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State of Philippine Food and Agriculture R&D
In preparing a roadmap to revitalize Philippine Agriculture, the panel tried to draw up a fairly precise picture of the global demand for fresh/raw produce and processed food. This demand profile will serve as a guide to determine the competitiveness of the products of Philippine agriculture in fulfilling its current and potential capacity to be a reliable supplier of high quality agricultural produce, both fresh and processed.The panel tried to balance this effort by also including in the agribusiness factor and the need to assure household food security for the Philippines. In other words, the food and agriculture panel tried to assess both the global and domestic market including the backward linkages to assure that supply will match demand to the fullest extent possible.
Achieving competitiveness in Agriculture and Food has become imperative in the light of the Philippines development efforts. A significant part of the population is in the rural areas and they largely depend on agriculture, either for sustenance or for income. The agriculture sector is a major source of employment and labor. People who depend on agriculture often experience the worse levels of poverty. Any investment in agriculture and food will have significant and direct effects on economic development and poverty alleviation.
The latest census data on the Philippines population is at 88,574,614 persons as of August 2007, which translated to an average annual population growth rate of 2.04 percent, the lowest growth rate recorded since the 1960s.
Philippine food and agriculture at a glance
The recent rice crisis has again placed agriculture and food production in the headlines.
In the ASEAN region, the Philippines ranked 5th in terms of paddy rice production, 2nd in corn production, 2nd in sugarcane production, and 4th in cassava production.
In 2007, Philippine food exports were valued at $1.48 billion, up 13.39 percent from 2006 exports valued at $1.39 billion. Almost half of this is processed food, which accounted for $735.03 million in 2007, up significantly from $583.09 million in 2006. The other half is fresh foods which accounted for $741.65 million in 2007, which only rose slightly from $719.09 million in 2006. Total export target for 2008 is $1.741 billion.
Fresh foods include banana, mango, pineapple, and asparagus. Processed foods include processed fruits, confectionery, nuts/coco products, cocoa products, sugar/preparations, processed vegetable, beverages, tea products, cereals/preparations, dairy products, coffee products, meat products, sauces/condiments, and edible preparations.
In 2007, the top Philippine agricultural exports were dessicated coconut, fresh pineapples, dried pineapples, preserved pineapples, dried mangoes, mango puree, mango juice and other concentrates, carageenan, and tuna.
The top food export destinations in 2006 were: USA, Japan, Korea, Taiwan, and Iran. Top agricultural export destinations in 2007 were USA, Japan, Netherlands, Korea, Thailand, Indonesia, Malaysia, Vietnam, Hongkong, and Iran.
Recent Worldwide Trends
In 2005, processed food sales worldwide reached $3.2 trillion, only 10 percent of which is traded.
Studies show that in developed countries, a large share of retail food is sold through supermarkets/hypermarkets. In developing countries, independent stores and traditional markets still account for very large shares of total retail sales.
In the global food market, food is either sold through retail stores or through food service establishments (mainly restaurants). With consumers increasingly demanding convenience, it is likely that value of global restaurant sales will overtake global food retail sales. This rising demand is reflected by the rapidly expanding fast food sector. In some countries such as the Philippines, retails sales of packaged foods to as much as 28 percent.
The primary driving force in the global food markets is the changing consumer. Income growth, lifestyle changes brought about by urbanization, and changing family structures have resulted in dietary changes among consumers worldwide.
The increased share of high-value food expenditures in total food expenditures reflects not only consumers’ increased purchasing power but also lifestyle changes brought about by the increased prevalence of household amenities. For example, increases in acquisitions of refrigerators may lead to greater household purchases of perishable food products, while increases in ownership of microwave ovens may lead to increased purchases of ready-to-eat foods that require minimal preparation.
The issue of market access remains a major impediment for expansion of global trade in high value foods, particularly processed foods. Countries use tariffs and other measures that effectively stimulate imports of relatively unprocessed agricultural commodities at the expense of processed products.
Research and Development
In terms of number, the Philippines is slowly but steadly increasing its number of food and agriculture researchers. It had 2,424 public agricultural researchers in 1991, 3,053 in 1996, and 3,213 in 2002.
Total spending for food and agriculture R&D is also increasing. Spending was $80 million in 1991, $121 million in 1996, and $141 million in 2002 respectively. This compares with food and agriculture R&D spending for the entire Asia-Pacific region, which was at $1,680 million (’91), $1,907 million (’96), and $2,551 million (’02) respectively for the same years. More than eighty percent of the funding for Philippine R&D comes from government sources.
Challenges for Philippine agriculture and food researchers include the low compliance to market standards, low investment in science and technology, low quality and numbers of graduate scientists and engineers, lack of effective demand for S&T, and weak innovation and entrepreneurship cultures.
However, opportunities also exist because production/supply of fresh fruits can be sustained or even increased. Also, the Philippines is very near the Asian and ASEAN markets. There is a growing industry support from the academe and R&D institutions, and more importantly, Filipino ma
