Land Conversion and Industrialization and its Impact on Crop Production
Abstract
Agriculture, specifically crop production, is a crucial driver of prosperity in the Philippines, contributing to economic growth, employing 36% of the workforce, and ensuring food security. Palay is Central Luzon'smost widely grown crop, making it the country'slargest producer. Crops like palay do not grow on their own; a variety of factors, such as arable land availability, urbanization, and agricultural mechanization influences them. Therefore, this study examines the effect of selected agricultural input on palay production in Central Luzon from 1970 to 2019, with CobbDouglas production function as its basis. The adopted methodology is the unit root test by the Augmented Dickey-Fuller (ADF) approach, a test for long-run relationship (Johansen cointegration), and the Ordinary Least Squares (OLS) multiple regression method. The study would like to knowhow the chosen input will affect the output of palay production in the area. The study indicates that the variables are stationary. Land use conversion and Agricultural mechanization show that it significantly affects palay production in the region. Considering that the area is well suited for crop production, the governing bodies should urgently establish and impose policies that cultivate agricultural development to support the country'sfood security and economic prosperity.
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Introduction
Crop production is one of the main activities classified as agricultural output. It is the process of cultivating crops for both domestic and commercial consumption. Nemethova et al. (2022) further defined it as a branch of agriculture that focuses on growing crops on the land. Factors such as the availability of arable land, agricultural technology, yields, macroeconomic uncertainty, consumption patterns, and crop genetic potential playa significant role (Organisation for Economic Co-operation and Development, 2017). It is critical to understand how to manage these factors in agricultural practices as they play an essential role in ensuring the nation’sfood security (Kumar et al., 2023). As a developing country, land is a scarce variable that plays a vital role in the nation’sadvancement. According to De Maria (2019), it is a commodity for almost every output known to humanity. Given the country’ssoil, tropical climate, and prosperous farming culture, it is best positioned for agricultural activities. Agriculture is the Philippine economy’sbackbone, contributing significantly to the country’seconomic output. The crop productivity in the country was 3% in 1970, but has declined to 2.3% in 2020 (Evenson & Sardido, 1986; Philippine Statistics Authority, 2020). In the period 1960s to 1969 it is seen that the agricultural sector contributes most in the Gross Domestic Product (GDP) in the country, with a contribution of 4.2% in the GDP of 4.7% (Briones, 2021). However, as time progresses it placed at the third spot in contributing most in the GDP from 2012 to 2022 (Statista, 2024). The country’spopulation is rapidly increasing, inextricably linked to social and economic services such as housing, health care, educational institutions, recreational facilities, and office buildings (Liu, 2018). As a result, conflict among different industries regarding land use may arise, such as unplanned land use, which impedes the nation’sgrowth. Azadi et al. (2018) defined land use conversion as the transformation of agricultural land for urban development. It is the process of changing the current physical use of apiece of agricultural land into a non-soil cultivation use. Currently, neoliberalism, a political-economic practice, has spread throughout the country due to structural adjustment programs. It accelerated capital accumulation and dispossession and reshaped land and agrarian relations, promoting economic growth by protecting private property rights, free markets, and free trade (Imbong, 2021). Such ideology frequently serves the interests of foreign and large corporations (Dizon, 2020). Ariola and Park (2014) stated that many agricultural lands in Metro Manila’sneighboring regions have been converted to promote economic development and improve infrastructures, adapting to global competition. However, land conversion poses significant challenges because it comes after the loss of agricultural land, threatening the Philippines’ palay production and food security.
Central Luzon, the Philippines’ rice granary and the major rice producer, is a prime example of rapid land conversion for urbanization and slow land distribution for agricultural farming (German et al., 2022). According to Kajisa et al. (2022), the region’sfarm size of 2.54 hectares in 1970 has decreased to 1.79 hectares in 2020. With its ideal conditions for maximum development and growth of crops, it contributes 18.7% of the country’srice basket; however, it is the region that has the largest area of converted lands (Navarro, 2023). Also, the region’sfarmlands are declining by 5% due to land conversion according to Fair Finance Asia, (2021). Currently, the country’slargest producer of palay has been regarded as the “next frontiers” of Philippine urbanization, becoming the center of the ongoing development of the roadworks of the Alviera and Clark Green City (CGC) projects despite being ideal for agricultural production (Campos, 2016). Hence, there is an observed misalignment between the supposed land use of Central Luzon and the region’scurrent development trajectory.
