Role of Agriculture in Economic Development in the Philippines

Want to know the role of agriculture in economic development?

Imagine a world without the farmers who work in the farms to produce fruits or vegetables or grains and the like.

What would it be without agriculture?

Farmer Cooperator

Agriculture sector serves as the major source of income and employment of our country – Philippines. Agriculture, as we all know, is the primary occupation of the rural people in our country including my family. It supplies all our basic necessities as a human and increases the employment rate of one’s country. Also, it has something to do with the production, exportation and other related things. Indeed the role of agriculture in economic development is beyond compare.

Few facts and figures

Well, talking about the economy, according to the World Bank (www.worldbank.org) the economy of our country remained resilient to global headwinds last year. They also project that real Gross Domestic Product (GDP) will grow at a rate of 6.9 percent in this year (2017) and next year (2018). In fact, according to their latest edition of Global Economic Prospects, it is almost twice the country’s long-term growth.

On the other hand, this rapidly growing domestic economy has yielded substantial gains in employment and poverty reduction. Noticed that? I believe, agriculture has something to do with that and we will tackle it later. Further, Philippines is the 10th fastest growing economy in the world in 2017 (www.forbes.com).

According to the GDP Annual Growth Rate, the Philippines averaged 3.68 percent from 1982 until 2017, reaching an all time high of 12.40 percent in the fourth quarter of 1988 and a record low of -11.10 percent in the first quarter of 1985 (www.tradingeconomics.com). Data and pieces of information gathered would speak as to how the economy of the country is growing but to sum up all the things, the Philippines’ growth outlook remains positive.

Alright, lets look at the role of agriculture in economic development in terms of employment, production and exportation in this simple diagram.

role of agriculture in economic development

Now, let us dissect the three indicators of development one by one.

Employment

In terms of employment, I found out that the average share of agricultural employment for the past two decades to the total labor force is about one-third or 36.6%. In 2010, 31.2% of the total labor force was working in agriculture. When the total employment figures in the agriculture sector are broken down by region, Western Vistas and Cagayan Valley have the most numbered employed persons in agriculture while the least are in Metro Manila and CARAGA.

Moreover, in 2012, agriculture had a 32% share in the total employment, according to the Philippine Statistics Authority (PSA). This is slightly lower than in previous years. Total Employment 37.61 million people Agricultural Employment 12.09 million people.

However, the share of agriculture in the country’s economy was only 11%, according to PSA. And, in 2013, the government announced that it will focus on creating more jobs in the agriculture sector.

In addition, the economic development in Philippines has been because of high government spending. A hardworking service sector and large allowance from millions of Filipinos working abroad played an important role in Philippine economic development. More economic development of Philippines are required to alleviate poverty and address imbalances in distribution of income for the main focus of the country is to develop employment opportunities and lessen poverty. With these data, I can say that an economy with high agriculture will lead to an increase in the employment rate.This is so for an economy will need more workers for better production.And thus, there will be enough opportunity for the people in need of jobs to be employed and somehow, this will also lead to development in the economy.

B. Production

Philippines economic development is also the result of agricultural products which include corn, sugarcane, pineapples, coconuts, bananas, rice, cassavas, mangoes and pork, eggs, beef, and fish.

agricultural economy

Major industries that contribute to economic development of Philippines are wood products, electronic assembly, food processing, footwear, garments, pharmaceuticals, chemicals, petroleum refining and fishing. Hence, according to the Food and Agriculture Organization (FAO), better nutrition begins with improving agriculture.

Agricultural productivity growth contributes to better nutrition through raising incomes, especially in countries where the sector accounts for a large share of the economy and employment, and by reducing the cost of food for all consumers. In addition, a study by the Organization for Co-operation and Development (OECD) suggested that agricultural growth contributes to a country’s overall property reduction.

Now, with these data, the impact of agriculture in our economic development is evident in terms of production.

You can also read the “State of economic development in the Philippines.”

Exportation

The Philippine economy prides itself in having been resilient during the global financial crisis of 2008. Until now, the Bangko Sentral ng Pilipinas (BSP) has said that the country has a well-insulated economy, characterized by steady remittances, robust private consumption and capital formation, and lastly, a well-maintained services sector and a booming industrial base. The Gross Domestic Product (GDP) grew by 6.9 percent in the First Quarter of 2016, growing faster than the economies of China, Vietnam, Indonesia and Malaysia at 6.7, 5.5, 4.9 and 4.2 percent respectively, in the said period.

According to the Philippine Statistics Authority (PSA)the “main driver of GDP growth was the services sector which accelerated to 7.9 percent from 5.5 percent while industry grew by 8.7 percent from 5.3 percent” from last year. On the other hand, the agriculture sector remained in a dire state as it continued to decline – this quarter by 4.4 percent representing “its fourth consecutive quarterly decline since the second quarter of 2015.”

Meanwhile, services still had the largest portion of GDP at 56.8 percent, followed by Industry and by Agriculture, Hunting, Forestry and Fishing (AHFF) at 34 and 9.2 percent, respectively. Per capita GDP expanded by 5.2 percent as compared to 3.2 percent. With these data, there indeed has an impact of agriculture in terms of exportation in our economic development.

Conclusion

To sum up, agriculture plays a vital role in our country’s economy. Agriculture plays an important role in economic development particularly in terms of employment, production and exportation. And these three terms are somewhat interrelated to each other for these constitute agriculture towards the Philippine economic development.

Credits:

Article written by Camarines, Lemar R. and Nelia Penaflor

BS Education Student

NwSSU, Calbayog City

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