AGRIBUSINESS AREA PLAN

I. ASSESSMENT
Region 1s economy is anchored in the agriculture sector. About 79.92% of the regions total land area is arable or suitable for cultivation. Moreover, with its western portion stretched along the coast of the South China Sea and abundant inland waters, fishing is likewise suitable. Agriculture and fishery production combined contributes 30 to 40% of the regions GRDP. Staple crops such as rice and corn remains to be the major produce of the region, and ranks 4th and 5th, respectively, in terms of their contribution to the national production. Priority high value cash crops such as garlic, mango, peanut, Figure 1. Gross Regional Domestic Product Percent Contribution (at constant prices) tomato, mungbean, onion and others are also significantly produced. The region continues to be the top producer of tobacco in the country notwithstanding the declining production growth rate for five consecutive years (CYs 2003 to 2008). Region 1 is also the major producer of bangus (milkfish) in the country. Fishery production in the region includes commercial, municipal and aquaculture.

The performance of the sector particularly its contribution to the GRDP had been declining due to the vulnerability of the sector to the adverse effects of Figure 2. Agri-Fishery Production Growth Rate climate change and the Region 1, CYs 2006-2010 recurrent weather disturbances. While the sector maintained an annual growth rate of 7% in CYs 2005 to 2007, drastic decline was recorded at -1.0% and -11.30% in CYs 2008 and 2009, respectively. The decline was attributed to the onslaught of typhoons, unfortunately, at 1

the period where crops/commodities are already mature or ready for harvesting. In CY 2010, the sector was able recover and registered a 7.43% growth from its CY2009 performance. This was due to the quick response recovery program that provided appropriate assistance to put back on tract the medium term direction of the sector toward agribusiness development. The average food sufficiency level of the various agri-fishery commodities from CY 20052010 achieved or Figure 3. Sufficiency Level even surpassed the Region 1, CYs 2005-2010 desired 100% sufficiency level except for rootcrops. In CY2010, the sufficiency level of rootcrops is only 95%, basically because the people of Region 1 do not consider rootcrops as major food and the potentials for its value adding are not yet fully explored. The sectors contribution to employment in CY2009 is 41.94%. This represents a slight increase by 1.36% from its declining trend since CY 2005 (45.33%) to CY 2008 (40.59%).

The Agri-Production Land Use

The agricultural production area of Region 1 is 1,026,148 hectares or 79.92% of the regions total land area as shown in Table 1 and Figure 4. It contributes 30 to 40% of the GRDP making the sector the regions major economic driver. The agricultural land is divided into three land uses namely croplands, pasturelands and fishery areas. Pasture lands had the biggest land area of 603,960 hectares or 58.86% followed by croplands with an area of 404,847 hectares or 39.45%. Fishery areas, which include fishponds, swampy areas and lake, account for the remaining 1.69% or 17,341 hectares. In terms of provincial disaggregation, Pangasinan had the largest agricultural area of 472,566 or 46.05% of the total agricultural lands while the province of La Union occupies the least agricultural area of 12.18% or 125,026 hectares.

Figure 4. Land Use Map

Region 1

Table 1. Land Use by Province

Land Use A. Agricultural Lands 1. Croplands 2. Pasturelands 3. Fishery Areas B. Forest Areas (forestland/NIPa/Mangrove) C. Built-Up Areas D. Miscellaneous Land Uses (saltbed/beachsand/riverash/ sand dune/airport) T O T AL AR E A

IN 223,535 71,189 152,047 299 98,797 6,628 10,974

IS 205,021 53,451 151,120 450 30,194 10,221 12,522

LU PA 125,026 472,566 35,463 244,744 88,485 212,308 1,078 15,514 12,669 32,352 9,146 2,468 24,272 7,628

Reg. 1 % distribution 1,026,148 79.92% 404,847 31.53% 603,960 47.04% 17,341 1.35% 174,012 13.55% 50,267 33,592 3.91% 2.62%

339,934

257,958

149,309 536,818

1,284,019

100.00%

The Fishery Resources

The total coastal distance of Region 1 is 708.165 kilometers stretched along the South China Sea. Fishery activities include mariculture, aquaculture and municipal fishing within the 15 kilometer zone. The fishing grounds and resources as contained in the Regional Physical Framework Plan (RPFP) 2004-2034 include: (a) 45,790.50 hectares of sheltered coastal area; (b) 1,421.75 hectares fishpond area; (c) 46.38 hectares freshwater fish pen area; (d) 57.66 hectares freshwater fish cage area; and (e) 4,111.36 hectares of communal area. In addition, a total 13,084.25 hectares account for brackish water fishpond area.

