Republic of the Philippines

Central Luzon State University

Science City of Munoz, Nueva Ecija

ABEN 3421
Laboratory

AB Products Processing and Storage

LABORATORY EXERCISE 1
Trends in Agricultural Processing

Members:
Aquino, Zack Philip
Montero, Benjamin
Pagani, Clarizza Jane
Pelagio, Melissa
Ponce, Christian Aurhel
BSABE 3-3

Submitted to:
Mrs. Camaso Eliza
 ABEN3421 (Laboratory)
AB Products Processing and Storage
LABORATORY EXERCISE 1 – Trends in Agricultural Processing

I. INTRODUCTION
The agriculture and food production industries face enormous challenges in feeding our world's
growing population while reducing the environmental impact. It is estimated that by 2050, we will
need to increase food production by up to 68 percent. Furthermore, there is an increase in the world's
middle-class population, which usually means an increase in demand for meat. These are enormous
challenges for our already troubled planet, as the food system accounts for up to 26% of greenhouse
gas emissions. Let's take a look at some of the key trends that will help us reimagine the entire
agricultural and food production ecosystem. Technologies help us to have an efficient farming system.
Some methods of farming are created hydroponics, aeroponics, and aquaponics. Traditional farming
methods are still used in some areas of the Philippines. To feed the world's growing population, we
must increase farm utilities and change farming methods. Agriculture accounts for approximately 8.6
percent of the Philippines' Gross Domestic Product. Agricultural products are abundant, low in value,
and highly perishable. The inherent nature of these products, the country's tropical setting, a lack of
post-harvest infrastructure and facilities, the method of handling, and the multi-layered distribution
system are all major contributors to massive losses. From initial harvesting, grading, and packaging to
field-to-transport, storage, and distribution to Filipino customers, up to 50%, post-harvest losses have
been recorded. To address these challenges, agricultural processing needs to be improved and the links
between agricultural products, agricultural services, industry, and technological resources and
agricultural processing need to be strengthened.

II. OBJECTIVES
After performing the exercise, the students should be able to:
1. familiarize the students with the Trends in Agricultural Processing;
2. identify the Potential of Philippines Agriculture for Agro-Processing; and,
3. Identify Issues involved in the agro-processing sector.

