Agriculture Industry

[antediluvianist]

"the first Asia Fruit Congress in Bangkok"

Oh, that's nothing. We have one of those convocations of fruits every year in Malate.

[obelix]

by Maricel E. Burgonio
The Manila Times

The Monetary Board has approved a microfinance loan from a United Nation’s unit and new insurance product by the Bank of the Philippine Islands (BPI).

The MB has given the nod for the International Fund for Agricultural Development Fund (IFAD), to provide to Peoples Credit Finance Corp. (PCFC) a $2.5-million loan.

PCFC is a source of microfinancing for the poor while IFAD is a special UN agency that finances agricultural development projects primarily for food production in developing countries.

Around 7.1 million families belonging to the lowest income strata are engaged in microfinance activities, but owing to the absence of microfinancing sources, they are forced to rely on more expensive credit system such as informal money lenders, limiting their capacity to grow.

Meanwhile, MB authorized the BPI to sell new insurance products of Ayala Life Assurance, which will be introducing two new products—the Peso Protector 300 and Dollar Protector 300—that will cater to BPI clients.

The product will be an addition to the Express Dollar Protector 5, a single-pay five-year endowment plan, the bank said.

BPI has an existing marketing and distribution channel of BPI insurance companies such as BPI /MS, Ayala Life and Ayala Plans called BPI Bancassurance Inc. (BBI).

BBI sells investment-type insurance products catering to BPI’s clients in all the bank’s branches nationwide.

Last year BBI contributed 30 percent of the total premiums to Ayala Life alone from 22 percent in 2004. In 2005, Ayala Life netted P389.6 million in profits from P219 million in 2004.

Ayala Life sells a good mix of insurance products covering peso term insurance, peso and dollar whole life products, peso and dollar endowment products, group products and a packaged product.

[obelix]

By: Judy T. Gulane
The Journal Group


Sumitomo Fruits Philippines Corp., a subsidiary of Sumitomo Corp. of Japan, is expanding its banana plantation in Mindanao at a cost of P1 billion.

Sumitomo Fruits (Sumifri) and Sumitomo Corp. officials led by Sumifri president, Paul Cuyegkeng, paid a call on President Gloria Macapagal-Arroyo yesterday to tell her about the company's expansion plan.

Sumifri is presently planting a total of 4,000 hectares in South Cotabato, Davao City and North Cotabato to bananas. Under its expansion plan, it will plant 1,800 more hectares to bananas and spend P1 billion for the necessary infrastructure.

A Palace statement quoted Mr. Cuyegkeng as saying: "One and a half years [after we promised the President we were going to expand our operations], we are happy to report we are going to plant more than 4,000 hectares. We are going to plant 5,800 hectares and we are going to spend P1 billion more."

The new investment brings Sumifri's investments in the Philippines to P6.5 billion. The additional investment is expected to translate into 12,000 additional jobs for residents in adjacent communities.

Mr. Cuyegkeng was accompanied to Malacanang yesterday by Sumitomo Corp. Chairman Joichi Saito, senior manager Yoshi Moritomo, general manager Shoichi Sato, and Sumifri general manager Jesus F. Mercado, Jr.

[choobeebo]

"El Niño conditions have developed and are likely to continue into early 2007.

Some impacts from the developing El Niño are already evident in the pattern of tropical precipitation. During the last 30 days drier-than-average conditions have been observed across all of Indonesia, Malaysia and most of the Philippines, which are usually the first areas to experience ENSO-related impacts. This dryness can be expected to continue, on average, for the remainder of 2006." -- NOAA.

It will be a mild El Nino but it will still adversely affect agricultural production in the 1st semester of 2007. It should have implications on economic growth, inflation, farm incomes, and the like.

[choobeebo]

While driving home Fri evening, I was listening to TV Patrol News. I heard a feature on El Nino. As an aggie enthusiast, an agri commodities cash and futures trader, an agri price-risk management consultant, and the like, I turned the sound volume higher. To a veteran El Nino watcher like me, there was nothing new about the feature. What caught my attention was the FALSE report that El Nino is associated with a larger fish catch in South America. On the contrary, countries like Peru and Chile catch less and impose longer fishing bans during El Nino years. A ban is imposed to protect young fish and to allow them to grow to more economic sizes.

