DECEMBER 2023

DISCUSSION PAPER SERIES NO. 2023-29

Transforming Philippine Agri-Food Systems

with Digital Technology: Extent, Prospects,
and Inclusiveness

Roehlano M. Briones, Ivory Myka R. Galang, and Jokkaz S. Latigar

The PIDS Discussion Paper Series constitutes studies that are preliminary and subject to further revisions. They are being circulated in a limited number of copies only for
purposes of soliciting comments and suggestions for further refinements. The studies under the Series are unedited and unreviewed. The views and opinions expressed are
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Transforming Philippine Agri-Food Systems with Digital Technology:
Extent, Prospects, and Inclusiveness

Roehlano M. Briones
Ivory Myka R. Galang
Jokkaz S. Latigar

PHILIPPINE INSTITUTE FOR DEVELOPMENT STUDIES

December 2023
Abstract

This study presents a rapid assessment of digital technology's adoption in Philippine agriculture
and its implications for smallholder farmers. Modernization of agriculture, a perennial goal in
agricultural policy, is increasingly linked with digital technologies, as outlined in the Philippine
Development Plan (PDP) and underscored by Industry 4.0’s transformative impacts on
markets, trade, and manufacturing. Digital agriculture offers significant potential benefits,
including enhanced productivity, market access, and sustainability. However, it also presents
the risk of exacerbating the “digital divide,” potentially leaving vulnerable rural populations
further behind.
The assessment explores the current application of digital technologies in agricultural value
chains, the prospects for further adoption, and whether these technologies are benefiting the
most vulnerable farmers and fisherfolk. Findings reveal that, while certain digital agriculture
components like advisory apps and online retail networks are widespread, others remain in
early development or at prototype stages. Government priorities and stakeholder interest
(farmers, fisherfolk, agribusiness companies) suggest promising prospects for the expansion of
digital agriculture tools, including decision support systems and online marketplaces.
The study also identifies strategies to bridge the digital divide, such as community organizing,
development of rental markets, and investments in rural connectivity. Key policy
recommendations include harmonizing government data and advisory services, creating a
single government portal for digital agriculture, integrating digital solutions into farm
management, expanding decision support for diversification and climate resiliency, and
establishing a centralized e-commerce platform. Emphasizing the importance of government-
led initiatives, the study advocates for exploring public-private partnerships to enhance the
commercialization and accessibility of digital agricultural technologies.

Keywords: digital agriculture, agri 4.0, precision agriculture, smart farming, e-commerce,
fintech, digital divide

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 Table of Contents
Abstract.................................................................................................................................. i
1. Introduction ................................................................................................................... 1
Rationale ........................................................................................................................... 1
Aims and scope of the study ............................................................................................. 1
2. Conceptual framework and method of the study............................................................ 2
Problems and solutions for Philippine agriculture and agribusiness................................... 2
Benefits from digital agriculture ......................................................................................... 3
Method of the study........................................................................................................... 4
3. Review of past studies .................................................................................................. 5
Extent of adoption ............................................................................................................. 5
Factors determining adoption ............................................................................................ 6
Impact of adoption............................................................................................................. 7
The “digital divide” ............................................................................................................. 8
4. Philippine agriculture and the digital economy ............................................................... 9
Philippine agriculture and the Filipino farmer ..................................................................... 9
Digital usage and digital economy in the Philippines ....................................................... 11
Philippine agriculture and digital technology .................................................................... 13
5. Findings of the rapid assessment ................................................................................ 15
Decision support and computer enabled systems ........................................................... 15
Extent of adoption ....................................................................................................... 15
Prospects .................................................................................................................... 17
Inclusiveness............................................................................................................... 17
Information and advisory services ................................................................................... 18
Extent .......................................................................................................................... 18
Prospects .................................................................................................................... 20
Inclusiveness............................................................................................................... 21
Agricultural automation/smart farming ............................................................................. 23
Extent of adoption ....................................................................................................... 23
Prospects for adoption ................................................................................................ 24
Inclusiveness............................................................................................................... 24
Fintech in agriculture ....................................................................................................... 24
Extent .......................................................................................................................... 24
Prospects and inclusiveness ....................................................................................... 25
E-commerce for agriculture ............................................................................................. 26
Extent .......................................................................................................................... 26
Prospects .................................................................................................................... 29
Inclusiveness............................................................................................................... 29
6. Conclusion .................................................................................................................. 30
Summary......................................................................................................................... 30
Policy implications ........................................................................................................... 31
7. References .................................................................................................................. 34
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List of Tables

Table 1: Key informant opinions on impacts of SSNM-DT ..................................................... 7

Table 2: GVA in agriculture, current prices (PHP billions) ..................................................... 9
Table 3: Estimated number (in thousands) and shares of farmers and fisherfolks, 2021 ....... 9
Table 4: Access to ICT of Filipino households, 2019 (%) .................................................... 12
Table 5: Digital economy indicators, Philippines and AFF establishments, shares in total ... 14
Table 6: Examples of decision support systems .................................................................. 16
Table 7: Examples of digital information and advisory services ........................................... 19
Table 8: Demographics of users by PhilRice app (as of July 2022) ..................................... 21
Table 9: Examples of fintech in agriculture .......................................................................... 25
Table 10: Examples of e-commerce for agri-food product suppliers .................................... 26

List of Figures

Figure 1: Pathways for digital agriculture to benefit producers and society............................ 3

Figure 2: Distribution of farmers and fisherfolks by age range (%) ...................................... 10
Figure 3: Distribution of farmers/fisherfolk by educational attainment .................................. 10
Figure 4: Distribution of farmers by farm size attainment..................................................... 11
Figure 5: Indicators of ICT penetration, Philippines, 2018 - 2022 ........................................ 11
Figure 6: Proportion of households, by usage of internet connection at home (%) .............. 13
Figure 7: Digital economy GVA and share in GDP, current prices, 2018-2022 .................... 13
Figure 8: Shares in total farmers and fisherfolk, by source of information needed for
farm/aquafarm activities, multiple response (%) .................................................................. 15
Figure 9: Geographic location of users by PhilRice app (as of July 2022) ........................... 22
Figure 10: Number of cooperative merchants, by number of sales through [Link], 2021-
present ................................................................................................................................ 28

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 Transforming Philippine Agri-Food Systems with Digital Technology:
Extent, Prospects, and Inclusiveness 1

Roehlano M. Briones, Ivory Myka R. Galang, and Jokkaz S. Latigar

1. Introduction

Rationale

Modernization of agriculture and fisheries has been an elusive and perpetual goal of
agricultural development policy (Briones, 2023). Chapter 5 of the current Philippine
Development Plan (PDP), on Modernizing Agriculture and Agribusiness, identifies digital
technology in several strategies for agriculture and agribusiness modernization (National
Economic and Development Authority [NEDA], 2023). The potential of information and
communications technology (ICT) is demonstrated by the Fourth Industrial Revolution, or
Industry 4.0, that has expanded markets, promoted trade, and transformed manufacturing
processes (Lamberte et al. 2019). Digitalization is now beginning to affect the agri-food
system. Considering these trends, PDP Chapter 5 identifies the strategy of Improve physical and
digital infrastructure under Outcome 2: “Access to markets and agriculture, fisheries, and
forestry (AFF) enterprises expanded”. The strategy involves: integrating and improving inter-
operability of AFF information systems; strengthening capacity of farmers and fisherfolk in using
mobile and web-based platforms; as well as implementation of AFF digitalization projects, such as
the National Farmers and Fisherfolk Registry System (NFFRS). Digital technology opportunities
are highlighted as well in the areas of finance, insurance, and land administration.
Digital agriculture leads to economic benefit through increased productivity, efficiency, market
opportunity, and environmental sustainability. Already, smallholders’ access to information,
inputs, and markets, are improving with the spread of mobile technologies, remote-sensing
services, and distributed computing. However, the “digital divide” risks worsening inequities
between urban and rural areas, further leaving vulnerable populations behind (Trendov et al.
2019). Given this strong interest from government and other stakeholders in digital technology
in agriculture, as well as its concerns over the equity of its benefits, the following policy
questions are most relevant:
• What are existing applications of digital technologies in the agricultural value chain in
the Philippines?
• What are the prospects of further adoption?
• Are the benefits from these new technologies reaching the most vulnerable farmers and
fisherfolk?

Aims and scope of the study

This study undertakes a rapid assessment of existing and potential adoption of digital
technologies in Philippine agriculture, and implications for smallholders. The assessment aims

1 The authors, who serve as PIDS Fellow II, Supervising Research Specialist, and Research Analyst II, extend their
gratitude to Ms. Junalyn T. Bayona for her invaluable assistance during the data collection phase of this research
study. For correspondence, you may email the authors at: rbriones@[Link], igalang@[Link], and
jlatigar@[Link].

1
to addressing the foregoing research questions, as follows: a) determining the extent to which
digital technologies are being applied in agricultural value chains; b) evaluating prospects for
further adoption; c) assessing the degree to which small-scale farmers and fisherfolk benefiting
from the digital technologies.
The rest of this paper is organized as follows: Section 2 describes the conceptual framework
and study method. Section 3 reviews previous research on the policy questions. Section 4
provides a background on the Philippine agriculture and digital economy. Section 5 presents
findings of the study on extent, prospects, and inclusiveness, of digital agriculture. Section 6
concludes with a summary and policy implications.

2. Conceptual framework and method of the study

Problems and solutions for Philippine agriculture and agribusiness

The PDP diagnoses an array of interrelated problems affecting Philippine agriculture and
agribusiness. These include: Low farm/labor productivity; low access to credit and insurance,
particularly among smallholder primary producers; unsustainable farming practices; weak
export performance; weak investments in the AFF sector; inadequate infrastructure;
fragmentation of agricultural lands; and high vulnerability to multidimensional shocks. To
address these problems, PDP Chapter 5 proposes desired Outcomes and associated strategies
as follows:
Outcome 1: Agriculture, forestry, and fisheries (AFF) production enhanced:
• Diversify farm and non-farm income
• Consolidate/cluster farms
• Create and facilitate adoption of improved technology
• Improve access of primary producers to production requirements (e.g., land, water,
renewable energy, and credit)
Outcome 2: Access to markets and AFF-based enterprises expanded
• Create opportunities for the participation of primary producers in value adding of AFF
products
• Improve physical and digital infrastructure
• Protect local AFF against unfair competition and supply/price manipulation
Outcome 3: Resilience of AFF value chains improved
• Create and adopt climate- and disaster-resilient technologies
• Strengthen local food systems
• Develop and mainstream early warning systems/anticipatory mechanisms
• Integrate climate and disaster risks in AFF planning and programming

ICT offers a pathway towards achieving PDP Outcomes. “Information” is defined as what
is conveyed or represented by a particular arrangement or sequence of things (Oxford
Languages, 2023). More broadly, information may be seen as coded in digital symbols and
conveyed through electromagnetic waves. With digitized symbol manipulation comes
unimaginable information processing capacity enabled by modern electronics. With better data
2
and processing of information, greater efficiency can be realized throughout the agricultural
value chain, from the production of inputs and services, to farming, processing, logistics, and
distribution to consumers. Digital agriculture refers to “ICT and data ecosystems to support
the development and delivery of timely, targeted information and services to make farming
profitable and sustainable while delivering safe nutritious and affordable food for ALL.”
(International Crops Research Institute for the Semi-Arid Tropics [ICRISAT], n.d., par. 4) It
represents both a technological transformation in itself, as well as a means to accelerate
agricultural innovation.