III. ACTIVITY
Make a group composed of 5 members. Prepare a research paper about Trends in Agricultural
Processing
You can use this in preparing your discussion/ or make your flow of discussion
1. Introduction
2. Significance of Agricultural Processing
3. Potential of Philippines Agriculture for Agro-Processing
4. Issues involved in the agro-processing sector (Foodgrains, policies, and regulations)
5. Discuss other relevant information
IV. RESULTS AND DISCUSSION
Significance of Agricultural Processing.
The agricultural industry provides food for the community. It generates raw ingredients for the
food, pharmaceutical, cosmetics, and energy industries, among others. The resources are visibly
deteriorating because of a range of difficulties. It is the dying sector that is essential to long-term
survival. A growing population is just one of many challenges faced by the agricultural sector, which
necessitates more supply to satisfy market demand. Furthermore, the evolving world gives birth to
new challenges for the agricultural sector as it is impacted by shifting weather patterns posed by
climate change and other emerging concerns. Development is the key to get through the arising
problems. It encompasses new techniques of material production and processing in the industry.
Agricultural processing includes changing, packing, and sorting goods with the purpose of preserving
food, increasing crop value, and preventing or reducing losses. Agricultural goods are the most
difficult to properly maintain, and their biological component makes them more vulnerable to
damages. The changing environment due to climate change makes it harder for agriculture to safeguard
their harvest. Products necessitate a favorable environment and to be properly stored and packaged for
them to survive or maintain their quality. Agricultural processing also gives agriculture new options
to adjust to and minimize the effects of climate change by effectively managing goods.
Agricultural products, specifically corn, can be used as human food, animal feed, and other
industrial products. It is being process by wet and dry milling to produce variety of products such as
corn starch, corn gluten oil, corn gluten feed, corn gluten meal, corn steep liquor, and ethanol.
Processed raw materials are more efficient, may be used in more ways, and have a longer shelf life.
These processed goods aid the corn sector in increasing value, extending shelf life, and increasing
product efficiency and may be able to export its products, allowing it to service a global market.
Another agricultural product, bananas, the world's most traded fruit, is exported from the Philippines.
According to United Nations International Trade Statistics Database (UN COMTRADE) and
International Trade Centre Statistics (2018), the global banana exports totaled US $12.09 billion in
2017 which 9 percent of it were from the Philippines. Due to their composition, banana is difficult to
pack, store, and transport. The Philippines, on the other hand, can accommodate neighboring countries
such as China, Japan, and Korea due to proper processing and packaging, which contributes to their
export revenues and their economy.
Despite the huge demand, agricultural waste is still prevalent. During and after the production,
agricultural goods are also susceptible to loss when they are stored or packed. The agriculture industry
suffers losses even from production. According to the Food and Agricultural Organization (FAO),
post-harvest losses in developing countries can be as high as 10% to 50% of total agricultural output.
Cereals and pulses, such as rice and corn, as well as fruits and vegetables, have the biggest global
losses. Agricultural processing encompasses not only the adding of value to the finished product, but
also the turning of agricultural waste into a useful product. According to Brancoli et al. (2018), wheat
straw is a common agricultural waste that has a lot of potential for making liquid or gaseous biofuels.
It may also be used to make particle board illustrations, extract arabinoxylans, and produce bioenergy.
Agricultural processing can help narrow the gap between demand and supply for agricultural
products by enhancing the efficiency of production and by creating a sustainable food system.
Agricultural goods can now adapt to the new environment brought on by climate change and other
difficulties by regulating crop quality through agricultural processing. It will aid agricultural industry
in preserving food, increasing value, creating animal feed, and producing high-quality and safe food
that can be beneficial for food security, poverty alleviation, and high-yielding agriculture.
Potential of Philippine agriculture for agro-processing
Agro-processing of Philippine Agriculture has been shaped by its nature of cropping, natural
disasters, climate, governmental support and agriculturists’ implementation and performance.
Nevertheless, Philippines as an agricultural country has so much potential for new and more developed
agro-processing.
According to the Policy Advisory No. 2009-08, Agro-processing is something that the Food
and Agriculture Organization (FAO) focuses on as a branch of manufacturing that deals with raw
materials and their processing between harvesting and final usage, agricultural intermediate products
are produced. There have been big players in the Philippine industry of food-processing such as San
Miguel Food Corporation which dominates the food and beverage industry with its purchase of
Purefoods. Its products ranged from processed meat to beer. The other companies are Universal
Rubina Farm, CDO, Marsman Drysdale, Dole Philippines, Del Monte Philippines, and Swift Foods
Inc. These corporations control around 80% of the total processed food and beverage market. They're
also the most important exporters. The remaining 20% is split evenly between small and medium-
sized agro-processors. A few companies dominate the coconut processing sector, one of which is
Franklin Baker. Capansana conducted a survey of the Philippines' food processing industry. The
majority of food processors are located in the National Capital Region. Region 4 is the most populous,
followed by Region 5, Region 6, and Region 8. Despite the fact that food production is concentrated
in rural areas, the majority of the population lives in cities. Processing factories are placed near urban
centers such as Metro Manila, Cebu, and Davao are the three main cities in the Philippines.
Additionally, the article by Cecilio P. Costales titled “Adjustments in the Agro-processing
Industry and the RP-US FTA” shows more proof why the Philippines has so much global competence
potential. Based on the said article, the Philippines is the world's leading provider of abaca fiber, coco
coir fiber, processed mango and banana chips. While poultry and floriculture are still in critical
development and start-up stage respectively.
On the other hand, there are factors that make it difficult for the Philippine agriculture to
harness its global potential in terms of agro-processing. Based on a report in the Department of
Agriculture website last December 2, 2021, DA is requesting an additional P12 billion on top of the
planned P95 billion budgets for 2022 to address the "new world's" rising food and agriculture issues.
Secretary Dar was also quoted to have said that next year and beyond, these global difficulties will
continue to have a negative influence on food production, distribution, and consumption. As a result,
there is a perceived need for increased budgetary support in the Philippines, as well as for us at the
Department of Agriculture.
Additionally, there is also a report by Czeriza Valencia of the Philippine Star addressing the
need for the sophistication of the Philippine agro-processing. As stated in the news, according to the
state-run think tank Philippine Institute for Development Studies, establishing a robust agro-
processing sector may considerably raise the complexity of Philippine exports, which has barely
improved in two decades (PIDS).
Static converters, semiconductor devices, telegraph equipment, electric capacitors, electronic
printed circuits, cruise ships, and ferry boats were all included in the export portfolio in 2014, but they
only accounted for a small portion of the country's total export revenues. This was attributed to the
Philippines' failure to create a strong manufacturing sector from an agrarian base before transitioning
to a service-oriented economy.
 Harnessing the potential of the Philippine agriculture in agro-processing almost rely on
implementing the projects prior to its development. So far, the timely project spent for agriculture was
stated by the article in Food and Fertilizer Technology Center Agricultural Policy Platform (FFTC-
AP). The Philippines is on a higher growth path, with a sustained growth rate of 6.3 percent from 2011
to 2016. To secure the means for improving people's lives, a long-term national vision involving a
combination of social, economic, and institutional processes was established through the "AmBisyon
Natin 2040." The Philippine Development Plan (PDP) 2017-2022 was anchored on this platform
pursuant to Executive Order No. 5, s. 2016. The overall strategies are divided into three pillars:
Malasakit (to improve the social fabric), Pagbabago (to reduce inequality), and Kaunlaran (to increase
the economy's potential growth), all of which will be supported by a strong foundation in national
security, infrastructure development, and ecological integrity. The development agenda was crafted in
accordance with the President's 10-point Socioeconomic Agenda and is the result of consultation with
stakeholders and the general public.