[obelix]

Eileen A. Mencias
The Manila Standard


The state-owned Development Bank of the Philippines has opened a P500-million omnibus line facility to assist Mindanao farmers in raising bananas for export.

DBP president and chief executive Reynaldo David said the facility aimed to improve the living conditions of farmers in Mindanao and promote banana production in the region.

Banana exports are expected to post the highest growth rates in the coming years.

David said the facility would provide a banana farmer with P1.35 million in funding, provided his farm does not exceed three hectares. Farmers tapping the facility may avail of a repayment plan that allows a grace period of 11 months on interest payments and a one-year grace period on the principal.

David said the facility would benefit at least 370 farmers with the potential of developing 1,100 ha of land into banana farms and boost the country’s banana export earnings by $13 million.

The facility can be availed of through any of the bank’s branches as well as its partner bank, One Network Rural Bank Inc., the largest rural bank in the country.

DBP also signed an agreement with the agriculture department, the Cagayan State University, the provincial government of Cagayan and the local government of Lal-lo Cagayan for the development of the DBP-CSU forest program into a model agribusiness project, showcasing modern agri-fisheries technology.

David said the project would convert the 182-ha forest area located in Lal-lo, Cagayan into a model farm that promotes conservation of natural resources and sustainable crop production practices.

DBP said the project would generate at least 350 new jobs and benefit 172 new households in the area, promote multi-line processing and marketing facilities and improve farm-to-market roads linking four barangays in Lal-lo, Cagayan.

The DBP-CSU Forest project was launched last year and initially had 151 hectares of mixed plantation.

[choobeebo]

Mga Bosing, Good news ito sa aggie sector. Higher ag output, less inflationary.

El Nino Weather Update: More weather models are now forecasting an earlier demise of El Niño. The peak is now expected in Jan-Feb compared to the previous forecasts of April-June 2007.

From the USA-NOAA: "A majority of the statistical and coupled model forecasts indicate El Nino Conditions will weaken during the next 1-3 months, with a return to ENSO-neutral conditions sometime during the Northern Spring (March-May 2007).

From World Weather Inc. - "El Nino is exhibiting signs that it may have peaked already. Two more weeks are needed to help confirm that El Nino has reached its peak".

Quote from the Australian Bureau of Meteorology:
"There are a few signs that the event may have already started to weaken: the SOI has only been weakly negative for more than a month; the Trade Winds in the western and central Pacific have strengthened to near-normal values in December; and sub-surface temperatures show a weakening of east-Pacific warmth and a strengthening cool signal extending from the west. "

[looseyourtan]

From the foreign market thread as posted by Boss Roiking:

For our country, I believe we are in that process of agricultural maturity (independence financially) due to more money per capita on OFW remittances. Soon, we will improve our masa from this to entrepreneurial..

Other countries like Taiwan started like this before, agricultural that weaned the people toward more sophisticated venture, as they gain more wisdom and financial independence.

I'll expound on my point only from the sugar industry's POV.

Land Re-distribution worked in Asian countries like Taiwan, Korea and Japan after World War II because there was substantial support from their respective governments. There were subsidies for fertilizers, farm to market roads were laid out, irrigation was improved and they were given bigger plots(Taiwan gave out 5 hectares per beneficiary). And landowners whose farms were "land reformed" were paid annually for x amount of years.