Figure 5. Fishery Resources Region 1

Key Production Areas

Region 1 has 3,804.796 square kilometer key production areas (KPAs) as shown in table 2. Cropping system which was rice-based followed by corn, tobacco and vegetables had been the customary system used by the farmers over the decade. In terms of production area, production and productivity for major crops, it had not significantly changed over the years except in CYs 2008-2009 where a decline in production were experienced due to the inevitable occurrences of weather disturbances.

Table 2. Key Production Areas, Region 1 Class Legend Key Grain Area (Rice) Key Grain Area (Corn) Key Commercial Crop Area Key Commercial Crop Area (Tobacco) Key Livestock Development Area Key Fishery Development Area Total of 6 Classes Area (sq km) 947.339 405.110 1,264.163 363.513 654.523 170.148 3,804.796 Area (%) 24.90 10.65 33.23 9.55 17.20 4.47 100.00

The province of Pangasinan is the regions highest producer of agri-fishery commodities with a total key production area of 2,266.56 sq.km. or 59.57% of the region KPAs. Aquaculture areas particularly fishponds were in Pangasinan and La Union. Following are the provincial data on key production areas:

Table 3. Key Production Areas by Province A. Province of Pangasinan

Class Legend -----------------------------------------------1 Key Grain Area (Rice) 2 Key Grain Area (Corn) 3 Key Commercial Crop Area 4 Key Commercial Crop Area (Tob) 5 Key Livestock Development Area 6 Key Fishery Development Area -----------------------------------------------Total of 6 classes

Area(%) ----------------21.67 10.91 38.58 0.08 21.62 7.14 ----------------100

Cumm Area ----------------21.67 32.58 71.16 71.25 92.86 100 -----------------

Area(sq km) ----------------491.16 247.28 874.49 1.89 490.01 161.72 ----------------2266.56

B. Province of Ilocos Norte

Class Legend -----------------------------------------------1 Key Grain Area (Rice) 2 Key Grain Area (Corn) 3 Key Commercial Crop Area 4 Key Commercial Crop Area (Tob) 5 Key Livestock Development Area -----------------------------------------------Total of 5 classes

Area(%) ----------------43.12 11.08 15.86 10.89 19.06 ----------------100

Cumm Area ----------------43.12 54.2 70.06 80.94 100 -----------------

Area(sq km) ----------------280.896 72.19 103.29 70.92 124.156 ----------------651.452

C. Province of Ilocos Sur

Class Legend -----------------------------------------------1 Key Grain Area Crop (Rice) 2 Key Grain Area Crop (Corn) 3 Key Commercial Crop Area 4 Key Commercial Crop Area (Toba 5 Key Livestock Development Area -----------------------------------------------Total of 5 classes

Area(%) ----------------17.05 15.8 34.14 27.12 5.89 ----------------100

Cumm Area ----------------17.05 32.85 66.99 94.11 100 -----------------

Area(sq km) ----------------92.421 85.64 185.08 147.027 31.929 ----------------542.097

D. Province of La Union

Class Legend -----------------------------------------------1 Key Grain Area (Rice) 2 Key Commercial Crop Area 3 Key Commercial Crop Area (Tob) 4 Key Livestock Development Area 5 Key Fishery Development Area -----------------------------------------------Total of 5 classes

Area(%) ----------------23.32 28.52 40.44 5.34 2.37 ----------------100

Cumm Area ----------------23.32 51.84 92.28 97.63 100 -----------------

Area(sq km) ----------------82.862 101.303 143.676 18.986 8.428 ----------------355.255

In terms of the land distribution or areas covered by the above-mentioned key production areas, hereunder are the maps identifying the specific area/location:

Figure 6. Pangasinan: Key Production Areas

Figure 7. Ilocos Norte: Key Production Areas

Figure 8. Ilocos Sur: Key Production Areas

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Figure 9. La Union: Key Production Areas

