PH coco industry ain’t a tough nut to crack

With the Philippine Coconut Authority (PCA) celebrating its 50th anniversary this week, it is timely to identify three crucial initiatives that will uplift the coconut industry and our farmers.

We are the number one coconut exporter in the world, with 3.5 million farmers and farm workers helping buoy the industry. But our lead is threatened by global competition, not to mention the fact that the industry is still the poorest in our country.

We must now use the P130 billion coconut levy fund, which was recently made available, to address this critical situation.

We must also heed our president’s call for unity. To do this, we should improve communication and cooperation between government and the private sector, between the Department of Agriculture (DA) and the Department of Trade and Industry (DTI), and between farmers and agribusiness in the private sector.

It is in this context that three coconut initiatives are recommended:

Coconut methyl ester or CME

The 2003 Biofuels Act mandates that CME should constitute 5 percent of diesel by 2020. Today, CME level is still at 2 percent.

Oppositors say increasing the mix will further hike fuel prices. However, the Asian Institute of Petroleum Studies showed that savings obtained from increased mileage using CME was at least five times the return (or a 500-percent return on investment) on the CME cost.

This is analogous to spending the extra cost of fertilizer because the increase in yield justifies the cost. Such an economic advantage does not even consider the significant benefits in increased farmer incomes while decreasing our environment’s carbon footprint.

When the Alyansa Agrikultura brought up the topic with an undersecretary of the Department of Energy seven years ago, the official said it would be considered only if we could guarantee that the increased coconut revenues would go to farmers and not to agribusiness. This kind of reasoning is inconsistent with a unity approach.

Increasing our CME biofuel usage to 5 percent benefits everyone. From 17 million to 250 million tons a year at P55 a kilo, this means additional income of P12.8 billion. Indonesia uses a 30-percent biofuel mix, while Malaysia is targeting 20 percent. Why can we not go for 5 percent?

Intercropping

Two million out of our three million coconut hectares don’t undergo intercropping, thus wasting the beneficial use of our lands. Aside from crops like cacao and banana, coffee can also substantially increase coconut farmers’ income.

According to the Philippine Statistics Authority, we import 80 percent to 85 percent of our coffee. This means we can easily trump imports while keeping the jobs here and increasing farmers’ incomes.

The international nongovernment organization Rainforest Alliance showed that, with help from Nestle in Bukidnon and Sultan Kudarat, coffee yield increased from 300 kilos to 875 kilos a hectare.

Through the PCA’s public-private coconut-coffee program, new plant mortality rate dropped from between 30 percent and 45 percent to 15 percent and 20 percent because of the coconut-coffee fertilization approach.

Coconut products

In a June 26 column, John Tria wrote: “Incentivizing the creation of related industries can help our coconut industry go beyond copra and mean jobs for millions more. Desiccated coconut, coconut oil, coconut water, oleochemicals, activated carbon, and other downstream products will broaden the potential of each harvested coconut.”

In a recent interview with Dean Lao Jr., chair of the United Coconut Association of the Philippines and managing director of Chemrez Technologies, Inc., he said he was grateful for government support, but more could still be done.

A Lao-affiliated company is investing more than P10 billion this year in a coconut processing plant in Tanauan, Batangas. It will produce a full range of coconut-based export products for personal care, health, nutrition, and even household cleaning.

He suggested that our government must keep up with other countries: by expanding exports and creating more jobs. Maybe the government can help in promotions in establishments like Target in the United States, Coles in Australia, and Aldi in Germany.

We must not lose to other countries in this fast growing high-end, health-conscious global market. It will give us much higher incomes than our traditional low-value copra.

With these three initiatives, PCA can be a game-changer in improving our long neglected coconut industry and coconut farmers.