Dairy

16.45

18.45

12.16

2. Palay

16,684.06

18,032.43

8.08

44.95

48.08

6.96

4. Pineapple

2,246.81

2,397.63

6.71

5. Corn

6,971.23

7,406.84

6.25

425.69

442.99

4.06

37.67

39.75

5.52

1,4 14.30

1,479.43

4.61

403.44

421.07

4.37

15,244.61

15,828.03

3.83

3. Tobacco

6. Rubber 7. Duck eggs 8. Chicken 9. Chicken eggs 10. Coconut

Source: Bureau of Agricultural Statistics, Performance of Philippine Agriculture, January

GROWTH RATE (%)

December, 2012.

Top Exports The top ten agricultural exports include coconut oil, banana, tuna, pineapple and pineapple products, dessicated coconut, manufactured tobacco, seaweed and carrageenan, centrifugal sugar, milk and cream and products, and manufactured fertilizer (Figure 1). Figure 1 - Value of Philippine Agricultural Exports, 2010-2012 (in F. O. B. M US$) 1,400 2010

2011

2012

F.O.B Value in US$

1,200 1,000 800 600 400 200 page 7

0 Coconut Oil (Crude and refined)

Bananas, Fresh

Tuna

Pineapple and Pineapple Products

Dessicated Tobacco Coconut Manufactured

Seaweed and Carageenan

Centrifugal Sugar

Milk and Cream and Products

Fertilizer Manufactured

Source: Bureau of Agricultural Statistics (BAS) Updates on Agricultural Trade Performance, January to December 2012.

Tuna posted the highest growth in value at 44.67 percent, a rebound from the negative growth in the previous year. Its share in total agricultural exports expanded from 5.8 percent in 2011 to 9.1 percent in 2012. This was mainly due to the increase in its world price.

Small in absolute value but big in growth, emerging agriculture exports have the potential to compensate for when prices of traditional exports become volatile. These include: fresh and dried guavas, live eels, fresh watermelon, cocoa beans, fresh or chilled okra, coco vinegar and coconut water (Table 3).

Table 3. Examples of emerging agricultural exports, 2011-2012. ITEM Guavas, Dried Guavas, Fresh Eels, Live Watermelons, Fresh Cocoa Bean, Whole/Broken, Raw/Roast Okra, Fresh or Chilled Coco Vinegar Coconut water*

2011

2012

(FOB Value in M US$)

GROWTH RATE IN %

0.027 0.005 5.801 0.091

7.100 0.550 15.353 0.176

25,457.34 9,364.37 167.78 93.78

0.356

0.639

79.39

13.740 0.291 15.113

19.341 0.386 18.543

40.76 32.47 22.70

Source: Bureau of Agricultural Statistics, National Statistics Office, *Philippine Coconut Authority

Accelerated Growth of Agricultural Output Growth in agricultural output rose from 2.59 percent in 2011 to 2.92 in 2012 (Figure 2). This was led by the crops and poultry sectors which grew by 4.14 and 4.53 percent, respectively. The livestock sector inched up by 1.10 percent. Especially remarkable, however, was the

performance of the fishery sector significantly arrested the decline of the sector at negative 0.04 percent from negative 3.77 percent in 2011. At current prices, the value of agriculture production amounted to Php1.42 trillion.

Figure 2 Performance of Philippine Agriculture by Sub-Sector, 2011-2012. 7

4.14

2.59

2012

4.35 4.53 2.92

1.99 page 8

Percentage Growth

2011

4.85

1.1 1 -.04

-1

-3 -3.77 -5 Crops

Livestock

Poultry

Fisheries

Agriculture Sector

Source: Bureau of Agricultural Statistics (BAS) 2012 Performance of Philippine Agriculture, January to December 2012.

Figure 3 shows the breakdown of agricultural output. Crops remain with the biggest share at 51 percent followed by fisheries with 18 percent. Livestock and poultry shares are 16 and 14 percent, respectively. Growth in crop production was driven by the increase in palay production that contributed

Figure 3 Percentage Distribution of Output in Agriculture by Sub-sector, Jan Dec, 2012.

38 percent of the crop subsector which includes corn, banana, coconut, sugarcane, and pineapple. Together, these crops make up 78 percent of total crop production (Figure 4). The performance of these major commodities are covered in the next section on commodity programs.

Figure 4 Percentage Distribution of Output in Crops, 2012. (in percent) Sugarcane 5% Pineapple Coconut 4% Banana 8% 10%

Livestock 16% Poultry 14% Crops 51%

Corn 13%

Others 22%

Fisheries 18% Palay 38%

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Source: Bureau of Agriculture Statistics, 2012. Source: Bureau of Agricultural Statistics (BAS) 2012 Performance, January to December 2012.

Farm gate and Market Prices The average farmgate prices of the crops subsector declined by 4.74 percent. However, farmers of major staples enjoyed higher prices for their produce as farm gate prices of rice and corn increased by 6.30 and 0.95 percent, respectively. Banana and pineapple prices also increased by 4.74 and 15.99 percent. High demand for processing pushed camote (sweet potato) and cassava prices up by 4.39 and 9.84 percent, respectively. Tobacco prices also went up by 6.53 percent due to the good quality of the native variety.

fisheries subsector went up by a significant 5.59 percent and slightly in the poultry subsector by 0.68 percent. On the consumption side, the food price index decelerated from 5.5 percent in 2011 to 2.2 in 20124 translating to generally stable food prices.

In 2012, farm gate prices were lower than in 2011 by an average of 1.70 percent. Price cuts were particularly pronounced in the crops subsector and slightly in the livestock subsector. On the other hand, prices in the

NSO, January 2013, Summary Inflation Report Consumer Price Index (2006=100): December 2012 http://www.census.gov.ph/statistics/survey/price/summary-inflationreport-consumer-price-index-2006100-december-2012

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Lower world prices pulled coconut and rubber prices down by 29.38 and 32.25 percent, respectively. Sugarcane recorded another price cut of 19.19 percent.

Agriculture and the Philippine Economy Share in Gross Domestic Product/Gross National Income

The Services sector remained the biggest contributor to GDP at 57.0 percent (Figure 6). In 2012, it grew strongly by 7.4 percent compared to the previous year. The growth was led by trade followed by real estate, renting and business activities.

The country's Gross Domestic Product (GDP) rose to Php6,314.9 billion or by a hefty 6.6 percent in real terms in 2012 compared to the previous year. With this per capita GDP growth accelerated to 4.8 percent from 2.2 percent while Gross National Income (GNI) increased 4.0 percent, up from 1.5 percent in 20115.

The Industry sector contributed 32.0 percent of the GDP. It also registered a robust growth of 6.5 percent. Construction led with a double-digit growth of 14.4 percent, followed by manufacturing (5.4 percent) and electricity, gas and water supply (5.1 percent). 5

NSCB, Performance of Philippine Economy, Fourth Quarter/ Annual 2012 http://nscb.gov.ph/sna/2012/4th2012/tables/JRGA_powerpoint_4Q %202012.pdf

Figure 5 Industry Group Growth Rate (%), 2005-2012, Philippines 14 12 10 8 in percent

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Figure 5 shows the trend in the performance of the different sectors making up the GDP. Both the Industry and Service sectors exhibited acceleration in their growth rates. Agriculture, Hunting, Fishery and Forestry, on the other hand, remained flat.

6 4 2 0 -2 -4

2005

2006

2007

2008

2009

2010

2011

2012

AHFF

2.2

3.6

4.7

3.2

-.7

-.2

2.7

Industry

4.2

4.6

5.8

4.8

-1.9

11.6

2.3

6.5

Services

5.8

7.6

3.4

7.2

5.1

7.4

Source: National Statistical Coordination Board, 2012

Agriculture, Hunting, Forestry and Fishery (AHFF) made up the balance of 11.0 percent of the GDP. With a gross value added (GVA) amounting to Php 698.7 billion in 2012, it grew by 2.7 percent compared to the previous year. Figure 6 Breakdown of GDP by industry, 2012. (in percent) AHFF 11%

Services 57%

Industry 32%

Corn, poultry and coconut (including copra) also posted respectable growth rates of 6.30, 4.60, and 3.90 percent, respectively. These, however, were offset by declines in sugarcane (8.90 percent) and mango (2.60 percent). The decline recorded in sugarcane production was primarily because the harvest was moved from the first quarter of 2012 to the last quarter 2011. After consecutive years of decline, fishery showed strong signs of recovery, growing 3.3 percent in the last quarter of 2012. The rebound was attributed to increased production in commercial fisheries after the lifting of the tuna fishing ban. Increased tilapia and milkfish production contributed to the growth in aquaculture as a result of increased demand.

The sector s growth was driven primarily by the remarkable 8.0 percent increase in palay production, which accounts for a fifth of the agricultural output.6

NSCB, May 2013, Gross Value Added in Agriculture, Hunting, Forestry and Fishing http://www.nscb.gov.ph/sna/2013/1st2013/2013aff1.asp

page 12

Source: National Statistical Coordination Board, 2012.

Agriculture in Perspective Figure 7 Contribution of agri-based subsectors to the Industry Sector output, 2012. (at current prices) (a) (b) Share of agri-based products to Breakdown of Industry Sector Manufacturing Subsector, 2012. by Subsector, 2012. Mining & Quarrying 4% Electricity Gas & Water Supply 11%

Construction 19%

Food Manufactures 46%

Others 50%

Manufacturing 66% page 13

Tobacco Manufactures 0%

Beverage Manufactures 4% Source: National Statistical Coordination Board, May 2013.

o put the contribution of agriculture in perspective, the Philippine Development Plan 2011-2016 notes that if the whole agriculture value chain (i. e. from input suppliers to consumers' table) is taken into account, its contribution would be around 35 percent of gross value added and 50 percent of employment. 7 Therefore, contribution of Agriculture to the economy measured by its GVA alone leads to an underestimation of the sector's importance.

manufacturing in 2011.8 Based on this, the values for 2012 would be as presented below. Based on May 2013 NSCB estimates, GVA of food manufacturing amounted to Php990.3 billion while beverages and tobacco products were valued at Php83.3 billion and Php6.2 billion, respectively. These three account for 50.0 percent of the total manufacturing subsector (Figure 7.a).9 Since the, 7

For example, manufacture of agri-based products is a sizeable portion of the manufacturing subsector of the Industry sector. Dr. Rolando Dy of the University of Asia and the Pacific estimated the magnitude of agri-based

NEDA. (2011). Philippine Development Plan 2011-2016. Retrieved from http://www.neda.gov.ph/PDP/2011-2016/CHAPTER%204.pdf In 2011, the gross value added of food manufacturing amounted to P885.7 billion, beverages P80.6 billion, and tobacco products P6.4 billion. The total, P972.1 billion, accounted for 47.5 percent of total manufacturing output measured in gross value-added. This excludes other agro-processing such as primary rubber, cultured wood products, etc. Rolando T. Dy, The Achilles' heel in Philippine agri-manufacturing, Philippine Daily Inquirer 3:25 am | Monday, June 3rd, 2013. The numbers are updated for 2012 using the analysis in this article.

manufacturing subsector contributed 66.0 percent to the total output of the Industry sector (Figure 7.b), this means that about 33 percent of the total Industry sector utilized Agriculture output as inputs, although not all of these are locally sourced. Figure 8 Distribution of Employment by Industry Sector, 2012. (in percent)

Services 52.5%

Agriculture Sector's Contribution to Total Employment The total labor force (annual average) in 2012 was 37.62 million persons. Figure 8 shows the distribution of employment by sector while Table 4 shows the annual average number of employed persons by sector from 2010-2012. The labor force grew by 1.16 percent or from 37.2 million in 2011 to 37.6 million persons in 2012. The Service sector remains the major employer of the labor force with 52.5 percent share equivalent to 19.75 million persons. The Agriculture sector employed some 12.1 million persons or 32.2 percent of the total labor force. The share of the Industry sector was lowest at 15.3 percent or about 5.77 million persons.

