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Term Paper
Presented to:
Ijy James Lomibao
Instructor
Presented by:
Ryan Carlo Conde
Viverly Joy De Guzman
Rose Mel Mergilla
Level of Mechanization
Mechanization in any area is characterized into three levels: low, fair, and high. Low
mechanization level means that manual power use has exceeded 33%. Fair means that animal
power utilization ranges from 34% to 100%. And high means that mechanical power utilization
ranges from 67% to 100% (Rodulfo, et. al, 1998).
Table 1 shows the level of mechanization in rice and corn farming operations, expressed in
three main sources of power, namely: manual, man-animal and mechanical. The data shows
that human power dominates farm operations at an average of 56.53%. Mechanical operations
are applied mainly in milling, threshing or shelling, land preparation, and planting. Animals
continue to dominate land preparation. Sun drying is still preferred by farmers. In terms of
available power expressed as horsepower per hectare (hp/ha), the level of mechanization
stands at 1.68 hp/ha (Table 2). This is relatively low compared with other neighboring countries.
The reason for this is the abundance of manual labor, which dominates the use of human
power in rice and corn cultivation activities. The high hp/ha of power tillers and threshers
indicate that the use of mechanical power in land preparation and threshing is increasing.
Irrigation, harvesting, and drying have low hp/ha level.
Compared with other Asian countries, the Philippines ranks 9th in terms of level of
mechanization at 0.52 hp/ha in 1990 (Table 3). This again is very low compared with Japan at
7.00 hp/ha, Republic of Korea at 4.11 hp/ha, and Peoples Republic of China at 3.88 hp/ha
(RNAM, 1994)
In terms of rice production, RNAM report indicates that the Philippines ranks eighth and sixth of
11 countries in terms of mechanization level and production per hectare. Korea topped the list
followed by China both based on total power source. China and Korea ranked first and second,
respectively in terms of production per hectare (Table 4).
AMDP (1998) did a correlation analyses to determine the possible relationship between the two
variables. The computed linear coefficient of 0.7645 shows a degree of relationship between the
level of mechanization (independent variable) and the production per hectare (dependent
variable). However, it does not explain how the level of mechanization affects the production per
hectare since there are other factors that could affect production per unit hectare such as farm
inputs application and farmers capability to increase inputs.
Spraying 100 0 0
Harvesting 98.79 0 0
Milling 0 0 100
Average 56.53 19.25 21.70
4. Engines
b. Thresher 0.34
Total 1.68
Table 4. Comparison of palay production and level of mechanization among Asian countries.
The level of agricultural mechanization in the different farming operations of selected crops is
shown in Table 5. In rice and corn production, only land preparation and threshing are done with
the use of mechanical power source operated by man, while milling operation is highly
mechanized. The use of locally fabricated, imported or second hand (imported) hand tractors in
plowing and harrowing operations has increased over the years. Threshing is done using axial
flow threshers powered by diesel engines while cleaning and bagging are done manually. At the
farmers level, sun drying is still the predominant method of drying in multipurpose pavements
(e.g. basketball courts) and rakes for mixing rice, although some farmers are using the flatbed
dryers. Traders and millers who buy wet rice from farmers utilize mechanical dryers (e.g.
continuous flow or batch recirculating dryers). Rice milling operation is done using rubber roll
rice milling machines by small-scale rice millers, while big rice millers utilizes modern and energy-
efficient rice mills. Whereas in corn production, harvesting is done manually although in clustered
farms, there is an effort to introduce mechanical harvesting. Another is thrashing or dehusking
that is done either manually or through the use of a husker sheller. Shelling is predominantly
done using mechanical shellers while drying is done through sun drying or with the use of flatbed
dryers or other mechanical dryers (Amongo. R.M., L.D. & Larona, 2011).
The predominance of manual operation and absence of mechanical power in the production of
other crops yields a lower level of mechanization than those of rice and corn. However, the level
of mechanization is high for sugarcane, pineapple and banana due to the presence of imported
machines for large-scale operations of multinational corporations. Although harvesting is still
done through manual labor, there are attempts to introduce mechanical harvesters, especially in
large-scale sugarcane plantations. The other postharvest and processing operations are mostly
done using mechanical machines.
