Long Quiz - Agricultural economics (Oct 28)

Agriculture

is the lifeblood of the Philippine economy not just as a means of livelihood for millions but as a cultural and historical backbone that connects generations.

1. Perfection competition

2. Monopolistic competition

3. Oligopoly

4. Monopoly

What are the 4 market structure?

Rice, corn

What are the Products under perfect competition

Organic bananas, coconuts, cacao

What are the Products under monopolistic competition

Sugar, Cavendish banana (export), Pineapple (export), Yellow corn

What are the products under oligopoly?

Tobacco, Abaca

What are the products under monopoly?

1. Climate change and extreme weather

2. Land fragmentation and limited access

3. Low productivity and mechanization barriers

4. Poor infrastructure and post harvest lost

5. Aging farmers and youth outmigration

6. High input costs and limited financing

7. Lag in technology adoption and extension services

What are the 7 agricultural challenges in the Philippines?

Climate change & extreme weather events

Each year sees about 15 to 20 typhoons alongside prolonged droughts, heavy monsoon flooding, and unpredictable,. These hazards destroy crops and infrastructure, disrupt supply chains, and drive-up production costs.

Land fragmentation and limited access

A persistent agriculture problem in the Philippines is this problem to secure land tenure. The typical Filipino farm is not only small and fragmented but often lacks clarity in legal ownership or long-term lease arrangements.

Low productivity and mechanization barriers

The Philippines farm productivity lags behind its ASEAN neighbors. The average yield per hectare for staple crops remains 30-40% lower than top Asian producers. High inputs costs and inconsistent availability of seeds fertilizers, and plant protection tools further depress farm productivity and reinforce and the -income trap.

Poor infrastructure and post-harvest loss

The agriculture problems in the Philippines cannot be solved without addressing long-standing deficits in rural infrastructure. Poorly maintained roads, unreliable irrigation, limited grain storage, and a lack of cold chain facilities.

Aging farmers and youth organization

The average age of a Filipino farmer is now close to 58 and continues to rise. Rural youth, seeing little profit or promise in traditional farming, are migrating in droves to urban centers or overseas. Critical implications for labor availability, innovation adoption, long-term food security.

High input costs and limited financing

Rising costs of seeds fertilizers, fuel and pest management tools have squeezed Filipino smallholders - especially since 2021 when global fertilizer costs surged by over 45%. Combined with limited access to affordable credit, this creates ‘‘profitability trap’’

Lag in technology adoption and extension services

The global agriculture sector is rapidly digitalizing, but much of the Philippines’ rural landscape remains dependent on manual, traditional practices.

As a result, yield stay low, crop losses remain high and the ability to respond to climate, pest and market changes is significantly constrained.

1. Financing agriculture

2. Production

3. Marketing

4. Industrialization

5. Land Tenure

6. Taxes & Subsidies

7. Economic infrastructures

What are ECONOMIC PROBLEMS in agriculture?

1. Attitude, values and cultures

2. Public Administration

3. Health

4. Education

5. Population

6. Religion

What are NON-ECONOMIC PROBLEMS in agriculture?

Production

is the method of turning raw materials or inputs into finished goods or products in a manufacturing process.

1. Land

2. Labor

3. Capital

4. Enterpreneurship

Four factors of production?

Land

has a broad definition as a factor of production and can take on various forms from agricultural land to commercial real estate to the resources available from a particular piece of land.

Oil and gold

natural resources that can be extracted and refined for human consumption from the land.

Labor

refer to the effort expanded by an individual to bring a product or service to the market. 

Capital

refers to the purchase of goods made with money in production.

Enterpreneurship

is the secret sauce that combines all the other factors of production into a product or service for the consumer market.

The production function

is a purely physical relationship used to describe the quantity of inputs required to product a given quantity of output. It specifies the maximum possible output that can be produced for a given amount of input or alternatively the maximum quantity of input necessary to produce a given level of output. 

Returns to scale

The output effect of a proportional increase in all inputs. They affect the optimal scale, or size of a firm and its production facilities.

Returns to a factor

The relation between output and variation in only one input.

Factor producitivity

is the key to determining the optimal combination of inputs that should be used to manufacture/ produce a give product.

Total Product (Q)

a measure of the total output or product that results from employing a specific quantity of resources in a given production system.

Marginal product (MP)

the change in output associated with one-unit change in the factor input, holding all other inputs constant.

Law of diminishing marginal returns

As the quantity of a variable input increases, the resulting rate of output increase eventually diminishes.

Stage 1 Production

is defined by a level of input use that is to the left of point A, where AP = MP. Stage I is an “irrational” stage of production, in the sense that the producer can become more efficient if he or she increases the quantity of input used.

Stage 3 Production

includes all input levels greater than the point at which MP becomes negative. In this stage, the producer is using too much input, since total productivity diminishes with each additional unit of input use.

Technological change

change that allows the same level of inputs to produce a greater level of output. Allows production of the same level of output with a smaller number of inputs.