Industry 15.3%

Agriculture 32.2%

Source: BAS CountryStat, 2013.

INDUSTRY/SECTOR ALL INDUSTRIES AHFF Industry Services

Employed Persons ( 2010 2011 36,035 37,191 11,956 12,266 5,399 5,530 18,682 19,395

000) 2012 37,622 12,104 5,768 19,750

Source of raw data: BAS CountryStat, 2013.

Growth Rate (%) 2010-11 2011-12 3.21 1.16 2.59 -1.32 2.42 4.30 3.82 1.83

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Table 4 Annual average number of employed person by industry group, Philippines, 2010-2012.

Table 5 Agricultural Exports and Imports, Philippines, January-December, 2010-2012 FOB and CIF Value in M US$ ITEM

Growth Rate 2012/ 2011/ 2011 2010

Jan-Dec 2012 P

Jan-Dec 2011

Jan-Dec 2010

51,995.24 5,003.50 3,384.74 1,618.76 9.62

48,304.93 5,431.76 3,993.51 1,438.25 11.24

51,497.51 4,101.09 3,019.28 1,081.81 7.96

7.64 -7.88 -15.24 12.55 -14.42

-6.20 32.45 32.27 32.95 41.20

65,386.40 8,122.38 4,071.19 4,051.19 12.42

64,096.59 7,839.93 4,166.23 3,233.57 12.66

58,467.80 7,399.79 4,166.23 3,233.57 12.66

2.01 3.60 7.39 0.05 1.56

9.63 5.95 -9.01 25.22 -3.36

(3,118.88)

(2,408.17)

(3,298.71)

29.51

-27.00

A. Exports (FOB Value) Total Exports Total Value of Agricultural Exports Top 10 Agricultural Exports Other Agricultural Exports % of Agri. Exports to Total Exports

B. Imports (CIF Value) Total Imports Total Value of Agricultural Imports Top 10 Agricultural Imports Other Agricultural Imports Percent of Agri. Imports to Total Imports

C. Balance of Trade P-Preliminary

Source: National Statistics Office (NSO)

Performance of Agricultural Trade

Figure 9 World Prices of Coconut Oil, January-December, 2011-2012 2.5 2 US$ per kg

page 15

Agricultural exports did not fare well in 2012. Earnings were down by 7.88 percent owing to the decrease in value of the top ten agricultural exports which accounted for 67.6 percent of total exports (Table 5). Low world prices played a significant role in this reduction. Nevertheless, agricultural exports amounted to US$ 5.0 billion which represents 9.62 percent of the country's total exports.

2011

1.5 1

2012

tobacco, seaweed and carrageenan, centrifugal sugar, milk and cream and products, and manufactured fertilizer. Nevertheless, other agricultural export products showed notable growth of 12.6 percent equivalent to US$ 180.5 million. Earnings from coconut oil exports (crude and refined) amounted to US$ 1.0 billion in 2012, a significant decline of 28.7 percent from the previous year's level. Lower world prices contributed largely to the decrease in the value of exports of this commodity (Figure 9). This downtrend was attributed to weak demand for the product from its major markets particularly the United States and European Union. The increase in the volume of export was not able to offset the significant decline of prices. This reduction amounting to US$ 409.4 million was enough to pull down the total agricultural export earnings.

.5 0

Jan Feb Mar Apr May Jun

Jul Aug Sep Oct Nov Dec

The total earnings generated by the top ten agricultural exports for 2012, declined by 15.24 percent from US$ 3,993.51 million in 2011 to US$ 3,384.74 million this year. The top ten agricultural exports include coconut oil, banana, tuna, pineapple and pineapple products, dessicated coconut, manufactured

Of the top ten exports, three commodities tuna, fresh bananas, and pineapple and pineapple products exhibited strong growth performance. Tuna recovered from its decline in the previous year posting the highest growth in value at 44.67 percent. Tuna's share in total agricultural exports expanded from 5.8 percent in 2011 to 9.1 percent in 2012 overtaking sugar and pineapple and placing third.

Figure 10 Agricultural Exports, Imports, and Trade Balance, 2010-2012 (Value in M US$) 2010

7,399.79

5,431.76

2011

2012

7,839.93 8,122.38

5,003.50

4,101.09 3,298.71

3,118.88 2,408.17

Agricultural Exports

Agricultural Imports

Agricultural Trade Balance

Fresh bananas proved to be a resilient export commodity. Earnings from export of fresh bananas grew by 36.9 percent to US$ 647 million as volume reached 2.65 million MT (28.8 percent higher than the previous year) despite the problem with exporting to China. It retained its place as second in the list of top agricultural exports for 2012 accounting for 12.9 percent of total agricultural export.

Meanwhile, the country's top 10 agricultural imports reached US$ 4,071.19 million, 7.39 percent higher than the previous year s level of US$3,790.96 million. The top ten agricultural imports are wheat, milk and cream and products, soybean oil/cake meal, manufactured fertilizer, coffee, meat of bovine animals, urea, unmanufactured tobacco, maize/corn, and rice.

Earnings from the export of pineapple and pineapple products reached US$ 414.9 million, up by 20.0 percent from the previous year's level as volume expanded from 582.7 thousand MT to 742.6 thousand MT. It contributed 8.3 percent of total agricultural export.

The trade deficit in Agriculture rose to US$ 3.12 billion in 2012, up by 29.5 percent from US$ 2.41 billion in 2011 (Figure 10).

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Source: Bureau of Agricultural Statistics (BAS) Updates on Agricultural Trade Performance, January to December 2012.

Program Performance: Interventions and Innovations

ith the delivery of results as main driver, the DA operating units led by the regional field units and supported by the service units, bureaus and attached agencies and corporations worked hard to deliver commitments in 2012.

This section gives an account of the achievements of various banner programs that were realized with the cooperation of the entire DA system and agri-fishery stakeholders.

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Food Staples Sufficiency Program The National Rice Program is the lead implementing team of the Food Staples Sufficiency Program (FSSP), the centerpiece agriculture program of the present administration. The National Corn and Cassava

Program, supports the FSSP in the production of alternative staples. (Table 6 shows summary of FSSP targets and accomplishments).

Table 6. Summary of FSSP targets and accomplishments Target for 2012

Accomplishment

Accomplishment Rate

Palay

18.46 M

18.03 M

97.51

White Corn

2.466 M

2.166 M

87.8

Cassava

385,000

278,000

72.2

Incremental Harvested Irrigated Palay Area (ha)10

107,050

127,308

118.9

Cropping Intensity

1.47

1.59

108.2

FSSP Outcomes Volume of Production (MT)

Figure 11 Estimates of Palay Production and Annual Growth Rate, Philippines, 2001-2012 (in MT, %) 19

17 6 16 15

Annual Growth Rate, %

Annual Production, MT (in millions)

0 12 -2

11 10

-4 2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Towards achieving food staples sufficiency, the rice and corn subsectors delivered a record 18 million metric tons of palay and seven million MT of corn (white and yellow) through the concerted efforts of farmers and irrigators' associations, local government units and the DA regional field units and operating units. Figure 11 shows the record performance of the palay sub-sector in terms of both annual production level and annual growth rate. The improvement in food staples production resulted in a significant decrease in rice importation, from 2.4 million MT in 2010 to

860,000 MT in 2011 and 500,000 MT in 2012. All told, this represents foreign exchange savings of US$ 1.4 billion from 2010 to 2012. In addition, the National Food Authority (NFA) collected a total of Php 4.59 billion in service fees in 2012 in connection with the Private Sector Financed (PSF) Importation Program through which private traders and farmers cooperatives were allowed to import rice. Meanwhile, NFA bought 381, 229 MT of palay from local farmers in 2012 thereby infusing Php 6.551 billion in new money into local economies throughout the country. Doing well with enabling interventions FSSP implementation included various interventions targeted at improving productivity and providing an enabling environment for enhanced competitiveness.

This refers to the additional area that was harvested using the newly generated and restored irrigation facilities. Generally, it can be computed by adding generated and restored areas multiplied by cropping intensity.

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Source: Bureau of Agricultural Statistics, 2012

Table 7. Small Scale Irrigation Projects of the BSWM, 2012

Area Generated/Restored

Physical Target

Physical Accomplishment Completed

Ongoing

Preimplementation Phase

Total

3,711

1. SWIP/ DD 2. Small Farm Reservoir (SFR)

2,418

1,317

2,304

3,750

230

671

3. Pump and Engine Sets

3,000

3,711

In the FSSP s Irrigation Component, the National Irrigation Authority (NIA) provided irrigation to an additional 127, 308 hectares of palay in 2012, surpassing its commitment of 107, 050 hectares that resulted in an increase of 416, 297 in the volume of harvest.

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The Bureau of Soils and Water Management (BSWM), for its part, provided Small-scale Irrigation Projects (SSIP) which aim to increase palay production in areas not served by the Large Scale Irrigation Systems (LSIS). The involvement of local government units (LGUs), both provincial and municipal, in the implementation of SSIPs nationwide has been recognized as an effective scheme to ensure the sustainability of the projects beyond the construction period. The BSWM, under the rice program accomplished the following small scale irrigation projects (SSIPs) in CY 2012 (Table 7).

163

1,064 3,711

The FSSP Credit Component includes two lending programs: a) the Rice Production Program (RPP) directed at irrigators' associations nationwide and fully funded by the Land Bank of the Philippines and b) the Sikat-Saka Program initiated in the four major rice producing provinces of Isabela, Nueva Ecija, Iloilo and North Cotabato. As a focused lending program for the FSSP, the Sikat-Saka was launched in January 2012 to provide loans at a lower interest rate (maximum 15% per annum) to small palay farmers who are endorsed by Irrigator s Associations. Sikat-Saka operates through a Provincial Action team (PAT) headed by the DA Regional Executive Director. The NIA is responsible for identifying qualified irrigators association s, while the NFA and the National Agribusiness Corporation (NABCOR) undertake to buy the produce of the Sikat-Saka borrowers. The Agricultural Training Institute (ATI), for its part, assissts in explaining the program and conducting orientation and credit discipline sessions for participating

As of December 31, 2012, Php48.2 million in loans has been released to 764 rice farmers who who conveniently access their production loans as needed through their personal automated teller machine (ATM) cards. To qualify, these farmers complied with loan requirements including a table collateral in the form of their irrigated farm land of one to five hectares or other acceptable collateral. Through Sikat-Saka, farmers will be able to establish their individual credit records with the LBP toward gaining continuing credit access with improving credit terms. In early 2013, Sikat-Saka coverage was expanded to include the top twenty rice producing provinces of the country. Complementing the Credit Component is an insurance program provided by the Philippine Crop Insurance Corporation (PCIC). This includes the compulsory insurance coverage of LBP-DA Sikat-Saka loans and the DA-NIA third cropping rice programs. With this, additional cropping areas are made available and rice production is increased, thereby making the commitment of Rice Self Sufficiency by the end of 2013 more attainable (Table 8).