Benefits from digital agriculture

The pathways to benefits from digital agriculture are summarized in Figure 1, adapted from
Schroeder et al. (2021). Digital agriculture is relevant for allocation of physical, natural, and
human capital, for transaction cost in coordinating across the value chain (i.e. searching cost
for matching supply and demand; and monitoring and enforcement of contracts.) As an
immediate gain to producers, application of digital technologies can improve technical and
allocative efficiency; there are also potential gains to society by net economic benefits in the
value chain; improved equity by increasing access to goods and services; and environmental
sustainability by avoiding excessive input use and extraction of resources, Lastly, disaster
preparation and response (an extension over the original Schroeder et al. [2021] schema) is
another pathway to realize gains to producers and society through risk reduction.

Figure 1: Pathways for digital agriculture to benefit producers and society

Gains to producers Gains to society

Allocation of
physical,
natural
Net economic
human
gains
capital
Policies and Technical,
public Digital allocative Equity
investment agriculture Transaction efficiency
cost
Environmental
sustainability
Disaster
preparation
and response
Risk reduction

Source: Adapted from Schroeder et al. (2021)

Decision support systems: Decision Support Systems encompass various information systems
tailored for agricultural and environmental contexts. They offer comprehensive resource
profiling, risk assessment, and critical data to guide planning, disaster response, and the
allocation of investments. The deployment of such systems can significantly enhance the
efficacy of public services.

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Agricultural production applications: Digital agriculture is often enabled by devices that are
either embodied in agricultural machinery and equipment or else disembodied and deployed
by human users, such as smartphones or tablets. Information/advisory services, and other
tools of e-extension, is a more cost-effective way to reach more farmers with new technologies,
training, and advice. Precision agriculture and smart farming are characterized by the
collection, processing, analysis of temporal, spatial, and individual data which are combined
with other information to handle variations in field management and perform precise machine
action (Food and Agriculture Organization [FAO] 2022).
Fintech: Financial technology, or Fintech, refers to “advances in technology that have the
potential to transform the provision of financial services, spurring the development of new
business models, applications, and processes, and products” (World Bank 2022, p. 10). By
increasing the efficiency of financial intermediation, fintech may benefit farmers with
improved access to finance.
E-commerce: The deployment of online platforms for matching demand with supply, and
arranging payments and logistics. These platforms may benefit buyers and suppliers by better
matching of supply and demand, leading to narrowing of intermediation, opening up new
markets, reducing transaction costs, and improving price discovery.
Protection of ecosystem services: The reduction of input use and waste, enhanced
environmental monitoring, and promotion of sustainable farming practices, all ensure a more
reliable and sustained flow of ecosystem services from soil, water, biodiversity, and the like.

Method of the study

This study relies on rapid appraisal techniques to obtain qualitative answers to its research
questions. The first major source of information is a desk review of relevant data, and research
reports and scientific papers. Qualitative data collection methods used by the study are focus
group discussions (FGDs) and key informant (KI) interviews. This study employed chain
referral methods, namely, snowball sampling. This entails identifying key informants and/or
documents to name one or two individuals from the population, who are then asked to
recommend others who may be interested to participate. The process is repeated, and the
sampling grows with each interview until saturation is reached. Snowball sampling is
commonly used in social sciences to study populations that are hard to find or access such as
those that are small and scattered (Bernard, 2016).
In this study, the use of snowball sampling is particularly crucial due to the challenge of
identifying respondents from an undefined population. There is no comprehensive listing of
institutions or agencies actively employing digital technologies in agriculture. This complexity
is compounded by the diverse range of technologies in use and the variety of stakeholders in
the agri-food system, which include producers, distributors, retailers, and consumers, each
potentially employing different digital tools and approaches. Thus, traditional sampling
methods are less effective, making snowball sampling an ideal strategy to reach a
representative group of respondents in this fragmented and evolving field.
The key stakeholders to be covered in the rapid appraisal are: Government actors in digital
agriculture; private companies and social enterprises engaged in digital agriculture, whether
agribusiness or tech companies; and farmer organizations. These stakeholders have their
respective engagement with the key digital technologies; for instance, tech and agribusiness
companies engage in e-commerce, e-extension, and smart farming. Other companies, together
with farmers and farmer organizations, as well as consumers, serve as clients of these digital
technologies and its users.
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The assessment of extent of adoption entails a review of secondary data on technology usage,
supplemented by FGD and interviews with key informants who possess local insights into the
uptake of digital technologies. Assessment of prospects is limited to a five-year horizon, based
on two considerations: a) Benefits derived from adoption; and b) Factors influencing the
pace/rate of adoption. The common idea is that the greater the benefits from adoption, the
greater the incentive to adopt. However, there may be obstacles for benefits of a technology to
scale. Lastly, assessment of inclusiveness examines whether there are any systemic biases
against certain types of farmers, especially those that are more marginalized. These aspects are
further explored in the subsequent literature review.

3. Review of past studies

Extent of adoption

There is evidence of widespread adoption of some types of digital agriculture in developed

countries, but very limited uptake in developing countries. Precision agriculture started in the
1980s in the USA when field mechanization was integrated with global positioning system
(GPS), geographic information system (GIS), and remote-sensing technologies (Robert, 1999
as cited in Serraj and Pengali 2019). In Japan, farmers had been using unmanned helicopters
for chemical application (e.g. pest control and pesticides in rice, soybean, and wheat fields)
since early 1980s. Other early adopters are Australia and New Zealand which adopted precision
agriculture not just in crop management, but also in rangeland and livestock management
(Huang and Brown 2018, as cited in Serraj and Pengali 2019). Since then precision agriculture
has spread throughout the developed countries. Lowenberg-DeBoer and Erickson (2019)
summarized adoption estimates as follows:
• Widespread adoption in developed countries on GPS and related geographic information
systems
• Slow adoption of variable rate technologies even in developed countries: for instance,
variable rate fertilization does not exceed 20 percent of farms even in North America
On the other hand, in developing countries, there has been very little use of precision
agriculture on non-mechanized farms in the developing world. One reason is that very few
precision agriculture technologies are cost-effective on non-mechanized medium and small
farm common in these countries (Loweberg-DeBoer and Erickson, 2019).
Similarly for site-specific nutrient management digital tools (SSNM-DT), most of the experts
surveyed in Sida et al. (2023) believe these digital tools have not been widely adopted in
developing countries. Up to 54 percent of experts estimated adoption rate at under 1 percent of
farmers. The biggest adoption barrier is technical; usually, only agricultural extension workers
(AEWs) actually use the tools to generate recommendations, which are then relayed to farmers.
While solid data is seldom available, broad-brush characterizations are common; for instance,
Voutier and Woo (2021) identify three waves of technology advancements that occurred. The
first involves mobile communication, owing to increased mobile phone penetration in rural
areas in the 2000s. By 2015, the second wave of agribusiness digitization had begun, as
entrepreneurs adopted digital solutions along the agri-food value chain, such as monitoring of
farms using satellite data. On-going is the third wave, involving digital payments by farmers,
digital trading and lending platforms, hardware innovations for smallholder farmers, and digital
farmer advisory services. The third wave is heavily dependent on private sector investment,
especially in technology start-ups. As of 2021, tech start-ups in smallholder agri-technology in

5
the Philippines numbered 18, compared with 27 for Singapore and 51 for Indonesia, although
at par or better than Viet Nam (18), Malaysia (14), and Thailand (14) (Voutier and Woo 2021).

Factors determining adoption

Despite the favorable outcomes measured, various intervening farmers determine actual pace
and extent of adoption. Ruzzante et al. (2021) assesses various theories of agricultural
technology adoption against the evidence. Theories of agricultural technology adoption may
be categorized into three “paradigms”: the innovation-diffusion paradigm points to information
as the key constraint to adoption, leading to a range of adopter categories from innovators and
early adopters to laggards. The economic constraints paradigm posits that technology adoption
is the outcome of utility maximization subject to constraints; differences in resource
endowments account for adoption patterns. Lastly the adopter-perception paradigm
incorporates subjectivity in assessing constraints and opportunities, within a cultural and
institutional context . Hence for instance, the economic constraints paradigm can better explain
why farm size matters compared with the innovation – diffusion paradigm, inasmuch as large
farm size may enable economies of scale associated with agricultural innovation. However,
adoption factors such as caste, social networks, etc., are better accommodated in the adopter-
perception paradigm.
Ruzzante et al. (2021) conduct a meta-analysis of adoption studies for major new agricultural
technologies in developing countries, namely: natural resource management (e.g. crop rotation,
intercropping, organic farming); improved varieties (e.g. high yielding maize); chemical inputs
(e.g. pesticides); and mechanization/infrastructure (e.g. groundwater pump, laser land
leveling). They find that education, farm size, access to credit, land tenure, contact with
extension agents, and membership in farmers’ organizations, all positively influence the
adoption of most of the new technologies. The same effects are found for digital agriculture,
with additional variables such as: ease of using technology, supporting institutions and
services, compatibility of different brands and models, cost of equipment, possibility of renting
equipment, presence of regulations for reduced input use; other farmer characteristics such as
familiarity with computer usage and willingness to take risk; and social milieu (Say et al. 2018).
Readiness for digital agriculture is typically greater, the higher the average income of an
economy. Based on these and related adoption factors and other indicators, several country
assessments of readiness for digital agriculture are compiled in Briones and Jiang (2023),
covering India, Pakistan, Thailand, and Viet Nam. Readiness indicators are computed for
upstream, production, downstream, and general development and digitization aspects of the
agricultural value chain, and qualified as Low, Medium, and High. Degree of readiness
upstream is mixed, though Indonesia tends towards the Medium-Low end and Thailand at the
High-Medium end. Downstream factors range from Medium-Low for India and High for
Thailand. Lastly, enabling factors for development and digitization range from mostly Low to
Medium for India, up to Medium-High for Thailand, with Vietnam and Indonesia at the
intermediate stage.
The Philippines, however, is not included in Briones and Jiang’s (2023) analysis. A separate
assessment by Camacho et al. (2022) evaluates the readiness for Agriculture 4.0 within
Philippine agricultural research and development organizations. Their ratings are, in order of
increasing readiness: Level 1 – Awareness; Level 2 – Conceptualization; Level 3 – Creation;
and Level 4 – Innovation. Of the 187 organizations assessed, only 2 are at the Innovation level
(most ready), while 76 (41 percent) are at the Creation level; the remainder (58 percent) are at
the least ready levels.

