Analysis of the determinants of agricultural production in the Philippines: 1990-2018
Date
2022-12
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Abstract
Agriculture plays an essential role in the Philippine economy. It employs over 24% of Filipino
workers and supplies food to the country's expanding population. However, farmers and fishermen in
rural regions have remained the poorest since 2006. With the aim of improving Philippine agriculture, this
study determines the factors that affect agricultural production and analyzes their impacts to suggest
government policies. Two econometric models will be used in the research. The agricultural policy model
makes use of irrigation, credit, and government spending, while the traditional model employs land,
capital, and labor as independent variables that are regressed against agricultural GVA. The findings
indicate that the only traditional variables that significantly affect agricultural production are labor and
capital. Meanwhile, government expenditure is the only factor that has a significant effect under the
agricultural policy model. During droughts, irrigation systems frequently fail to function and typically
have poor design elements for workers to operate on. On the other hand, credit is not easily accessible to
farmers, and those who acquire it often use it for personal activities rather than for farming. Therefore, the
researchers concluded that the state should focus on public investments, which may be in the form of
education subsidies and training programs for farm employees to efficiently adapt to new technologies
and manage finances better. Overall, agricultural production would improve with additional modernized
capital and public investment in human capital that increases labor productivity.
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Keywords
Agriculture, agricultural production