The DA and the International Rice Research Institute (IRRI) formed a partnership in 2012 to pursue joint initiatives in order to reduce poverty and hunger, improve the health of farmers and consumers, and ensure food and environmental sustainability. Under the partnership, seven proposals in the pipeline will be implemented from 2013 to 2016: Philippine Rice Information System (PRISM) An operational system for rice monitoring to support decision-making towards increased rice production in the Philippines Improving Technology Promotion and Delivery through Capability Enhancement of the Next Generation of Rice Extension Professionals and Farmer Intermediaries Accelerating the Development and Adoption of Next-Generation (Next-Gen) Rice Varieties for the Major Ecosystems in the Philippines Rice Crop Manager: A Comprehensive Decision Support Tool for Increasing Yields and Income for Farmers in the Philippines

Table 8. PCIC's Insurance Coverage, 2012 Accomplishment Particulars

No. of Insured Farmers

No. of Area (Has.)

Amount of Cover (PhP M)

1. DA-LBP Sikat Saka 2. DA-NIA Third Cropping Total

271 31,101 31,372

511.40 28,384.97 28,896.37

19.565 283.865 303.430

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farmers. The LBP provides the matching loan fund and, as the lending agency, conducts the screening and approval of borrowers .

For its Research and Extension Component, FSSP was supported by various agencies notably the Philippine Rice Research Institute (PhilRice), the Bureau of Agricultural Research (BAR) and the Agricultural Training Institute (ATI). A regional rice R&D review and conference sought to strengthen the national rice self-sufficiency agenda. A concrete result of research efforts was the release for propagation in 2012 by PhilRice and the Bureau of Plant Industry's National Seed Industry Council of three inbred rice, one special rice, and one lowland hybrid variety seeds. The ATI conducted Farmers' Field Schools for the transfer of technology to farmers.

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Raising Productivity and Enriching the Legacy of Heirloom/ Traditional Rice through Empowering Communities in Unfavorable Rice-Based Ecosystem (Heirloom Rice) Benchmarking The Philippine Rice Economy Relative To Major Rice-Producing Countries In Asia Accelerating the Development and Dissemination of Associated Technologies for Direct-Seeded Rice in Irrigated and Rainfed Ecosystems Under the Upland Rice Development Program (URDP), PhilRice in coordination with DA-RFUs established a total of 52 Palayamanan sites in 48 provinces and/or cities nationwide.11 The program aimed to harness the potential of the upland rice ecosystem as one of the major sources of the country's rice supply and to develop the upland communities as selfsufficient communities. Five applied research and production/post production related technology

commercialization activities were funded by the Rice Program in 2012. Most notable of these are the commercialization and product development of black rice and other traditional varieties, genetic identification of traditional rice varieties in support to rice exportation, and the Rodent Control program in Negros Occidental and Iloilo. As an important intervention, the Consumption Management Component of FSSP, was planned as a nationwide campaign. Launching this, President Aquino proclaimed the year 2013 as the National Year of Rice (NYR) under Proclamation no. 494 on October 18, 2012. It is an advocacy campaign that aims to promote responsible rice consumption for better health and less rice wastage and productive farming through promotion of efficient rice technologies and inspiring farmers to do better. 12

PhilRice, 2012 Highlights of Accomplishments

The success of the effort to attain rice sufficiency is due to the various factors cited, foremost among which is the budget support for the required infrastructure and the partnership with Irrigators Associations and LGUs--especially the provincial and municipal agriculturists and technicians -and the energized DA operating units. The story would not be complete, however, without citing the new ways of doing things that were introduced through the program, which are presented below : Distribution of two-kilogram starter packs of registered seeds to farmers. This innovation placed high-quality seeds within the reach of ordinary farmers. In previous programs, the government distributed hybrid seeds worth Php1,200 per 40-kilogram bag. The government paid Php 600 while the farmer paid Php 600 for the seeds. Scandal-ridden as it was, some seed deliveries did not produce the promised yields. Under the new way of making high quality seeds available, the farmer or a

group of them produced the seeds at their own farms using the starter packs. Each starter pack cost the government Php 40. Part of this program was the establishment of community seed banks that provided storage facilities for seeds produced by the community thereby ensuring availability of quality seeds for the next cropping cycle or whenever needed. A total of seven (7) new seed banks were established in the lowlands, while 16 were rehabilitated. For the upland areas, a total of 17 seed banks were set up. Laminated tarpaulins as post-harvest intervention. A 10-meter x 10-meter tarpaulin sheet costing Php 450 was a quick post-harvest intervention to help farmers protect their grains from sudden rainfall. It is difficult to measure the exact impact of this intervention but a regional director who saw farmers using the protective sheets began to bring several pieces of the sheet during field visits to provide it to farmers who wanted to use them. Farmer recipients signed an acknowledgement receipt as they received the material. A total of 398,515 tarpaulin sheets were distributed in 2012.

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Doing better through innovations

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Buffer stocking for quick turn around after calamities. During calamities, farmers used to wait months before they could replant the fields damaged by typhoons and flooding. With buffer stocking, 10 percent of the seed requirement of every region is stored for quick positioning in times of calamities. During typhoon Pablo, North Cotabato provided seeds to Region 13. In Central Luzon, the buffer stock allowed farmers to immediately replant after typhoon Gener. A total of 548,217 bags of certified seeds were positioned for quick replanting in various regions. The seeds were also used for the 5-in-2 (five cropping cycles in two years) program. MakinaSaka started in 2011 as a modest program conducted in Munoz, Nueva Ecija for Luzon and in Iloilo for Visayas and in General Santos City for Mindanao, the National Rice Program invited agriculture machinery suppliers and fabricators to an event attended by farmers. This represented a radical departure from the past practice of the DA procuring farm equipment in bulk and farmers simply receiving what were given them.

At MakinaSaka, farmers could view and test the equipment and interact with suppliers who informed them of actual prices. With this innovation, farmers helped to choose the equipment that they would use. Fabricators were delighted to learn specific requirements from the farmers themselves. Modern equipment were also put on display to give farmers a view of future possibilities. MakinaSaka led to the introduction of equipment such as the combine harvester that allowed farmers to harvest and thresh within a day or two and beat the coming of a typhoon. In 2012, MakinaSaka was made a national event and it was attended by President Noynoy Aquino himself. It has become the biggest agricultural machinery exposition in the country, MakinaSaka 2012 featured various modern production and post-harvest machineries and equipment that are available to farmers, farmers' organizations and local government units.

Listening to and honoring farmers. A first ever National Conference of Food Staple Producers was held last December 12 to 14, 2012. Its goal was to recognize and motivate the farmers, agricultural workers, Local Government Units, regional Field Units and other rice industry stakeholders toward increasing rice production to meet targets under the Food Staples Sufficiency Program. The conference highlighted the important role of irrigators' associations who manage and maintain national and communal irrigation systems and small water impounding systems, farmer-scientists, rural women and youth, and

indigenous peoples in achieving food sufficiency in rice and major staples. During the conference, Rice Achiever's Awards were given to 10 provinces, 50 cities and municipalities, eight Irrigators' Associations, and 157 agricultural extension workers. The 10 winning provinces are: Ilocos Norte, Mindoro Oriental, Mindoro Occidental, Iloilo, Negros Occidental, Southern Leyte, Davao del Norte, Davao del Sur, Agusan del Sur, and Surigao del Sur. Some farmers who attended these events were in Manila for the first time and stayed at a hotel also for the first time. The boost in the morale of these producers can only be measured by the record harvest that they delivered in 2012.

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MakinaSaka also served as a venue for the convergence of over 1,800 participants in the parallel Irrigators Association (IA) and Agriculture and Fishery Council (AFC) conferences. These conferences aimed to identify strategies, needs, and solutions to concerns besetting the agricultural sector, and provide guidance and aid in policy formulation and formulation of commodity roadmaps.

Panatang Makapalay [Tagubilin: Ilagay ang kanang kamao sa tapat ng puso.]

Bilang isang mamamayang Pilipino nakikiisa ako sa panatang 'wag magsayang ng kanin at bigas. Magsasaing ako ng sapat lamang at sisiguraduhing tama ang pagkakaluto nito. Kukuha lamang ako ng kaya kong ubusin upang sa aking pinggan ay walang matirang kanin. Ganoon din ang aking gagawin kung may page 25

handaan o kung sa labas ako kakain. Ang brown rice o pinawa

ay susubukan kong kainin, pati na ang ibang pagkain bukod sa kanin tulad ng saba, kamote, at mais. Ituturo ko sa iba ang responsableng pagkonsumo nang mabigyang halaga ang pagod ng mga magsasaka at nang makatulong na maging sapat ang bigas sa Pilipinas. Aking isasapuso ang panatang ito dahil sa bawat butil ng bigas o kanin na aking matitipid ay may buhay na masasagip.

National Rice Program Secretariat Department of Agriculture Elliptical Road, Diliman Quezon City, Philippines

Corn-Cassava Program With corn and cassava both promoted as food staples and cassava used as substitute for corn in feed formulation, the two crops have been placed under one program that is at times simply referred to as the Corn Program.

The large production of quality yellow corn resulted in an increase of 11.37 percent in the income of farmers. It is also generated an additional 49, 213 jobs related to corn farming. The Corn Program has continued to push the formation of farm clusters in the country s corn production areas. A corn farm cluster is formed with either a lead cooperative or an association of corn producers and must have at least 200 hectares planting area with a potential expansion area of at least 400 hectares. For CY 2012, some 1,000 farm clusters were strengthened and supported with various projects and programs to enhance corn productivity and develop the social and economic condition of corn farmers and associated workers. Different business partnership modalities were established between farmer clusters and the private sector to provide ready markets, technical and management support. These modes include purchase orders, service or

management contracts, contract growing or processing arrangements, lease agreements and joint ventures. Under the Pilot Farm Mechanization and Tractor Pool program, 96 units of farm tractors were distributed through counterpart-funding arrangement with LGUs, cooperatives or farmer associations. About 19, 200 hectares of corn farm areas were properly cultivated using these tractors. The corn program also established and distributed different post-harvest facilities and equipment. (Table 9) These interventions resulted in the reduction of post-harvest losses from 15 percent to 12.7 percent (1.3 percent harvesting, 1 percent piling, 2.7 percent shelling, 4.6 percent drying and 3.1 percent storage). In March 2012, the Bureau of Agriculture and Fishery Product Standards (BAFPS) issued the Roadmap to Quality and Aflatoxin-Free Corn. The issuance identifies tools/techniques to reduce and control of aflatoxin contamination in corn for food and feeds and provided capability building measures for integrated control of aflatoxin. This was adopted by corn

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Corn production grew by 6.25 percent or 435,609 MT in 2012 for a record production volume of 7.4 million MT. Yellow corn reached 5.24 million MT at 8.72 percent growth rate or 420,326 MT above the 2011 level. On the other hand, white corn reached 2.17 million MT at 0.71 percent growth rate or 15,283 MT more than the previous year. Cassava production also grew by 0.61 percent or 13, 460 MT, from 2.21 million MT in 2011 to 2.23 million MT in 2012.

stakeholders and the DA Regional Field Units.

