Determinants of yellow corn utilization in the Philippines from 1980- 2010

Date

2011

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Prudenciano U. Gordoncillo

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Abstract

Corn or maize is the second most important crop in the Philippines next to rice. There are two types of corn produced, white corn and yellow corn. This study determined and analyzed the trend of yellow corn utilization as well as the determinants of yellow corn utilization. To achieve the study‟s objectives, both descriptive and inferential analyses were used in analyzing secondary data gathered from various government databases and statistical yearbooks. The trend analysis on yellow corn utilization showed that there is a steady increase for the past thirty years. This is also true for yellow corn production. Yellow corn imports, on the other hand, exhibited a highly fluctuating trend throughout the years. The trend analysis on the determinants of yellow corn utilization all showed increasing trends but in varying rates of increase and also without the exemption of some fluctuations. For the population variables, it has been observed that human population had a very high and consistent trend. Hog and chicken population, although not as high and consistent as human population, exhibited positive growth rates even during periods of fiscal crises. On the other hand, GDP per capita and GNP per capita showed increasing trends. It was observed that there is a widening of the gap between the two due to the increase of remittances from abroad. Moving on, the wholesale prices of yellow corn also showed an increasing trend while Philippine exchange rates exhibited growth until 2004 but declined thereafter. The data gathered were also subjected to regression analysis in three functional forms: simple linear, log-linear and double log forms. The dependent variable, yellow corn utilization, was lagged in order to capture imperfect market information. Also, because of the issue on correlation, the population variables had to be separated resulting to several regression runs with different population variable combinations. Almost all the models obtained had very high r-square values. In the end, a model in the double log functional form was deemed as the best fit model in determining yellow corn utilization. It exhibited a very high r-square and also showed the most number of significant variables. These variables are GDP per capita and yellow corn wholesale price. Based on the model, there is a positive relationship between GDP per capita and yellow corn utilization. This means that as GDP per capita increases, yellow corn utilization is also expected to increase. On the other hand, yellow corn wholesale prices manifested a positive coefficient due to the aggressiveness of the hog and poultry sectors. This implies that the increase in price is not enough to offset the need to buy yellow corn because hog and poultry growers have to support the growth and expansion of their sector. During the development of the study, it had been discovered that there was a distorting element that may have affected the levels of yellow corn utilization. The aggregate utilization values did not correspond to the value of production and import volumes. This means to say that there were volumes of yellow corn available in the market and utilized through unknown channels. Based on the results gathered, the study recommends that the government fully implement existing agricultural policies such as AFMA that would diminish inefficiencies in production and marketing of yellow corn in the country. By doing so, the yellow corn subsector can easily catch up with the very robust growth and expansion of the livestock and poultry sectors. Moreover, there is also a need to have a more in depth and focused study on the extent and gravity of the effect of illegally traded agricultural products especially yellow corn.

Language

English

Location

UPLB Main Library Special Collections Section (USCS)

Document Type

Thesis

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