Supply and demand analysis of rice in the Philippines, 1990-2019

Date

1-2021

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Cenon D. Elca

Committee Member

Antonio Jesus A. Quilloy, Agham C. Cuevas

Abstract

Rice is the most important crop in the country. Majority of farmers in the country grow rice and at least 20 percent of a Filipino household’s income is spent on rice consumption. Despite its abundance in the country, rice crises due to lack of supply and increasing demand have been disrupting the economy. Therefore, analyzing the supply and demand of rice in the country is necessary.

The objectives of the study were (1) analyze the trends in production, area harvested, farmgate and retail price of rice, and rice consumption, (2) determine the effects of growth in area harvested and yield on rice production, (3) determine the effects of growth in population and per capita consumption on rice consumption, (4) determine the factors affecting supply and demand, and (5) formulate policy recommendations. The study used time series data from the Philippines Statistics Authority which includes farmgate prices, retail prices, agricultural wage rate, and population. Annual rainfall data were also sourced from the Philippine Atmospheric, Geophysical, and Astronomical Services Administration. The consumer price index which was used to adjust the prices and per capita income was gathered from World Bank. Trend analysis, growth decomposition analysis, provincial-level supply assessment, supply analysis, and demand analysis were the methods used to analyze data.

Rice production, area harvested, and yield were generally increasing from 1990 to 2019. Some fluctuations in some years were primarily attributed to technology adoption and climatic conditions. The trends in rice prices and wage rate also displayed increasing trend. The spikes for both prices were attributed to economic disturbances and rice crises while the fluctuations in wage rate were mostly dependent on market prices and level of production. Yield and per capita consumption were also revealed as the main sources of growth for production and consumption respectively. Provincial-level assessment of rice production also showed that Sultan Kudarat, Bukidnon, and Maguindanao have high potential to become top rice producing provinces. The results of regression analysis for supply showed that agricultural wage rate, rainfall, and adoption of combine harvester have significant effect on rice production. Lastly, demand analysis also revealed that retail price of rice and corn, and population of major cities significantly affect consumption.

The study revealed that there is still significant gap between rice production and consumption. With the expansion of rice supply mostly predicated on technology adoption, it is recommended that the government should continue to promote adopting rice technology, improve irrigation system, and increase farm mechanization. Focusing also on improving rice farming in Mindanao would help in significantly increasing rice production.

Language

English

LC Subject

Rice trade, Supply and Demand

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2021 A14 L33

Notes

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Document Type

Thesis

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