ANALYZING THE IMPACT OF AGRICULTURAL STATISTIC ON RICE FARMAR’S ANNUAL AVERAGE

INCOME PHILIPPINES/ NIGERIA

A Research Proposal
Present to the
Graduate school
Adamson University

In Partial Fulfillment of the Requirements

In Research method

Summited by:

Ogu Confidence C.
Fidawos Olowo

Submitted to:

Dr. Catherine Q. Castaneda

 Table of Contents

CHAPTER I .................................................................................................................................... 3
Introduction ................................................................................................................................. 3
The Problem ................................................................................................................................ 6
Objective ..................................................................................................................................... 6
General Objective .................................................................................................................... 6
Conceptual Framework ............................................................................................................... 6
Hypothesis ................................................................................................................................... 7
Significance of the Study ............................................................................................................ 8
Scope and Limitation .................................................................................................................. 8
Definition of Terms ..................................................................................................................... 9
CHAPTER II................................................................................................................................. 10
Review of Related Literature and Studies ................................................................................. 10
CHAPTER III ............................................................................................................................... 21
Research Design and Methodology .......................................................................................... 21
Method of Research Used ......................................................................................................... 21
Sample and sampling Technique .............................................................................................. 21
Respondent of the Study ........................................................................................................... 22
Instrument Used ........................................................................................................................ 22
Statistical Treatment of Data ..................................................................................................... 22
Financial Requirement .................................................................................................................. 22
Time Table of Activities ............................................................................................................... 23
Reference ...................................................................................................................................... 26
Article and Journals ...................................................................................................................... 26
 CHAPTER I

Introduction

As the Philippine economy expands its structure changes. The output share of agriculture
fell by 14 percentage points over the period 1986 – 2015 while its employment share fell by 21
percentage points. And while agriculture still provides employment for a sizable 29 percent of
workers, its output share is only 10 percent. Hence, productivity of the average worker in
agriculture is only about a third that of the average worker. Likewise, the basic pay of an average
agricultural worker is below half that of the average worker. In 2012, most of the working poor
(66 percent) were in agriculture. Average daily basic pay in agriculture in 2015 was virtually
identical to its level in 2001 in real terms. Availability of full‐time work is limited, compared to
the industry and services sectors.

In 2015, the visible underemployment rate in agriculture was 20percent, compared to 11 percent
for the economy as a whole. About forty percent of all underemployed workers are in
agriculture. It is unclear to what extent workers in agriculture have benefitted from the recent
growth acceleration and tightening of labor markets, in which per capita GDP increased by an
annualized rate of 4.8 percent from 2011 – 2016, while unemployment fell from 8.8 percent to
5.5 percent. Clearly, inclusive growth requires boosting incomes of workers currently in
agriculture, either by shifting than to better‐paying jobs outside agriculture, or raising wages
within agriculture. The two options are interrelated in rather complex ways; for instance,
increasing demand for labor outside agriculture may induce migration of agricultural workers,
and push up farm wages. A further consideration is the widening base of the rural economy,
which encompasses more than just agriculture – as in most other countries, rural workers in the
Philippines may engage in either or both farm and nonfarm occupations.

A comprehensive socioeconomic profile of agricultural workers will facilitate identification and

prioritization of their problems, opportunities, and constraints, and design appropriate programs
for rural households and their employment. The formulation of appropriate rural employment
strategies however is however stymied by the lack of socio‐economic characterization of
agricultural workers. To address this, the author has proposed a socio‐economic survey of
agricultural workers, to be conducted in 2018

The information could be applied in modeling for the agricultural labor market outcomes
in the context of the author’s parallel work on applied general equilibrium modeling of the
Philippine economy and agriculture. In preparation for the data gathering, this study undertakes a
review, covering available literature and secondary data to determine the scope and limits of
existing data. The results of this review are presented in this Report.