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Philippine Maize Federation Inc., a member of the National Corn Board, in partnership with the Department of Agriculture through DARFU XI and the City Government of Davao held the 8th Philippine National Corn Congress last September 25-28, 2012 in Davao City.

Kalusugan, Kayamanan ng Bayan was the theme of the said event in recognition of the importance of sustaining the corn industry in the country as a source of food for every Filipino. The congress, attended by some 1,500 corn stakeholders, showcased new technologies and corn products.

Masaganang Maisan, Kabuhayan at Table 9. Targets and accomplishments for the distribution of Post-harvest facilities and equipment of corn program for CY 2012. Post harvest Facility/Equipment

Target

Accomplishment

% Accomplishment

Village-type post harvest facilities

Corn mills

Hammer mills

Hermetic cocoons

124

Mechanical corn shellers

Cassava chipper

Cassava granulator cum shedder

Fisheries Program Cebu. The Zamboanga Peninsula and Davao region also registered an increase in fishing trips and catch. Moreover, tuna catch increased with the lifting of tuna ban in the areas of Indonesia, Papua New Guinea and Micronesia.

Fisheries as a Growth Sector Following years of decline, the fisheries sector finally arrested the trend with the annual decline in 2012 at a negligible 0.04 percent, a significant recovery over the 3.77 percent decline in 2011 (Figure 12). Commercial fisheries was able to recover from its negative performance in 2011 and managed to grow by 0.23 percent. There was a reported increase in the number of fishing days and bigger volume of unloadings in CALABARZON. An increase in the number of fishing sorties for anchovies and sardines was reported in Masbate while increased volume of catch of big-eyed scad and roundscad were observed in

The value of fisheries subsector (at current prices) amounted to Php237.17 billion in 2012, 5.55 percent higher than the previous year's

Figure 12 Growth of Fisheries by Subsector, 2011-2012. (in percent) 2011

2012

2.85 1.83

2 Growth Rate in Percent

.23 0 -.04 -2

-1.82

-4

-3.77

-3.88

-6 -8 -10 -12 -14

-13.34 Commercial

Municipal

Aquaculture

Source: Bureau of Agricultural Statistics (BAS), January to December 2012.

Fisheries Subsector

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Aquaculture also posted a positive growth at 2.85 percent. There was a high demand in Metro Manila for milkfish that encouraged higher production in Pangasinan. Pampanga and Quezon also noted a higher production for milkfish and tilapia due to good quality fingerlings. Antique produced more tilapia and catfish due to high demand.

level. It accounted for 18.20 percent of total agricultural output. Aquaculture dominated production with 42.2 percent share followed by municipal fisheries at 31.4 percent and commercial fisheries by 26.4 percent (Figure 13). Figure 13 Percentage Distribution of Fisheries by Subsector, 2012 (In percent)

Aquaculture 42.2%

Commercial 26.4%

Municipal 31.4%

Source: Bureau of Agricultural Statistics (BAS), January to December 2012.

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The success of the Bureau of Fisheries and Aquatic Resources (BFAR) in arresting the decline in fisheries in the last five years is the result of science-based interventions, the resolve to enforce and regulate fishing activities and the serious effort to improve the BFAR bureaucracy.

With a solid program in hand, the BFAR has successfully obtained sufficient budget to carry out its interventions. For 2012, the Department committed to address the decline in fisheries through adopting a triple strategy of regeneration, protection and sustainable production. Promotion of Coastal Resource Management together with the replanting of mangroves under the Integrated Community-Based MultiSpecies Hatchery and Aquasilvi Farming Program were important programs put in place to achieve these commitments. The serious deterioration in the natural resource base for fisheries was addressed through the implementation of the sardine management plan and the Philippine Aquasilvi Culture and Mangrove Rehabilitation. Effective closed season: first in Philippine fishing history BFAR through joint DA-DILG Administrative Order No. 1 Series of 2011, declared a closed season for catching Indian sardines in East Sulu Sea, Basilan Strait and Sibuguey Bay from December 1, 2011 to March 1, 2012. This was

On Day 1 of the lifting of the sardine ban on March 2, 2012 a commercial purse seiner based in Zamboanga City, caught about five metric tons of assorted fish with a total of 3.5 metric tons of sardines and round scad. Prior to the sardine ban, catches of commercial purse seine in the area continued to decline with each catch registering less than one metric ton. The success of the closed season in Zamboanga led to another ban on mackerel and sardines in the Visayan Sea from November 2012 to March 2013. A report from the Philippine Fisheries Development Authority (PFDA) revealed an increase of tamban or sardinella loadings in Regional Fish Ports by 49 percent during the period January to September 2012 when compared with the same period in 2011.

Also, as a result of the conservation and management measures instituted for tropical tuna fishing, a December 2012 decision by the Western and Central Pacific Fisheries Commission (WCPFC) effectively grants Philippine access to 36 fishing vessels in WCPFC's High Seas Pocket 113 from March 2013 to February 2014. While we are allowing our fisheries resource base to recover, the DA will intensify its efforts to cushion the effects of a temporary economic set-back from these conservation and protection measures. Affected groups, especially municipal fisherfolk, will be assisted through the provision of environment-friendly fishing gears. The seaweed development program (SDP) seeks ensure socio-economic upliftment of subsistence fisherfolk through improved productivity. It was created in response to the high world market demand for seaweeds and

high seas bounded by the exclusive economic zones or EEZs of the Federated States of Micronesia, Republic of Palau, Indonesia, and Papua New Guinea

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done to save the dwindling population of sardines and to give a chance for the fishery resource to regenerate. For every 1 kilo of sardines left to spawn, 27 kilos would be gained after the closed season.

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address the problems and constraints being encountered by the local seaweed industry.

(ETL) to ensure that they will devote time to managing the areas and the participants.

Innovative partnering with SUCs

Improving balance of trade

For the BFAR's aquasilviculture program, 62 SUCs have been engaged through a Memorandum of Agreement to help administer the planting and growing of mangroves by marginal fishers to serve as fishing grounds to be seeded with fingerlings from the multi-specie hatcheries also managed by the SUCs.

For the future, the BFAR hopes to make a significant contribution toward improving the country's balance of trade through increased fishery-based exports. BFAR subscribes to and seeks to effectively enforce the European Union (EU) requirement for IUU-compliance: this means exports to European countries must be guaranteed to be not Illegal, Unreported or Unregulated (IUU).

Under the program, fishers are enjoined to collect, plant, and nurture mangrove propagules. As an incentive, participant is paid P 1.50 for every propagule collected, P 2.00 for every propagule planted and P 2.50 for every fully grown plant. By 2012, some 25.787 million propagules have been planted and reported to have some 70,000 participating fishers. Up to 2016, the program target is to plant 100 million propagules throughout all the coastal areas of the country.

In 2012, fish exports increased by 23.9 percent with an export value of Php18,700 million.14 As required by law, all fishers will be licensed in 2013 through the BFAR system using the Registry System for Basic Sectors in Agriculture (RSBSA) conducted by the National Statistics Office in a joint program among the DBM, DILG, DAR and DA.

SUCs have agreed to grant teachers involved in the program with Equivalent Teaching Load 14

NSCB, as of January 2013

High-Value Crops Development Program

Other commodity-specific interventions were introduced in targeted production sites such as the following: In collaboration with Nestle Philippines, Inc. a coffee demo farm and clonal garden was established in Northern Mindanao Integrated Agricultural Research Center (NOMIARC), Bukidnon to make quality planting materials readily available for the coffee farmers. The establishment of a coffee demo farm in Quirino is on-going. Consultation meetings with shallot exporters regarding the compliance of shallot growers with the requirements of the Indonesian

Ministry of Agriculture on Good Agricultural Practices (GAP). Under the HVCDP, BAFPS, BPI and ATI together with the private exporters conducted trainors' trainings on GAP for shallots in Nueva Ecija and Ilocos Norte toward compliance with the requirements for the issuance of GAP certification. The Production of Garlic Planting Materials for Area Expansion Project was implemented in Regions I, II, III, IVA, IVB, VI, XI and XII to develop a seed system for the production of garlic planting materials. With the project assistance, more than 300 hectares were planted with garlic exceeding target of 200 hectares for CY 2012.

Table 10. Summary of interventions of HVCDP on priority crops, 2012. Crops

Planting materials provided (pieces)

Area planted (hectares)

Nurseries established

Coffee

1,430,745

259 has

Coffee roasting centers 1 demo farm

11 dehullers and depulpers, 8 coffee roasters

731 has

community based cacao roasting facilities

cacao roaster, cacao cracker and cleaner, cacao grinder and tablea maker

3,238 has

Cacao

Rubber

1,587,266

Demo farms and facilities and equipment

Processing equipment

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he DA conducted regional consultations in 2011 on the High Value Crops Development (HVCDP). In 2012, the program proceeded to support expansion programs for priority crops identified (i.e. coffee, cacao and rubber) with interventions such as the provision of planting materials, developing nurseries, establishing demo farms equipped with facilities and equipment, and providing processing equipment (Table 10).

