Regional Welfare Effects of Tariff Trade Policy among Yellow Corn Consumers and Producers in the Philippines, 2000-2023

Date

6-2025

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Cenon D. Elca

Committee Member

Geny F. Lapiña, Maria Angeles O. Catelo

Request Access

For non-UP researchers, requests for access to this material may be directed to the CEM Library at cemlibrary.uplb@up.edu.ph or to the UKDR administrator at uscs-mainlib.uplb@up.edu.ph

Abstract

Yellow corn is a key ingredient in feed milling, making it a crucial input in the livestock and poultry industries of Philippine agriculture. As demand continues to grow alongside the expansion of these industries, yellow corn remains crucial to food security, rural livelihoods, and economic stability. The Philippines‟ long-standing challenge in bridging the supply-demand gap for yellow corn has urged the government to liberalize trade by gradually reducing tariffs on yellow corn imports. However, this liberalization raises concerns about the welfare of domestic producers and the implications for government revenue.

This study aimed to assess the welfare effects of trade policy options of protection and liberalization on yellow corn producers and consumers across the national and regional island group levels, particularly in Luzon, Visayas, and Mindanao. The research covered the period from 2000 to 2023. Specifically, it sought the following: conduct a comprehensive review of trade policies related to the Philippine yellow corn industry, characterize yellow corn production, demand, and trade trends, analyze the impact of varying tariff rates on the welfare of stakeholders, and provide policy recommendations based on the findings. Partial equilibrium analysis simulated two scenarios: raising the tariff rate from 15 percent to 35 percent and removing tariffs entirely. Key informant interviews were also conducted with yellow corn farmers and feed millers to support and validate the quantitative findings.

The study revealed that from 2000 to 2023, yellow corn demand consistently exceeded supply, resulting in persistent national deficits. In terms of regions, Luzon and Visayas exhibited deficits, while Mindanao consistently showed a surplus. The first simulation, which increased the tariff from 15 to 35 percent, resulted in welfare gains for producers and the government but imposed losses on the feed millers. In contrast, the second simulation, which converted tariffs to zero, significantly increased consumer surplus but negatively impacted producer surplus and government revenue. The second simulation still resulted in an overall net gain to society, with regional differences in magnitude and distribution of gains and losses.

Trade policy is not just about numbers, it is also about people, livelihood, and regional economies. Based on the results of the study, it is therefore recommended to: 1) strengthen strategic trade partnerships; 2) invest in climate-resilient genetically modified yellow corn varieties; 3) gradual and seasonally responsive tariff reduction schedule; 4) development of inter-island bulk shipping infrastructure; 5) consideration of alternative feed ingredients; and 6) establishment of a dual-scenario funding mechanism.

Language

English

LC Subject

Corn industry, Trade regulation—Philippines, Consumption (Economics)

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2025 A14 P47

Notes

Viewing access to electronic resources is restricted solely to UP Gmail accounts. Any access and share requests from external organizations and personal email accounts will be promptly declined.

Document Type

Thesis

Link to Full Text

Share

COinS