Emergency rice initiative: Socioeconomic analysis of rice farmers in Nigeria

The world’s population is projected to increase from 6.8 billion people today to 9.4
billion people by 2050, meaning that there would be an increasing need to produce more
food over the next 50 years than has been in the past 10, 000 years combined (FAO, 2009).
Compounding this challenges are the effect of climate change and limited natural resources.
Nigeria is a country with a population of over 138.3 million people, about 14.3% of the
total African population and 2.1% of the world’s population (Komolafe, 2007), with an
estimated land area of about 923.768 km2, of which half is arable.
The country is richly endowed with abundant natural, human and material resources,
but has not been able to harness these sufficiently and efficiently enough to meet the food
needs of the nation (World Bank., 1996). The size of the poor population in Nigeria who
are mostly farmers in the rural areas rose from 35 million in 1992 to 44 million in 1995 and by
the year 2007, it has risen to 70 million persons (U.S Census Bureau, 2008; Okunmadewa,
1997). The annual per capita expenditure of the poor rose from N593 in 1985 to N795 in 1992
and then dropped to N720 in 1995. Presently the poor population in Nigeria like most other
developing countries spend between 50 to 80% of their income on foods. More alarming is also
the fact that about 50% or more of the population still live on US$ 1 (N140) per day or less
and the distribution of wealth remains unequal and exclusive. These facts obviously show the
worsening nature of poverty in Nigeria, the consequences of which is increasing level of
food insecurity, strive, and civil war. Deficient situation in national food self-sufficiency
has continued to be a reocurring phenonmenon in Nigeria (Aromoralan, 2000; Ado, 2005).
Currently Nigeria spends more than $3 billion annually on food importation. More recently
about N80 billion was released from the Natural Resources Development Fund (NRDF) for
the importation of 500,000 metric tons of rice and 11,000 metric tons of grains to
compliment local production and ease the scourge of food crisis that is recently hitting the nation
very hard (Kolapo, 2008a).
Rice has become the most important staple crop in making billions of people around
the world food secured, it feed more than half the world’s population. However, increase in
rice productivity lags behind other crops. Reason for this include lack of adequate
investment to improve varieties and yield, diminishing land and water resources, and
environmental stresses. According to Baje (2008) and Ikeokwu (2008), the recent food
price increases are a major cause for concern around the world – the price of rice has
doubled. In March 2008, rice prices on the world market were at a 19-year high in real terms
price in the mid-1990s (FAO. 2008a). In developing countries, where most of the household
income is spent on food, increased food prices are undermining attempts to reduce hunger and
pushing some of the world’s poorest people into abject poverty (World Bank, 2001a, b).
The underlying causes of the most recent increases in food prices are complex and include
factors such as increased demand from rapidly growing economies, poor harvests due to an
increasingly variable climate, higher energy and fertilizer prices. It is undeniable that over the
past century, agricultural science and new technologies have boosted production, with
enormous gains in yields and reductions in the price of food (Lupine and Menza, 2004).
 Three province’s in the Philippine for rice farming are, Nueava vizcaya, Pampanaga .
Three provinces for rice farming in Nigeria are Benue, Ekiti, and Kaduna.

The Problem
1. The current income of rice farmers is low and has serious effect on families’ nutrition and
their capacity to afford basics need.

2. The important to survey the average income of rice farmers and suggest the correctives
measure to improve the solution.

Objective

General Objective
 The general objective is to do a ‘survey on rice yield income in Philippines and Nigeria in
the last five years and analyze the effect of the income on families’ lives.

Specific Objectives

1. To review the statistics of rice yield, agricultural production average income in the last
five years.
2. To find out the causes of why the rice shortage in Philippines and Nigeria.
3. To determine the extent which the rice yield affect others socials cultural aspects of the
family life.
4. To encourage the production of the others agricultural productivity omit the losses in
income to poor rice production.
5. Review the best practices of the advanced countries that can be imputed to the plan in the
Philippines and Nigeria.
6. To suggest solutions that help to improve the rice yield in the Philippines and Nigeria.

Conceptual Framework

The participate in the Rice Farmer’s Annual Average income is expected to be influenced
by selected test and preference (low knowledge of farmers, natural calamities*(flood, tropical
cyclone frequency, disaster damage) and climate changes. (Figure 1) Rice farmers who produce
high and low quality of rice are still subjected to test and preference by the market shareholders
 and government for not meeting the number consumer demand for rice which will lead to
importation of rice from other neighboring country.

Despite the challenges face by the farmers like flood, yeast infection, rainfall,
temperature and other extreme weather event the farmer’s expectation in yield forecast and
perceived yield risk which will lead to their income (farm income and non-farm income). The
premium price only benefit the imported rice which will still leave the rice framers on same
annual average income without improvement in their yield production for rice farming.

Low knowledge of farmers Natural calamities Climate changes

POOR RICE PRODUCTION OF FARMERS

The farmers can’t put

Low capacity to buy Poor income of rice farmers children to school and
others basics expenses.
Figure 1.