A research on Fusarium entitled Mitigating Banana Fusarium Wilt TR4 through a Farmer Participatory Approach of Developing Disease Management Strategies is being conducted with Bioversity International. About 14 farms (14 hectares) were planted with resistant varieties such as GCTCV 218 and 219 varieties. Field evaluation plots have been established in the identified farms and approximately 26,000 GCTCV 219 seedlings have been planted in the fields, along with Gran Naine to serve as control. Vegetables

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Special programs for vegetable production. In cooperation with the Technology Generation and Dissemination for the Growth and Development of the Vegetable Industry (TECHGEN) and the New Bilibid Prison's (NBP)Agro Production Division, the HVCDP launched the Yaman sa Halamanan Project in February 2012. The project was formed in response to President Aquino's order during a January visit to the NBP to its unused land productive. Aside from the provision of planting materials, the project included a season-long training

program for 22 inmates in the Minimum Security Camp and 13 Bureau of Corrections (BuCor) employees. In the Phase I of the project, a total of 1.2 MT of hot pepper was harvested from approximately 3,900 square meters of land. Phase II included the production of different type of vegetables in approximately 3,000 square meters. The project also aimed to provide livelihood opportunity for the inmates upon their release from the institution. HVCDP also continued the implementation of its Agri-Pinoy Urban Gardening Program which covers 30 congressional districts in the National Capital Region (NCR). This program aims to integrate farming into the lifestyle of urban dwellers by introducing values of basic food production, healthy food systems and clean urban environment. In 2012, 24 communal gardens were established while 19 household trainings on vegetable production were conducted. DA also provided production inputs, small farm equipment, greenhouse and shredding machine to the project sites. The Agri-Pinoy Gulayan sa Paaralan Program of HVCDP is being implemented in support of the supplementary feeding program of public

Banana Banana production which accounted for 5.07 percent of total agricultural output inched up by 0.67 percent this year. The volume reached 9.23 million MT. Growth was mainly attributed to the recovery from last year's typhoons and lesser weather disturbances. Harvest area also expanded and additional bearing hills were observed in Northern Mindanao, MIMAROPA, Western and Central Visayas, and ARMM. Export of Philippine banana increased by 91 percent in 2012. The Bureau of Plant Industry (BPI) accredited 59 banana exporters, 74 packing facility operators, 422 packing facilities and 431 banana growers/farmers with a total area of 10,224.17 hectares. In addition, export of banana to the United States will start in 2013.

Sugarcane Sugarcane production stood at 26.4 million MT, down by 6.83 percent from the 2011 level. Unfavorable weather conditions in Bukidnon, Davao del Sur and Lanao del Sur in the first quarter hindered the harvest. A decline in production in Negros Occidental was reportedly due to early harvesting in the last quarter of 2011 instead of the first quarter of 2012. Smaller canes were harvested from ratooned sugarcane in Iloilo, while shifting to oil palm in Maguindanao in the second quarter negatively affected its production. At current prices, sugarcane production amounted to Php42.3 billion in 2012.

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elementary and secondary schools. It promotes food security in schools and communities through self-help production activities and aims to idevelop an appreciation of agriculture among students for agriculture. A total of 11,022 school gardens were established all over the country.

The Sugar Regulatory Administration (SRA) addressed the existence of 300,000 MT of excess sugar in the country through the advanced swapping of B sugar into A sugar. This was to avoid the plummeting of domestic sugar prices to unprofitable levels15 and its negative effect on the income and livelihood of the sugarcane farmers .The advance swapping program enabled the country to maintain the sugar stock at a comfortable level and a stable price that is profitable to producers but fair to consumers. The agency s efficient management of sugar stocks kept sugar prices stable at around Php 50 per kilo (retail) from August to November 2012.

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To resolve the issue on low productivity of fragmented sugar farms, the DA, the SRA and the Department of Agrarian Reform (DAR) joined hands to implement a two-year pilot sugarcane block farming project that will consolidate small farms owned by agrarian reform beneficiaries into blocks of 30 to 50 hectares to attain economies of scale. Sixteen areas have been identified as viable project sites. Sugarcane block farms have been developed in five of these: Kamahari and Damba in Nasugbu, Batangas; Lucban in Balayan, Batangas; Prenza in Lian, Batangas; and Pontevedra in Negros Occidental. In addition these accomplishment, sugar smuggling was minimized through close coordination with the Bureau of Customs and the private sector's task force on anti-

smuggling and implementation of the Philippine National Single Window (NSW) that seeks to streamline and better monitor all import activities .16 Fibers The Fiber Industry Development Authority (FIDA) has developed 2,373 hectares more than double the targeted 1,000 hectares of new areas for abaca production which provided 4,746 jobs and rehabilitated 1,426 hectares old and disease free abaca areas that benefitted 1,104 farmers. Of the newly developed areas for abaca production, 70 percent are in Mindanao, 20 percent in the Visayas and 10 percent in the Bicol Region. Most of the areas that were rehabilitated were in Bicol Region (62 percent), followede by Visayas Region (25 percent) and Mindanao (13 percent).17 In addition, 203,481 pieces of abaca planting materials were distributed to 147 beneficiaries. Bigger opportunities and possibilities for Philippines fiber and manufacturers were opened as a result of FIDA's participation in international fora and exhibitions.

15 16

SRA, 2012 Accomplishment Report It is a computerized internet-based system that allows parties involved in trade to lodge information and documents with a single entry point to fulfill all import, export, and transit-related regulatory requirements. FIDA, Major Accomplishments in 2012

Livestock and Poultry Program

Figure 14 Percentage Distribution of Livestock by Subsector, 2012.

he output of the livestock sector grew by 1.10 percent. It accounted for 16.07 percent of total agriculture. Livestock production is dominated by the hog subsector, accounting for 83 percent of its output (Figure 14). Production in the hog subsector grew by 1.71 percent (Figure 15) as increases in numbers of animal slaughtered were reported in Ilocos Region, Central Luzon, Western Visayas, Central Visayas and Northern Mindanao due to the high demand for pork during the holiday season. Significant decline in number of animals slaughtered caused the carabao and cattle subsectors to drop by 3.25 and 0.89 percent, respectively. On the other hand, building up of animal stocks in Ilocos, Central Visayas, Davao and SOCCSKSARGEN was observed consequently reducing the output of goat meat by 3.25 percent.

Hog 83%

Goat 3% Dairy 0%

Cattle 10%

Source: Bureau of Agricultural Statistics, January to December 2012.

Carabao 4%

Dairy production showed a rather rapid growth at 12.16 percent. There was an increase in number of dams and milking animals particularly in National Dairy Authority (NDA)assisted dairy farms and cooperatives.

Figure 15 Growth of Livestock by Subsector, 2011-2012 (in percent) 2010-11

2011-12

12.16

Percent Growth

10 8 6 3.72

2.22 1.71

1.79

2 0 -2 -4

-.34

-.32

-.89

-3.25

-6

Carabao

Cattle

Hog

Goat

Source: Bureau of Agricultural Statistics (BAS) 2012 Performance of Philippine Agriculture, January to December 2012.

Dairy

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Steady Performance by the Livestock Sector

Gross earnings from the livestock sector amounted to Php214.3 billion at current prices, 0.94 percent higher than the 2011 level. Robust Growth in the Poultry Subsector

Duck and duck eggs grew by 2.08 and 5.52 percent, respectively (Figure 16). Favorable weather conditions and sufficient water supply resulted in the increase in duck inventory; thus, the increase in stocks available for slaughter. Duck eggs grew due to the increased

Figure 16 Growth of Poultry by Subsector, 2011-2012 (in percent) 2010-11

2011-12

5.52

4.52 4.61 4.16

Percent Growth

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Poultry production, which accounted for 14.27 percent of total agricultural output in real terms, grew by 4.53 percent. Chicken which contributes 76 percent of total output in poultry grew by 4.61 percent owing to high demand for chicken meat in Ilocos Region, Cagayan Valley, Central Luzon, Central Visayas, Northern Mindanao, Davao Region and South

Cotabato, Saranggani and General Santos (SocSarGen). Chicken egg production likewise maintained its uptrend, growing 4.37 percent compared to its previous year's level. This was due to the reported increase in number of laying flocks and sustained demand for eggs.

4.37

4.35

4.53

2.7 2.08

.55

0 Chicken

Duck

Chicken Eggs

Duck Eggs

Poultry

Source: Bureau of Agricultural Statistics (BAS) 2012 Performance of Philippine Agriculture, January to December 2012.

acquisition of laying flocks and the reported higher egg-laying efficiency ratio in most regions. High demand for balut and salted eggs were also noted in Cagayan Valley and Western Visayas. Overall, poultry production amounted to Php167.1 billion, 5.24 percent higher than last year's record.

A risk assessment analysis was conducted by the Food Development Center. This is in compliance with Administrative Orders (AOs) 5 and 6 regarding the time of holding of the newly slaughtered meat in the market for eight (8) hours, and the maintenance of frozen meat under chilled conditions, while thawing. Overall results strongly support current AO regulations and provide solid basis for extending this type of research for future epidemiological and risk assessment undertakings. DA s Livestock Program allotted Php180 million for the construction of two Triple A slaughter houses, one in North Luzon (Bulacan) and another in South Luzon(Batangas). However, to address various requests from LGUs for the

construction of Double A slaughterhouses in their respective municipalities, the target was charged to 13 Double A slaughterhouses. These slaughterhouses will be constructed in the provinces of Cagayan, Quezon, Batangas, Oriental Mindoro, Romblon, Marinduque, Capiz, Iloilo, Davao Oriental and Davao del Norte. On animal health welfare and quarantine, the Bureau of Animal Industry (BAI) automated its system for issuing sanitary and phyto-sanitary permits and continues to strengthen its border control program. The automation reduced the processing time of issuance of permits from 1015 under the old system to 3-5 days. It also minimized opportunities for corruption and enhanced work efficiency. In addition, the bureau took part in anti-smuggling efforts of the government through its support to the

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In 2012, the Livestock and Poultry Program focused on the improvement of meat quality and safety, with the following strategies:

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Bureau of Customs (BOC) in the campaign against technical smuggling by: monitoring and reconciling of declared reference value abroad and monitoring imported items from

banned countries and recommend to the BOC the disposal of the said products when necessary.

National Coconut Program

Despite the increase in coconut production, value at current prices declined by 26.7 percent from P120.9 billion in 2011 to P88.64 billion in 2012. This was due to a large decrease in farmgate price by 29.4 percent caused by the low price of coconut products in the world market. The coconut industry continued to make headway in improving the lives of millions of Filipinos dependent on coconut, despite the substantial damage brought by Typhoon Pablo to the coconut farming communities in Compostela Valley and Davao Oriental, which affected an estimated 10 million coconut trees worth P5 billion.

The Accelerated Coconut Planting and Replanting Program (ACPRP)18 is one of the highlights of the accomplishments of the Philippine Coconut Authority (PCA). This included Participatory Coconut Planting Project (PCPP) and Coconut Seedling Dispersal Project (CSDP)/Indigenous People Outreach Program (IPOP) (Table 11). Based on BAS data, the PCPP contributed to the increase in coconut production for new bearing trees in Sultan Kudarat and Misamis Occidental as some of coconuts planted since 2008 reached fruiting stage. The Salt Fertilization Project (SFP) fertilized fruitbearing coconut trees using common salt to increase coconut productivity and improve its 18

PCA, Accomplishment Report, 04 January 2013

Table 11. Accomplishment of the projects under Accelerated Coconut Planting and Replanting Program (ACPRP), 2012. COCONUT PLANTED SUB-PROGRAM PCPP CSDP/IPOP TOTAL

NO. OF SEEDS SOWN NO. OF SEEDS PLANTED

AREAS PLANTED (HAS.)