In the Philippine sugar industry scenario however, landowners are being paid in 10-year government bonds. After the land is given to the beneficiaries,(one grant is between .98-1.04 hectares) they are largely left on their own to till the land, pay the land taxes and pay the government for part of the cost of the land. After their takeover, they are obligated to pay for the cost of the land on the 5th and 8th year. Farmer beneficiaries are only producing between 50-75% of the land's potential.
For example:Average effeciency farmers should produce 80 tons of sugar cane per hectare. Yield would be 2 - 50 kg. bags of sugar per ton of cane milled(LKG/TC).
2 LKG. x 80 tons = 160 LKG.
Mills usually charge 30% milling fee. 160 LKG. - 30% = 112 lkg. This total is further classified to
A(Export to US)6%@P800 per bag, B70%@1100 per bag(domestic Raw), C 18%(reserve)@1050, D6%(world market)@550 sugar. At these current prices one would earn a gross profit of 116,480.00 per hectare. Planting, Cultivation, milling expenses and leasing costs are around 87,000. This would leave a profit of 29,480.
Beneficiaries in our coop on the other hand could only produce 60 tons(@75% efficiency), reason being they cut down on fertilization and cultivation costs. After milling they end up with a gross profit of 87,360 - 30,000(planting, cultivation and milling costs) = 57,360/year or 4,780/month. Now how can a family of five subsist on 4,780 a month?
Moreover, the above computation will only hold true since sugar prices have remained high for the past two years reaching a high of $19/LKG .(world sugar prices are currently ranging from $11.08- $12.10 /lkg.) One may ask how come our domestic prices are so high? It is due to current tariffs being levied to imported sugar to protect the farmers but 2010 will mark our entry to the WTO agreement and we will see a reduction of tariffs from 65% to 5%. The outlook gets a little dimmer, JP Morgan has predicted that world sugar prices will be at the $10.45/Lkg. level until 2011.

One may argue however, that how come we are experiencing an increase in sugar production year on year even with the present land reform situation, it is due to two things:
1. HIGHER SUGAR PRICES. With more income derived from the last two year's crops, the bigger farmers have been able to invest more in fertilization, better techniques and new equipment. We have been getting better yields as compared to before while farmer beneficiaries' yields have been going down year on year since they don’t invest enough on the above and don’t resort to re planting of their fields since this would be an added cost.
2. The second major reason is GOOD WEATHER, we have been experiencing this for the past two years, rainfall has been apt and the typhoons that hit sugar producing localities have not been that bad.

Currently, however, we are in an El Nino year and we expect production to go down between 10-15%. Without ample rain, farmers won’t be able to fertilize and cultivate their land properly thereby stunting growth and reducing yield. MOreover, oil prices have continued its rise and when this happens fertilizer costs go up as well. This has in a way discouraged farmers to apply the ideal amount per hectare.

At the current rate, I doubt if we will achieve the agricultural independence that you mentioned(especially from the sugar industry's POV). Don't get me wrong, I am for agricultural independence and I have accepted that land reform is a fact of life we have to live with. I wish though that it should be implemented properly. Government should have vehicles in order to help farmer beneficiaries become more efficient in their endeavor thereby giving them true agricultural independence.

P.S. Ethanol production may help in sustaining prices but we are still at least 2 years from working it out.

[choobeebo]

Currently, however, we are in an El Nino year and we expect production to go down between 10-15%. Without ample rain, farmers won’t be able to fertilize and cultivate their land properly thereby stunting growth and reducing yield.

Am not sure where you got the information that this is an El Nino year. My typical suspect is the Dept of Agriculture. I have seen their press releases in the past about the Philippines suffering or about to suffer from the ill-effects of the Nino -- when we are actually in either a mild La Nina or neutral conditions. I guess it is to justify a larger budget allocation from the national government.

I consider myself a veteran El Nino watcher. It has helped me a lot in trading/merchandising agricultural commodities (sugar, rice, corn, copra, coconut oil, palm oil, soy oil, soybeans, soymeal). Would like to share my latest El Nino records culled from the web.

Various El Niño Weather Updates:


April 2nd USA Update
- Tropical Pacific currently in an El Niño Southern Oscillation (ENSO) neutral state.
- A transition from ENSO-neutral to La Niña conditions is possible within the next three months.
- [Moderate to strong La Niña conditions are associated with below normal rainfall in the US corn and soybean belts and above average rainfall in Indonesia and the Philippines - RSG.]