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Impact of adoption

While precision agriculture tools have had measurable impacts in developed countries, similar
evidence for developing countries is sparse. Owing perhaps to a longer history and experience
with precision agriculture, benefits have been better researched and quantified in developed
countries. For example, digital soil mapping-enabled adoption of YieldProphet in Australia has
led to an estimated net present value of AUD 26.1 million, with benefit-cost ratio of 3.2.
Meanwhile, users of SoilWaterApp (also enabled by digital soil maps) affirmed benefits from
the app, with 47 percent believing it helped better monitor soil and water, 43 percent had
increased knowledge about water storage and losses, and 30 percent had led to more efficient
use of soil/water (Grundy et al. 2020).
In developing countries, however, evidence on outcome and impact in developing countries is
sparse. Grundy et al. (2020) examined regional scale application of digital soil mapping in
Cabulig River Watershed in the Philippines, a mountainous area covering 220 sq. km. The
resulting soil atlas was the basis of developing a land use plan as well as location-specific land
management packages. However, impact assessment of this initiative has not been done.
At the input provision stage, Paudel et al. (2023) found that laser land leveling (LLL), a
precision technology that can do away with these water holding structures in rice fields, entail
high cost, though a survey of Nepali farmers found that those in the top quantile by acreage
were willing to pay an average 45 percent more than the market price for service. As for e-
extension, a meta study finds the transmission of agricultural information through mobile
technologies boosted yields in sub-Saharan African and India by an average of 4 percent
(Fabregas et al. 2019). Meanwhile the odds of adoption of recommended inputs increase by 22
percent. Fabregas et al. (2023) compile the following additional examples from several
previous studies:
• Six experimental evaluations of text extension services in Kenya and Rwanda found
that farmers receiving texts were 19 percent more likely to follow the advice.
• Several video-based interventions for farmers were found to have improved knowledge
and farmer practices (as self-reported), although measured impacts on crop yields have
been mixed.
• Weather forecasts affect farmer investment, and accurate forecasts increase farm
profitability.
Digital tools for site-specific nutrient management (SSNM-DT) have failed to scale despite past
applications showing favorable impacts on productivity, economic, and environmental outcomes.
Sida et al. (2023) based on a survey of key informants, examined expert opinions on effects of
the aforementioned digital tools on adopters (Table 1). Impact on yield and environment are
overwhelmingly positive, while a majority of farmers had experienced a positive economic
impact. Negative effects are relatively rare, except for environmental effects, while neutral
effects are observed by a considerable number of farmers for economic impact.

Table 1: Key informant opinions on impacts of SSNM-DT

Yield Economic effects Environmental effects
Negative 4.8 3.2 17.9
Neutral 20.6 41.9 11.0
Positive 74.7 55.0 71.2
Source: Sida et al. (2023).
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Use of the internet has been found to have a significant positive impact on farmer income, access
to markets, and to finance in some countries. For surveyed farmers in Ghana, internet use
increased farm and household income by 20 percent and 15 percent, respectively; the impact
was measured using an endogenous switching regression model and probit models were
employed to achieve the aims of the study to account for selection bias (Siaw et al. 2020). For
surveyed wheat growers in Pakistan, mobile phone and internet technology usage (MPITU)
has been found to be associated with higher incomes of rural farmers. Active MPITU increased
agricultural revenue by more than 36 percent, with also positive impact on off-farm income. A
major channel of income increase was the greater efficiency of selecting sales channels.
Propensity score matching and Heckman regression were applied to control for selection
effects (Siaw et al. 2020).
For rural China, household data for Henan and Shanxi provinces were analyzed to isolate the
impact of e-commerce. Adoption of e-commerce significantly increased farmers’ selling price,
although it also increased marketing cost (as farmers now undertake numerous functions
previously performed by intermediaries). In turn, adoption of e-commerce is driven by
education level, smartphone use, off-farm employment, and social capital. These variables
were used to adjust for the endogeneity bias using endogenous switching regression (Liu et al.
2021). Similarly, a survey of farmers in China found that e-commerce adoption, with controls
for endogeneity (using propensity score matching and difference-in-differences), is associated
with a significant increase in sales income. However, income effects differ across locations and
household characteristics (Li et al. 2021).
Not all countries, though, yield definitive evidence. Despite widespread use of mobile phones,
mobile phone ownership has had no statistically significant effect on the level of farmgate price
received by farmers in Ethiopia, except for wheat (Tadesse and Bahigwa 2015). Similarly, a
survey of Kenyan farmers found that although over 80 percent of farmers use mobile money,
only 15 percent utilize it for agriculture-related payments. Less than 1 percent of farmers use
mobile loans for agricultural investments (Parlasca et al. 2022).

The “digital divide”

Digital divide refers to a “range of inequalities between social groups, genders, age groups, and
rural and urban areas, both within and across countries (International Institute for Applied
Systems Analysis (IIASA) 2019 as cited in Schroeder et al. 2021, p. 35).” It arises from
heterogeneity across farm households with respect to adoption factors, creating differential
access to digital technologies for agriculture, thereby skewing the incidence of benefits from
the technology.
A critical divide relates to farm size. FAO (2022) examined the barriers to inclusive adoption
of agricultural automation and digital technologies by small-scale farmers. Drawing from 27
case studies, the most significant challenges include (i) low levels of digital literacy,
particularly in rural areas, (ii) inadequate infrastructure, such as limited connectivity and lack
of electricity access, and (iii) financial limitations. In general, asset endowments tend to
correlate with early adoption of ICT (Schroeder et al. 2021). Similarly, ICT literacy among
smallholder farmers tends to be low. For instance, Alant and Bacare (2021) find that even the
most basic smartphone use competencies elude smallholders, based on a survey in South
Africa. ICT literacy tended to be greater for better educated farmers, as well as younger farmers
and, as a corollary, those with fewer years of farming experience.

8
4. Philippine agriculture and the digital economy

Philippine agriculture and the Filipino farmer

Agriculture remains a sizable contributor to gross domestic product (GDP), with largest
contributions coming from rice, livestock, poultry and egg, and support services. According to
the Philippine Statistics Authority (PSA), in 2022, Gross Value Added (GVA) in agriculture
had reached PHP 2.1 trillion in current prices, about a tenth of total GDP (Table 2). The crops
together sum up to less than half of GVA (46.4 percent), while capture and raising of animals
account for 41.9 percent. A sizable and rising portion of agricultural GVA comes from support
services. 1 Among the crops, the largest share is contributed by palay at 17.0 percent; the share
has been declining though from 18 percent back in 2020. Capture and farming of animals has
been seeing a rising share, as has support services to agriculture.
The Department of Agriculture (DA) (2021) conducted a Baseline Study based on a survey of
farmers and fisherfolk listed in the Registry System for Basic Sectors in Agriculture (RSBSA).
According to this study, there are about 6.05 million farmers and 0.9 million fisherfolk in the
country (Table 3). Farmers and fisherfolk are predominantly male (72.6 percent of the total).

Table 2: GVA in agriculture, current prices (PHP billions)

2020 2021 2022
GVA, total 1,828 1,954 2,103
Shares in GVA (%): 100.00 100.00 100.00
Palay 18.07 17.69 16.98
Corn 4.75 5.33 6.02
Coconut 4.39 4.66 4.66
Sugarcane 1.53 1.35 1.80
Other crops 21.76 19.64 16.94
Livestock and other farmed animals 16.19 17.09 17.82
Poultry and egg 10.29 10.31 11.23
Fishing and aquaculture 12.29 12.70 12.82
Support services to agriculture 10.63 11.15 11.67
Forestry and logging 0.11 0.07 0.06
Source: PSA (2023a).

Table 3: Estimated number (in thousands) and shares of farmers and fisherfolks, 2021
Farmers Fisherfolk Total
Number % Number % Number %
Female 1,708 28.2 197 21.9 1,905 27.4
Male 4,341 71.8 702 78.1 5,042 72.6
Total 6,049 100.0 899 100.0 6,947 100.0
Source: DA (2021).

9
Farmers and fisherfolk tend to be older and less educated than the average workers. Figure 2
confirms the commonly held view that farmers and fisherfolk are mostly older workers. Nearly
three-fifths are aged 50 and above, while those aged below 40 account for only 16 percent of
farmers and fisherfolk. Those between 40 and 50 years comprise the remaining 26 percent.

Figure 2: Distribution of farmers and fisherfolks by age range (%)

Source: DA (2021).

In contrast, in July 2021 the Labor Force Survey found that 65.5 percent of employed persons
were aged under 45 (PSA, 2022). Likewise, only 27.0 percent of farmers and fisherfolk had
advanced beyond secondary school in terms of highest educational attainment (Figure 3).
Those with secondary schooling are the largest group accounting for 39.5 percent of farmers
and fisherfolk. More than one-third has had only primary schooling or lower.

Figure 3: Distribution of farmers/fisherfolk by educational attainment

Source: DA (2021).

10
Most farmers in the country are cultivating small plots of land, with the largest share farming less
than one ha. Figure 4 documents the problem of fragmentation of the country’s agricultural
lands. About 38 percent cultivate less than one ha; a remarkable 68.5 percent cultivate not more
than two ha. Only 7.9 percent cultivate more than five ha.

Figure 4: Distribution of farmers by farm size attainment

Source: DA (2021).

Digital usage and digital economy in the Philippines

Usage of digital technologies has exploded in the past few years. The number of mobile phone
subscriptions had already reached 170 million in 2019, compared with the population then at
110 million, and 31 percent greater than the figure just the previous year (Figure 5). With the
coronavirus disease of 2019 (COVID-19) pandemic, subscriptions dropped to 150 million, but
have since recovered to its peak level by 2022. Internet penetration has likewise increased as a
share of the population, beginning from 44 percent in 2018, up to 53 percent in 2021.

Figure 5: Indicators of ICT penetration, Philippines, 2018 - 2022

Source: International Telecommunications Union (ITU): [Link]

11
Most households in the Philippines have ICT access, though rural households are at a distinct
disadvantage. The National ICT Household Survey of 2019 (Albert et al. 2021) provides more
details about household ICT access. The survey found that 75.3 percent of respondents own a
cellphone, while 79.0 percent had used a cellphone in the past 3 months. A breakdown of
selected indicators by urbanity is available from the survey (Table 4).

Table 4: Access to ICT of Filipino households, 2019 (%)

Urban Rural Total
Used internet in the last 3 months 57.3 36.1 46.9
Has internet connection at home 23.6 11.4 17.7
Owns computer 30.0 17.3 23.8
Use of computer at home, by type:
Laptop 67.3 63.4 65.9
Desktop 29.0 16.9 24.7
Tablet 36.6 44.7 39.4
Internet connection, by type of service:
Fixed, wired broadband 62.8 36.4 54.4
Fixed, wireless broadband 21.8 23.5 22.3
Mobile broadband 15.5 38.8 22.9
Source: Albert et al. (2021).

Only 46.9 percent of households had used the internet in the last 3 months; the proportion rises
to 57.3 percent in urban areas. Meanwhile only 17.7 percent of respondents had internet access
at home, with the share rising to somewhat 23.6 percent in urban areas, but only 11.4 percent
for rural areas. About 30.0 percent of urban households owns a computer, but the low 17.3
percent share among rural households pulls down the national average to 23.8 percent. Among
those with computer access at home, the main form of access is the laptop computer, although
urban households have the edge in terms of laptop access (67 percent) compared with rural
households (63 percent). The form of home internet access with the largest share is fixed wired
broadband at more than half of households (54 percent) with a much larger share for urban
households versus rural households (63 versus 36 percent).
Among households with internet connection, a majority use the internet for work/business,
although less than half of rural home internet users do so. The dominant form of usage of the
internet is for social media (i.e., connecting with friends and family), with nearly identical
shares of over 90 percent among rural and urban households with connection (Figure 6). The
next most common usage is for entertainment, this time with urban households exhibiting
larger share (71 percent), versus rural households (60 percent). The next largest usage is for
school work, with nearly identical shares (about 65 percent) for urban and rural households.
Usage for work or business is done by a majority of households, but a greater share of urban
households uses the internet for this purpose.