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The Agri-fishery Facilities

Facilities to support agri-fishery production are established in strategic locations in the region as shown in Figure 10. These facilities allowed the sector contribute significantly to the regions GRDP. For crop production, existing support facilities include Rice Processing Center in Pangasinan, Corn Processing Centers and Feed Mills in Ilocos Sur and Pangasinan, and the three (3) National Irrigation Systems, namely, Agno River Irrigation System in Pangasinan, Baoang Pump Irrigation Project in Ilocos Sur and the Ilocos Norte Irrigation Project. The region boasts its long coastline that is not only attractive for tourism activities but also for fishery activities. Thus, to maximize the benefits of water resource, support facilities were established along the coastal areas of the region, namely, Fishing Ports, Fish Nurseries, Cold Storage/Fish Markets and Fish Processing Plant. These facilities are also utilized for fishery production from inland waters.

Other existing agri-fishery support facilities include trade/market centers established in every province in the region, and Agriculture Research and Development Center located in the provinces of Ilocos Norte and Pangasinan.

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Figure 10. Existing Agri-Fishery Support Facilities Region 1

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Figure 11. Fishery Structures Region 1

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Challenges
The following are the challenges the region must deal with in gearing up for agribusiness development: The vulnerability of the sector from the adverse effects of Climate Change and other recurrent extreme weather disturbances. The region has been frequented with strong typhoons leaving massive damages to the agri-fishery production. In CY2008, the sector recorded a negative growth rate of 1.0%, and it further went down to -11.3% in CY2009 resulting to a -1.0% growth rate in the GRDP. The preparedness and resiliency of the sector on the adverse effects of climate change has to be developed. Negative impact of urbanization. Urbanization creates adverse consequences to the sector such as (a) decrease in labor/manpower support due to the transfer of young generation farmers to the cities and urban areas leaving the farming activities to the aging farmers, (b) conversion of productive agricultural areas to commercial or nonagricultural purposes, and (c) pollution in populated/areas that may cause degradation of river and coastal waters. Low marketability of agricultural products. In spite of the sectors high contribution to the national agri-fishery production, the regions agricultural products remain to be left behind, in terms of marketability, by the commodities produced in other regions. This is brought about by the low adoption and implementation of good agricultural and manufacturing practices. Furthermore, opportunities for agricultural improvement/ advancement are not maximized due to farmers/ fishermens lack of market information. Minimal financial, credit, marketing and institutional assistance. Although, agri-fishery related agencies provides technical and support assistance, these are not sufficient to fully develop the farmers/fishermen become agri-entrepreneurs. The inequitable distribution of assistance is also observed in some areas leaving the large population of small farmers remain to be subsistence farmers. Very few organized farmers/fisherfolks organizations. The existence of majority of the farmers/fisherfolk organizations in the region starts and ends at the registration stage. Generally, they characterized to be weak in pushing for their growth and development. Thus, the need to empower/strengthen them through capability building to avail opportunities open to them. Traditional farming system. The agriculture sector of Region 1 is generally composed of traditional farmers utilizing traditional farming systems in agri-fishery production. They are averse to modern and technological 15

advancements in farming, thus the need to transform them become modern farmers and agri-entreprenuers. This is to support the regions effort in gearing up for a more vibrant agribusiness. Worldwide campaign against tobacco use. Considering that the region is the major producer of tobacco in the country, the world-wide campaign against tobacco use posed a big threat to the industry. Anticipating the negative effects, industry considered some changes in their thrusts to include: (a) promotion of alternative uses of tobacco, e.g., as bio-pesticide, pulp and paper, etc. aside from raw materials for cigarette manufacturing, and (b) shift to other commodities whose production compares favorably with tobacco in non-productive tobacco areas. However, the production of quality tobacco in suitable and productive areas for this commodity is encouraged. The industry is also facing the stiff market competition with China.

II. Vision
In significantly contributing to the regions 2020 vision of becoming the agribusiness and tourism powerhouse in Northern Philippines, the agriculture sector is geared towards agribusiness development as emphasized in its CY2016 vision: By 2016, the traditional farmers are developed into agri-based entrepreneurs equipped with modern technologies, skills and resources to successfully compete in the market.