Table 3 shows the data of the census of major farm machinery in the Philippines in 2002.
There had been a rapid increase in the utilization of hand tractors from about 200,000 units in
1998 to 1.5 million units in 2002 because of the need at that time to produce more food for the
increasing population.
Table 6. Census of major farm machinery in the Philippines, 2002.
Farm Machinery Number of Units
Plow 2,723,850
Harrow 1,643,325
Sprayers 1,941,050
Hand Tractor 1,526,557
Source: Bureau of Agricultural Statistics.2002. http:countrystat.bas.gov.ph.
There are around 350 identified agricultural machinery manufacturers and dealers in the
country as shown in Table 4. Sixty nine percent are located in Luzon, 11% in the Visayas and 20%
in Mindanao. About one-third of them are based in the National Capital Region. Many of these
agricultural machinery manufacturers and dealers are not organized except for a few who are
members of the Agricultural Machinery Manufacturers and Dealers Association (AMMDA) with
only about 30 members. A mixture of importation and local manufacturing characterizes the local
agricultural machinery manufacturing industry. Tractors with 90 Hp are at the forefront of land
development of crop plantations for alternative fuel. Other machines such as power tillers,
pumps, transplanters, seeders, weeders, reapers, and postharvest equipment are locally
manufactured (Canapi, 2010). However, these manufactured machines have high import content
since the engines, electric motors, gearboxes, bearings, chains, sprockets, cold roll steels and
perforated sheet metals are all imported.
Input Structure
Since raw material needs of the industry are mainly metallurgical. Steel materials (e.g.,
sheets, pipes, steel bars, and plates) account for the 70% to 90% of the total weight of the power
driven agricultural machinery (Manaligod, 1988). At present, the raw materials being imported
include: engines, bearings, chains, gear boxes, sprockets, perforated sheets, and cold roll steel.
On one hand, the other raw materials are already being supplied by local mills. Since engines are
wholly imported and therefore costly, they constitute approximately 60 percent of the total cost
of the machine package. As of now, imports in our country has jumped 19.1 percent year-on-year
to USD 7.43 billion in December of 2016, compared to a 19.7 percent rise in the prior month.
Purchases rose transport equipment iron and steel (74.6 percent), power generating and
specialized machinery (56.2 percent), telecommunication equipment and electrical machinery
(37.2 percent), industrial machinery and equipment (36.8 percent), plastics in primary and non-
primary forms (35.0 percent), iron and steel (19.2 percent) and electronic products (18.9 percent)
(Trading Economics, 2017). Thus, increasing the price range of our agricultural machines due to
the lack of import restrictions.
According to the Tramat Mercantile Inc. (Ong, 1993), one of the constraints in
manufacturing equipment is the lack of capital to produce fabrication machines and quality
products and to procure raw materials. Hence, most of the manufacturers are still in the cut and
weld system. Which limits the capability of our machinery manufacturers in designing and
fabricating these machines, thereby affecting the quality of workmanship for locally
manufactured machines. Inadequate shop equipment, use of substandard materials, lack of
skilled workers and lack of training on machine fabrication further limit the attainment of a high
level of manufacturing system.
Industry Concerns
One of the main concerns of the industry is the poor quality of local steel materials which
is due to the absence of a truly integrated steel mill complex in our country and the lack of forging
and foundry facilities (AMDP 1990). Whereas, according to Manaligod (1988), the metallurgical
properties of our local steel materials do not follow the standard softness and hardness required
for the specified metal classification. Thus, this problem in effect translates the manufacturing
into a time-consuming and costly fabrication process. Another problem is the high cost of raw
materials, especially imported materials and components that are subjected to high tariff rates.
The need to upgrade the present production technology is also a main concern of the industry.
Since its introduction in the early 1970s by International Rice Research Institute (IRRI), major
changes have not been made in the fabrication technology. Moreover, low demand for
agricultural machinery and equipment is another problem which may be due to the following
reasons: (a) low economic viability of farmers brought about by high cost of some agriculture
inputs; (b) inadequate financing and credit; and (c) unfavorable natural calamities such as
droughts, typhoons, floods, and pests (Resurreccion 1991).