Issues involved in the agro-processing sector (Foodgrains, policies, and regulations)

Since the pandemic began, the agriculture sector has been one of the most affected by the
sudden closure of borders, and it has taken a long time to fully open until now. In fact, according to
the Department of Agriculture's 2020 year-end report, 2020 has officially become the most difficult
year for the Philippine agriculture sector. However, it is also the year in which the sector stands to
help the country provide a consistent and affordable food supply for the population, not just in that
year, but since World War II.
On the other hand, the agro-processing industry demonstrates its importance to the country.
TNAU Agritech defines agro-processing as a set of technoeconomic activities performed to conserve
and handle agricultural produce to make it usable as food, feed, fiber, fuel, or industrial raw material.
As a result, the scope of the agro-processing industry includes all operations from harvest to delivery
to end users in the desired form, packaging, quantity, quality, and price. The agro-processing sector
was thrust into the spotlight as the global financial crisis unfolded. Moreover, the agro-processing
sector has proven to be one of the more reliable sources of growth for the domestic economy.
According to Congressional Policy and Budget Research Development (CPBRD), its gross value
added is on the rise, increasing at a moderate annual average of 4.6 percent from 2000 to 2008.
However, numerous issues were aligned and are still being faced by the sector. These are
primarily:
Losses
Numerous losses were discovered in the same sector. According to Mopera (2016) in the
Journal of Developments in Sustainable Agriculture, more than 40% of food losses in the Philippines
occur during the production, postharvest, and processing stages. He also mentioned that in
overcrowded Southeast Asian countries like the Philippines, agricultural production and postharvest
handling and storage are stages in the food supply chain that have been identified as having relatively
high food losses. In his Journal, the estimated agricultural food production and post-harvest losses in
cereals 22,149.10 in metric tons and losses ranging from 9 to 37 percent, while fruits and vegetables
have a production of 49,706.80 in metric tons and losses ranging from 27 to 42 percent in 2012.
Lack of adequate infrastructure
 Agro-processing is heavily influenced by a lack of adequate infrastructure. According to Llanto
(2012) in his discussion paper The Impact of Infrastructure on Agricultural Productivity, the country
has underinvested in infrastructure at around 2% of GDP on average, compared to the 5% norm for
other ASEAN countries. He went on to say that as a result, the country's infrastructure has failed to
keep up with the growing needs of the economy and population. Poor and insufficient infrastructure
has also contributed to the country's lack of attractiveness as an investment destination. It has also
become a major growth constraint.
Low-cost labor
According to the Department of Trade and Industry's Policy Briefs Series No. 2017-11, the
Philippine agriculture sector employed approximately 11.3 million people or 29 percent of the
country's 39 million workforces; it was the second-largest employer after services. Despite this, the
same paper reveals that daily wages in agriculture are slightly lower than those in non-agriculture.
Rural wage rates have fallen in real terms in comparison to other Asian countries, as the rural
population has grown.
Availability of the raw products
Gutierrez (2009) mentions raw material availability and consistency of supply as one of the
challenges or issues in her paper Philippine Agro-Processing Industry: Prospects in a Time of Crisis.
Seasonality effects, according to Gutierrez (2009), include high financial requirements during months
of high supply for primary processing and inventory of raw materials for future production, under
capacity processing plants in commodity-specific processing equipment and machineries, higher
prices during the off-season, and risks associated with product failure due to disease outbreaks and
weather disturbances such as dry spells and typhoons.
Inadequacy of industry quality standards
Gutierrez (2009) cites a lack of standards as a major concern for the processing's ability to
enter foreign markets in the same paper. As part of their quality requirements, importing countries
implement food safety standards certification for Hazard Analysis Critical Control Points (HACCP),
ISO, FAO, WHO, and Codex Alimentarius. However, there is a concern about how different countries
apply the Sanitary and Phyto-Sanitary (SPS) provisions within the framework of the WTO. An
argument has arisen regarding the use of SPS measures that exceed the Codex levels as a non-tariff
barrier related to protectionist interests rather than health concerns.
Property rights
Despite decades of agrarian reform, Briones (2008) claims that property rights reform in
private lands remains a problem. Prolonged implementation jeopardizes farm investments, particularly
in long-term land improvements. As a result, the latter's growth and expansion are critical, as the agro-
processing industry heavily relies on the domestic agricultural sector for raw materials.
Other relevant information – updates and recommendations
Department of Agriculture’s updates on Agricultural programs and Innovations