III. Development Goals and Objectives

To create more jobs and generate higher income To improve productivity and sustain food sufficiency and safety/security To develop a modern and sustainable agriculture and fishery technologies and facilities To enhance agricultural resiliency/adaptability to natural disasters To strengthen farmers/fisherfolks organizations and sustain active participation in planning

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IV. STRATEGIES
Vibrant agribusiness as a priority thrust of the agriculture sector serves as catalyst for quality production, increased productivity, agri-based industrialization, and rural enterprises development, to include agri-tourism development. Achieving these contribute to job generation, agri-services development and eventually improve rural/farm-based income. As primary source of food, the sector shall ensure not only attainment of food sufficiency but security, as well as food safety. To achieve these thrusts and directions of the sector, the following strategies will have to be carried out: o Promotion and adoption of value adding and creation on agri-fishery products to ensure its competitive advantage, especially on the regions strategic commodities. o Aggressive promotion of the regions strategic commodities and other agrifishery products to increase investments as well as to improve and expand market. o Adoption of market-driven approach to agri-fishery production and the development of farm and market connectivity, along with the provision of adequate and CC-resilient agricultural inputs, o Implementation of pro-active programs, projects and activities to address the marketability of the agricultural commodities as well as weather-proofing of the production areas and facilities on the adverse effects of climate change o Provision of modern, appropriate, cost-effective and environment-friendly technologies and facilities. Technology transfer and extension services through trainings and farmer schools to most farmers is essential o Implementation of good agricultural and manufacturing practices to ensure the competitiveness of agri-products as well as the provision of incentives system to encourage its extensive adoption/implementation o Provision of financial, credit, marketing and institutional assistance that will respond to increasing investment in farming ventures as well as improved and expanded market

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Figure 12. Vibrant Agribusiness Framework

V. AGRIBUSINESS MODERNIZATION PLAN FOR REGION 1

Transforming the Ilocano Farmers
Farming and fishing are the primary occupation of the people in Region 1 especially those in the rural areas. Majority of the Ilocano farmers are characterized as traditional farmers who, primarily, make use of traditional farming systems for agri-fishery production. There are also few modern farmers who are already engaged in entrepreneurial activities. For the greater part of the farmers population in the region they are specifically characterized as ageing, poor and unproductive. Many have small land holdings or employed as tenant farmers and landless agricultural workers. This in effect results to low production and income, moreover, production is used for home consumption. Typically, traditional farmers have limited capital and poor access to credit facilities. They are also dependent on external resources and treat assistance as dole-outs. On the other hand, assistance provided to them by the various institutions are generally common facilities or services that they have to share with other farmer beneficiaries. 18

With the afore-mentioned characteristics of farmers in the region, the challenge for agribusiness development is the transformation of the traditional farmers into modern, selfreliant and profit-oriented agri-entrepreneurs. This can be facilitated by specifically profiling the Ilocano farmers and appropriately providing the needed technical, financial, marketing and institutional assistance for their transformation. The details are in Annex A.

Figure 13. Transformational Framework for Modernization Agri-fishery Sector

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The Regions Strategic Commodities

With rich arable areas as well as bodies of water suitable for agri-fishery production and existing support facilities, the region identified and developed priority commodities with comparative advantage. The RDC-1 created the Strategic Commodity Program for Region 1 where champion agencies were identified to develop the various strategic commodities through various stages of commodity development from raw material production to investment promotion. The identified strategic commodities in Region 1 include the following: bangus, mango, chichacorn, sericulture, apiculture, cotton, tiger grass, bamboo, seaweeds, basi, ube, red shallots, furniture, loomweaving and meat processing. Coconut and carabao industry were also included as priority commodities of the region. At present, the commodity champions had already developed mature technologies for the production and processing of these commodities. To further develop the potentials of these commodities, aggressive investment promotion will have to be undertaken through the preparation of the Commodity Investment Program which will form part of the Strategic Investment Program. While these commodities are being promoted for public and private investments, the champion agencies, together with the concerned rural development agencies and LGUs, may also transfer the technology to the local/traditional farmers to start their engagement to agribusiness/agri-entrepreneurial activities. Refer to Annex B for details. Table 4. Strategic Commodities and the Agency/LGU Champion
Region 1
Strategic Regional Commodities Fisheries Bangus Seaweeds Bagoong/Fish Processing High Value Crops and Livestock Mango Multiplier Onion Goat Ube Manufactured Products (OTOP) Chichacorn Handloom Furniture Meat Processing Basi Bamboo Others Tigergrass Apiculture Sericulture Organic Agriculture Cotton VirginiaTobacco Biofuel Sweet Sorghum Coconut Carabao Industry Enterprise Champions BFAR