Hypothesis

Ho1: There is a significant difference in the rice yield that affects the farmer’s income and in the
percentage of rice farmer’s production.

Ha1: There is no significant difference in the rice yield that affects farmer’s income and the
percentage of rice farmers’ production.
Ho2: There is a significant difference between the causes of rice shortage which affect the
farmer’s income.

Ha2: There is no significant difference between the cause of rice shortage which affect the
farmer’s income.

Significance of the Study

This study aims is to give deeper understanding of the subject matter as it investigates on
the issue.

The finding of this study may be useful to the Department of agriculture and other
agricultural sector who have invested in the rice sector. The various area covered can provide
insight to the low annual average income of rice farmers in Philippines and Nigeria in order to
assess the existing procedure while the new ideas presented may enable the agricultural sector to
review its policies.

This research will benefit the government in term of increasing the rice production and
the farmer’s income in order to have better life and provide for the family. It will encourage the
farmer’s to produce more rice yields, which will reduce the rate of importation of rice in the
country.

Scope and Limitation

Due to the time constraint of the researchers, the study focuses on analyzing the impact of
agricultural statistic on rice farmer’s annual average income in the Philippines/Nigeria.

The researcher will entirely rely to the primary data which will be obtained from various places
and the framers.

The study is to assess the rice farmer’s annual income from the selected villages or
barangay. The study covered at least 3(three) barangay from the Philippines specifically Nueava
Ecija, Pampanga area and three barangay from Nigeria which are Ekiti, Kaduna and Benue.
The study focused on the poor income of rice farmer’s with regards to their household
expenditure and the ability to afford other necessity of life. The respondents of the research are
the rice farmers

The limit of the study can be seen in the variable, Palay (Rice), Subsistence Incidence, and
Agricultural household. For agriculture systems we used Irrigation Spending, Rice production.

Definition of Terms

ITEM MEANING
Subsistence Subsistence incidence, on the other hand, is the proportion of the
Incidence population with per capita income less than the per capita food threshold.
Yield Forecast Yield forecasts determine the expected yield at your planned harvest
date. It uses up to date satellite based crop production information and
crop specific yield models to provide further information on future
outcomes.
Premium Subsidy A subsidy is financial assistance that helps you pay for something. It's not
a loan; you don't pay it back. There are two kinds of subsidies available
from the federal government for individual health insurance plans.
Agricultural A household is considered to be an agricultural household when at least
household one member of the household is operating a holding (farming household)
or when the household head, reference person or main income earner is
economically active in agriculture.
 CHAPTER II
Review of Related Literature and Studies

The purpose of this chapter is to present ideas and concept that are related to the study.

Rice Production

The exponential growth rates of rice production, area harvested, and yield from 1970 to
2007. Yield growth was the major factor pushing rice production from 1970 to 1990. Barker
(1984) and Panganiban (2000) attributed the gains in yield to the introduction of inbred MVs,
development of large-scale irrigation systems, information campaigns, and subsidized credit.
However, during 1990-2000 the growth in yield decelerated as a result of the decline in the
world price of rice, stagnant investments in public irrigation, exhaustion of productivity potential
from MVs, and soil degradation 15 brought about by intensified cropping systems (Hayami and
Kikuchi 1999; Mundlak, Larson, and Butzer 2002).

The contribution of land expansion through cultivation of new areas was exhausted in the 1990s.
An increase in area harvested was brought about by crop intensification in irrigated areas and the
development of public and private small-scale irrigation systems (Llanto 2003). Given the
competing uses of land for industrial and residential purposes, the Philippines may need to
produce more rice from less land in the future.

