Agri sector likely to contract this year - UA&P economist

MANILA, Philippines - The agriculture sector must post a growth of more than five percent in the fourth quarter to achieve a flat growth for 2010. Otherwise, it will end up in negative territory, said University of Asia and the Pacific economist Dr. Rolando Dy.

In an interview with The STAR, Dr. Dy expressed doubt that the farm sector would be able to achieve such a high growth in the fourth quarter following a 2.6-percent contraction in the first three quarters of the year.

More likely, Dy sees the sector contracting by another 0.5 percent. 

“There is a bigger downside,” he said, following the heavy negative impact of the weather on agricultural production in the first three quarters of this year.

The first and second quarter growth was stunted by the effect of a drought caused by the El Niño phenomenon, delaying production of palay, corn and sugar.

In the third quarter, the heavy rains destroyed standing crops of palay.

Agriculture Secretary Proceso Alcala has acknowledged the possibility of a zero growth for the agriculture sector this year even as he remains hopeful for a possible slight growth in the fourth quarter, barring any further weather disturbance.

The farm sector was unable to post any growth from January to September this year following the devastating effect of the dry spell specifically on crop production during the first three quarters of the year.

The crops sub-sector, which contributes 44 percent to total agricultural output, posted a negative growth of 7.24 percent with palay and corn production dropping by 14.95 percent, and 15.39 percent, respectively. Sugarcane turned into worst record with production plunging by 21.67 percent.

The growth registered by the livestock sub-sector of 1.07 percent, the poultry sub-sector of 3.01 percent and the fisheries sub-sector of 0.69 percent could not reverse the overall decline in the agriculture sector for the past three quarters.