DA

DMMMSU DTI

DOST DENR-I & MMSU DENR-I DMMMSU-NARTDI DMMMSU-SRDI ILARRDEC CODA NTA MMSU PCA PCC

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VI. PROGRAMS AND PROJECTS

Along with the concerted effort of the various agri-related agencies and local government units in transforming the traditional farmers of Region 1 become modern, technically-skilled and empowered agri-entrepreneurs, high impact projects will have to be adequately put in place in addition to the existing support services and facilities. This is to maximize the full potential of the agriculture sector in contributing to the regions CY 2020 vision of becoming the agribusiness and tourism powerhouse in Northern Philippines.

A. Agribusiness Development Projects

1. Establishment of Fish Processing Plant The project aims to improve fishery productivity through the preservation and processing of surplus fish production as well as maintain the quality and price of fish produce. The processing plant is proposed to be established in Pangasinan since the province caters the larger portion of key fishery production areas. 2. Mango and Fruit Processing Plant The project includes the construction of a building that will house an office space, storage for both raw materials and finished area products and working space equipped with machineries and a cold storage building. The processing plant is expected to minimize spoilage and maximize the benefits of these commodities through value-adding. 3. Expansion of Bagsakan and Cattle Markets The Bagsakan and Cattle markets in Urdaneta City, Pangasinan will be improved and expanded to cater to the growing market/commodity-exchange activities in the area. 4. Apiculture Development Program Recognizing the potential of the apiculture industry in providing employment and added income to farmers, the region intends to extend the adoption of this industry in other areas regionwide. In particular the Ilocos Sur Honey Corridor consists of the municipalities of Suyo and Cervantes will be developed. 5. Deep-Sea Commercial Fishing The project includes the establishment of floating assets, ice plants, and deep sea payaos along the coastal/marine zones of Region 1. 6. Multi-purpose Cold Storage Facility The proposed project will be established in strategic locations in the provinces of Pangasinan, Ilocos Sur and Ilocos Norte to maintain the quality of fish produced.

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7. Carabao Dairy Industry Development Program The emerging potential of the carabao industry will be enhanced through the establishment of milk processing facility. This will be established in the province of Pangasinan to accommodate milk produced in the eastern portion of the province. 8. Integrated Bioethanol-Ricemill Complex Project The proposed that will be established in Bani, Pangasinan. It will directly benefit the municipality and the entire District I as well as other municipalities and cities of Pangasinan that are suitable for rice and sweet sorghum production. The project, with a multi-million investment cost, is consist of (a) a state-of-the-art processing plant for rice, flour and other derivative products of sweet sorghum and palay, and (b) a sweet sorghum-base bioethanol and biomass-fired cogeneration electric power plant that will supply the energy requirement of the plant as well as export 3.65 MW of electricity to the local grid.

B. Agri-Infra Support Projects

1. Water Harvesting Program The project involves the construction of small water impounding projects (SWIP) to store excess water during the rainy season and to be used during the dry season for agricultural purposes to improve crop production and provide additional income to the local farmers. 2. Banaoang Pump Irrigation Project, Phase 2 The project involves the installation of pumping station at the left bank of Abra River about 1.5km upstream of Quirino Bridge to provide the irrigation requirement of various municipalities in Ilocos Sur. 3. Gregorio Del Pilar Irrigation Project The project involves the construction of irrigation facilities to provide the irrigation requirement of various municipalities in Ilocos Sur since the area do not have as yet established irrigation facility. 4. San Juan, Ilocos Sur Irrigation Project The project involves the construction of irrigation facilities to provide the irrigation requirement of various municipalities in Ilocos Sur since the area do not have as yet established irrigation facility.

