Agri output shrank 2.6% in Q3, says PSA

Farm output contracted by a hefty 2.6% in the third quarter this year, mainly due to the significant decline in the production of the livestock sector that is still suffering from the lingering effects of the African swine fever (ASF) outbreak.

The continuing drop in agriculture output further dims chances that the Department of Agriculture will hit its already lowered target to grow the essential agriculture sector by at least 2 percent in 2021.

The vital sector already shrank by 3.3 percent during the first quarter and by 1.5 percent in the second quarter, equivalent to a 2.5-percent contraction for the first nine months.

Based on the Philippine Statistics Authority’s (PSA) report, livestock output shrank by 15.2 percent in the third quarter due to ASF, which cut hog production by 17.8 percent year-on-year. Goat and cattle output during the period likewise declined.

Only the poultry industry yielded gains during the period, buoyed by the continuous increase in the production of eggs—a staple in most households, especially amid the pandemic, as it is easy to stockpile, cheap, and a good source of protein.

Low farmgate prices

Total poultry output rose by 1.3 percent following a 7-percent and 8-percent uptick in duck eggs and chicken eggs production. Duck and chicken output, however, was reduced by 2 percent and 1.4 percent, respectively, as raisers were discouraged by low farmgate prices.

Crops, which account for 54 percent of the country’s entire farm output, slightly dipped by 0.2 percent due to the onslaught of Typhoon “Jolina” in September.

While palay output increased by 6.7 percent, corn production declined by 18.6 percent. Abaca, cabbage, potato and onion output also dipped by double-digit levels. In contrast, sugarcane output skyrocketed by 110.8 percent. Other high-value crops like pineapple, calamansi and tobacco also posted higher outputs during the period.

Fisheries output, meanwhile, shrank by 0.4 percent. The heavy rains brought about by Jolina prevented fishers from sailing longer and farther and resulted in a slight reduction in fish catch. Nevertheless, the subsector was still able to account for 16.2 percent of the country’s overall farm output.

ING Bank economist Nicolas Mapa said the underperformance of the agriculture sector might be reflected in the overall economic performance of the country.

Definite drag

“The negative farm output will likely weigh on overall Q3 GDP, which we expect to have grown by 3.9 percent year-on-year and 0.7 percent quarter-on-quarter,” he said.

Jun Neri, lead economist at Ayala-led Bank of the Philippine Islands, hopes that the dismal performance of the industry may still be offset by other sectors.

“Agriculture’s decline definitely was a drag on third-quarter output, more so if the downstream food processing industries were constrained by the lack of local pork and other raw material supplies,” he said. “With the Delta variant weighing on third-quarter growth throughout most of the Southeast Asian region, surprise expansions in construction, mining, export manufacturing, and trade sectors will hopefully be able to offset the negative contribution of the farming sector on total output.”

Agriculture Secretary William Dar is yet to react to the third quarter figures. He earlier revised the DA’s target growth rate for this year to 2 percent from 2.5 percent because of the coronavirus pandemic and ASF. INQ