From 2000 to 2007, rice production grew at rates similar to those during the height of the Green
Revolution in the 1970s. Improvement in yield contributed to almost 80% of the output growth.
Irrigated and rainfed yields increased annually by 3% and 4%, offsetting the decelerating growth
in area harvested. Although yield trends provided an indication of productivity change, it did not
adequately explain the real cause of productivity growth. Yield can grow due to the increased use
of seed, fertilizers, labor, and machinery, making it complicated to identify the sources of
potential productivity growth. The production function provided a framework in isolating the
contribution of TFP growth from the role of growth in inputs. Umetsu, Lekprichakul, and
Chakravorty (2003) investigated rice TFP in the Philippines from 1971 to 1990. They
constructed the Malmquist TFP indices using linear programming and regional aggregate data.
Results showed that productivity declined by 2% from 1971 to 1975 followed by a 2.4% growth
from 1976 to 1980. A positive TFP growth of 3.6% was observed from 1981 to 1985, but a 1.8%
drop was seen from 1986 to 1990. The authors attributed the positive TFP growth to the
introduction and rapid adoption of second 16 generation modern varieties (MV2). In addition,
from 1986 to 1990, they ascribed the TFP decline to the intensified rice production in lowland
irrigated farms. Estudillo and Otsuka (2006) also analyzed rice TFP in the Philippines from 1966
to 1999. They used panel data on irrigated farms in Central Luzon to determine factor shares,
which were then used in computing the Tornqvist-Theil productivity indices. In addition, they
related rice productivity performance to the introduction of successive generations of inbred
MVs. The authors noted that the TFP decline from 1966 to 1974, which coincided with the
introduction of first generation modern varieties (MV1), suggested a relatively small contribution
of technological change to productivity growth during this period. Similar to the Umetsu,
Lekprichakul, and Chakravorty study, Estudillo and Otsuka attributed the 1979- 1987 TFP
growth to the introduction of MV2. They also identified that the productivity impacts of MV2
and MV3 were roughly the same size. Growth spurts in aggregate rice production and in per
hectare yield have occurred since 2000. However, it is not clear whether this growth was due to
the increased use of conventional inputs or to TFP growth. This study can provide significant
insights into the sources of rice production growth during this period. Policy makers can use this
information to create policies that can sustain the increase in production.
Rice Production in Myanmar:

At 676,552 km2the Union of Myanmar is the largest country in Southeast Asia. Dueto its
geographic size, Myanmar varies considerably both topographically and meteorologically.
Annual precipitation and monthly mean maximum/minimum temperatures also show
considerable variation over time and space, and are particularly affected by the summer
monsoons. In general, the climate is cooler in the mountainous north and warmer in the
southern Delta areas of the Ayeyarwady River, with monthly mean maximum temperatures from
24.1°C to 38.2°C in May, and monthly mean minimum temperatures from 2.3°C to 20.8°C in
December. Most major rice growing areas, such as the Ayeyarwady, Yangon and Bago
Divisions, are naturally provided with fertile deltaic alluvial soil and abundant monsoon rainfall.
Myanmar has a long tradition of rice production. In the years immediately prior to World War II
it was the largest rice-producing nation in the world, and it continues to be one of the ten largest
rice-producing countries in terms of total yield (IRRI, 2002).Traditionally, rice production
occurred only as a monsoon crop in the rainy season(from the end of May through November).
This changed during the late 1970s and early 80s with the government-sponsored Whole
Township Paddy Production Program that introduced modern high yielding varieties (HYVs) of
rice and thereby enhanced production possibilities. Since that time over 60 HYVs, usually of the
semi-dwarf type, have been introduced, and now comprise 70% of the total lowland rice area
(Nguyen and Tran, 2002). Many of these can accommodate closer spacing, heavy nitrogen (N)
fertilization, continuous cropping and/or are photoperiod insensitive. Overall, this adaptation of
HYVs and the improvement of irrigation systems in some areas of the country has allowed for
the cultivation of rice in the dry summer season and for double cropping. In particular,152 IR50
and IR 13240-108-2-2-3 now occupy 80% of the country’s dry land cultivation area(Kaushik,
2001). By 2001/02, the total overall area sown with rice was roughly 7.3Mio ha with 5.7 Mio ha
under monsoon paddy and 1.6 Mio ha under irrigated summer paddy in rotation (MOAI,
2003).Nonetheless, despite the cultivation of HYVs in many parts of the country, the expected
increases in yield did not happen during the last decade (IRRI, 2002). Rather, the average rice
yield has remained relatively stagnant at 3.2 t ha-1in 1994, 3.3 t ha-1in2000, and 3.4 t ha-1in
2002 (MOAI, 2003). In view of this, the purpose of this study was to examine biotic and abiotic
constraints to production through an in-depth survey of the country’s main rice growing regions.
 Impact of use of credit in rice farming on rice productivity and income in Benin
Kinkingninhoun