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Table 5. Strategic Investment Program Agribusiness and Agri-Infra Support Region 1

Project Title A. AGRIBUSINESS 1. Establishment of Fish Processing Plant 2. Mango and Fruit Processing Plant 3. Expansion of Bagsakan and Cattle Markets 4. Apiculture Development Program 5. Deep-Sea Commercial Fishing 6. Multi-purpose Cold Storage Facility 7. Carabao Dairy Industry Development Program 8. Integrated CogenBioethanol-Ricemill Complex Project B. AGRI-INFRA SUPPORT 1. Water Harvesting Program 2. Banaoang Pump Irrigation Project, Phase 2 3. Gregorio Del Pilar Irrigation Project 4. San Juan, Ilocos Sur Irrigation Project Region 1 Santa, Narvacan, Sta. Maria, Burgos Ilocos Sur NIA NIA ODA/KOICA GrantProject (GAA-JBIC) Sual and Bolinao (Pangasinan) San Carlos City (Pangasinan) & Balaoan (LU) Urdaneta City (Pangasinan) Regionwide LGU PPP Location
Implementing Entity

Funding Source

LGU

PPP

LGU LGU

PPP PPP

Ilocos Norte and Ilocos Sur Pangasinan, Ilocos Sur and Ilocos Norte Eastern Pangasinan

BFAR

PPP

LGU PCC, LGU

PPP PPP

Bani ( Pangasinan)

LGU

PPP

San Juan, Ilocos Sur

PPP

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Figure 14. Proposed Programs and Projects

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VII. ACTION PLAN

A. Strategic Commodity Program
Activity 1. Preparation/ updating of strategic commodity development plans 1.1 Performance Assessment of Strategic Commodities 1.2 Issues, gaps and opportunities identification 2. Conduct of Road Mapping for the Strategic Commodities 2.1 R&D plan for Strategic Commodities 3. Preparation of the Strategic Investment Promotion Plan 4. Conduct of Advocacy activities for Strategic Commodities 5. Implementation of Commodity-specific programs and projects 6. Investment Promotion of Strategic Commodities 7. Conduct of Regular Meetings Output 1 workshop 1 strategic devt plan per commodity 1 performance assessment per commodity Timeframe Q4 of every year Responsible Entity Agency champions Budgetary Reqt (PhP) 35,000

Once semester

per

-do-

1 situational Q1 every year analysis per commodity Q4 2011 1 workshop 1 roadmap for each commodity 1 database for Q4 2011 each strategic commodity

-do-

Agency champions, DOST DOST, ILARRDEC, agency champions Agency champions

75,000

Q4 2011 1 strategic promotion plan Brochure per commodity Q4 2011, DTI, OPAg, Trade fair continuing DA, agency Market matching champions Product exhibits Various PPAs Q1 2011, Agency continuing champions

50,000

150,000

Q4 2011, StratCom included in continuing Investment Promotion Guide of Region 1 Regular: once 1 meeting/ sem per semester, special meeting as need arises

DTI-NRBAC/ RDC Secretariat

20,000

AgriSeCom

25,000

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B. Agribusiness Modernization
Activity 1. Assessment of the Agri-fishery sector 2. Development of Agri-Fishery Agribusiness Modernization Framework Plan 3. Conduct of study on characterization of traditional farmers 4. Planning and Development of the Agribusiness Modernization PPAs 5. Advocacy and Adoption of Agribusiness Modernization Plan 6. Implementation of Agri-fishery Agribusiness Modernization Programs and Projects 7. Performance Monitoring and Assessment 8. Conduct of regular meetings and conferences Output 1 State of the Agri-fishery Sector 1 consultationworkshop 1 agribusiness modernization framework plan 1 study and proposal prepared 2 trainingworkshops at least 10 projects packaged Presentations to various conferences and meetings Key programs and projects Timeframe Q1 of every year Q1 2012 Q1 2012 Responsible Entity DA/NEDA Budgetary Reqt (PhP) 5,000

AgriSeCom members

20,000

Q3 2011

Friends of RDC

20,000

Q2 2012

AgriSeCom, agencies, LGUs

150,000

Q1 2012, continuing

AgriSeCom, Agency/LGU champions

50,000

Agencies/ LGUs

1 performance report

Q1 2012

DA/BAS/RLH Us AgriSeCom

50,000

Quarterly meetings, conferences/ workshops

Every quarter, as need arises

80,000

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