In addition, Central Luzon is experiencing rapid urbanization due to Metro Manila’snorthward urban expansion. According to Harini et al. (2012), such economic activity is increasing in tandem with growth in population, making it difficult to avoid competition for land utilization between farming and other industries. People now require housing as a consequence of these developments. As a result, several real estate developers have been eyeing the region to expand their projects, and they are now taking over Central Luzon. Thus, the conversion of land from agricultural to non-agricultural land use is becoming increasingly prevalent. Such occurrence may result in countless investors looking to profit from non-agricultural development in the region (Cabildo et al., 2017). Moreover, it has improved the economic corridors stretching through Central Luzon’sprovinces, creating a strategic market access system and boosting regional growth leading to flourishing of business and financial activities (Rosete & Eleria, 2020). However, every economic activity involves a trade-off. For instance, rapid urbanization caused by the desire for economic advancement aggravates the country’slimited resources. Land use conversion might be a major factor in reducing agricultural lands in Central Luzon, hampering palay production in the region and potentially contributing to the Philippines’ shrinking rice basket and compromising the nation’sfood security. Similar to the study of Long et al. (2018), Farmland loss poses a threat to food availability because it is the primary resource for ensuring food security.
In the agricultural context, industrialization is defined as the shift to traditional agriculture to modernization through technological progress (Yang & Zhu, 2013). According to Peng et al. (2022), agricultural machinery and tractors utilized as capital assist in transforming ways of farming. Mechanization saves time and effort in farming operations, increasing agricultural efficiency and productivity (Rodriguez and Piadozo, 2016). As a result, farmers carryout their tasks more efficiently and accurately, resulting in lower labor intensity, increased safety and comfort for agricultural workers, and less crop waste. Moreover, utilizing machinery in agricultural activity not only boosts productivity but also alleviates the burdens of manual labor, primarily when fewer people work in agriculture, caused by rural-urban migration and the aging farming population (Dela Cruz & Bobier, 2016).
In Asian middle-income countries, the structure of the agricultural sector is changing rapidly alongside mechanization (Dawe, 2015). Over the past 50 years, Asia has shown substantial progress in agricultural machinery; over the last three decades, a significant correlation between farm power availability and productivity in countries like China, Pakistan, India, and Bangladesh has been observed (Rehman & Khan, 2019). However, mechanization is not happening uniformly across all countries. For instance, the Philippines falls behind since the utilization of machinery is not seen as urgent due to rural landlessness, keeping labor productivity and income for rural workers low (Mataia et al., 2016). It suggests that mechanized farming in the Philippines is emphasized when there is only land to cultivate crops. Thus, it is observed that most machines available in the Philippines were utilized to cultivate rice and corn, the predominant grain crop grown in the country (Dela Cruz & Bobier, 2016). Although several studies have been conducted on the relationship between land use conversion and agricultural industrialization on crop production, most of these studies have concentrated solely at the national level, with a few focusing on Central Luzon specifically. In addition, only a few studies have considered Central Luzon's (Aurora, Bataan, Bulacan, Nueva Ecija, Pampanga, Tarlac, Zambales) accelerated urbanization due to Metro Manila'snorthward development and the existence of the Philippines' largest homebuilder in studying the region'scrop production index.
The study will be beneficial as it can provide essential information and raise awareness on the current status of the country'sagricultural production in light of rapid urbanization in Central Luzon, whether positive or negative. Since Central Luzon is the country'slargest rice producer, it is imperative to comprehend the factors that affect it to maintain consistent food security. The study'sfindings can contribute to future studies, such as the economic and environmental implications of land use conversion among agricultural lands. Moreover, it can provide additional information in the field of academics, which may extend to developing policies that will balance urban expansion and agricultural sustainability. It can also provide the researchers an extensive knowledge about the crop production situation in the region that could be useful in their future studies in the agricultural industry in the Philippines.
