Year: 2010 Vol.: 59 No.: 1
Authors: Angela D. Nalica
When the strong El Nino episode in recent history happened in 1998, gross value added of the rice sector in the Philippines declined by as much as 24% while other crops were able to keep the decline to within single digit level. The convergence hypothesis was verified among the Philippine provinces with reference to rice production. Convergence could mean harmonized efforts among various stakeholders to increase production and hopefully aim for food sufficiency. Divergence on the other hand could imply the need for structural assessment of the sector including the goals of various stakeholders, so that an optimal strategy that can stimulate development will be identified. A spatial term is incorporated into the model, providing empirical evidence for the need to localize rice production policy programs across the country. The spatial term also accounts for the natural endowments of the producing provinces that complement those policies in realizing progress in the sector. Rice production among the Philippine provinces diverged in the period 1990-2002. The El Nino episode of 1998 pulled down rice yield by as much as 10% aggravating further the divergence among provinces.
Keywords: spatio-temporal model; backfitting; autoregression; convergence hypothesis; agricultural growth