March 28th Australian Bureau of Meteorology Update:
- Pacific Ocean cooling slows; conditions currently neutral.
- There appears to be little chance of a return to El Niño conditions in 2007, with a continuation of neutral, or a switch to La Niña conditions, the more likely outcomes.

March 26th USA Update:
- Same as last week. Please see the report below.

March 19th USA Update:
- Sea surface temperature anomalies are near zero across the equatorial Pacific -- indicating neutral El Niño Southern Oscillation (ENSO)conditions;
- A transition from ENSO-neutral to mild La Nina conditions is possible in the next three months.

March 7th Australian Bureau of Meteorology Update:
- Equatorial Pacific sea surface temperatures have further cooled.
- Most computer models predict further cooling of the Pacific during the 1st half of 2007. (Trending towards a mild La Niña - RSG).

Feb. 12, 2007 - Update from the USA-NOAA:
Subsurface conditions and recent forecasts indicate the possible development of La Nina during the last half of the year.

Feb 5, 2007 - Update from the USA-NOAA:
A majority of the statistical and coupled model forecasts indicate a weakening El Niño in the next two months and a return to neutral conditions during the Northern Spring season (March-May 2007).

Jan 31, 2007 - Update from the Australian Bureau of Meteorology:
Summary: El Niño continues to weaken.
There has been a sustained cooling of the equatorial Pacific since early December, with current SST anomalies now close to their El Niño thresholds. This is the clearest sign that the El Niño event is weakening and it bodes well for a switch towards average or wetter than average conditions across eastern Australia sometime in the late summer or autumn. In fact, we've already seen a southward extension of tropical moisture that resulted in heavy rain over the NT, SA and the western parts of Queensland, NSW and Victoria. This can be taken as a sign that rainfall patterns are beginning to change across Australia, the timing of which is consistent with that observed during previous events.

In addition to the surface cooling, there has been substantial cooling below the surface; a situation that is likely to promote further weakening of the surface El Niño pattern. However, the SOI, Trade Winds and central-western Pacific cloudiness have seen their decline towards neutral values arrested somewhat during January, in association with a westerly wind burst mid-month. The westerly burst has now dissipated, so it is expected that these other ENSO indicators will continue their general trend towards neutrality over the coming months, in keeping with the weakening of the El Niño event. Furthermore, computer modeling supports the view that the El Niño will continue to decline.


Jan 22, 2007 - USA-NOAA El Niño Update:
A majority of the statistical and coupled model forecasts indicate SST anomalies will weaken during the next 3 months, with a return to ENSO-neutral conditions during March-May 2007.

Jan 10, 2007 - Update from the Australian Bureau of Meteorology:
Summary: El Niño showing signs of weakening.
All the main ENSO indicators show that the El Niño event has begun to weaken. This bodes well for a switch towards wetter conditions across Australia sometime in the late summer or autumn. The timing of the weakening also fits in well with that observed during previous events, although it is still possible for there to be renewed strengthening of the El Niño event for a month or two before it finally dissipates.

1st week January 2007

El Nino Weather Update: More weather models are now forecasting an earlier demise of El Niño. The peak is now expected in Jan-Feb compared to the previous forecasts of April-June 2007.

From the USA-NOAA: "A majority of the statistical and coupled model forecasts indicate El Nino Conditions will weaken during the next 1-3 months, with a return to ENSO-neutral conditions sometime during the Northern Spring (March-May 2007).

From World Weather Inc. - "El Nino is exhibiting signs that it may have peaked already. Two more weeks are needed to help confirm that El Nino has reached its peak".

