Any stranger or first-time visitor to Laguna and Quezon will be instantly awed at the sight of endless rows of tall and lush coconut trees which dominate the landscape. But the thick tree cover all around seems to camouflage the acute ills that beset the coconut industry in these provinces and the entire country.
In fact, small coconut farmers are finding it more and more difficult to make both ends meet as copra prices have plunged anew to rock-bottom level. Unknown to many, scores of coconut oil factories have long been idled or shut down in Laguna and Quezon for insufficient supply of coconuts to process. With less and less coconuts being harvested due to unabated cutting of trees and the increasing number of senile and unproductive trees, factory owners have to order coconuts from as far as the Bicol provinces, Marinduque and Mindoro island to feed to their processing plants.
Aside from the indiscriminate cutting of trees, the coconut industry has been hobbled by increasing competition from other vegetable oils in the export market, the lack of incentives for replanting trees, pest infestation and the pernicious practice of converting coconut plantations into orchards for other high-value crops and for non-agricultural purposes.
The pressing question is how determined the government is in arresting the decline of the coconut industry and save the main source of livelihood for about a fourth of our population.
Now, the economic situation of coconut farmers and their families has worsened because of the sharp drop in copra prices. In Southern Tagalog, copra prices went down from P28.25 per kilogram in 2007 to P24.75 per kg in 2008. The rapid decline in prices is worse in the Visayas and Mindanao, averaging more than P7 within a year. Because of unattractive prices, farmers would rather cut coconut trees and sell them as lumber instead of harvesting coconuts. The falling prices were largely caused by increasing competition from other sources of vegetable oil in the global market such as palm oil, rapeseed and soy oil.
Alarmed over the bleak situation, Senator Edgardo Angara, who comes from the coconut-growing province of Aurora, has been spearheading a series of measures to revitalize the moribund coconut industry. This time, Angara is calling for the creation of the Philippine Coconut Development Industry Authority in a bid to strengthen the institutional mechanism for promoting the growth and development of the coconut industry and for extending assistance to marginalized coconut farmers.
”I see the need for the creation of Philcida to fulfill the goal of ensuring that the more than 20-million coconut farmers, farm workers processors, lessors and tillers, and their families shall become direct participants in, and beneficiaries of such development and growth thereby increasing their income and uplifting their quality of life,” says Angara who served as secretary of agriculture under the Estrada presidency and chairman of the Senate committee on agriculture.
The senator and known champion of agricultural causes has traced the sharp drop of coconut oil prices in the world market to the glut in palm oil. This is happening at a time when domestic copra production has been affected by the widespread destruction of coconut trees caused by a series of typhoons last year.
”If the scenario continues, the coconut industry will collapse. Thus, we should focus our efforts towards saving our leading export earner. This can be initially done by providing a conducive policy atmosphere for the revival of our coconut industry,” Angara says.
Last year, coconut oil prices fell to a new record low. The Philippine Coconut Authority reported that coconut oil and copra prices were greatly affected by the overall weak sale of vegetable oils, lingering uncertainties in global financial markets, steep decline in crude mineral oil prices and weak Asian vegetable oil markets.
With earnings from coconut oil exports averaging $760 million a year, the coconut industry contributes about 1.14 percent to the country’s gross domestic product. The Philippines is the world leader in coconut exports, and accounts for 59 percent of the world market.
Last year, the country’s coconut oil exports plummeted to 840,547 tons, 5.2 percent lower than the 2007 level and below the 1 million ton target. The United Coconut Association of the Philippines attributed the lower exports to the bigger demand for coconut oil used as feedstock for local bio-diesel production.
With better weather conditions, the association foresees coconut production in copra terms to rise by 5.4 percent to 2.516 million tons this year from 2.386 million tons last year. Coconut production reached a record 2.8 tons in 2001. The Philippines exports about 80 percent of its coconut oil output overseas but it accounts for only 5 percent of the global vegetable oils market due to the drop in production in recent years and the trend in the traditional export countries like Europe to shift to the cheaper palm kernel oil.
A recent study by the Asian Development Bank blames the continuing decline of the country’s coconut industry to the government’s dismal failure to address the concerns of “stagnation and declining productivity of coconut, low domestic consumption and weak research and development.” At the rate coconut trees are being cut down faster than they are being planted, the ADB warned that “the Philippines will lose the distinction of being the world’s top coconut producer and supplier.”
Angara, principal author of the Agriculture and Fisheries Modernization Act, lamented that the government has failed to undertake massive replanting of coconut trees and to adequately invest in research and development to encourage farmers to plant what is fondly called “the tree of life.” He observes that neighboring countries like Indonesia and Thailand are investing so much in their coconut industries. He says it is not far-fetched for Indonesia to overtake the Philippines in coconut oil exports because it is investing heavily in research and development of this versatile crop. He adds that failure to efficiently produce coconut oil at a reasonable price, starting at the farm, will affect the product’s marketability worldwide because of stiff competition from other types of vegetable oil.
Since last year, the Philcoa, under the leadership of Administrator Oscar Garin, has started a program to plant up to 18 million coconut trees. The Philcoa pays the farmer P7 for each quality seed-nut and pays him another P7 when the leaves of the seed-nut reach 2 feet. Finally, when the seed-nuts are planted, the agency pays the farmer another P20. Eventually, the agency buys the nuts produced. Each coconut development officer is given the task of replanting 100 hectares of land a year in his region. A coconut tree is expected to produce 35 seed-nuts yearly, which is equivalent to one-half ton of copra. The Philcoa program is laudable except for the fact that available funds are too limited to expand it and cover as many areas as possible.
Angara says the irony is that there is an estimated P50 billion to P100 billion in coconut levy funds invested in San Miguel Corp. which are still tied up in court litigation over the ill-gotten wealth cases. Every administration starting with the Ramos government zealously attempted to unfreeze the coconut levy assets for use in rehabilitating the troubled coconut industry. Unfortunately, nothing has happened and the cases are still languishing in the courts up to this day—to the detriment of the poor coconut farmers and the whole nation.–Fel V. Maragay, Manila Standard Today
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