Agriculture is the mainstay of most developing countries’ economies. On average, the

sector accounts for 70% of full-time employment, 33% of national income, and 40% of total
export earnings in Africa (Otsuka et al., 2013). Therefore, increasing agricultural productivity,
especially in countries facing land constraints, requires the intensification of farming systems
through yield-enhancing technologies and strategies (Borlaug, 2001; Diao et al., 2007). Rice is
the most strategic food crop in West Africa because of its contribution to food security of the
populations and its impact on the economy of households and countries (Seck et al., 2013; FAO,
2013). In response to the 2008 food crisis, Benin, like several other African countries, developed
policies and programs to boost agricultural production through the intensification of farming
systems with particular emphasis on rice sector development (Republic of Benin, 2011; 2007;
MAEP, 2010). One of the major orientations of these programs is the development of thirteen
promising sectors including rice. The objective is to produce 385 000 tons of milled rice by
2015. In addition, with the support of the African Coalition for Rice Development (CARD),
Benin developed its National Rice Development Strategy (NRDS) in 2010 (MAEP, 2011). In all
these rice sector development programs, one of the key strategies for rice production
intensification is to improve access of small rice farmers to suitable and timely credit. Indeed, it
is generally recognized that credit plays a crucial role in economic development in general and
agricultural development in particular (Diagne and Zeller, 2001; Diagne, 2002; Honlonkou et al.,
2005; Simtowe and Phiri, 2007; Fall, 2008; Simtowe et al., 2008; CTB, 2012). Therefore, credit
appears as a solution to the weakness of rural savings by allowing producers to cover the
expenses related to production. According to Diagne (2002), the continuing inadequate and
limited access of African farmers to credit is believed to have significant negative consequences
for various aggregate and household-level outcomes, including technology adoption, agricultural
productivity, food security, nutrition, health, and overall household welfare.

It applies the potential outcomes framework to data collected from 342 rice farmers in
Benin to estimate the Local Average Treatment Effect (LATE). The findings show that the use of
credit in rice farming has a positive and significant impact on farmers’ rice yield, rice output, rice
income, per capita rice income, annual household income and per capita annual household
income. Access to credit allowed users of credit in rice farming to improve their inputs
utilization (rice land, fertilizer and labor) in order to increase not only their yields and rice
output, but also their rice income and their households’ annual income. Therefore, facilitating
access of rice farmers to agricultural credit is a good strategy for supporting rice sector
development, and therefore contributing to food security and poverty alleviation in Benin.
However, the impact was not homogeneous among farmers in the population. For all the impact
indicators (yield, output, rice income and annual household income), the impact was higher for
female potential users of credit than their male counterparts. Therefore, it is important to control
for heterogeneity in impact assessment studies in order to appreciate the real effect of
interventions on different social categories in the target population for targeted actions.

Statistic from Agriculture

The Philippines is the world’s eighth-largest rice producer. Its arable land totals 5.4
million hectares. Rice area harvested has expanded from nearly 3.8 million hectares in 1995 to
about 4.4 million hectares in 2010. However, the country’s rice area harvested is still very small
compared with that of the other major rice-producing countries in Asia. More than two-thirds of
its rice area is irrigated. The country’s production increased by a third, from 10.5 million t in
1995 to 15.8 million t in 2010. Seventy-one percent of rice production came from irrigated areas.
Although yield improved from 2.8 t/ha in 1995 to 3.6 t/ha in 2010, it was still way below the
yield potential of modern varieties.

Rice is a staple food for most Filipinos across the country. The nation’s per capita rice
consumption rose from 93.2 kg per year in 1995 to 123.3 kg per year in 2009.

The Philippines imports about 10% of its annual consumption requirements. In 2010 and 2011,
the country was the biggest rice importer. Its rice imports amounted to 2.38 million t in 2010,
mostly coming from Vietnam and Thailand. Despite these imports, rice prices for consumers are
some of the highest in developing Asia (as are farm-gate prices for farmers). The high prices are
enforced through an import control by the National Food Authority (NFA), a government
agency, which also procures paddy from farmers at a government support price. The NFA is also
involved in rice distribution by selling rice through the agency’s licensed and accredited
retailers/wholesalers in strategic areas at a predetermined price.
Although rice is the main staple in the country, it is a highly political commodity. The Philippine
rice sector has always been the center of the government’s agricultural policies. The focal points
of the policies revolve around promoting rice self-sufficiency and providing high income to
farmers while making rice prices affordable to consumers.