Quote from the Australian Bureau of Meteorology:
"There are a few signs that the event may have already started to weaken: the SOI has only been weakly negative for more than a month; the Trade Winds in the western and central Pacific have strengthened to near-normal values in December; and sub-surface temperatures show a weakening of east-Pacific warmth and a strengthening cool signal extending from the west. "

[looseyourtan]

ahhhh... finally our aggie guru speaks. Came across some of the reports that you posted boss. The first one being sometime in December from the NOAA website, the report mentioned that there was already an increase in the temperature in the Pacific side of Central America(cant quite remember exactly where) thereby expecting an El Nino season for us here. This was not to be the case however since rain continued to pour in our farms(we are situated in the northern part of Negros Island) until mid January. In the southern portion though, the farmers had already started to irrigate as early as the first week of December.
We continued to monitor the reports regarding the EL Nino phenomenon until early Feb. and it mentioned exactly what you posted that things will be not as bad as expected. My confidence on some rain "blessing us" however waned as each day went by. For the whole Negros Island, not a single substantial drop was shed in our farms in the low lying areas. For our farms in the >1000 ft. elevation, 2 instances of rain occured, the first one about 1 inch and the second which occured a week later with 2 inches. We have been blessed with rain clouds, but they were just that rain clouds. And coupled with the stronger than usual winds, our farm lots have been drying faster. It was decided therefore in early February that we treat this planitng season as an El Nino season or else we could count on nothing in the next harvest. It became imperative therefore to use the irrigation systems starting that time and up to now, we've been racking a lot of "miles" on our engines.

PS: Funny how our old farm hands predicted that the start of this year would be dryer than usual. They were in a way accurate.

Hope to hear from you soon Boss.

[choobeebo]

Hi Looseyourtan. Am no ag guru. Let us just say that I have a working knowledge of agriculture (and an avid El Nino watcher) that is enhanced thru interactions with people like you. Thank you for sharing your thoughts and experiences. I have no on-farm experience but plenty of table research.

My thoughts: Indonesia was hit by dryness that was induced by the moderate strength El Nino in the last quarter of 2006 and early 2007. With the demise of El Nino and onset of neutral conditions, the outlook for Phil agriculture improved. But weather is fickle. Your neighboring farm can have a half-inch of rain and yet not a single drop in yours. We don't need an El Nino to have droughty conditions. But El Nino can make it worse. Rains are really hard to come by during summer (dry season). They typically come in the form of thundershowers during this period. I hope that you have sufficient moisture in your subsoil from the early rains to tide the crop till the rains come. I figure out that the dry weather should have been perfect for the mature canes (higher sugar content) and harvesting but bad for the young cane crop. With the young crop threatened, it usually bores deeper into the subsoil in search of moisture. By doing so, it develops a deeper root system that can make wonders when timely rain arrives. It will also be more resistant to lodging.
At what stage is the greatest need for moisture by the cane crop? It has been a long time, I have forgotten my cane agronomy. In corn, it is during the tasselling or pollination. In soybeans, it is during the R6-R7 pod-filling stage.
I hope you and Melhins get the timely rains.

[looseyourtan]

I could not agree more boss chobeeboo. Very fickle indeed, perfect example would be today. two farms beside each reported differently, one said they had drizzles the other none at all and really sunny.
Too bad that the subsoil has dried up already. I dont know the english terms of agronomy but everytime we turn over the soil it is already a bit hard. In our case, it is crucial to irrigate right after planting in order to give the cane tops a chance to grow. We follow it up with 2 more doses of water 1 week apart. Next crucial ones would be right before fertilizer application.

Its also good when one month old new plants are stressed a little bit. They work harder and tend to "generate" more stalks. The dry months was good for our harvest that was planted in FEB-April last year. But our late planting suffered from too much rain from June-Jan. and too little from Jan. up to now. They experienced stunted growth thereby sacrificing tonnage. Oh well life in the farm, we are under the mercy of the elements.

[choobeebo]

Looseyourtan, I hope you do not lose your shirt. Sad to hear about the stunted canes. Brazil had a great growing season - harvest had began in the Sao Paolo area. India and China are poised to have big crops. This has pressured world sugar prices. Lower prices and lower yields in your farms are not exactly a good combination When u say "late planting" is this in May-June? Two-thirds of your area is supposed to be ratoon crop? One-third is plant crop?

Am curious why you have to turn over the topsoil? Isn't it that you will lose moisture faster that way. Is this part of the new tillage practice?

Thanks for the farm updates. By the way, my crystal ball says you will have much better precipitation chances in May. I hope it is not too late.