12
Figure 6: Proportion of households, by usage of internet connection at home (%)

Source: Albert et al. (2021).

Digital economy accounts for about a tenth of the economy although its GDP share has remained
stagnant. The PSA (2023b, par.2) uses the term “digital economy” to refer to “digital
transactions covering digital-enabling infrastructure, e-commerce, and digital media/content”.
Since 2018, digital economy has been rising in terms of current GVA, but not steadily (Figure
7). As with mobile phone subscriptions, there was a marked drop ion 2020, followed by a
recovery to 2022. As a share in GDP, however, digital economy GVA has shrunk slightly, from
10 percent of GDP in 2018-19, to just 9 percent of GDP in 2022.

Figure 7: Digital economy GVA and share in GDP, current prices, 2018-2022

Source: PSA (2023a).

Philippine agriculture and digital technology

Digital technologies are increasingly being adopted by all establishments, including AFF
establishments, though the latter tend to lag behind overall average trends. PSA establishment
data cover agricultural, fisheries, and forestry (AFF) establishments, which are categorized as
formal establishments. Table 5 compares AFF with establishments for the entire country, based
on annual sample surveys. By 2017, nearly all establishments in the country (98.2 percent) use
13
computers and communications equipment, up from 92 percent in 2010. The proportion is
somewhat lower for AFF establishments (87 percent in 2017).

Table 5: Digital economy indicators, Philippines and AFF establishments, shares in total
2010 2013 2015 2017
With computers and communication equipment
Philippines 92.4 95.7 96.1 98.2
AFF 85.7 86.1 84.2 87.4
With internet access
Philippines 78.3 92.2 93.4 95.3
AFF 56.2 74.8 69.2 74.1
With web presence
Philippines 24.7 25.5 32.8 33.2
AFF 5.4 4.3 5.9 13.0
With e-commerce via internet
Philippines 17.1 14.4 14.2 17.7
AFF 10.4 9.0 11.1 12.1
Employees using computer routinely at work
Philippines 31.9 35.4 42.0 44.0
AFF 4.3 5.8 13.1 15.2
Employees with internet connection routinely at work
Philippines 20.7 28.5 34.5 37.5
AFF 2.2 3.4 8.6 13.3
Source: PSA (2023a).

There was also a relatively rapid increase in the share of establishments with internet access
from 2010 to 2017, from 78 percent to 95 percent. However, for AFF establishments, the share
with internet access started out with a low base (56 percent), ending with a higher share by
2017 (74 percent), but lower than the internet access share for all establishments. This lag is
likewise observed for having a web presence, conducting e-commerce via the internet, and
employees with internet connection routinely at work. The relatively low shares for AFF
establishments are likely to be higher now than in 2017, before the COVID-19 pandemic,
although to date more recent figures are not available.
Only a small percentage of farmers and fisherfolk receive information needed for their
farm/aquafarm activities. The Baseline Study also asks respondents: “In 2019, where did you
get information you need in your farm/aquafarm activities?” About half had no source of
information (Figure 8). Among those with information, the most common is
training/coaching/mentoring at 42.4 percent of the total; next is radio/television at 16.7 percent;
only 9.3 percent receive information by Short Message Service (SMS), while under 5 percent
get information from the internet.

14
Figure 8: Shares in total farmers and fisherfolk, by source of information needed for
farm/aquafarm activities, multiple response (%)

Source: DA (2021).

5. Findings of the rapid assessment

Decision support and computer enabled systems

Extent of adoption

Government agencies in agriculture are increasingly computerizing their management and

information systems. Examples of computerization among agriculture-related agencies abound.
The following list is far from exhaustive:
• Within DA, procurement of fertilizer handout has been converted into a voucher
scheme with computerized records, based on a digital RSBSA.
• Farmer and fisherfolk enterprises are also being registered in the FFEDIS (Farmer and
Fisherfolk Enterprise Development Information System).
• The Philippine Crop Insurance Corporation (PCIC) has shifted to computer assisted
personal interviews (CAPI) to collect information about insured farmers and about
indemnity claims.
• The Bureau of Agriculture and Fisheries Engineering (BAFE) offers Geographic
Information System for Agricultural and Fisheries Machinery and Infrastructure
(GEOAGRI), an online portal that consolidates, stores, processes, and analyses GIS-
based data of the Farm-to-Market Road Projects of the Department and other road
projects of National Government Agencies (NGAs) and Local Government Units
(LGUs).

A number of decision support systems exist to serve government agencies, LGUs, and other
stakeholders, partly driven by the need for a more climate-resilient agriculture. Table 6 presents
some examples of decision support systems adopted by government and used by other
stakeholders. Under DA, PhilRice has introduced platforms like the Philippine Rice
Information System (PRISM), PalayStat System, RiceLytics, the Pest and Disease Risk
Identification and Management system, Climate-Smart Maps, and the Data Analytics Center.
15
Also under DA is the Climate Resilient Agriculture Office, which is leading a number of
initiatives to address climate vulnerability in agriculture and among farming communities:
• The National Color-Coded Agricultural Guide (NCCAG) Map is a digital tool that shows
the suitability of the country’s land area to 21 economically important crops, as well as the
state of climate change vulnerability of these areas. Launched in 2017, it is now undergoing
updating for re-launch this 2023.
• The Climate Information Services (CIS) offer online and printed advisories for farming and
fishing at two horizons/levels: seasonal climate forecasts at the regional level, and ten-day
forecasts at the municipal level. An Agro-climatic Advisory Portal (ACAP) is currently
under development to automate the provision of CIS and enable online dissemination for
every region.

Table 6: Examples of decision support systems

Name Description
Philippine Rice A system that relies on satellites to monitor rice crops, offering timely
Information System and reliable information about rice production through the use of
(Prism) remote sensing, crop modeling, and information and communication
technology (ICT), enabling better-informed policy and planning
decisions.
Pest and Disease Risk Its goal is to identify the risk factors for pest outbreaks and suitable
Identification and management strategies and tactics for minimizing crop losses.
Management (PRIME )
Smarter Approaches to An action-research program, funded by Department of Science and
Reinvigorate Agriculture Technology (DOST) - Philippine Council for Agriculture, Aquatic and
as an Industry in the Natural Resources Research and Development (PCAARRD), that creates
Philippines (SARAi) tailored crop advisories for rice, corn, banana, coconut, coffee, cacao,
sugarcane, soybean, and tomato. These advisories emphasize the
integration of local weather information and drought predictions into
farming practices.
DOST’s Advance Science A Help Desk which intends to generate and relay crucial disaster data to
and Technology pertinent agencies and primary end-users, enhancing the efforts of
Institute (ASTI) - Remote current governmental bodies and initiatives. DATOS synthesizes and
Sensing and Data incorporates previously supported and current DOST projects, as well as
Science (DATOS) various techniques from Geographic Information System (GIS), Remote
Sensing (RS), and other Data Science domains.
Source: Authors’ compilation.

Meanwhile, under DOST, is Project SARAi, which began as a DOST-funded initiative 8 years
ago, with over PHP 420 million allocated for its two phases. Currently, it is implemented by
the UPLB and 11 other State Universities and Colleges (SUCs) and six national government
agencies. Aimed at climate-proofing agriculture in the country, SARAi integrates modern
technologies to deliver timely and pertinent information. Initially focused on coffee, coconut,
banana, cacao, rice, and corn, it expanded to include tomato, soybean, and sugarcane in its
second phase (2018 – 2021). The project combines data from various sources: Sentinel's
satellite data, weather insights from AWS, Philippine Atmospheric, Geophysical and
Astronomical Services Administration (PAGASA), and DOST Advanced Science and
Technology Institute (ASTI), along with agronomic, market, and economic information. The
16
Project currently maintains the [Link] portal, which continues to offer cropping advisories,
remote sensing data, and weather monitoring data. It ensures that the data is updated regularly,
with intervals ranging from 6 to 10 days.
The Drought and Crop Assessment Forecasting (DCAF), closely observes a drought index
tailored for the Philippine environment. Additionally, there is the Soil Suitability Map, which,
compared with DA’s National Color-Coded Agri Guide map, offers more detailed suitability
levels and colors. This map, enriched with BSWM data from the group’s ground truthing, is
web-based due to its memory-heavy nature for mobile apps.
SARAi has also ventured into real-time weather monitoring through the Automatic Weather
Station (AWS). They have set up their own AWS devices, covering a 20 km radius on flat
terrains. However, due to the considerable distance between stations, data from other sources
remains essential. Each AWS device, valued at PHP 400,000 and owned by DOST, can record
data on precipitation, wind velocity, radiation, humidity, temperature, and soil moisture. Some
of its limitations include the need for a signal, an annual subscription of PHP 10,000 per unit,
and a monthly load worth PHP 300. The readings are then sent to SARAi and subsequently
shared on their platform. Moreover, SARAi has partnered with SUCs to supervise the AWS
installations.

Prospects

Prospects for further utilization of decision support systems are excellent, although the high cost
of some applications may limit features of some systems. Decision support systems are
primarily developed and applied by government. Given the strong policy interest in e-
governance and adopting digital agriculture, the prospects for further utilization are favorable.
The results of decision support interventions are also well received by beneficiaries. For
instance, the geomapping of farm plots under various projects such as Rice Crop Manager
Advisory Service (RCMAS) and Digital Clustered Rice Farming (DCRF) has led to more
accurate crop management (i.e. better implementation of crop recommendations, which are
typically on a per ha basis). Likewise, the income diversification thrust of Adaptation and
Mitigation Initiative in Agriculture (AMIA) village projects has led to great interest in the
beneficiary community to continue with the project and expand their involvement in it.
A continuing obstacle, however, is the high cost of some services, that need to be absorbed by
government. For instance, a subscription to a proprietary satellite land use mapping service
costs upwards of USD 3 million per year. Certainly, government subscription provides
bargaining power and cost-sharing, although licensing arrangements may limit number of users
within the subscription.
The decision support systems across multiple agencies may not offer harmonized
recommendations. It has been noted that crop suitability maps available in NCCAG and SARAi
exhibit some inconsistencies in specific locations. This may lead to unnecessary confusion on
the part of users (e.g. LGUs or farmers), and induce hesitation in fully embracing these tools.

