Agribusiness

Agribusiness refers to agriculture-related activities that put farmers, processors, distributors, and consumers within a system that produces, processes, transports, markets, and distributes agricultural products.

The transformation of agricultural farming into a thriving agribusiness-driven sector entails acquiring farming technologies, training in more sophisticated farming techniques, creating stable supply chains, establishing transport and agricultural infrastructure, investing and research and development, and securing a reliable property rights regime.

These activities can contribute not only in diversifying and increasing the value of agribusiness outputs, but also contribute to the inclusive growth and rural development agenda of the Philippine government. Because of this, the agribusiness sector is positioned to largely contribute to the industrial development of the Philippine economy.

  1. Vision of the Industry
  2. Goals and Strategies
  3. Economic Contribution and Growth Performance
  4. Industries

01

Vision of the Industry

The vision is to transform and upgrade the agriculture sector from traditional farming to agribusiness or industrial clusters to take advantage of opportunities in rubber, coconut, mangoes, bananas, coffee, palm oil, cacao, and other emerging high value crops.

02

Goals and Strategies

Short-run (2014-2017) Goals:

  • Improve productivity of high value crops where regional comparative advantage lies
  • Strengthen our capacity in emerging high value crops

Medium-run (2018-2021) Goals:

  • Strengthen agro-processing and the linkages between production (agriculture) and processing (manufacturing)
  • Strengthen supply chains and commodity clusters

Long-run (2022-2025) Goals:

  • Deepen participation in global value chains

 

Strategic Actions

  • Strengthen coordination mechanism among stakeholders
  • Address supply chain gaps and other coordination issues
  • Provide support to small farmers especially access to technologies, technical knowledge and production issues as well as access to finance
  • Promote green and climate resilient products
  • Investment in rural infrastructure
  • Investment in innovation and R&D
  • Strengthen regulatory and certification system
  • Property rights regime

agribusiness roadmap

03

Economic Contribution and Growth Performance

Growth Performance

The agricultural sector, as a whole, has only grown by an average of 1.1% in the last five years in terms of value added. At the sub-sector level, the fishery sector has registered the fastest growth of the three components, with an average value added growth of 9.2% from 2009 to 2013. It is followed by the agriculture (crops, livestock and poultry) sub-sector, with an average value added growth of 1.4%. In this sub-sector, the cassava and poultry segments, which have registered average value added growth rates of more or less 4%, are the top performers. The forestry sector contracted, on the average, by 0.3% during the same period.

Value Added Growth Performance (in percent)

Year 2009 2010 2011 2012 2013 2009-2013
TOTAL INDUSTRY -0.7 -0.2 2.6 2.8 1.1 1.1
     AGRICULTURE -1.6 0.2 4.2 3.6 0.9 1.4
Palay -1.2 -2.4 5.9 8.0 2.2 2.5
Corn 1.4 -8.9 9.5 6.3 -0.4 1.6
Coconut with Copra 2.1 -0.6 -2.2 4.2 -3.5 0.0
Sugarcane -6.3 -15.7 59.7 -8.9 -6.9 4.4
Banana 4.2 0.6 0.7 0.7 -6.3 0.0
Mango -12.5 6.9 -4.6 -2.6 6.2 -1.3
Pineapple -1.1 -0.3 3.2 7.1 2.8 2.3
Coffee -1.2 -2.0 -6.8 1.4 -11.6 -4.1
Cassava 3.2 4.8 5.1 1.1 6.3 4.1
Rubber -5.1 1.3 7.8 4.0 0.4 1.7
Other Crops -0.5 2.7 -3.2 1.5 0.2 0.2
Livestock -1.0 0.6 2.0 1.1 1.8 0.9
Poultry -2.0 7.7 4.4 4.6 4.2 3.8
Agricultural Service -8.6 3.3 3.0 2.1 0.6 0.1
     FORESTRY 3.0 -0.5 -4.3 -0.4 0.7 -0.3
     FISHERY -2.0 -31.3 40.5 2.3 36.7 9.2

Source: Bureau of Agricultural Statistics

Value Added Contribution The value added

The value added share of agriculture to GDP has been the lowest among the three major sectors of the economy since 2008. At the sub-sector level, agriculture (crops, livestock and poultry) has the largest average value added contribution, with an 80% average share from 2008 to 2013, whereas the fishery sector has the lowest contribution, with only a marginal average share of 0.6% for the same period. The top contributors for the agriculture sub-sector are palay, livestock and poultry, with more than 10% contribution to the total agricultural industry value added share.