The research explores whether the production theory is evident in Central Luzon'sagricultural industry. According to Cobb and Douglas (1928), the production theory implies that a change in input results in a change in output units. Hence, the development of the factors of production plays a significant role in the crop production of the region. In addition, using time series data, it investigates the effects of the (IV1) land use conversion to the (DV) crop production of the Central Luzon region, the (IV2) Urbanization Level on Central Luzon region (DV) crop production, and the (IV3) quantity of agricultural machinery and tractors available for the (DV) crop production of the region of Central Luzon with 50 observations. This data analysis will be carried out regionwide to ensure a thorough analysis and conclusion. Specifically, the current undertaking seeks: to investigate the effect of land use conversion on crop production (palay) in Central Luzon; to investigate the effect of the rise of the urbanization level on crop production (palay) in Central Luzon; to investigate the effect of agricultural mechanization and industrialization on crop production (palay) in Central Luzon.
The study will concentrate on the effects of land conversion, urbanization level, and industrialization of agricultural machineries on crop production, specifically in Central Luzon. The study'sdata will come from secondary sources and publicly available statistics. It will only validate the impact or relationship between the three independent variables, land use, conversion and industrialization, on the crop production index, and will not address the effects or consequences of such independent variables. The survey'sfocus on palay production in general limits its ability to narrow down to specific crops. Moreover, the data covered in this study spans 50 time periods, commencing from 1970 to
Conclusion
Despite the Philippines slowly shifting its main contributor to Gross Domestic Product (GDP) from agrarian to service sector, the agricultural sector still plays a vital role in the country'seconomic position. Crop production has an integral role in the Philippines' economy. Agriculture has been the country'sbackbone for centuries, with Central Luzon as its leading contributor, earning the title "Rice Granary of the Philippines." It is responsible for employing 36% of the Filipino workforce, providing a continuous income stream, and allowing individuals access to their needs. Furthermore, the country is experiencing a growing population, which entails growing demands. Hence, the agricultural sector is vital to securing food security for this concern. The main objective of this study is to investigate the effect of variables such as land use conversion, urbanization level, and agricultural mechanization on palay production in Central Luzon. Specifically to validate that the persistent land use conversion and urbanization in the Philippines negatively affect the crop production in Central Luzon. Moreover, it also aims to validate that the addition and utilization of mechanized farming positively affects crop production in Central Luzon. Furthermore, the study employs the Cobb-Douglas production function in another approach, wherein the production inputs to be utilized will substitute the traditional inputs on the function and instead have input factors such as land conversion, urbanization, and agricultural machinery.
The variables estimated through multiple regression analysis demonstrated that the decreasing farm size input, which results from land use conversion and the amount of available agricultural machinery, significantly impacts the growth of palay production in the region. The continuous land use conversion has negatively affected the palay production. On the other hand, the increasing availability of agricultural machinery has positively influenced the production of palay in the area. However, results showed that despite the region experiencing rapid urbanization, it does not significantly affect palay production. Since Central Luzon is the country'smajor rice producer, the governing body should boost agricultural development in the region. Through establishing and enforcing land-use policies and zoning regulations that prioritize the protection of agricultural lands, as well as fostering collaboration among urban planners regarding sustainable urban development to prioritize the preservation of existing farmlands and reduction, or better, the avoidance of negative impacts on agricultural lands. It is also noted that adopting more mechanized farming positively affects the palay production. Hence, the adoption of agricultural machinery should be supported through subsidies or incentives among farmers to increase their productivity and efficiency to boost the production of crops and secure food for the growing population. These measures hold the promise of a more sustainable and productive agricultural future for Central Luzon. Moreover, the study provides future researchers knowledge to find strategies to balance the preservation of agriculture and the growing urbanization in rural areas. It may also create more nuanced knowledge and examine land conversion'seffects on crops and geological areas. This could also extend to future researchers assessing how well different land management techniques preserve agricultural land and productivity in the face of increasing urbanization.