Inclusiveness

Benefits of decision support systems appear to be inclusive. The government is clearly resolved
to utilize these systems to serve the marginalized groups, especially those most vulnerable to
climate change. Hence, such systems appear to be highly inclusive. The Climate Resilient
Agriculture Office (CRAO), for instance, adopts the Climate Risk Vulnerability Assessment
(CRVA), a systematic method for assessing climate risk at the provincial level. To date, CRAO
has prepared 63 CRVAs. Among the priority provinces is Albay, where CRVAs were have
17
been conducted for various municipalities, narrowing down to Tiwi, Pio Duran, and Rapu-
Rapu. Within Tiwi, prioritization was done to identify vulnerable barangays, leading to the
identification of Barangay Joroan.
In Joroan, the AMIA project implemented a participatory rural appraisal, in cooperation with
the Joroan Farmers and Fisherfolk Association (JFFA). Based on the appraisal, several
livelihood initiatives were identified, and funding realized through linkages with other
government agencies. These initiatives include chicken egg laying (600 heads), vegetable
hydroponics, and a community processing center, the latter being directly funded by AMIA.
Lack of internet connectivity in remote rural areas may prevent the spread of benefits, though it
is being addressed by various government programs. The problem of low internet connection
(Section 4) is due to some areas simply having no access to the internet. Outcome 3 of the
National Broadband Plan (Department of Information and Communications Technology
[DICT], 2017) is “More places connected,” which entails several strategies, including: a)
Leverage the use of satellite and emerging technologies; b) Establish the Philippine Integrated
Infostructure, including provide demand-responsive domestic connectivity. Consistent with
this Plan, the Cooperative Development Authority (CDA) has implemented a satellite-based
internet connectivity project covering 58 sites identified in collaboration with DICT in various
rural areas throughout the country. The project is aimed at cooperatives (mostly in agriculture),
with the primary aim to enabling them to file all their registration and renewal papers online
(towards CDA target of 100% online registration and renewal for Philippine cooperatives).
CDA covers the equipment and a one-year subscription (at PHP 10 - 12,000 per month). The
total cost of the project was PHP 14.4 million covering 58 sites (averaging about PHP 250,000
per site on average). However, few cooperatives have indicated commitment to continue the
subscription once the subsidy ends, even though the service provider offers income-generating
opportunity through the sale of access vouchers. For example, in areas with Piso WiFi
available, the vouchers are uncompetitive by comparison.

Information and advisory services

Extent

Numerous information and advisory apps are available, but are not yet widely adopted, with one
significant exception. Examples of digital information and advisory services for the Philippines
are summarized in Table 7. For rice farmers, about 31 percent have been found to use ICTs as
tools for rice cultivation, according to the 2016-2017 Rice-Based Farm Household Survey
(IRRI 2017). In particular, RCM has generated 2.66 million fertilizer recommendations in the
Philippines from 2013 to early 2021 with an estimated uptake of 30 percent (Chivenge et al.
2021). As for the other apps, based on the data provided by PhilRice, the number of users of
AgriDoc App, e-Damuhan, and Binhing Palay apps (as of July 2022) are 1,061, 3,236, and
8,268 users, respectively. Other than rice, an online knowledge bank has been developed for
the pili nut, namely PILI NICER ([Link] However, feedback from
one user is that the amount of information available is very sparse; the website developers
admit that the latest research is not yet online as they are awaiting completion of the publication
process before uploading on the site.

18
Table 7: Examples of digital information and advisory services
Name Description
Rice Crop A web- and Android-based platform for field-specific information on crop and
Manager nutrient management to increase yields and income of rice farmers, based on
Advisory Service site-specific nutrient management (SSNM) principles.
(RCMAS)
Precision and A Central Luzon State University (CLSU) center which hosts facilities and
Digital technologies such as spatial variability for soils, a greenhouse, field monitoring
Agriculture systems, irrigation canals, farm machines, microclimate monitoring equipment,
Center (PreDiCt) and fabrication tools.
AgriDoc App A mobile rice farm management application tool which allows users to record
day-to-day major farming and management operations and monitor rice crop
growth.
Binhing Palay A mobile app catalog of released rice varieties in the Philippines.
App
e-Damuhan app A mobile app that uses artificial intelligence technology for weed recognition. It
provides descriptions of weeds and recommendations on how to manage
them.
WateRice A project which developed ICT and IoT-based tools for improving decision
making on water and weed management, recommended best practices for
rainfed environments, and introduced mechanization for land leveling and
planting to improve water productivity.”
Agricultural Offer self-paced online certified courses on different production technologies
Training on crops, livestock and poultry, fisheries, sustainable agriculture; as well as
Institute (ATI) social technologies. These courses are developed by the ATI in collaboration
e-extension and consultation with subject matter specialists from research and
development institutions, other government agencies, state colleges and
universities, and private sector.
FarmSmart In training, farmers are introduced to tech tools for quick information access,
and they also learn basic mobile media and social marketing skills to increase
income and expand their reach in local communities and online platforms. A
collaboration between Smart Communications, Inc., and ATI, it targets both
young and seasoned farmers to help bridge the digital divide (Smart Public
Affairs 2021).
Fresh Depot A pilot project between Fresh Depot and Mankayan’s Manpat-A Farmers
(Aboitiz Group) Association of Benguet. The first phase is a pilot site of its innovative modular,
solar powered, onsite cold storage unit to reduce postharvest losses from
prolonged land transport. The second phase of Fresh Depot entails digitizing
information on farmers’ land, planting practices, pre-harvest and harvest.
Fresh Depot collaborated with several international agri-tech players, including
Cropin Technology Solutions, to provide farm monitoring services and
communications solutions connecting farmers, agri-businesses and field
officers (Lagare 2023).
Source: Authors’ compilation.

Other agencies have also developed information and advisory apps. One of the advisory apps
developed under SARAi is SPIDTECH (Smarter Pest Identification Technology). This
technology enables partners to send in reports on pests and diseases. By utilizing this
information, SPIDTECH can identify hotspots for pest and disease incidences and use the
19
accumulated data to forecast their spread, providing an early warning to farmers. The system
applies a facial recognition algorithm and uses a comprehensive database from the National
Crop Protection Center (NCPC). After one year of deployment in Google Play Store,
SPIDTECH registered 2,755 users located in 78 provinces, of which 51.3 percent were farmers,
the rest being students, AEWs, researchers, and private companies (Guiam et al. 2020).
Information services are assisting rice farmers to upgrade and standardize crop management
practices in one province of the Philippines. The DCRF Project, initiated in June 2023 in the
province of Albay, engages a private sector partner that deploys its proprietary expert system,
to inform and monitor rice production in the project area. Actions of rice producers are all
monitored in real-time using satellite remote sensing, which is able to read crop growth
indicators on every 10 days.
Rice producers are those who are part of a farmer cooperative who agreed to participate in and
met the requirement of DCRF. Conceptualized in December 2022, the provincial LGU was
responsible for vetting project proposals for modernizing rice farming, as well as participating
cooperatives, to identify appropriate project areas and partners. Loan finance for rice
production is sourced from the Development Bank of the Philippines (DBP) under the Rice
Competitiveness Enhancement Fund (RCEF) financing window. The project will run for three
years (six cropping seasons). By the end of the six seasons, the farmer cooperative will take
over management of the DCRF, including free use of the proprietary system.
As learning modality, e-extension is slowly gaining wider acceptance. When e-extension was first
introduced in 2007, there was initial reluctance among AEWs. By 2023 though, there are now
76 courses available online, which have already produced 170,000. According to
implementors, graduates affirm that the training certificates are well recognized in their job
applications.

Prospects

While impact evaluations are rare, some advisory services have been found to be beneficial to
adopting farmers. Among these SSNM-DTs, the Rice Crop Manager (RCM) in the Philippines
has been the subject of an impact evaluation (ASCEND, 2020). Using propensity score
matching to control for selection effects, the study found that treatment farmers earned PHP
10,000 per ha per season more than control farmers. For those who recall actually receiving an
RCM recommendation, the impact goes up to PHP 16,669.
Meanwhile, SPIDTECH was found to achieve 77.3 - 89.5 percent accuracy. An initial usability
survey of 24 cacao farmers in Laguna and 48 coffee farmers in Cavite found that 94.44 percent
of the respondents are willing to use the application and 97.22 percent are willing to
recommend the application to other farmers (Guiam et al. 2020).
Accurate weather information has the potential to increase the efficiency of different farming
practices and reduce the waste from various agricultural inputs. AMIA has installed Automatic
Weather Stations (AWS) at the municipal level, providing area-specific, 7-day weather
advisory. AMIA beneficiaries agree that their training has equipped them to make use of these
advisories for optimal timing in applying fertilizers, planting crops, harvesting, and going to
sea to fish.
Project SARAi also deploys AWS in their project sites to improve the accuracy of local weather
information by 40-50 percent and increase the frequency of information delivery through
constant updates. In justifying increased provision of these information beyond the SARAi
sites, a contingent valuation study estimated the willingness-to-pay of farmers in Dingle, Iloilo
as a way to measure the economic value of improved information. The study finds that farmers
20
are willing to make a one-time payment of PHP 233.55 for the weather information
improvement. Sex, educational attainment, farming years, and farming practices of the farmers
are also important determinants of willingness-to-pay (Lacson et al. 2020).
Other apps have received less favorable feedback. Some AEWs found that apps such as the
AgriDoc were tedious to use due to considerable demands on amount and accuracy of data
entry. Moreover displays were typically in English. RCM by contrast is relatively simple and
straightforward to use, with SMS advisories available in Filipino. In their municipality, more
than half are using RCM.
Preliminary estimates of DCRF crop management system experience suggests favorable impact
on the ground. At the time of the FGD, few farmers under DCRF had already harvested. One
of these were interviewed for this study. He claimed that he managed to follow the DCRF
package of technologies indirectly. He clarified that he actually followed the program
prescribed by the seed company (the same one certified by DCRF). Before DCRF, his typical
harvest was 2.9 tons per ha (wet palay); at PHP 14 per kg, he would gross PHP 70,000. After
deducting expenses, net income was around PHP 30,000. In his most recent harvest (October
7), he harvested 95 cavans per ha, paid a price of 21.80 per kg, equivalent to gross of PHP
120,118. Only PHP 35,000 expenses for a profit of PHP 85,000, about 183 percent increase.
Experiences like this have spread by word-of-mouth; there is now widespread interest among
farmers in surrounding communities to sign on to DCRF. Around two thousand hectares of
palay farms are scheduled to be covered by 2024 (the next cropping season), with potentially
5,000 hectares in total throughout Albay in subsequent cropping seasons.

Inclusiveness

Users of PhilRice advisory services for farmers are mostly male, aged 21-40, college graduates,
and more likely to reside in Luzon. PhilRice embedded user profiling in their apps to have a
better sense of user statistics (Table 8).

Table 8: Demographics of users by PhilRice app (as of July 2022)

AgriDoc App e-Damuhan Binhing Palay
Total number of users 1,061 3,236 8,268
Shares in total users (%)
Males 58 54 61
College graduates 74 75 69
Farmers 55 40 57
Extension workers 23 19 19
Farmers aged 21-40 62 55 60
Source: PhilRice.
Most registered users are males (54-61%), aged 21-40 (55-62%), college graduates (69-75%),
and they are either farmers (40-57%) or AEWs (19-23%). In terms of spatial distribution, the
top three provinces where users of AgriDoc and e-Damuhan reside are Occidental Mindoro,
Nueva Ecija and Iloilo. For Binhing Palay, the top three provinces are Nueva Ecija, Isabela,
and Pangasinan. Across the three apps, majority of users reside in Luzon, with Visayas users
account for one-fifth to one-third, and the remainder in Mindanao (Figure 9).
Aforementioned numbers may be underestimating extent of usage owing to information
spillovers within the household, but this requires engagement of young people in farming.
According to some AEWs, many older farmers are being assisted by younger household
members in the use of advisory apps. Hence the characteristics of actual users may differ from
21
those of registered users. Note that if young people are absent in the household due to
migration, or disinterest in farming, older farmers may be unable to access the latest apps.