Agriculture Value Added Contribution (in percent)

Year 2008 2009 2010 2011 2012 2013 2008-2013
Industry 32.8 31.8 33.6 32.1 32.1 32.8 32.5
Services 48.9 50.1 49.7 56.4 56.9 56.8 53.1
Agriculture 18.3 18.1 16.8 11.5 11.1 10.4 14.4
AGRICULTURE (crops, livestock  and poultry) 79.5 78.8 79.0 80.2 80.8 80.7 79.8
Palay 19.1 19.0 18.6 19.2 20.1 20.4 19.4
Corn 5.6 5.7 5.2 5.6 5.8 5.7 5.6
Coconut with Copra 4.4 4.5 4.5 4.3 4.4 4.2 4.4
Sugarcane 2.2 2.0 1.7 2.7 2.4 2.2 2.2
Banana 4.7 5.0 5.0 4.9 4.8 4.5 4.8
Mango 2.4 2.1 2.3 2.1 2.0 2.1 2.2
Pineapple 2.1 2.1 2.1 2.1 2.2 2.2 2.1
Coffee 0.5 0.5 0.5 0.5 0.5 0.4 0.5
Cassava 1.1 1.1 1.2 1.2 1.2 1.3 1.2
Rubber 0.5 0.4 0.5 0.5 0.5 0.5 0.5
Other Crops 6.1 6.1 6.3 6.0 5.9 5.8 6.1
Livestock 13.6 13.5 13.7 13.6 13.3 13.4 13.5
Poultry 9.7 9.6 10.3 10.5 10.7 11.0 10.3
Agricultural Service 7.5 6.9 7.1 7.2 7.1 7.1 7.2
     FORESTRY 19.9 20.7 20.6 19.2 18.6 18.5 19.6
     FISHERY 0.6 0.6 0.4 0.6 0.6 0.7 0.6

Source: Bureau of Agricultural Statistics

 

Employment Contribution

The agriculture sector, as a whole, has been the second biggest employment contributor to total employment since 2008, with an average share of 33.65% from 2008 to 2013. The top contributor for the same period is the services sector, with an average share of more than 50%. In the sub-sector level, the agriculture (crops, livestock and poultry), hunting and forestry segment, with an average employment share of 30%, has the bigger share than the fishery segment with only a 4% average contribution to total employment for 2008 to 2013. Employment Contribution of Agriculture (in percent)

Year 2008 2009 2010 2011 2012 2013 2008-2013
TOTAL AGRICULTURE 35.1 35.3 34.3 33.0 32.2 31.1 33.5
Agriculture, Hunting and Forestry 30.8 31.1 30.2 29.0 28.4 27.4 29.5
Fishery 4.3 4.2 4.2 3.9 3.8 3.7 4.0
Industry 15.3 14.8 14.5 14.9 15.3 15.6 15.1
Services 49.6 49.9 51.1 52.1 52.6 53.4 51.5

Source: Yearbook of Labor Statistics (2014)

04

Industries

Cacao / Tablea
The Philippine tablea is defined as roasted, ground and molded nibs of fermented pure (100%) cacao beans without added ingredients and additives. It is also a cocoa mass and cocoa liquor made from cacao beans that are fermented, dried, roasted, ground then molded into blocks, balls, discs, or tablets.

It is traditionally used in the Philippines to make a hot chocolate beverage using a wooden mixing implement or stirrer. The Cacao Industry Development Association of Mindanao estimated that around 2,000 tons of cacao beans is processed to tablea.

Carrageenan
Among the world's top biggest exporters, the Philippines is a well-known and leading producer of carrageenan. "Philippine-grade" carrageenan is one of the most reliable inputs in meat processing, processed food, dairy products, condiments, personal care products, and pet food products.

Condiments
Condiments and sauces are among the country's essential food products. In a country where eating and dining is an important social activity, these products are constantly profitable and will continue to experience high levels of demand as the population increases. In this regard, the Philippine condiments industry can enhance its competitiveness in specialty products, as well as explore other export markets in order to increase sales and accelerate growth.

Processed Fruit
Dried mangoes is among the more competitive food manufactured products in the Philippines. The country’s brand of dried mangoes is well-recognized around the world, with 85% of total dried mango local production exported to key markets, such as the United States, China, Japan, South Korea, and other Asia Pacific countries. Because of the wide acceptability of dried mangoes worldwide, the Philippines can reap greater benefits by expanding its market coverage and deepening the value of dried mango production in the country.

Processed Meat
The Philippine processed meat industry has six different product categories: fresh processed meat products, cured meat pieces, raw-cooked products, pre-cooked products, raw (dry) – fermented sausages, and dried meat. Major export products are sausages, corned beef, bacon, luncheon meat, and other indigenous meat products.

Processed Shrimp
Shrimp is one of the seven major aquaculture species in the Philippines and is one of the country's two major aquaculture exports, sent to countries such as Japan, Korea, and the United States. Shrimp farming in the Philippines uses a variety of systems which are affected by the climate, availability of capital, site location, sources of water supply, the marketing of harvested products, and the availability and cost of farm inputs.