Cause of Rice Shortage

Global rice shortage caused by El Nino threatens price crisis

The world is expected to suffer a major rice shortage after global production was hit by
extreme weather patterns - potentially fueling an international price crisis. Hot weather and
droughts brought on by the El Nino system continue to affect production in India, Pakistan,
Thailand and Vietnam, where 60% of the world’s rice is grown. Grain stocks in those countries
are forecast to plummet to 19 million tons by the end of the year, down from a peak of 43 million
tons in 2013. Dr Samarendu Mohanty from the International Rice Research Institute (IRRI) told
The Independent: “There is no doubt that the supply situation is very tight, and this will
inevitably cause a spiral in demand. “The extent of this crisis all depends on what happens
during the upcoming monsoon season. If it goes badly in India and Indonesia and the crops don’t
get the rain, there could be real trouble ahead. The monsoon season in India lasts from July to
September and supplies up to four-fifths of the country’s annual rain. “At the moment it looks
like the situation won’t be as serious as in 2008 but the countries affected must act more
rationally this time rather than panicking, and they must learn from the mistakes of the past.”
Thailand’s last major crop haul was around half the peak production from 2013 and output is
expected to fall to just 15.8 million tons this year. 593,000 acres of paddy fields have been
destroyed by recent drought and salivation in Vietnam’s Mekong Delta region. The situation has
not been helped by the one million wells built in the country since the 1960s, which have
worsened the saline problem and contaminated the Vietnamese product. The Philippines is
weighing up whether to import an extra 500,000 tons of rice this year in an effort to boost state
reserve stocks in case of a future crisis.

Effect of low Rice Yield

The effect of climate change on rice production in Adamawa State, Nigeria

 According to Shah et al (2009) the adverse consequences of climate change will take an
irreplaceable toll on food production and food security especially in developing countries which
have a low capacity to cope and adapt to these challenges. Evidence from Singh et al (1997)
confirmed the effects of climate change on farm net revenue in different parts of the globe
through rainfall and temperature variability. These probably underlie the reason why
International Food Policy Institute’s 2013 Global Food Policy Report observed that current
discussions on the post-2015 agenda are emphasizing the need to expand beyond the Millennium
Development Goals (MDGs) by incorporating climate change alongside urbanization, conflict,
and sustainable consumption and production patterns into the development framework. With
nearly 6% of Nigeria’s population dependent on agriculture and the sector contributing nearly
40% of the country’s GDP, Nigeria remains vulnerable to climatic variability and long term
climate change (Ajetomobi et al, 2010). Unfortunately, credible reports from Nigerian
Metrological Agency, NIMET (2012a) did not offer much hope. The report indicated that
Nigerian climate had shown considerable temporal and spatial shifts in its variability and change,
making extreme climate and weather event (drought, flood, heat waves, ocean surges, etc.) a
more regular event, exemplified by destructive flood of 2012 which occurred in many parts of
Nigeria. Eboh et al (2006) observed that, while data limitations made it difficult to estimate cost
of possible crop land degradation, the historic crop yield data showed that economic cost of
degradation and poor management of renewable natural resources was at least 6.4% of GDP in
Nigeria.

Best Practice of advanced Agriculture Countries

Farmers’ income in India: Secondary

The average total annual income of a farm household is INR 77,888 which roughly turns
out to be around INR 6,491 per month. This figure was INR 25,380 per year or INR 2,115 per
month in 2002-03 based on a similar survey conducted by NSS (GoI, 2005). This roughly
translates to a compound annual growth rate of 3.4% per annum for real income of farm
households1. The CAGR for farming income, livestock income, wage/salary income and
nonfarm business income are 3.7%, 14.3%, 1.4% and -0.1% respectively. We find that livestock
incomes have grown at a very high rate during the period under consideration. Non-farm
incomes and wages/salary of farm households have grown at a much slower rate than cultivation
for farm households. A high growth in nonfarm incomes might help farmers move out of
agriculture into non-agricultural activities. But, we find that this has not happened and this might
be the reason why even with impending agrarian crisis farmers are not leaving cultivation. In the
farm survey conducted in 2002-03, a high percentage of farmers had indicated that they would
shift out of crop cultivation if provided with an option. One of the reasons this might not have
happened is because the growth rate of cultivation and wages have been higher than growth in
nonfarm business incomes. The low wage growth is also surprising given the positive effects
MGNREGA is supposed to have had on rural wages. In this regard, the negative growth rate of
wages in period prior to MGNREGA could have played a role (Gulati, Jain and Satija, 2013).
We should also keep in mind while interpreting these growth rates that that the year 2002-03 was
a drought year and 2012-13 was not.