Figure 9: Geographic location of users by PhilRice app (as of July 2022)

100%
90% 17 18 22
80%
32 25
70% 22
60%
50% 57 56
40% 51
30%
20%
10%
0%
AgriDoc eDamuhan Binhing Palay

Luzon Visayas Mindanao

Source: PhilRice.

Owing to advanced age of many farmers and low levels of digital literacy, app usage depends on
the frequency and quality of agricultural extension service. Advisory services may end up
increasing the efficiency of extension service delivery of LGUs. This was the case for RCMAS,
which received large funding from the National Rice Program to incentivize extension workers
to achieve coverage targets (i.e. 100 farmers per AEW per cropping).
Unfortunately, without support from national commodity programs local dissemination efforts
may fall short owing to budget constraints. In some instances, extension workers do not have
ample financial support, such as transportation allowance to visit farmers. Even in LGUs that
are highly agricultural, the number of AEWs are too few compared to the number of farmers
that need to be served. AEWs are also hampered by a low number of permanent appointments,
with job orders being common. The type of appointment, compensation and benefits also have
an effect on AEWs’ quality of monitoring and mentoring of farmers.
LGUs have no monopoly on providing extension service. Farm technicians can also be
deployed by private companies. In the case of DCRF, all the computer system interaction is
handled by professionals, while monitoring and information services are delivered by company
technicians. These make up for the lack of facility of some farmers with digital applications.
Obstacles to scaling up digitally enabled crop management include upfront financing
requirements and management costs. New technologies may require larger outlays of working
capital for inputs (i.e. seeds, fertilizers, equipment services), reflected in high upfront
financing. High cost of satellite services, software development, farm technician salaries, etc.
may entail high overhead cost for computerized farm management. In the case of the DCRF,
the management is PHP 52 million per year for the 5,000 ha, which is part of the upfront
financing cost. For the initial 2,000 ha, PHP 20.8 million has already been shouldered by DBP.

22
Clustering of farmers is one way to share in the management fee, giving rise to economies of
scale. However, not many cooperatives may have this size of membership, nor the
organizational maturity to run a fairly sophisticated, computer-enabled farm management
scheme.

Agricultural automation/smart farming

Extent of adoption

The policy environment endorses mechanization using smart farming technologies. The DA is
at the forefront of mechanization based on smart farming. For instance, DA Memorandum
Order (MO) No. 16 (Series of 2021) under the previous administration promotes the use of
agricultural drones towards the transformation of Philippine Agriculture. This effort is
continued by the current administration, as evidenced by MO No. 13 (Series of 2023), which
provides for drones for fertilizer application, seed sowing, and spraying; and for topographic
surveys, mapping, structural safety inspections, crop health monitoring, and agricultural
surveys. The policy also encourages the use of Laser Land Levelling (LLL) technology as part
of precision/smart farming, aiming to facilitate clustering and consolidation.
Large agribusiness companies are at the forefront of adopting smart farming. Outside of
government, it is the large companies that can readily absorb the high investment costs of
automated agriculture. Examples of large company investments are the following:
• Del Monte Philippines: began a smart farming technology pilot project in 2018, which
boosted their on-going precision farming efforts. Smart farming is being used to
identify target pesticides more effectively or boost nutrient levels in particular areas
(Del Monte 2018).
• Syngenta Philippines: two new pesticides were developed in 2021 for the purpose of
drone application of crops. One pesticide targets rice bugs, while the other targets the
fall armyworm. Aside from pesticide application, the company also deploys drones for
crop monitoring, area mapping, and image capture of crops, to assist farmers in crop
management (PhilStar 2021).
• Denso Philippines: Normally known for its air-conditioning business, it has recently
opened a hydroponic smart agri-tech farm in Ibaan, Batangas. The PHP 60 million farm
produces high value vegetables and fruits (Cahiles-Magkilat 2023).
At least one individual large farmer was able to invest in some smart farming technologies, with
government support. One farmer we visited in Benguet has invested in a smart irrigation system
for his 4 ha farm. He was supported by DOST Small Enterprises Technology Upgrading
Program (SETUP) 4.0, which aims to assist Micro-, Small and Medium-sized Enterprises
(MSMEs) enhance their information and communication technology (ICT) infrastructure. The
assisted enterprises are given three years to return the funds they received, interest-free, and
are granted a one-year grace period (DOST Region VI 2023).
Several government R&D projects have developed smart farming technologies, most of which
are at pre-commercialization stage. For instance, PreDICt of CLSU has developed auto furrow
irrigation system, indoor agriculture with sensors, controllers, and monitoring equipment. They
also have drones and 3D printers for customizing parts and for their equipment. The mobile
solar pump that was developed is perceived positively by farmers as a cost-saving innovation.

23
Likewise, DOST’s Advance Science and Technology Institute (ASTI) has developed
ROAMER, an autonomous robot equipped autonomously traverse plantations and, through AI,
pinpoint plants potentially afflicted with diseases, and mitigate their proliferation, without
incurring high labor cost. With a P24.7 million budget, this pilot project, initiated in June 2021,
is anticipated to be operational by June 2024 (Chua 2023). In another DOST-supported project,
UP Mindanao is now conducting research towards developing an AI system for automatic
sorting of durian by ripeness, quality, and type. It is intended to replace manual grading, a
time-consuming and subjective process.

Prospects for adoption

Many of the technologies may take years before reaching commercialization. Commercialization
of new agricultural technologies is typically a convoluted process with several determinants of
success, including the amount of external assistance, availability of expert services, and clarity
of intellectual property (Chernova et al. 2019). Although the policy environment for private
sector engagement and commercialization is already in place, thanks to the Philippine
Technology Transfer Act of 2009 (RA 10005), current digital technologies are still in nascent
or, at most, in incubation stage.
Portable systems have an excellent outlook for widespread use among the farmers on a fee-for-
service basis. Equipment that has been manufactured into relatively small and mobile units,
such as hand tractors, mechanical seeders, combine harvester-threshers, is now increasingly
used on a fee-for-service basis. There is every reason to believe that the uptake of drone seeders,
drone sprayers, automated tractors, etc. will also increase under a similar payment modality, as
long as pricing is competitive with existing methods. For instance, estimates from Bayer Crop
Science indicate that a drone rice seeding service is only PHP 3,000 per ha, compared with
manual transplanting which costs at least PHP 11,000 per ha (Bayer Crop Science n.d.).

Inclusiveness

Fixed systems such as smart irrigation may entail large upfront investments, thereby excluding
most smallholder farmers. Unlike portable equipment, fixed systems such as smart greenhouses
and smart irrigation must be installed on-site. Hence the adopting farmer is compelled to absorb
the investment cost, which is usually beyond the financial means and/or risk appetite of small
farmers. Alternatively, a cluster of farmers may divide the investment cost among themselves;
however, this requires the consolidation of multiple farm operations under a single facility,
along with its attendant transaction costs.

Fintech in agriculture

Extent

Fintech has only recently been introduced in the country’s financial and regulatory landscape. In
2020, most Securities Exchange Commission (SEC)-registered fintech companies were
engaged in virtual currency issuance, remittances, credit and finance, and lending (Quimba et
al. 2023). In the context of agriculture, two examples are found for the Philippines (Table 9).
Both fall under the regulatory regime of SEC, under Memorandum Circular (MC) No. 14
(Series of 2019): Rules and Regulations Governing Crowdfunding.
One crowdfunding platform has assisted 1,600 farmers since 2015. The Cropital website
introduces production ventures of various farmers, and invites users to invest in these ventures
based on the description provided, and the financing requirement. The minimum investment

24
per farm is PHP 5,000, with a maximum of PHP 15,000 (in increments of PHP 5,000). The
investment can be made in an e-wallet, or via bank deposit. The return is a fixed percentage of
the net profit of the farm. Cropital collects a 5 percent platform service fee up front. Since its
founding in 2015, the company has raised PHP 100 million, assisting 1,600 farmers residing in
10 provinces (Cropital n.d.).
To minimize risk to lenders, Cropital has partnered with PhilGuarantee and PCIC. It also
actively supports its farmer-partners by providing technical assistance and production
monitoring. Interaction with farmers is mediated through farmer organizations, as Cropital does
not deal with individual farmers.
As part of its P2P (peer-to-peer) lending, Cropital has had to develop a comprehensive profile
of farmers it is serving. A spin-off of this activity is a credit scoring service, developed with
support from DOST. It is now another revenue generating activity of the company.

Table 9: Examples of fintech in agriculture

Name Description
Cropital A crowdfunding platform that helps finance its partner farmers and at the same time
provides an alternative medium for investments to prospective investors.

FarmOn Likewise a crowdfunding platform that acts as an investment gateway, assisting users
in identifying and supporting projects with high potential. At present, the platform
features projects under three main categories: (1) Farming, (2) Technology and
Mechanization and, (3) Farm Produce Procurement and Franchising (FarmOn n.d.).

Source: Authors’ compilation.

Prospects and inclusiveness

Cropital offers a rate of return for lenders at about 3-5 percent per cropping (5-6 months
duration). Note that the financial product carries a disclaimer that returns on investment are not
guaranteed, as Cropital needs to collect from farmers to pay back its investors. About 85 to 87
percent of farmers pay their lenders on time; of those who are delayed in repaying, another five
percentage points will eventually pay over the next three months. A remaining eight percent
are the delinquent borrowers, who have typically undergone some unexpected setback which
is preventing them from completing repayment, despite coverage by crop insurance (PCIC)
and credit guarantee (PhilGuarantee).
There are no statistics available on annual growth of agricultural credit via fintech. The
geographic scope of Cropital offers a clue about prospects for this business model: previously
Cropital had reached farmers in Bohol, Samar, Leyte, but they have returned to focus on Central
Luzon and Ilocos Region, mainly in Nueva Ecija, Pangasinan, and Bulacan. High cost and high
climate risk among less productive farmers in Visayas have compelled them to scale back the
geographic scope of operations. The small number of farmers served, and the lack of new
players in the fintech space, suggest a stagnant outlook for agricultural fintech.
The borrower-clients of Cropital are all rice farmers, farming small plots (5 ha and below), with
relatively low levels of risk as gauged by their credit scores. Farmers are not required to have
smartphones, or even be digitally literate, to engage as borrower-clients. What they need to
demonstrate are characteristics and behaviors that mark them out to be reliable borrowers
(unfortunately, owing to its proprietary nature, we were unable to gain access to the credit
25
scoring methodology). They are currently restricted to rice farming as diversifying to other
agricultural activities (e.g. other crops, livestock) entails gathering considerable amounts of
new information to gauge risk and return.

