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Commentary

New strategy for coconut farmers

Last Feb. 25 and 26, two separate conferences were held to develop a new strategy for coconut farmers. A key objective of both conferences was to help ensure that current and new funds are harnessed to implement this strategy.

The Feb. 25 conference was attended by small farmers to identify their needs and make recommendations. The Feb. 26 conference, on the other hand, brought together investors and coconut processors. They suggested and discussed different successful models for different situations which, if replicated, could address the needs identified by the farmers the day before.

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Immediately after the two conferences, a Task Force was formed and convened to act on the conference recommendations. Last March 11, this Task Force had its first meeting to identify priorities and form an Executive Committee that would meet every week. The Alyansa Agrikultura was identified as an Executive Committee member that would concentrate on helping make current and future funds available to benefit the small coconut farmers.

Today, these funds are plentiful, but very little is used.

Of Land Bank’s over P200-billion loanable funds in 2013, only 12 percent or (P27.3 billion) went to small farmers and fisherfolk. Of United Coconut Planters Bank (UCPB)’s over P70 billion in loanable funds, less than 1 percent (or P500 million) went to small farmers.

Challenge

The challenge is to identify feasible projects so that more of the UCPB and Land Bank funds can responsibly go to the coconut industry.

At the Task Force March 11 meeting, Presidential Assistant for Food Security and Agricultural Modernization Francis Pangilinan cited the need to identify successful projects that could be replicated and funded because of their track record.

At the earlier conference, some had already been identified and explained. The challenge is to find more such projects, document them, and form a template for others to follow. This will facilitate funding for similar enterprises.

During this conference, Mayor Sandy Javier Jr. of Javier, Leyte explained many successful examples of coconut processing and value-adding enterprises that he successfully started.

At this Task Force meeting, it was noted that Pangilinan funded from his Senate resources several Gawad Kalinga homes, which became models for housing developments.

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The same replication strategy should be implemented for coconut enterprises.

Two models

Since the objective is to help coconut farmers, intercropping coffee between coconut trees is recommended.

This yields P100,000 income per hectare, as compared to the P20,000 income for coconut alone.

One model is for the coconut farmers at the barangay level to become complete businessmen.

They will do the coffee processing and sell the output, thus getting the value added from the coffee beans.

For other areas, a different model may be appropriate. Some 80 percent of our coffee today is imported from Vietnam.

Since the Vietnamese use large economies of scale to bring their costs down and export their coffee to us at low prices, we must likewise use the same economies of scale to compete successfully.

Therefore, this larger model must be used in certain parts of the country.

Ideally, these large processing plants should eventually be co-owned by the farmers so that both the purchase price of produce from the farmers, as well as the processing profits, will benefit them and not the already rich entrepreneur.

Depending on the need of the area, both models are correct.

One advocate for the model of small processing is Vie Reyes of Philippine Coffee Alliance (029279460).

For the second bigger model where farmers are initially suppliers and not processors, a knowledgeable advocate is Roberto Ansaldo of Rocky Mountain Arabica Coffee Company (09173090850).

It is this kind of searching for successful models in different situations that the newly formed task force should concentrate on.

This will then result in templates of financially feasible projects.

This will allow the banks to release their funds to feasible coconut projects, instead of the currently financially safer non-agriculture areas of energy, housing and real estate.

Results

To eliminate the idea that the task force is just a “ningas-cogon”, the Task Force members have committed to deliver concrete results within six months.

To help make sure that this happens, the Land Bank and UCPB are being harnessed to help meet these objectives.

We recommend that the PCA hire a new specialized group to look for these successful coconut enterprise models, document them, and create templates with the assistance of Land Bank and UCPB.

Without these efforts, much money for coconut farmers will be available, but there will be few viable projects to fund.

Fund release to feasible projects must therefore be the priority focus of this task force.

(The author is chair of Agriwatch, former Secretary for Presidential Flagship Programs and Projects, and former Undersecretary for Agriculture, Trade and Industry. For inquiries and suggestions, email [email protected] or telefax (02) 8522112).

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TAGS: Business, coconut farmers, Coconut Industry, column, ernesto m. ordonez, Philippines, strategies
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