11,176,437

7,687,453

76,875

9,284,550

6,745,097

54,330

20,460,987

14,432,550

131,205

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oconut production recovered from its slight decline of 1.71 percent in 2011 and grew by 3.83 percent reaching 15.83 million MT in 2012. The growth was primarily due to the improvement of coconut productivity through the Salt Fertilization Project. New bearing trees were also reported in Sultan Kudarat and Misamis Occidental as part of the Participatory Coconut Planting Program (PCPP). There was also an increase in demand for young coconuts as ingredient of buco-based products particularly in Aurora, Camarines Norte, Negros Occidental, Aklan, Leyte, Camiguin and Lanao del Norte.

resistance to pest and diseases. For 2012, 19.79 million coconut trees were fertilized over an area of 197,916 hectares benefitting 141,936 farmers. With salt fertilization, the yield of fruitbearing coconut trees would increase by as much as 25% one year after fertilization, and 50% or more in the second year of fertilizer application.19

In addition, the PCA continued to implement the Kasaganaan sa Niyugan ay Kaunlaran ng Bayan (KAANIB) Project in 90 sites distributed in 53 provinces nationwide involving close to 11,000 coconut farmers and creating 18,000 jobs. About P41.73 million has been released to finance intercropping, livestock raising and product diversification of some 10,984 farmerparticipants.

PCA, Inputs to the President's midterm SONA, 17 April 2013

Agri-Infrastructure Programs Farm-to-market Road Development Program page 41

The Farm-to-Market Road Development Program (FMRDP) of the Department adopted various ways to fast track the implementation of the FMR projects across the country. A convergence between the Department of Agriculture (DA) and Department of Agrarian Reform (DAR) helped in the proper identification of beneficiaries based on the list of agrarian reform communities (ARCs). The said convergence allocated 20 percent of the regular fund of the DA for FMR projects in ARCs.

To make the identification of project sites more objective, the FMRDP also required the submission of project templates and maps by the proponents through the facilitation of the various DA Regional Field Units. New technologies to support the FMRDP such as geotagging tools have also been introduced this year. Geotagging made the validation and monitoring of projects easier and more reliable. The DA gave priority to projects that involved the concreting of roads. FMRs have been re-designed to last longer and be more resilient against flooding. FMRs

Under the regular program, a total of 717.3 km of FMRs were completed from JanuaryDecember 2012, out of the targeted 1,000.19km. Of these 261.37km were funded in CY 2012, 320.26 km in CY 2011, and 135.67 km in CY 2012. Foreign-Assisted Projects also completed 279.56 km of FMR while LocallyFunded Projects completed 39.26 km (Table 12). Table 12. Completed farm-to-market roads for CY 2012.20 Project

Completed (km)

FMR Regular Program Foreign Assisted Projects (FAPs) InfRES MRDP2 SELAP2 Locally Funded Projects (LFPs) SOCSKSARGEN DIDP CASECNAN CIDP ZIADP TOTAL

717.31 279.56 17.26 258.5 3.8 39.26 3.61 13.64 8.37 6.14 7.5 1,036.13

Irrigation Development Program Irrigation is a major intervention towards attaining food self-sufficiency. For CY 2012, National Irrigation Administration (NIA) was

allocated a total of P29.46 billion to implement 121 irrigation projects: 15 foreign-assisted, 105locally funded (including continuing activities and carry-over projects), and two inter-agency projects. As of December 31, 2012, the agency accomplished 55,500 hectares for generation, 45,950 hectares for restoration and 206,897 hectares for rehabilitation. NIA now manages a total of 217 national irrigation systems (NIS) with a total service area of 793,638 hectares.21 The total irrigated area was 1,265,561 broken down as follows: 569,622 ha during the dry season, 574,383 ha for the wet season and 121,566 ha for the third crop (quick turn around and ratooning). Cropping intensity reached 159% based on the service area. Agri-Pinoy Trading Center Program For CY 2012, the Agri-Pinoy Trading Center (APTC) Program initiated the establishment of six (6) trading centers that are at various stages of development in strategic areas across the country: Benguet, Nueva Ecija, Bohol, North Cotabato, Pangasinan and Quezon. This is where small farmers and fisherfolk can bring their marketable agricultural and fishery products directly for sale. The largest of these is the Benguet Agri-Pinoy Trading Complex (BAPTC) in La Trinidad, Benguet covering 4.0 hectares. The construction of the BAPTC is targeted to be completed by the end of 2014.

Includes accomplishments for CY 2012, carry-over projects, other sources, and inter-agency projects

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remained critical for the development of the rural areas as they enable farmers to bring their produce to market and transport inputs at less cost. The involvement of LGUs in the construction/rehabilitation and maintenance of FMRs ensured the sustainability of projects beyond construction.

Organic Agriculture Program

he National Organic Agriculture Program is governed by the National Organic Agriculture Board (NOAB), chaired by the Department of Agriculture. It is composed of different government agencies (DILG, DENR, DAR, DTI, DOST, DOH, DepEd), representatives from small farmer groups, NGOs, and agribusiness groups. Local Technical Committees (LTCs) served as frontliners in the implementation of the program in LGUs. In 2012, 34 provincial LTCs, 541 municipal LTCs and 59 city LTCs were established. page 43

For the medium term, the program is geared towards the conversion of five percent of agricultural lands into organic farming. Overall, the country devoted a total of 833.19 has (38 certified farms) to organic agriculture22 as reported by the BAS in the Final Results of the 2012 Organic Agriculture Baseline Survey of this total; 286.85 hectares are owned by the

farmer, 474.79 hectares is rent-free (13 farms) and 71.55 hectares are covered by Certificate of Land Transfer or Certificate of Land Ownership Award(CLT/CLOA) (3 farms). The Bureau of Agriculture and Fishery Product Standard (BAFPS), as the NOAB administrative and technical secretariat registered 14 organic fertilizers/importers. In addition, 60 demo farms were established out of the targeted 71. These farms showcased integrated farming systems utilizing organic technologies. The major local destinations of the organic products of the places being considered were local outlets/markets within the region of the producers/processors while the rest are being sold to commercial establishments like supermalls, and other private entities and to other provinces in the country.

Year-end Accomplishment Report for the Cabinet Cluster on Climate Change Adaptation and Mitigation

Coconut products are being exported to Europe, USA, Japan, Australia, Taiwan, Vietnam, Korea, Singapore, and China. Muscovado sugar is entering the markets of Switzerland, Germany, Japan, USA, and France, while ginger tea is now being marketed to Oslo, Norway along with other coconut products. Seaweed-based liquid foliar fertilizer from Central Visayas is being sold to Indonesia, South Africa and Sri Lanka. Medicinal tea and capsule are to be exported to Germany and USA. Identification of markets, both local and international not just fulfill the mandate of the Department of Agriculture as stipulated in Republic Act 10068 (Organic Agriculture Act of 2010) but more importantly, this will serve as a relevant input for future researches which would eventually lead to the success of the mentioned law.

The NOAB Secretariat approved three (3) major projects in 2012 namely Installation of Sustainable Organic Agriculture System in Lowland and Upland Communities in Dumingag, Zamboanga del Sur, Strengthening of Regional Organic Agriculture Research and Development in Benguet State University, and Provision for Laboratory Equipment for Organic Fertilizer Assay at the Regional Soils Laboratory in DA-RFU 13. A total of 419 projects were approved by the Regional Field Units and other implementing agencies. These projects focused on production support and research to ensure the availability of inputs for organic agriculture benefitting 125 NGOs, POs, and cooperatives, 115 LGUs, and 77 academe and SUCs.

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The BAFPS endorsed the following seven (7) approved guidelines, and passed DA's Administrative Orders and Memorandum Circular (Table 13):

Table 13. BAFPS Approved Organic Guidelines, 2012 Document Number

Document Title/Subject

AO No. 02 Series of 2012

Regulation Incentive Subsidy Scheme for Organic Certification

AO No. 03 Series of 2012

Fee Structure for the Regulation Incentive Subsidy Scheme for Organic Certification

AO No. 04 Series of 2012

Guidelines on the Evaluation and Approval of Organic Agriculture Project Proposals

AO No. 10 Series of 2012

Guidelines for the Selection of Organic Demo and Training Farms

AO No. 11 Series of 2012

Implementing Rules and Regulations on the Accreditation of private Organic Agriculture Extension Service Providers (OA ESPs)

AO No. 12 Series of 2012

Guidelines for Accreditation of Non-government Organizations (NGOs)/Peoples Organizations (POs) and Foundations for Entitlement to Organic Agricultural funds

MC No. 12 Series of 2012

Guidelines for the Establishment of Organic Trading Posts

Foreign-Assisted Projects The DA is implementing a total of 43 Foreign Assisted Projects (FAPs) with project ending dates spanning from 2012 to 2015. The aggregate project cost of foreign-assisted projects as of end April 2013 is Php39.83 billion. In terms of project type, 20 are loans while 23 are grants .

Development Bank for exceeding the maximum implementation period. The unfinished portion was continued using local funds in 2012. InfRES, likewise received a Good Practice Award from NEDA last December 2012 under the Achieving Desired Outcome Category.

Following are the highlights of accomplishments of some FAPs in 2012:

Under CHARMP II, to conserve and reforest critical watersheds, 141 Indigenous Peoples Organizations (IPOs) are implementing Comprehensive Site Development (CSD) covenants covering 6,109 hectares in six (6) provinces of Abra, Apayao, Benguet, Ifugao, Kalinga, and Mt. Province.

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Last December 2012, NEDA awarded the Mindanao Rural Development Program (MRDP) a Good Practice Award for the program's application of the applied geotagging technology as tool for transparency and public disclosure. The MRDP introduced the geo-tagging tool which is a Google Earthbased system of tracking infrastructure and other projects from inception to completion. MRDP trained local government partners and contractors to use the tool. The Infrastructure for Rural Productivity Enhancement Sector Project (InfRES) was terminated in 2011 by the Asian

Started in 2009, the Rapid Seed Supply Financing Project (RASSFiP is a component of the Rapid Food Production Enhancement Program (RaFPEP) that provided a bag of certified seeds to 411,990 farmers. Results of the study conducted by BAS on the RASSFiP showed that the yield per hectare of program beneficiaries increased by 5 to 10 bags per hectare or 250 kilograms to 500 kilograms per cropping cycle. This is in addition to the

The FAO-assisted project known as AMICAF (Assessment of Climate Change Impacts and Mapping of Vulnerability to Food Insecurity under Climate Change to Strengthen Household Food Security with Livelihoods' Adaptation Approaches) that started in 2011 led to the farm trials of Green Super Rice a multi-trait climate resilient rice variety that is being tested for application in different parts of the country through DA research stations.

Through the Philippines' Agriculture and Fisheries Biotechnology (BioTech) program, studies have been undertaken for the application of biotechnology for various crops including the enzyme-based extraction of essential oils, the study of the effects of cadmium content on the fertility of ducks and the propagation of spices and other ingredients. BioTech also currently have a number of research projects anchored on developing rapid, efficient and reliable methods and kits to detect major diseases and pests in rice, corn, banana, tomato, abaca, orchids and livestock.