In terms of components of total income, the average farming income of the households is
highest from farming which comes to INR 36,960. Income from wages and salary is the second
highest source of income with the average earning of farm households at INR 24,847. The
average income from livestock and nonfarm business are lower and are INR 9,943 and INR
6,138 respectively. Figure 2.1 and Figure 2.2 provide the composition of annual household
income for the recent survey and the 2002-03 survey.

Finding related tom Total income

• Farm households earned INR 77,888 in the period from July 2012 to June 2013 or INR 6491
per month during this period. During the same period from 2002 to 2003 the earning of the farm
households, based on a similar survey by NSS, was INR 2,115 per month. This translates to a
CAGR of 3.4% for real household incomes during the period from 2002-03 to 2012-03.

• CAGR for real income from crop cultivation, income from livestock, income from nonfarm
business and income from salaried/wage employment for the same period turns out to be 3.7%,
14.3%, -0.1% and 1.4% respectively. While interpreting these growth rates, it has to be kept in
mind that 2002-03 was a drought year while 2012-13 was not.

• The growth of income from livestock was very high compared to other incomes and it has
increased its share in total income of a farm household from 4% to 13%. The share of nonfarm
business income in total income dropped from 11% to 8% during the period and that of
wage/salaried income reduced from 39% to 32%.

• Among farm households having different principal income sources, those having nonfarm
incomes earned the most – INR 1,04,593 in July 2012- June 2013. But, these households
constitute only 4.7% of total farm households. Households with wage/salaried employment as
principal income source earned INR 92,132 in the same period and are

22% of total farm households. 63.5% of farm households have crop cultivation as their primary
income source and earn on average INR 74,977 in the period. Households with livestock as
primary income source constitute 3.7% of total farm households and earned INR 76,639 in the
period.

Area of Reform and Corrective Action of Other Country.

Outsourcing Agricultural Production: Evidence from Rice Farmers in Zhejiang Province

The literature on AOS, while scarce, has been growing in China in recent years. It is
found that with the exception of a couple of related papers, the majority of the papers on this
topic are published in Chinese journals. The literature suggests several possible ways that AOS
can affect crop production. 1) Agricultural-production outsourcing services support certain labor-
constrained households (e.g., with migrant or local off-farm workers) to continue to engage in
crop production and farming on their own land. 2) Agricultural-production outsourcing services
also support farmers who lack sufficient agricultural machinery via the outsourcing of
agricultural machinery services. Since machine ownership is found to be positively correlated
with farm size, agricultural-production outsourcing is more likely to help small-scale farms
overcome small-farm disadvantages associated with machine use. 3) Agricultural-production
outsourcing services can also assist farmers who lack certain key skills to overcome such
constraints. 4) The outsourcing of agricultural production can also be expected to lower costs and
increase profits via various means (e.g., work specialization and economies of scale).

This study contributes to the emerging literature on agricultural-production outsourcing

and identifies factors that affect the decisions of farmers to outsource agricultural production
using data from rice farmers in Zhejiang Province. Results from a logistic model indicate that
farm size and government subsidies tend to encourage farmers to outsource rice production while
labor endowment, ownership of agricultural machinery, and (to some extent) land fragmentation
are negatively associated with the decisions of farmers to outsource. Results also suggest that
agricultural-production outsourcing decisions (by farmers) are correlated with specific
production tasks outsourced by farmers. Thus, this paper makes two significant contributions to
the literature. First, it is among the first few studies to bring this important institution to the
attention of international communities. Second, it utilizes an ideal setting: Zhejiang Province,
which is one of the most urbanized and industrialized provinces with traditional importance in
rice production. We will provide a more detailed description of this province in the next section.

