International Benchmarking Study of the Philippine Livestock, Dairy, and Poultry Industries

Background

The Philippine livestock and poultry subsector urgently needs a boost and a reboot. For decades now, it has received limited attention and developmental assistance from the government because the major focus of the Department of Agriculture (DA) has been mostly on rice and corn. The occasional and limited livestock dispersal programs have not been sustained. Budget support for livestock and poultry has been averaging at only PHP 1.18 billion or 1.6 percent of the total budget of the DA in 2009-2020. DA has not created a broad-based, organized, and competitive livestock and poultry industry in the country, except for a few large corporate livestock ventures.

In August 2019, the African Swine Fever (ASF) was detected in the Philippines. As of 16 April 2021, the virus has affected a total of 12 regions, 46 provinces, 493 cities/municipalities and 2,571 barangays in the country (BAI, April 2021). According to the Bureau of Animal Industry (BAI), a total of 61,324 farmers were affected by ASF as recorded through government-led culling activities. The continuing spread of ASF has resulted to a large supply deficit, leading in turn to the spike in retail prices and pushed meat inflation from 2.9 percent in September 2020 to 19.6 percent in the first quarter of 2021. While the overall inflation in March 2021 decelerated to 4.5 percent on account of slower inflation for other food items, the meat inflation increased to 20.9 percent and was the top contributor to overall inflation at 1.4 percentage points. The contribution of meat to overall inflation has even exceeded that of rice during the height of the 2018 inflation spike, where rice contribution to inflation peaked at a lower 1 percentage point.

In a letter to the Department of Finance (DOF) dated 21 March 2021, Senator Cynthia Villar requested the National Economic and Development Authority (NEDA), with the Philippine Institute for Development Studies (PIDS), to conduct a benchmarking study on the livestock, poultry and dairy as reference in drafting a bill to accelerate the development of the Philippine livestock, poultry, and dairy sector.

However, the pandemic poses challenges of deploying field personnel to other countries to collect data/information needed for benchmarking. In addition, there are also procurement constraints regarding the hiring of foreign consultants/experts/data collectors in other countries. Hence, the project was divided into two components: the Domestic Component and the International Component. The PIDS will implement the domestic component, and the Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), with its known network of international partners who can be immediately mobilized, will implement the international component covering selected Asian countries, namely China, Thailand, and Vietnam.

Objectives

The overall objective of the International Component of the study is to determine the comparative advantage of the livestock, poultry, and dairy industries (i.e., hogs, chicken, cattle, and carabao) in other Asian countries (e.g., China, Thailand, and Vietnam) based on parameters including productivity levels, cost of production and structure, among others. As such, the study will cover a comparative analysis based on the following:

1. Cost and return structure of livestock, poultry, and dairy (cattle and carabao) production in Asian countries (e.g., China, Thailand, and Vietnam) by farm type (i.e., commercial and backyard, if possible);
2. Livestock/poultry/dairy production management and marketing practices in the identified Asian countries; and
3. Identification and analysis of key enabling policies to strengthen the livestock, poultry, and dairy sector in the identified Asian countries.

Scope of Work

The following major activities will be undertaken for the study:

Activity 1. Literature Review

• Review of the (a) historical performance of the livestock, poultry, and dairy industry; (b) farm management practices of producers; (c) cost of material inputs (e.g., cost of stocks, feeds, biologics, etc.), land rental, labor, etc.; (d) interventions provided by the government to producers/raisers; and (e) existing policies, and other relevant documents/issuance relevant to livestock, poultry, and dairy industries, among others, in the identified Asian countries.

Activity 2. Data Collection

• Development of survey questionnaire and setting of questions for the Key Informant Interviews (KIIs) or Focus Group Discussions (FGDs), with reference to the questionnaires developed in the Domestic Component of the study;
• Conduct of survey: Collection of (a) primary data (e.g., production cost and return, management, and marketing practices); and (b) secondary data (e.g., prices, volume of production) on international livestock, poultry, and dairy industry across provinces for commercial and backyard farms; and
• Conduct of KIIs or FGDs with key Asian countries stakeholders in the sub-sector/s (e.g., farmer groups, industry members).

Activity 3. Analysis, Interpretation and Write-up of the Technical Report

• Analysis of data/information and write-up for the international component of the study.

Expected Outputs

• Inception Report - include the detailed Work and Financial Plan (WFP), provisions pertaining to the fulfillment of the study, as well as approaches and methodologies to be utilized in the conduct of the study.
• Draft Technical Report - include among others, the results highlights/results of the KIIs/FGDs, and all findings concerning the international component of the study.
• Final Technical Report – reflect comments/suggestions from NEDA and PIDS, and relevant findings concerning the international component of the study.