March 4, 2010

El Niño drought may further contract Philippine crops in Q1

The Philippine agriculture sector might contract this quarter due to billions of pesos worth of crop damage from an El Niño-induced drought, newly appointed Agriculture Secretary Bernardo Fondevilla said on Wednesday (March 3).

Fondevilla said the department might further revise growth forecasts for the year to take into account the overall effects of El Niño on agriculture.

Based on a February 22 report of the agency's Central Action Center, El Niño damages on crops could have reached PHP7 billion (US$152.17 million).

But recent reports showed that figure might have breached the damage forecast of PHP8 billion (US$173.91 million) under a mild El Niño episode. As of March 1, unverified reports revealed as much as PHP11 billion (US$239.13 million) worth of damages on unhusked rice, corn and high-value commercial crops.

El Niño is an abnormal weather pattern caused by the warming of the Pacific Ocean. It is characterised by climatic aberrations around the world - warming in South America, torrential rains in North America, and drought in Southeast Asia and Australia.

Fondevilla said they were expecting PHP11 billion (US$239.13 million) in damages under a moderate El Niño, while a severe episode could easily cause PHP20 billion (US$434.78 million) worth of crop damage until May.

A severe dry spell could lead to losses of 816,372 tonnes of rice worth PHP12.24 billion; 440,429 tonnes of corn worth PHP5.2 billion; 42,362 tonnes of fish worth PHP2.54 billion; and 3.08 million tonnes of high-value crops worth PHP443 million.

Earlier, economists projected farm output to post flat growth or even decline this quarter because of the drought.