Rice Reforms and Poverty in the Philippines: A CGE Analysis

The Philippines is one of the three countries granted exemption in 1995 from the removal
of quantitative restrictions (QR) on rice under Annex 5 of the World Trade Organization (WTO)
agreement. Japan and South Korea are the other two. The exemption will expire on December
31, 2004. The primary objective of this paper is to examine the possible poverty and
distributional effects of the removal of the QR and the reduction in tariffs on rice imports. In
particular, it attempts to analyze the following issues: (a) Do the poor share in the potential gains
from a freer market for rice? (b) What alternative or accompanying policy measures may be
needed to ensure a more equitable distribution of the potential gains from a more liberalized
market for rice? (c) What is the transmission mechanism through which the removal of the
control may affect the poor? These are critical issues that the government must address as it
implements market reform and opens the economy to imported rice. Rice is the staple food for
about 80 percent of Filipinos, and is therefore a major item in the consumption basket of
consumers. It is the single most important agricultural crop in the Philippines, and is therefore a
major source of income for millions of Filipino farmers. Because of its political significance, the
government is heavily involved both in its supply and distribution to assure consumers a
sufficient and stable supply at low prices and to maintain a reasonable return to rice farmers with
adequate price incentives. One major policy instrument of the government at present is the
control on imported rice through the QR. Market reform in general and the removal of the QR on
rice in particular could have economy-wide effects. In this regard, it is appropriate to analyze
these issues using a computable general equilibrium (CGE) model calibrated to an input-output
table and national accounts data. On the other hand, it is appropriate to study the effects of
reforms on poverty and income distribution using individual household data to capture the
heterogeneity of households. This paper integrates these two approaches. In particular, it
specifies and calibrates an agriculture-focused CGE model to a set of actual data and simulates
the effects of the removal of the QR on consumer prices and household income, and applies
these results to a set of individual household data in the Family Income and Expenditure Survey
(FIES) to compute the poverty and income distribution effects.

This paper was written while the author was a Visiting Researcher at the Asian Development
Bank Institute from December 2003 to May 2004. Support from the Institute and the comments of
John Weiss on the earlier versions of the paper are gratefully acknowledged. However, the
author is responsible for remaining errors and gaps in the analysis.
 CHAPTER III

Research Design and Methodology

This chapter discussed the detailed description of the research methodology, samples and
sampling techniques, the instrument used, the procedure of the study and the statistical treatment
of the data gathered.

Method of Research Used

This study utilized the experimental method of research employing the techniques of
testing documentary analysis and unstructured interview, the data gathering procedure and the
statistical treatment of the data. Since this study focus on the use of a statistical analysis of the
rice farmer’s income, the aimed to determine its effects on poor production of rice.

Sample and sampling Technique

The respondent in this study were the two province from the Philippines, Nueava Ecija,
Pampanaga, and three village from Nigeria which are Benue, Ekiti, Kaduna rice farmers’ .

Respondent of the Study

The respondent of this study will be the (50) rice farmers’ from the province and the
village, both in the Philippines and Nigeria . Data from the department of agriculture (DA),
Philippines statistical Authority (PSA) on household expenditure and other data that relate to the
farmers income.

Instrument Used

Survey and Questionnaires: Survey and Questionnaires will be the major instruments use
by researcher. It will contained questions on the profile of the respondents.

A draft of the questionnaire will be present to the adviser for review and approval.

Interviews: Interview will still be conducted to clarify some vague answers to the
questions. It helped the researcher to gather additional information needed in her study.

Document Analysis: An analysis from the rice farmer’s annual income by the
Department of agriculture (DA), Philippines Statistical Authority (PSA) on how the measure the
Rice farmers income and household data.

Evaluation Reports, Terminal Report and the performance Evaluation System which will
be made by the researcher to support her studies.

Statistical Treatment of Data

The data were retrieved and statistically treated. It will be presented in tabular and
graphical form so that it can serve as basis for analysis and interpretation. Quantitative analysis
of data was utilized to describe certain characteristics such as frequencies and percentage.

Financial Requirement

Item of Expensive Proposed Amount (php)

 A. Personal Service
1. Honoraria for the Research Personnel
1.1. Project Leader
1.2.Research Associate/ Assistance (DA 4,000
and PSA)
2. Honoraria of the statistician 4,500
B. Maintenance and Other Operating
Expenditures
1. Laboratory Fees 8,000
2. Equpmental Rental 5,000
3. Transportation Expenses 5,000
 Taxi Fare/ Grab Fare
 Commuting Fare
4. Supplies and Materials 3,000
5. Printing, Binding and Reproduction Of 3,000
Final Manuscript
C. Miscellaneous

Total : 32,500.00

Time Table of Activities

Activities Schedule of Activities

1st Q 2nd Q 3rd Q 4th Q
1. Preparation
and Approval
of research
Proposal
2. Checking of
the statement
of the Problem

3. Checking the
General object
of the Problem
4. Analysis of the
Related
Literature
5. Data
Gathering
6. Checking if
the data is
assessable
7. Radiation
Monitoring
8. Method and
Procedure
Reference

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