Supply Response of Sugarcane (Saccharum Officinarum) in the Philippines

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