E-commerce for agriculture

Extent

A variety of online platforms are actively offering market matching functions for agricultural
goods or processed agricultural products. Table 10 lists some examples of online platforms
which include agri-food products. The various platforms may be categorized as follows:
• Online marketplace: offers an online platform for market transaction, from order
placing, to payment, and product delivery. [Link] and [Link] are well-
known examples.
• Online retail: a site/app that allows buyers to interact electronically with a retailer to
place orders, make payments, and arrange delivery, e.g. [Link] for SM
Supermalls. The retailer is responsible for procuring goods for sale, whether by
traditional means, or also by an online platform.
• Hybrid: functions as an online marketplace but lacks one or two of the key features
enumerated above, such as onsite payment and delivery arrangement; these elements of
the transaction are performed offsite.
• Online market information: A website/app that provides information about merchants
and suppliers, but otherwise lacks facility for placing orders making payments, ensuring
delivery, except in direct interaction with the merchant. An example is Facebook
Marketplace.

Table 10: Examples of e-commerce for agri-food product suppliers

Name Description
Agrabah A multipurpose online platform that connects farmers and fisherfolks by giving
them access to buyers, allowing them to move their goods from farmer to
market with ease, and giving them access to quickly-vetted credit.
Agro-digital A multipurpose online platform that digitizes the food value chain starting from
Philippines capturing and forecasting demand, consolidating production and storage, and
finally facilitating fulfillment. The model revolves around organized small
holders.
ANI Express The web- and mobile-based portal of AgriNurture Inc. (ANI) offering the delivery
of a wide range of products including rice, fruits, and vegetables.
Co-opBiz An e-commerce platform by CDA that provides cooperatives, particularly micro
and small, a free space for selling and promoting their products for domestic and
international markets.
Facebook A marketplace feature of [Link], which allows: search for items to buy;
Marketplace and message buyers/sellers to arrange transactions. Facebook plays no role in
facilitating or managing transactions (Target Internet n.d.).
GoLokal A market access platform provided by DTI to the Philippines’ micro, small and
medium enterprises (MSMEs) for market incubation and brand testing
Lazada Online shopping platform, owned by Lazada Group, a global e-commerce
corporation, recognized as one of the prominent players in Southeast Asia, had
amassed over 10,000 third-party sellers by November 2014 and attracted 50
26
 Name Description
million active buyers as of September 2019.
Livegreen A social enterprise engaged in the production, processing, and distribution of
International fresh and Organic Certification Center of the Philippines (OCCP)-certified organic
vegetable produce. Aside from its displays in brick-and-mortar supermarkets
under the brand “Organicus,” it also utilizes online platforms in selling its
produce.
Mayani An online agri-fisheries value chain platform that directly sources fresh produce
and agricultural products.
[Link] An online marketplace for buying and selling of variety of goods i.e. food, vintage
goods, and handmade products, among others.
Pili Pili Marketplace was launched in February 2021 under the PILI NICER project of
Marketplace the Bicol Consortium for Agriculture and Resources Research and Development
(BCARRD), with funding from DOST.
Rural Rising Website offers a marketplace to place orders for delivery within Metro Manila
and adjacent towns and cities, or where door-to-door services (Lalamove, Grab,
etc.) are available. As of May 2023, Rural Rising has moved over 2,000 tons of
produce, helped 4,500 farmers nationwide, and fostered a community with over
40,000 members (Golangco 2023).
Session Company located in the famous Session Road of Baguio City, it links over 2,000
Groceries partner farmers spread across Benguet, Cavite, Ilocos, Mindoro, and Pangasinan
to customers with its online marketplace. For every sale made, 30 percent of the
profit goes directly to the farmer (Gonsalves n.d.).
[Link] Shopee Pte. Ltd Singaporean multinational company specializing in e-commerce.
In 2021, it held the status of being the primary e-commerce hub in Southeast
Asia, recording 343 million monthly visitors. Furthermore, it extended its
services to connect buyers and sellers in East Asia and Latin America seeking
online transactions.
[Link] The online store of SM including Savemore, the leading supermarket of the
Philippines by number of stores
Zagana An online platform that sources fresh produce and frozen food from local
farmers.
Source: Authors’ compilation.

The use of e-commerce for food retail, including farmgate purchasing, has likely exploded since
2020 due to the Covid19 pandemic lockdowns. Like e-commerce in general, food e-commerce
has also seen significant growth during the Covid19 pandemic. There are indications that this
has penetrated to the farm level, i.e. several formal farm enterprises had shifted to online
selling, with sales even going up upon shifting to online retail, often in partnership with the
DA’s E-Kadiwa program (FAO, 2021).
Online market information systems and hybrid platforms seem to offer a narrow marketing
channel for farmers and food processors. An example of an online market information system
is [Link]. Another example is Pili Marketplace ([Link]),
which hosts 22 merchants. We interviewed J. Emmanuel Pastries, the largest pili processor in
Bicol Region, who has not sold any pili through Pili Marketplace.
A hybrid platform, meanwhile, is [Link], which allows buyers to place orders and arrange
logistics, but does not accept payments. Moreover, order placement requires further off-site
communication between merchant and buyer (by email or messaging service). According to

27
CDA, [Link] started as an online market information system, but secured few merchants.
They opted to add features and relaunched the website last 2021. The renovated site allowed
them to invite more merchants, up to the 144 cooperatives now in the online store. However,
they do not accept fresh food, only processed and packaged food. The website itself tracks the
number of cooperatives by number of sales made (Figure 10).

Figure 10: Number of cooperative merchants, by number of sales through [Link], 2021-
present

Source: [Link]

Figures shown in the chart are likely an underestimate as transactions consummated offsite are
omitted. Nonetheless the figures are striking; only 2 cooperatives have made ten sales; both are
cacao farming cooperatives based in Davao City. Only 1 cooperative (selling handicrafts from
Ilocos Region) has made 9 sales. Ten cooperatives have made just 1 sale, and 118 cooperatives
(82 percent) have made no sales.
Online marketplaces are a minor marketing outlet for a few established SMEs and cooperatives.
Biao Agrarian Reform Beneficiaries Cooperative (BARBCO), one of the top sellers in
[Link], also sells through [Link]. While their total sales through CoopBiz does not
exceed PHP 6,000, they sell an average of 30 kg per month (cacao beans) through Shopee.
Even this amount is miniscule compared with their annual sales of about 100 tons in a year,
mostly through brick-and-mortar stores. A larger share of sales (but still only 5 percent) is
coursed through online marketplaces, in the case of J Emmanuel Pastries.
Online retail seems to be linking more farmers to markets, whether directly or indirectly,
compared with the other platforms. The Magsige Multipurpose Cooperative (MPC) is engaged
in multiple businesses, including garment manufacture, brick-and-mortar retail outlets, finance,
job contracting, coffee manufacturing, and sale of agricultural products. Their main product
offering is garments, of which up to 50 percent of sales is done through their website. However,
only miniscule amounts of coffee and other food and beverage products are sold online, with
the bulk being disposed of through their traditional outlets.
Meanwhile, Mayani has managed to reach over 139,000 organized smallholder farmers and
fisherfolks in Mayani’s grassroots network. They distribute to over 20,000 retail customers and
more than 230 commercial stores, including supermarket giants Robinsons Retail, WalterMart,
Merry Mart, luxury resort City of Dreams; international fast food brand Bon Chon, as well as
Manila Doctor’s Hospital, Wildflour, Yellow Cab, Turks, and Caramia. Driven by a social
28
enterprise mission, Mayani was founded in 2019 with just one supplier, the Malarujatan Family
Farm Association (MAFFA), in Lian, Batangas. Since then, they have reached out to farmers
all over Luzon.
They transact by anticipating demand from both online and direct orders from institutional
buyers, as well as anticipating supply from harvest and production of client
associations/cooperatives. They adopt a policy of pricing based on their prevailing prices,
though they can offer more than the usual farmgate price, subject to a 30 percent net income
for the farmer on top of estimated production cost. Delivery is done by Mayani using third
party logistics as well as their own vehicles.

Prospects

Online market information systems offer little additionality over other marketing platforms and
are therefore not a growth area. New market information systems are simply entering an already
crowded space for online market information. They offer little additional value compared to
established options, such as social media, and already established websites (e.g. Carousell).
Without additional features, merchants may not find it attractive to join online market
information systems. Hence, for instance, DA’s [Link], which was active during the
pandemic, has gone offline following the economic recovery.
Growth of online retail and online marketplaces is promising, though the latter is limited by
high commission fees. The additional features are available from online marketplaces, such as
Shopee and Lazada; according to BARBCO, they will be much more incentivized to engage
actively in CoopBiz if the site could replicate the convenience of these established apps. On
the other hand, these platforms do charge a commission fee, about 12 percent according to
BARBCO. 2 This fee can be avoided if the enterprise developed its own online retail store,
though it would have to shoulder a web development cost, as well as pay the fees of third-party
payment and logistics providers.
For online retail, B2C will remain a small market segment owing to delivery fee, while B2B could
potentially become a mainstream mode of procurement. Food is a daily consumption item,
which consumers may still find useful to physically visit stores and decide on purchases on the
spot over the foreseeable future. The relatively high share of delivery cost in small purchases
more than offsets the convenience of online shopping. On the other hand, B2B transactions are
typically in bulk, hence delivery cost can be driven down to a small proportion of the purchase
cost. Retailers and food service establishments may therefore rely increasingly on online
procurement for their raw material and inventory needs.

Inclusiveness

Clustering of farmers and fisherfolk into organizations such as cooperatives is essential to joining
the e-commerce space. No individual farmer we observed was able to sell directly to an e-
commerce enterprise. Farmers typically had to be part of an association or cooperative; the
farmer-owned enterprise then either transacted with the e-commerce company, or itself
engages in e-commerce.
Larger agri-coops with greater amounts of inventory will be more motivated to sell online. Online
retail (through one’s own website) is a matter of scale: smaller agri-coops with low levels of
inventory will likely eschew the high cost of e-commerce development; larger agri-coops with
more inventories at hand will be more willing to expand markets through an online store.
E-commerce-linked enterprises are able to include small farmers, women, other marginalized
groups, and even communities without internet access. Among the Mayani supplier enterprises,
29
38 percent of the members are women. Approximately 50 percent are below forty years old
based on profile of FGD participants. At least one IP community (among the Aeta of Zambales)
are supplying ube to Mayani. While 70 percent have some ability to use digital technology, the
internet is not the main medium for communication owing to weak signal and lack of data
access. Instead, Mayani staff make direct farm visits in order to transact with and ensure
delivery from their suppliers.
Inclusiveness limited by the sheer proportion of farmers and fisherfolk still in the unorganized
informal sector. DA (2021) finds that 67.3 percent of farmers and fisherfolk are members of an
organization (farmers organization, livestock and producer organization, fisherfolk
organization, or other agricultural organization/association). However, as this figure is drawn
from RSBSA, it may be unrepresentative of the population. Songco (2023), on the other hand,
finds that just 20 percent of farmers are members of an economic organization. This is more
consistent with Annual Poverty Indicators Survey data for 2020, which finds that only 16.0
percent of families in rural areas were members of cooperatives (any type, not necessarily agri-
cooperative). The national figure is just 12.3 percent (PSA, 2021).

