Supply Response of Sugarcane (Saccharum Officinarum) in the Philippines

This study has attempted to provide
quantitative estimates of the supply response of
sugarcane farmers to variations in its own price in the
Philippines. It likewise examined the trends in area
harvested for sugarcane, average rainfall, average
temperature, and price of fertilizer. The study revealed
that Philippine sugarcane industry is characterized with
relatively erratic production from 1982 to 2020.In 2020, the total land area harvested to
sugarcane was 3.99 million hectares. The Philippines, in
general, had relatively low productivity or yield per
hectare at 60.73 metric tons per hectare throughout the
39-year period. These concerns are pivotal since it
impacts food security since sugar is an essential
component for processing of food and beverages
products. Furthermore, vector autoregressive (VAR)
model was used in estimating the quantity response of
sugarcane to its own price, price of fertilizer, area
harvested, average temperature, and average rainfall in
the country. The short-run quantity sugarcane price
elasticity is 0.51, for area harvested is 1.19, for average
temperature 0.66, for average rainfall 1.58, and for price
of fertilizer 1.25. Variables own price and average
temperature are found inelastic, while variables area
harvested, average rainfall, price of fertilizer, and
average temperature are found elastic in the short-run.