Locally-Funded Projects In 2012, the DA continued to implement 14 Locally Funded Projects (LFPs) with a total project cost of Php3.66 billion with project duration spanning from 2002 to 2013. Of these, nine (9) LFPs ended in 2012. Only SOCCSKSARGEN Integrated Food Security Program, Davao Integrated Development Program (DIDP), 4-H Club Youth Development Program (4-H Club YDP), Casecnan Social Measures Project (CSMP), and Support to Poverty Eradication Empowerment and Development Program (SPEED) will continue in 2013. Below are the accomplishments of selected Locally-Funded Projects in 2012: The Basilan Accelerated Peace and Development Strategy (BAPADS) distributed to farmer-beneficiaries in the province 520 bags of organic and inorganic fertilizers; 4,000 hills of rubber seedlings (clones); and 8,110 packs of assorted vegetable seeds.

The SOCCSKSARGEN Area Development Project Office provided 300 bags of OPV white corn foundation seeds; 10 corn mills and 10 corn shellers to 17 farmer organizations. The Davao Integrated Development Program (DIDP) rehabilitated and improved 19.15 kilometers of road sections. The CARAGA Integrated Development Project (CIDP) completed nine (9) irrigation projects with 646 hectares influence area and 791 household beneficiaries. The project also c o m p l e t e d 1 8 . 1 5 k m o f construction/rehabilitation of FMRs benefitting 875 households.

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average yield of the farmers of 3.8 MT per hectare at the start of the program. RASSFiP was completed in 2012.

The Department's Action Team:

The Regional Field Units Management Teams

he interventions of the Department of Agriculture are delivered by the different regional field units (RFUs). They implement the major programs of the department and directly engage stakeholders (farmers, traders and local government units, among others). The service units are the frontliners of the DA.

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After visiting all the provinces in the country, the Secretary felt the need to further improve the delivery of DA's interventions, extending the reach of support to far-flung areas. Thus, in 2012, for the first time in the department's history, the RFU Management Teams (RMT) were called for a meeting with the Secretary together with other DA top officials and the Secretary's Technical Assistance Group. The objectives of the meeting were to emphasize the importance of team effort and to create a venue for the Secretary to listen to the teams that implement the DA programs and to deliver key messages for improving the services of the department. The RMT presented their current setup to the Secretary: the agricultural and economic profile

of the provinces in their jurisdiction, the team's available resources, and development plans. They shared the challenges they encounter in the field which slow down program implementation. They also shared their best field practices which the Secretary thought can be replicated by the other teams. As a bonus, they were able to present their requests to the Secretary. On the other hand, the Secretary explained the department's directions and priorities and the important changes to be expected in terms of planning, budget execution and LGU partnerships. The meetings were held in halfday sessions back-to-back with a meeting with the Finance Group of the department where budget concerns were tackled. Overall, the sessions with the RMT were productive. Bottlenecks in program implementation were identified, foremost of these are the inadequate number of personnel and dilapidated buildings and facilities. The problem with the pending regularization of officers in charge and the need to improve stock farms and research centers were also raised. The slow procurement process, caused

by failed bidding or lack of suppliers, was also cited as one of the major causes of delay in program implementation. On the bright side, the teams presented their respective best practices in the region. Among the notable management innovations was the Ulat sa Bayan by DA- Region XII which provides a venue for interaction between the DA and the stakeholders. It is a quarterly event during which the RFU presents the current agricultual situation in a selected province. With this, stakeholders are given the feeling of involvement in the growth process and emphasizing the importance of the contribution of each. It also played an important role in restoring their clients' trust and enabled the establishment of a partnership between the two.

Delivering programs to the farmers and fishers is not a simple task but with the presence of an excellent team on the ground, nothing is impossible. The Service Units To support the Regional Field Units, the DA has service units-Bureaus Attached Agencies and Attached Corporations perform specific functions. These are presented: page 48

The rollover scheme of Palayamanan was implemented successfully in one of the regions. There are already 496 sites in 2012 of which, half can be considered models.

In order to cope with the slow procurement process, the teams devised their own way of speeding up the process. Among the practices is the dividing of the Bids and Action Committee (BAC) into two: either dividing the procurement tasks into goods and infrastructure or by small and large value of procurement. This has sped up the procurement process to only 17 days for small value procurement, and 33 days for procurement of good/services amounting to more than Php500 thousand.

BUREAUS Agricultural Training Institute (ATI) Bureau of Agriculture and Fisheries Product Standards (BAFPS)

Bureau of Fisheries and Aquatic Resources (BFAR) Bureau of Animal Industry (BAI)

Bureau of Agricultural Research (BAR) Bureau of Agricultural Statistics (BAS) Bureau of Plant Industry (BPI) Bureau of Soils and Water Management (BSWM)

Leads in the provision of extension support services including the preparation of information and education materials and the conduct of Farmers'Field Schools and other training courses. Formulates agri-fishery product standards and monitors compliance with its issuances. Keeps the department and its stakeholders informed about international product standards and good agricultural practices. Responsible for the development, improvement, management and conservation of the country's fisheries and aquatic resources. Formulates long and short-range programs for the development and expansion of the livestock, poultry and dairy industries. Supports genetic improvement and provides necessary breeding facilities and services. Coordinates all agricultural research that is undertaken to maximize their utility to agriculture and fisheries. Collects, compiles and releases official agriculture and fisheries statistics. Responsible for quarantine enforcement on agricultural crops that enter the country. Provides technical support for various crops development. Formulates measures and guidelines for effective soil, land and water utilization, as well as soil conservation in croplands and other agricultural areas.

ATTACHED AGENCIES Agricultural Credit and Policy Council (ACPC)

Develops and recommends policies and strategies that increase and sustain the flow of credit to agriculture and fisheries sector.

Cotton Development Administration (CODA) Fiber Industry Development Authority (FIDA) Fertilizer and Pesticide Authority (FPA)

Undertakes initiatives that will spur the growth of the local cotton industry through cotton research, development and extension. Promotes the growth and development of the Philippine fiber industry in all its aspects including research, production, processing, marketing and trade regulation. Assures adequate supply of fertilizer and pesticide at reasonable prices; rationalize the manufacture and marketing of fertilizer; protect the public from the risks inherent in the use of pesticides; and educate the agricultural sector in the use of these inputs. Serves as a forum between the public and the private sector to discuss thrust and priorities of the livestock and poultry sector and industry's problems/issues, which will be the basis in formulating policies.

Livestock Development Council (LDC) National Agricultural and Fishery Council (NAFC) National Meat and Inspection Service (NMIS) page 49

Philippine Carabao Center (PCC) Philippine Center for Postharvest Development and Mechanization (PHILMECH)

Maintains a nationwide network of agricultural and fishery councils that serves as a forum for consultative discussions within the agricultural and fishery sectors. Promulgates and implement policies, procedures, guidelines, rules and regulations governing post production flow of livestock and meat products (both locally produced and imported) through the various stages of marketing and proper handling, inspection, processing storage and preservation of such products. Leads in the conservation, propagation, and promotion of the carabao as source of milk, meat, draft power, and hide to benefit the rural farmers. Generates, extends and commercializes appropriate mechanization and postproduction technologies and practices to reduce losses, improve food and feed quality, increase resource-use efficiency in order to maximize its benefits to various stakeholders.

ATTACHED CORPORATIONS National Agribusiness Assists DA program through commodity-related processing and Corporation(NABCOR) marketing ventures. National Dairy Authority (NDA) National Food Authority (NFA)

National Irrigation Administration (NIA)

Ensures the development of the Philippine dairy industry through policy directions and program implementation. Ensures food security of the country and the stability of supply and price of the staple grain-rice through various activities and strategies, which include procurement of paddy from individual bonafide farmers and their organizations, buffer stocking, processing activities, dispersal of paddy and milled rice to strategic locations and distribution of the staple grain to various marketing outlets at appropriate times of the year. Develops and rehabilitates irrigation systems in support of the national food production program and provide adequate level of irrigation service on a sustainable basis in partnership with the farmers.

Philippine Crop Insurance Corporation (PCIC) Philippine Fisheries Development Authority (PFDA) Philippine Rice Research Institute (PHILRICE) Quedan and Rural Credit Guarantee Corporation (QUEDANCOR) Sugar Regulatory Administration (SRA)

Raises the quality of life of the tobacco farmers including those who depend on the industry for their livelihood. Oversees the development of the coconut and other palm oil industry in all its aspects and ensure that the coconut farmers become direct participants in, and beneficiaries of, such development. Provides insurance protection to the country's agricultural producers particularly the subsistence farmers. Promotes the development of the fishing industry through the provision of post-harvest infrastructure facilities and essential services that improve efficiency in the handling and distribution of fish and fishery products and enhance their quality. Helps the country attain rice self-sufficiency by increasing the productivity and profitability of rice farmers in a sustainable and competitive manner. Conducts research on climate resilient rice varieties, location specific farm systems, etc. Accelerates the flow of investments and credit resources into the countryside so as to trigger the growth and development of rural productivity, employment and enterprises to generate more livelihood and income opportunities through the various quedan credit and guarantee programs. Promotes the growth & development of the sugar industry through greater participation of the private sector and to improve the working conditions of the laborers.

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National Tobacco Administration (NTA) Philippine Coconut Authority (PCA)

The DA Budget in 2012 AMOUNT (in P 000) Total New Appropriations (Net of Corporation)

2011

2012

35,198,376

53,255,820

12,790,650

24,454,052

2,500,000 4,317,216 483,642 926,867

5,000,940 6,181,166 950,739 1,336,658

682,330

1,027,861

Distribution by program Irrigation Projects - NIA Farm-to-Market Roads National Rice Program National Corn Program National High Value Crops Program National Livestock Program

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National Fisheries Program Organic Agriculture Market Oriented Program Other Support Program

1,792,912

2,400,505

900,000 675,082 6,356,508

927,200 911,755 6,219,456

Locally Funded Projects Foreign Assisted Projects

2,911,181 861,988

1,450,577 2,394,911

26,312,704

38,867,091

CAR Region I Region II Region III

924,717 577,427 506,739 942,892

1,228,670 864,574 1,184,320 1,438,685

Region IV-A Region IV-B Region V Region VI Region VII Region VIII Region IX

655,817 439,395 535,683 593,421 485,682 472,506 397,233

1,000,146 946,394 1,136,487 1,168,968 658,166 847,961 687,309

Region X Region XI Region XII

488,994 552,897 477,621

723,857 937,969 795,093

Region XIII

374,375 320,901

557,208 212,922

37,329,934 25,619,285

49,964,118 45,130,278

68.63%

90.33%

Distribution Per Office OSEC & its Bureaus & Attached Agencies

ARMM Budget performance Allotted Obligated Percent Utilization Utilization Rate As of December 31, 2012 As of June 30, 2013

98.43% 95.98%

Directions and Priorities: 2013-2016 Commitments for 2013 and beyond

Food Staples Sufficiency Attained and Sustained Environment for Enhanced Competitiveness in Agriculture and Fisheries Established Climate Resilient Agri-fishery Technology and Infrastructure Developed and Improved

Simultaneously, the Philippine Development Plan 2011-2016 is undergoing a midterm review with the goal of addressing gaps in the country's policy framework and concurrently attune strategies to achieve inclusive growth for the remaining three (3) years of the current administration. These commitments and indicators are structured on a rural development framework formulated by Department of Agriculture and adopted by the DA Management Committee. page 52

or the next three years, the DA renews its commitments and has submitted its outcome statements for 2013-16 as follows:

Delivery of outcomes shall be based on 16 indicators shown in the following table: Table 14. DA's Outcomes, Strategies, and Indicators, 2013-2016 OUTCOME STATEMENTS Food Staples Sufficiency Attained and Sustained

STRATEGIES Raise farm productivity and competitiveness

2. 3.