The Department of Agriculture held an annual consultative conference called “Sulong

Pilipinas” which aims to collect ideas, feedback, and discernments from farmers, retailers, and all the
stakeholders in the agricultural sector, in order to create better planning and developments for its socio-
economic priorities. And the latest e-conference was held on 26th of April 2021, the conference was
led by DA Secretary William D. Dar, the report on agricultural innovation with response to the Covid-
19 pandemic was an eye opener according to Secretary Dar, the pandemic showed how weak our
agriculture is, especially for the supplies of key commodities (rice, corn, vegetables, poultry,
livestock).
However the programs for technological and infrastructural projects are on process, the DA
Rice Competitiveness Enhancement Fund (RCEF) program was able to provide credit facilities,
capacity-building, inbred seeds, and training programs for our local farmers, and as a result the rice
industry has achieved 19 million metric tons of produce last 2020, and the increase of production in
the first quarter of 2021 was about 7.2 percent. With these results and continuous application of
programs in the rice industry, the DA said that it aims to hit 93% rice sufficiency in 2021.
Also, the Urban Agriculture program and the progress for establishing landing sites, facilities,
and more infrastructure developments were said to be strengthened, the response to lack of facilities
and infrastructures are addressed and on the process of funding. With these programs for agricultural
developments, the agro-processing sector can now address the great losses from grain produce and
other commodities with the help of new facilities, infrastructures, and training programs. Other
commodities such as poultry and livestock was also addressed, the DA pushed for faster dissemination
of vaccines in the hog industry when the African Swine Fever (ASF) has infected many regions in the
country, and the result was an immediate decrease in cases by the first quarter of 2021.
The DA also promoted the insights for opportunities of agriculture in terms of smart
agriculture, the DA mention the insertion of modernized technology that will boost up the productivity
of all agricultural industries.

