World copra prices dropped by 60 percent from P61 a kilo in April 2011 to just P25 a kilo today. Such a drop brings bad tidings to coconut farmers all over the country.
How then do we help the coconut farmers, who constitute not only the largest land-based agricultural sector but also the poorest?
Mayor Andre Avalon of San Roque, Northern Samar, sums up the condition of the coconut farmers in a text message sent to us last November 17.
Avalon said in his message that coconut farmers in remote towns are only able to sell their copra at a measly P4 a kilo. Farmers in towns get to sell at about P8 a kilo. But then the problem is that traders have stopped buying copra because of low demand.
He shared that crime incidence has increased and that some farmers are now unable to send their children to school.
Avalon even feared that if the situation continues, then insurgency might again rear its head, posing a major problem for the mayors.
The first question is: Why are the farmers getting only P4 per kilo for copra when the price in the world market is P24 a kilo?
Please see the table below sourced from the World Bank.
Bulk, Cit. N.W. Europe
October 2010 P41
April 2011 P61
October 2011 P35
April 2012 P37
October 2012 P25
Our research shows that the difference between the mill gate price and the world market copra prices is usually between P5 and P7 per kilo.
Therefore, the mill gate price today should be around P18 to P20 per kilo.
PCA officials say that the farm gate prices are generally P5 to P10 lower than the mill gate price. This means the farm gate price should be P8 at its lowest. But Mayor Avalon’s text states that the buyer at the barrio is paying just half of this at P4.
Omi Royondoyan of Centro Saka and Alyansa Agrikultura says that some traders are taking advantage of the farmers by giving them only one-half of the correct price.
This can be addressed if the government gives the farmers much assistance in support of cooperatives such as transport vehicles, soft loans and other technical assistance.
Northern Samar Representative Emil Ong has suggested a P2-per-kilo subsidy for the coconut farmers. This means P10 billion a year from the P70 billion coconut levy fund. But is there a better way to use this money?
There is a saying “Give a man a fish and he eats for a day; teach a man to fish, and he eats for a lifetime.”
The more useful solution is not a dole-out but effective technical assistance.
First, the budget of the Philippine Coconut Authority should be significantly increased.
For 2013, the proposal is to give PCA less than P2 billion, while the rice irrigation budget is more than P25 billion.
We should realize that there are more coconut farmers than rice farmers, and they are poorer.
Second, the coconut levy should be finally used to benefit the coconut farmers who contributed to it.
After so many years, this has hardly been touched.
The proposal of the Alyansa Agricultura and other farmer organizations is for the government to create a public-private partnership (PPP) body that will recommend and monitor the use of the coconut levy so it really benefits the farmers. This should be done immediately.
Third, there is a need for a useful coconut industry road map formulated by competent and experienced professionals. The current road map does not meet this standard.
Nevertheless, there are good points in this road map that should be funded and implemented, many of which are not being done today.
For example, two million out of the three million coconut hectares still have no intercropping.
Additional crops like cacao and coffee can provide the farmers additional income that will protect them from the copra price fluctuations in the world market that they have no control over, which we are experiencing.
At this time of dire need, it is critical that the government use the national budget, and more importantly the coconut levy, to immediately help the coconut farmers get out of their increasing poverty.
The PPP governance model should be harnessed immediately. Only then will the plea of Mayor Avalon and the coconut farmers be effectively addressed.
(The author is chairman of Agriwatch, former secretary for presidential flagship programs and projects, and former undersecretary for agriculture, and trade and industry. For inquiries and suggestions, e-mail email@example.com or telefax 8522112.)