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Industry Overview: Philippines Agriculture Industry

Philippines agriculture industry plays a vital role in the country's economy development. The country's agriculture sector grew by 1.93% during the first nine months of the year 2012, with a total value of Peso 956 billion at current prices. The crops subsector, which accounted for 50.7% of total output, increased by 3.33%, as Palay (paddy rice) and corn production grew by 6.9% and 7.5%, respectively, during the first nine months of 2012 versus the same period last year. Total Palay harvest amounted to 11.5 million metric tons (MMT), while corn output was estimated at 5.9 MMT.

Government programs to boost the agriculture sector are continuing. It is promoting both local and foreign investments, making agriculture a top investment priority until mid-2025. The core goal of agricultural development and modernization remains on food security, uplift of farmers and fisherfolk's lives, and national development.
 
As an indication of the government's increased focused on the agriculture market, the Department of Agriculture's budget for 2012 has been increased significantly. The Peso 48.7billion (US$ 1.1million) is more than 60% higher than the year before. Most of the funds will go into developing and improving rural infrastructure as well as improving on farming infrastructure.
 
The Philippine Coconut Authority (PCA), was also given a budget of Peso 512 million for replanting next year, against only Peso 60 million this year. Around Peso 354 million was also earmarked for the fertilization of coconut plantations. For the year 2012, they are targeting the production of 13 million seednuts for distribution to target areas where coconut growing is highly suitable.  The PCA also has its program of giving free fertilizers for coconut, particularly salt which has been proven to increase coconut yields by several percent. 
 
The Board of Investments (BOI) has also approved tax incentives for a Peso 259-million cold storage facility, another agribusiness project of Philippine firm Weal Builders Inc that is expected to spark economic activities in Occidental Mindoro. The cold storage facility project involves building a 12,658-square meter plant for storing onions and farm produce. BOI said that 10 to 15 additional cold storage facilities are needed by the country to meet food safety standards and make Philippine fruits and vegetable exports more competitive.
 
The Department of Agriculture (DA) is supporting the trend with a Peso 192 million budget for coffee and the implementation of Cacao Agribusiness Zones Development (CAZD), both aiming to boost coffee and cocoa production. Also, The National Sweet Sorghum Program (NSSP) is consolidating investments for a 500 to 1,000-hectare land for sweet sorghum as bioethanol feedstock which has a ready market in the San Carlos Bioenergy Inc. (SCBI). At a production cost of Peso 45,000 to Peso 55,000 per hectare, the plantation will require a low investment of Peso 22.5 million (500 hectares) to a high of Peso 55 million (1,000 hectares).  
 
As the trend towards healthier lifestyle continues to grow, the interest in organic farming in the Philippines is also expeditiously gaining ground. In fact, the government has mandated the Department of Agriculture to allot at least Peso 1 billion (US$23.70 million) this year to exclusively promote the organic agriculture programs in the country. President Benigno Aquino III believes that organic agriculture is the way of the future not only to address hunger but also to sustain health and environment. With all these prominent investments and initiatives the future prospects of the Agribusiness industry looks very optimistic.
 
(Source: Insight Alpha)
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Philippine Coconut Authority (PCA)