According to Tramat Mercantile Inc. (Ong, 1993), one of the constraints in manufacturing
equipment is the lack of capital to produce fabrication machines and quality products and
to procure raw materials. Hence, most of the manufacturers are still in the cut and weld system.
Which limits the capability of our machinery manufacturers in designing and fabricating these
machines, thereby affecting the quality of workmanship for locally manufactured machines.
Inadequate shop equipment, use of substandard materials, lack of skilled workers and lack of
training on machine fabrication further limit the attainment of a high level of manufacturing
system.
Extension workers are the key persons in this technology transfer. They need not only
interpersonal communication skills, but technical qualifications as well. With very limited number
of extension staff in a big number of client-farmers, the result would end-up in the non-adoption
of some technologies. Another is that these workers might be lacking the capability to integrate
the mechanization technology in the total farming system. Since, they too, might be lacking in
trainings particularly dealing with agricultural mechanization (Paras, 2005).
Prices of acquiring and maintaining durable farm machineries continue to stay at levels
unaffordable to most farmers. One of the reason here is the high tariff rate levied by the
government on imported agricultural machinery and parts. Imported farm machinery are levied
a 10% value added tax. Since locally manufactured machineries have high import content. The
only means of availability of farmers to access these machines are credited facilities, common
ownerships through cooperatives and associations, and custom-hire arrangements with private
entrepreneurs. However, employing these means continues to be minimal because of the limited
cooperativism and small number of entrepreneurs who engages in this kind of business (AMMDA,
2003).
Several efforts have been exerted in designing and developing postharvest machineries
in our country, specifically mechanical dryers appropriate both in our local conditions and
requirements. Mechanical dryers in the country, both imported and locally fabricated, are
suitable in the wide range of capacities and systems. These were developed to increase labor
productivity and efficiency in certain postharvest activities but have not been adopted
extensively.
Policy Constraints
According to PCARRD (2015), one of the reasons for the proliferation of imported
equipment in the Philippines is the adoption of liberal import policies and the lack of import
restrictions on the agricultural machinery. Thus, being an addition to the unstructured tariff and
taxation systems, which had negative effects on the viability of the local agricultural machinery
industry. Import duties on agricultural machinery in the Philippines ranges from 10% to 30% for
completely built-up (CBU) engines, 10% for completely knocked down engines (CKD) and 50% for
raw materials. As stated in the National Emergency Memorandum, tariff of machinery and
equipment was pegged at 10% and none for engines. Hence, lowering of tariff was reported
effective in the changes of output prices and increased production (Cruz, 1990).
Process of Distribution
Figure 1. showing the schematic diagram and the total processes of the Agricultural
Machinery Industry from Business sector to Individual Farmers. This figure shows that there is a
long and continuous interaction being done before individual farmers can acquire it (Kahn. A.U.,
1979).
Consumption:
The influx of second hand imported machinery in the country is becoming attractive to
farmers due to its low initial cost. But repair and maintenance becomes a problem especially
when replacement parts are hard to find. Because these are imported, conditions for which the
machinery was designed may not be suitable for our local conditions.
- Negative total factor productivity growth: very little capital accumulation or technological
change, absence of or slow industrial upgrading, lack of structural transformation
- Lack of export diversification
Table 10. Structural Transformation of East Asian Countries
Recommendations:
Possible Solutions:
Capacity Building
Implementation measures that will increase credit available to farmers for acquiring farm
machinery
a. Tariff reduction on farm machine imports and machine components that are not
locally produced
In the Philippines, indigenous design and production of simple, low cost machines is
important in mechanizing small farm holdings. As much as 80% of the farm power is provided by
human labor. To complement this labor, there is a need to develop simple manual equipment for
various farm operations.
In most developing countries, the human labor comprises as much as 60% of women
workers. Hence, the proposed appropriate machine designs should be based on the ergonomic
limitations of the individuals (Salokhe, 2003).
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