Environment for Enhanced Competitiveness in Agriculture and Fisheries Established

Percent utilization of allocated funds for natural infrastructure, e.g. mangroves, watershed, soil and water, coral cover

Percent utilization of allocated funds for hard infra, e.g. irrigation, FMRs, postharvest, trading centers

Increase in the yield of major commodities (corn, banana, pineapple, mango, coffee, cacao, rubber, sugarcane, coconut)

Increase in volume of production (hog, chicken, fisheries)

Strengthen regulatory capacity

Standards of priority commodities compliant with trading partners

Intensify market development efforts

Design and establish climate resilient agrifishery infrastructure

12. Kilometer of irrigation canals with lining 13. Kilometer of farm-tomarket roads constructed that are permanently surfaced and with proper drainage

Develop and improve agrifishery technologies

14. Percentage increase in beneficiaries using tolerant varieties (rice and chicken)

Provide the necessary personnel to achieve the stated outcomes

15. Approval of DA Rationalization Plan by DBM

Strengthen collaboration with other Departments, LGUs, SUCs, private sector, and civil society organizations

16. Number of stakeholders with which DA has formal arrangements

Increase efficiency in investments on agriculture and fisheries

Raise productivity and production

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Climate Resilient AgriFishery Technology and Infrastructure

Leadership, Management, Innovation

INDICATORS Increase volume of production (palay, white corn, cassava) Reduce volume of net imports (rice) Increase in net profitcost ratio in program areas (rice)

Development of new export commodities 10. Development of new export markets 11. Establishment of market-related infrastructure

Rural Development Framework

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Figure 17. Rural Development Framework

Focus agro-industries for 2013 to 2016

development. The process of identifying the focus subsectors involved various agencies engaged in rural development including the Department of Trade and Industry (DTI), Department of Science and Technology (DOST), Department of Social Welfare and Development (DSWD), National Anti-Poverty Commission (NAPC), National Electrification Administration (NEA), Department of Labor and Employment (DOLE) and others. Under the guidance of the NEDA and the DBM, various consultations were conducted to arrive at the focus subsectors that can impact the most number of poor people while ensuring that growth takes place in the target areas and industries.

In the pursuit of inclusive growth, the emphasis for the second half of the present administration is focused on agro-industrial

Of particular interest in the focus agroindustries development are the graduating batches under the conditional cash transfer

asically, the framework adopts the AgriPinoy principles and strategies laid out in early 2011: food security and sufficiency, sustainable resource base, services from farm to table, increase incomes through enhanced productivity and market access, broad partnership with producers and other stakeholders. The foundation of the rural development framework is a rural agro-industrial base. This is a framework that encompasses the engagement of producers and landless rural workers in value-adding ventures (Figure 17).

program of the DSWD. They are target participants in the various activities and enterprises that will be initiated in this focused inclusive growth effort.

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With the DOLE, the DA is engaged in re-entry programs into agriculture and agri-business for returning overseas workers and for relatives of overseas workers. Overseas Filipino Workers can potentially increase the ranks of the Philippines' young and enterprising farmers. Coconut agro-industrial hubs For coconut, the aim is to engage a majority of the three (3) million coconut farmers and households in activities and enterprises that will allow them to enjoy the benefits of emerging coconut-based products with higher value than the traditional copra-based enterprises. Coco water, coco sugar, virgin coconut oil, coco coir, coconets, cooking oil, coconut milk and coco diesel blend are among the products eyed for this purpose. At the center of this program will be the agroindustrial hubs in which farmer participation in enterprises will be enjoined from supplying raw materials to employment in the processing plants. Social protection will be linked to their participation in these enterprises so that farmers who supply coconut husks, whole nuts

and other raw materials increase their benefits as they increase their participation. Fishery-based agro-industries The overall strategy for sustainable fishing involves resource regeneration, protection and responsible extraction. To pursue inclusive growth in the sector, BFAR has a number of programs. The National Payao Program aims to establish 2,649 payaos. The payaos will be set-up in the eastern seaboard and west Philippine Sea to encourage the commercial fishers to leave the municipal waters to the municipal fishers. Small payaos will also be placed within municipal waters (15 kms. from the shoreline) so the small fishers can easily return home during inclement weather. A fishport and fish landing program will provide appropriate infrastructure and facilities that allow big numbers of small fishers access to landing sites and cold storage that will enable them to benefit from higher value fish products. Seaweed growing and processing, salt making, fish processing are some of the value-adding enterprises in which fishing households would

be able to participate as the DA, particularly through the Bureau of Fisheries and Aquatic Resources (BFAR), pursue a value-chain approach in addressing the poverty situation in the fishery sector.

Together with other agencies, social aspects in the fishery sector pertaining to securing homelots and land-based livelihoods are also part of the interventions for the sector. Improving the agriculture trade balance Pork and poultry, tuna and seaweed, corn, cacao, mangoes, abaca, fancy rice, bananas, pineapple and other high value crops are identified among the priority products for exports. Private sector participants take the lead and the DA support efforts to promote and export these products. On the farm side, the DA will also assist to lower the cost of products and make them competitive. Processing and value-adding are two important factors to improve profitability. The Agriculture Secretary's marching order for all DA agriculture attachĂŠs is to promote Philippines agriculture and agri-based

products in foreign markets. All posts in different continents have submitted the focus commodities that they will promote and reports on their activities are expected regularly. The DA's Bureau of Agriculture and Fishery Product Standards (BAFPS) is tasked to ensure that the necessary product standards and international trade protocols are met to support this effort. The Agribusiness and Marketing Assistance Service (AMAS) handles both local and foreign market support. It is in charge of the establishment of strategic trading posts. Together with the Department of Trade and Industry (DTI) and Department of Science and Technology (DOST) and local governments and through various DA programs, market expansion will be pursued vigorously.

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In partnership with 62 state colleges and universities, the BFAR has launched a mangrove restoration and multi-specie hatchery program that will allow fisher families to raise blue crabs, soft shell crabs and others species in designated rehabilitated mangrove areas.

Palayamanan: A Dream Farm in Iloilo

nlike other dreams, this one is for real and could be real for many others.

It is a two-hectare farm in the barangay of Cabolo-an Sur in Oton, Iloilo. It takes about five minutes walk from the highway to reach it. The path outside the wooden farm gate is lined with banana plants. Once inside the bamboo fenced area, one is feted to so many components of the farm.

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First, there is a fish pond where tilapia and gold fishes seem to greet the guests as they swim towards the feed that nine year old Joshua throws at them. His father, Engr Jason Baltazar, is the farmer who developed this dream farm. The pond is surrounded by different plants including a giant banana with ripe fruits. There is flowing water, a creek on one side and ampalaya vines overhang the narrow waterway

from a trellis of bamboo sticks. There is a clump of healthy onions and other herbs in one corner. There is a bahay kubo on one side that is most welcoming but one is not inclined to get inside immediately because there is so much to see. There is a patch of orchids and other flowering plants. Behind the bahay kubo is a swine area with a number of sows and piglets. Beside it is about a four meter row of baskets nests of over a hundred native chickens freely feeding at another part of the farm. Jason says that he supplies a restaurant in Iloilo City with native chicken. Because he has a steady and growing market for the native, free range chickens, all the eggs are hatched to keep the brood growing.

Nothing is wasted at the farm. The manure of the hogs drain into a pit where the solid components are separated and dried and scattered in the chicken range. Even rice grains from the kitchen sink pass through a small canal where the chickens can feed on the leftover rice. Joshua, happily hops following the guests and is ready to explain almost anything like what they feed the animals and what types of fishes and plants are there.

We point at a wild pig on a leash and Joshua says, yes, it is a wild boar. Later, he would walk the pig around on its leash like other boys would do with a pet dog. His Lola, a retired teacher, graciously smiles and answers our questions about the farm. Hearing so many of the guests commenting on the giant banana, he goes to pick two fruits from the bunch and soon the guests were feasting on the tasty fruit. We also had some boiled white corn and ripe papayas picked from another corner of the farm. Truly, one does not get a feeling of deprivation when resting in the bahay kubo at Jason's farm. Instead, there seemed to be enough to feed everyone of the 15 or so visitors. Palayan na pinagyaman Palayamanan! DA Regional Director Larry Nacionales brought the visitors to this farm because he also dreams of having a farm like this one when he retires from government service. Sana, madami pang magPalayamanan!

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Over a hectare of the two-hectare farm is planted to palay that supplies the family with enough rice for the whole year.

Transport of agri products is easier, cheaper with tramline system

ami dito sa komunidad namin ay nagtutulungan. Pinairal namin ang bayanihan system lalo na noong nabuo namin ang asosayon, kaya kami naka-avail ng mga proyekto ng gobyerno natin. Malaki ang naitulong sa amin ng Tramline System , Ignacio Kalinggan, presidetn of Taloy Sur Bawek Farmer s Association said. Their association, established in 2010, is composed of vegetable farmers growing sayote, beans, sweet peas, Chinese pechay, green pepper and sweet potato in Tuba, Benguet. page 59

With the establishmen of tramline system, we practiced synchronized harvesting of our

produce so we avail of a cheaper transportation cost from Tuba to La Trinidad trading post in Benguet, Kalinggan added. Also, through coordinated harvesting, he said that they can now demand for a more competitive selling price of their produce. Today, they are harvesting sayote every five days. When tramline was established in 2011, it was serving 30 vegetable farmers with total land holding of 21 hectares. but now, according to the farmer-leader, the number of vegetable farmers being served has doubled or even tripled.

na nila hina-harvest kasi malulugi lang sila sa bayad ng pag-transport, Kalinggan explained. Before, the farmers used to pay Php 3.00 per kilo of their produce to haulers to transport these from the farm to the nearest road. But now, they are only paying Pnp 0.50 for every kilo of vegetables for hauling through the tramline system. Previously, manual hauling of produce required 40-50 minutes of walking. Now, through the tramline system, it takes only 5-10 minutes.

Malalayo kasi yung mga lupa namin kaya hindi namin sinasaka. Ngayong may tramline na, nakita namin na mas madali na ang aming pagsasaka. Magaan na ang pagtratrabaho namin. Malaki ang naitulong ng tramline sa pagtransport ng mga produkto namin, kasi malayo ang nilalakad namin noong wala pa ito Minsan nga, kapag mahaba ang presyo ng sayote, hindi

Dati, gumagamit kami ng synthetic fertilizer dahil kahit ilang sako lang marami na ang malalagyan mo. Pero ngayong may tramline na at madali na ang mga-transport, puwede na kaming gumamit ng chicken dung at iba pa, Kalinggan said.

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Kalinggan also added that their usage of synthetic fertilizer is now reduced and has been susbtituted with chicken dung and other organic fertilizer.