Evaluation and Recommendations:

Proper processing procedures, materials and facilities for raw produce leads to minimal losses,
less waste, and better profit for farmers and retailers, however due to lack of strong implementation of
policies for agro-processing here in the Philippines, the fruit of agriculture is compromised.
Development plans
Strategic plans are needed in order to make an organize flow of troubleshooting challenges in
the agricultural sector, and the participation of the local government, farmers, and retailers are highly
needed in order to implement the best solutions for the present time. The local government should take
the lead in terms of implementation of development plans, because until now the agro-processing
industry is weak in advance operations (Costales 2008).
Technological development
Agro-processing is not possible without processing facilities, and funding for better facilities
will be a solution for poor utilization and storage of raw materials. In a recent report, over 50% losses
are recorded from initial harvesting, grading, packaging, and transportation of raw produce from field
to storage and distribution to consumers (Mopera 2016), the rise in population and stagnant
infrastructure storage facilities can later become a crisis for our country if not addressed, if the 50%
losses could be lessen, farmers and retailers will have better profit, and even the economy of the
country could improve.

V. REFERENCES
Pan, Z., Zhang, R., & Zicari, S. (Eds.). (2019). Integrated Processing Technologies for Food and
Agricultural By-Products. Academic Press.
Lopez-Hidalgo, A. M., Sánchez, A., & De León-Rodríguez, A. (2017). Simultaneous production of
bioethanol and biohydrogen by Escherichia coli WDHL using wheat straw hydrolysate as
substrate. Fuel, 188, 19-27.
Department of Agriculture. (2019). Banana Industry Roadmap 2019-2022. Retrieved from
https://www.da.gov.ph/wp-content/uploads/2019/06/Philippine-Banana-Industry-Roadmap-
2019-2022.pdf
Official Portal of the Department of Agriculture. 2022. DA requests P12-B more, on top of proposed
2022 budget, to address food, agri global challenges - Official Portal of the Department of
Agriculture. [online] Available at: <https://www.da.gov.ph/da-requests-p12-b-more-on-top-
of-proposed-2022-budget-to-address-food-agri-global-challenges/> [Accessed 8 February
2022].
FFTC Agricultural Policy Platform (FFTC-AP). 2022. Philippine Development Plan 2017 to 2022
for Agriculture, Forestry and Fishery Sector: Sustaining Inclusive Economic Growth.
[online] Available at: <https://ap.fftc.org.tw/article/1195> [Accessed 8 February 2022].
Philstar.com. 2022. Stronger agro processing sector improves exports mix. [online] Available at:
<https://www.philstar.com/business/2019/11/20/1970150/stronger-agro-processing-sector-
improves-exports-mix> [Accessed 8 February 2022].
Gutierrez (2009). Philippine Agro-Processing Industry: Prospects in a Time of Crisis. Congressional
Planning and Budget Department. https://cpbrd.congress.gov.ph/
Department of Agriculture (2020). Philippine Agriculture Rises to the Challenges of all Times.
https://www.da.gov.ph/wp-content/uploads/2020/12/2020-Year-end-Report.pdf
TamilNadu Agricultural University, n.d. Agroprocessing.
http://www.agritech.tnau.ac.in/agricultural_marketing/agrimark_AgroProcessing.html
Department of Trade and Industry (2017). The Philippines in Agribusiness Global Value Chains.
https://industry.gov.ph/
Briones (2008). Addressing Policy Issues and Constraints in Agricultural Diversification: The
Potential Contribution of the Fruits and Vegetables Subsector. PIDS Policy Notes No. 2008-
12.
Costales, C. P. Adjustments in the Agro-Processing Industry and the RP-US FTA.
Mopera, L. E. (2016). Food loss in the food value chain: the Philippine agriculture scenario. Journal
of Developments in Sustainable Agriculture, 11(1), 8-16.
Sulong Pilipinas 2021: Da's updates on agricultural programs and Innovations (April 26, 2021).
Official Portal of the Department of Agriculture. (2021, April 26). Retrieved February 10,
2022, from https://www.da.gov.ph/gallery/sulong-pilipinas-2021-das-updates-on-
agricultural-programs-and-innovations-april-26-2021/

VI. EVALUATION
Formative assessment: Submit final output on the deadline set per section as indicated in your
respective classwork tab. Submit your outputs to our google classroom
Everyone should click ‘Mark as Done’ only when you have already submitted your output. Failure to
do so on or before the deadline will result in a reduction in points. Late submission of outputs will
also get a reduction in points.