6. Conclusion

Summary

The most widespread elements of digital agriculture landscape are selected advisory apps and
online retail networks; other elements are at early or even prototype stages. In the Philippines,
digital agriculture is still far from being a majority choice of farmers and other stakeholders in
the agri-food system. Applications such as fintech, and some types of automated agricultural
equipment, are at an early stage of development, or even at prototype stage prior to
commercialization. Rather, the more commonly observed elements are online retail and farm
advisory apps (most notably, RCMAS).
The following elements of digital agriculture are more likely to be at or moving to the mainstream
within the next five years: decision support; computerization of public services; online advisory
and extension services; crop management and monitoring systems; portable equipment; online
retail; and online marketplaces. In the medium term, government priorities and willingness to
allocate budgets underpin the are healthy prospects for wider dissemination for decision
support and computerization of public services. Meanwhile, on the demand side, there is strong
interest among stakeholders, such as farmers, fisherfolk, and agribusiness companies, in
information, advisory and extension services, as well as portable equipment such drones,
sensors, lasers for land leveling.
Very real concerns about the digital divide related to farmer age, education, assets, and rural
connectivity, can be bridged through community organizing, development of rental markets,
provision of traditional extension services, and investments in last mile connectivity. The
literature and our rapid assessment have confirmed the reality of the “digital divide” in rural
Philippines. However, the rapid assessment also indicates that there are workarounds to bring
farmers in despite their advanced age, lack of education, low digital literacy, lack of rural
connectivity, and lack of assets. These are: organizing into large farmer-owned enterprises;
investing in shared facilities; fee-for-service transactions for portable equipment; visits by farm
technicians to bridge farmers to digital tools; and public-private-farmer partnerships.

30
Policy implications

The rapid assessment supports PDP strategies related to digital tools in agriculture. The
following draws out additional policy implications for agricultural policy on digital agriculture,
based on the rapid assessment.

1. Ensure that a single data set and advisory underpins the various decision support systems
used by government.
Rapid assessment of government agencies has uncovered some conflicting data and advice
from decision support systems deployed by different agencies, e.g. crop suitability. At root
there may be a lack of agreement about land and climate characteristics, base maps, parcel
maps, and other relevant information. Government must initiate a process of harmonization,
first by convening regional technical working groups (TWGs), with representatives of DA,
DENR, DOST, and SUCs. When discussing tenure issues, then Department of Justice,
Department of Agrarian Reform, and, , where applicable, the National Council for Indigenous
Peoples, should also be included. Second, outputs of these TWGs may be discussed in
validation workshops initially at the regional level, but ultimately at the national level for
standardized mapping. Achieving effective collaboration among multiple agencies, each with
its own mandate, culture, and priorities, can be challenging. As a possible solution, a high-level
steering committee may be established to oversee the harmonization process. This committee
should have representatives from all key agencies to ensure buy-in and facilitate smoother
coordination.

2. Provide a single portal linked to all the online sites and apps for digital agriculture developed
by government.
The proliferation of farm advisory apps may at first sight appear unnecessarily confusing to the
various stakeholders. However, the type of information required, the way the information is
conveyed, and the interface with users with different needs, may justify the variety of apps and
websites now available (and potentially more in future). The solution to proliferation may be
to simply create a single government portal which links to the various advisory tools provided
by government. The portal should catalog and describe each linked advisory tool to guide
potential users to the one most relevant for their needs. It seems most appropriate for the portal
to be hosted by DICT; however, each government app should contain a cross-link to the central
portal.

3. Integrate digital solutions to standardizing farm management in the DA’s clustering and
consolidation program, based on formation and capacity building of large cooperatives.
The DA is currently undertaking a farmer and fisherfolk clustering program. DA must now
consider digital agriculture as a technological solution to centralizing and standardizing
production and management practices to optimize production within these clusters.
Furthermore, to ensure economic viability and sustainability, clusters may need to cover
thousands of hectares (compared with the current 100 ha guideline), all under a single
cooperative. This will entail a program of consolidation of numerous small cooperatives and
associations into larger groups, with an aggressive campaign of recruiting currently
unorganized farmers and fisherfolk. Expansion of fewer cooperatives to cover a greater share
of the farm population enables the absorption of high overhead costs from hiring professional
and technical staff needed to run sophisticated management operations. The assumption here
31
is that current cooperatives are open to the idea of merging or forming a larger collective, such
as a group or federation. Nonetheless, a significant hurdle lies in persuading current officers
and Board members to give way to a possibly new set of leaders upon merger and expansion
who will assume responsibilities within this expanded organization. Possible ways to address
this issue would be: i) Phased Integration Approach: Rather than an abrupt merger, a phased
approach to integration can help in smoothing the transition. Start with joint projects or shared
services between cooperatives before fully merging. This approach can help members and
leaders to build trust and understand each other's strengths and weaknesses; ii.) Rotational
Leadership Systems: To address concerns about representation and power dynamics, a
rotational system for key management roles can be established; iii) Democratic Decision-
Making Process: Ensure that the process of determining which management officers will lead
the larger organization is transparent and democratic; and iv) Conflict Resolution Mechanisms:
Merging different groups can lead to conflicts, particularly regarding leadership and
management roles. It would be helpful to establish clear conflict resolution mechanisms and
channels for members to express concerns. This could involve setting up a neutral committee
or hiring a mediator to help resolve disputes.

4. Pursue diversification and climate resiliency by expanding decision support systems, and
diversified knowledge portals and advisory services.
Recommendation 3 focuses on clustering and consolidation around single crops. However, the
agri-food system encompasses a variety of production activities. Diversification supports
resiliency to climate and economic shocks, as well as opens opportunities for improving
livelihoods. Digital agriculture enables also diversification through decision support systems,
and through knowledge portals and advisory services encompassing crops beyond rice and
monocrop agriculture. Implementing this recommendation entails proposal and approval of
projects for developing decision support systems and knowledge portals, advisory apps, etc.,
covering a wide range of commoditie sand livelihood systems systems (such as coconut
intercropping, rice-legume rotation, etc.) These projects may be undertaken within DA, and
other agriculture-related agencies such as SUCs and DOST-PCAARRD. SARAI and PILI
NICER have already initiated this process but much more funding space should be allocated
for these inititatives.

5. Offer a centralized e-commerce platform catering to MSMEs, incorporating agri-food

products, and functioning as an online marketplace.
Unlike farm advisory apps, the proliferation of e-commerce platforms under different
government agencies is inefficient given that success of an online marketplace depends on the
same set of prerequisites, namely: attractive product advertising; ease of use; convenience in
terms of payment and logistics; and delivery assurance. These can all be achieved more cost-
effectively under a single platform. Government participation in such a platform is justified by
their support for development of MSMEs and agri-cooperatives.
The natural host of such a platform will be the DTI, which already has a market information
system (GoLokal) that can be grown into an online marketplace. Additional justification for
government intervention, as well as the role of the private sector in the platform, is dealt with
in the next two recommendations below. The challenge to implementing this recommendation
is to persuade various agencies already engaged in e-commerce to merge their efforts and
systems with those of DTI; DBM may need to enforce this by making budgeting and approval
conditional on e-commerce consolidation.

32
6. Realize agri-food system upgrading through e-commerce by investing in traceability, food
safety, registration and certification, and good agricultural practices.
Another reason why government may be interested to support such an online marketplace is to
enforce upgrading of value chains within an e-commerce ecosystem. In the case of agri-food
products, merchants should be properly registered, and required to source from GAP-certified
farms; processed food should be compliant with FDA food safety requirements; other
certifications may be included as applicable (e.g., halal). The marketplace can also
institutionalize traceability for food products. Such quality assurances will likely draw demand
to the marketplace. However, high standards may limit the ability of smaller or less-equipped
merchants to participate. One possible solution to this is to offer support programs for small-
scale producers to meet the required standards, such as subsidies for certification costs or
training in quality management systems. Another challenge would be on monitoring and
enforcement. Continuously monitoring compliance and enforcing standards can be resource-
intensive. To address this, it would be useful to utilize technology for monitoring, such as AI
for compliance checks. Implement a reporting system where consumers can report non-
compliance.

7. Government support for digital agriculture should explore entry points for private sector
participation, e.g. joint development, operation, licensing, and similar partnerships.
The consolidated online marketplace recommended above need not be entirely government-
run; private participation may be invited in the development and operation of the platform,
while government focuses on quality and delivery assurance. Resort to proprietary software is
one option for such partnership; however, note that there are any number of open source e-
commerce software that may be utilized. The Open Network for Digital Commerce initiative
of India may be a model that can be emulated for this purpose.
Similarly, commercialization of smart farming applications, automated equipment, and the
like, should also be spun off to the private sector. Whereas the legal framework for such
commercialization has already been established under RA 10005, further review and study may
be undertaken to identify and address bottlenecks to public-private partnership in
commercializing outputs of public R&D. Moreover, aligning the interests of the public sector
and private partners, especially regarding profit motives versus public service, is crucial. To
address this potential issue, there should be clear agreements and contracts that outline the
roles, responsibilities, and expectations of each party. Ensure that public interest remains a
primary focus, with mechanisms in place to prevent exploitative practices.

8. Aside from assisting smallholder farmers, skills enhancement programs should also target
the landless agricultural workers.
The high rate of underemployment in the Philippine agricultural sector, with one-fifth of
workers underemployed since 2006, underscores the need for targeted policy measures
(Briones 2017). As the sector undergoes modernization, there is an increasing need for
upskilling or retooling, particularly for those agricultural workers who might face job
displacement due to technological advancements. Addressing the skill gaps and productivity
issues in this sector is crucial. Policies should concentrate on skill enhancement and training
programs specifically designed for agricultural workers. By improving their technical
competencies and adaptability to modern agricultural practices, these initiatives aim to boost
their employability and productivity in the sector.

33
The development and implementation of the Pre-Employment Enterprise Based Training
(PET) Programs in Agriculture Qualifications by the DA and PCCI-HRDF is a significant step
in this direction (PCCI-HRDF n.d.). These programs are specifically designed to address the
skills gap and boost the productivity of agricultural workers, thereby enhancing their
employability in a sector that is rapidly evolving due to technological advancements. A parallel
action to the development of PET Programs is the establishment of an agricultural training
council, originally proposed by Philippine Chamber of Commerce and Industry-Human
Resources Development Foundation (Padin 2016). This council, envisioned to be composed of
employers, employees, and industry organizations, is aimed at ensuring the agricultural
workforce's skills are aligned with the current and future needs of the industry. Such a council
would play a crucial role in overseeing and guiding the upskilling and retooling programs
offered by the Agricultural Training Institute (ATI) and the Technical Education and Skills
Development Authority (TESDA), tailoring them to effectively address any skills gap among
agriworkers. As the industry incorporates more advanced technologies, it is crucial that
workers are not only versed in traditional agricultural methods but are also adept in the use and
maintenance of these new, high-tech machines and computer applications.

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1
Operation of irrigation systems through cooperatives and non-cooperatives; Planting, transplanting and other
related activities; Services to establish crops, promote their growth and protect them from pests and diseases;
Harvesting, threshing, grading, bailing and related services; Rental of farm machinery with drivers and crew;
Support activities for animal production; post-harvest crop activities; and seed processing for propagation.
2
The figure is much higher than what is advertised in the Shopee website. It may cover all fees and charges such
as delivery fee, payment processing, etc.

41