Executive Director's Corner

Coconut industry: Decades of poverty, decades of waiting

MAPping the Future

Coconut industry: Decades of poverty, decades of waiting

By Dr. Rolando T. Dy
Philippine Daily Inquirer

5:23 am | Monday, March 25th, 2013

In my past advocacies, I discussed the development impact of tree crops in Southeast Asia: How a well-managed and focused development of cocoa, coffee, oil palm and rubber lifted millions of rural poor out of poverty and energized the domestic markets for goods and services.

I cannot resist comparing the state of our coconut industry with our neighbors’ tree crops. The coconut industry and the poor people it supports are just too massive to have been ignored by past administrations. It is a national tragedy of enormous proportions.  The industry has been practically on auto-pilot for decades.

Where are we?

Coconut is not alien to me.  My family farm has less than two hectares of low-yielding coconuts grown from seedlings with unknown progeny. In my travels to Aurora, Davao del Sur, Leyte, Samar and Zamboanga, I saw poverty and senile trees with limited intercrops.  A friend from the Armed Forces once said that coconut areas have high a correlation to the presence of rebel groups, such as the New People’s Army.

A crop with 3.5 million hectares out of the total 10 million hectares of farmland cannot just be ignored.  Its dismal productivity of one ton of copra per hectare is a disgrace to the talented Filipino scientists. It is a surefire formula for poverty. Official statistics say that some 36.7 percent of the farmers and 41.4 percent of the fishers are poor, those in coconut lands would be far higher although there is a lack of official statistics for an important poverty sector. The National Anti-Poverty Commission estimates that coconut farmers have a poverty incidence of 60 percent.

The coconut industry is getting less and less competitive.  I remember many years ago that coconut has a price premium over palm oil in the world market.  Now, that is gone despite the massive inflow of palm oil into the global markets. Supply reliability is the key. Why should a foreign buyer design a factory for downstream products when the world’s number one exporter experiences high volatility?

The coconut value chain is riddled with poor quality of planting materials, low farm productivity, low capacity utilization of processing plants and no price premium over the leading vegetable oil, which is palm oil. There is also little research budget and worse, no dedicated research institute such as those for coffee, oil palm and rubber in Malaysia, Thailand and Vietnam.

In the farming community, low productivity and limited crop diversification cause high poverty. Also some 66 percent of the farmers do not own their lands. They are lease holders. Decisions to farm may be tough when the farmer is not the owner-operator. There are also hundreds of thousands (or millions) of “migratory” landless harvesters who do not appear in the statistics.

The leading donor communities have been engaged in rice irrigation (with lesser poor beneficiaries), agrarian reform communities, rural infrastructure, highways, etc.  I wonder why they have not supported coconut, with one of the largest poverty groups.  A leading agency has “fighting poverty” as its motto, and another has “working for a world free of poverty” and still another, “enabling poor rural people overcome poverty.”  Their take: Government institutions may not be ready to handle large projects.

Where are we going?

The central strategic focus should be the farmer. It is not the coconut tree. This may be an easy distinction for some, but not for many.   More efficient utilization of the land is the means to reduce the farmer’s poverty. The dictum is: If farming is profitable, then the industry will be sustainable.

How do we get there?

The above focus translates into several pillars of efficient value chains. Repeat plural, not singular.

To reduce the farmers’ poverty, we must think of productivity and efficient land use. Not just one crop but several crops.  How do we make coconut productive? Standard answers: Fertilize or replant old trees.   A sound poverty-reducing development strategy goes far beyond that.  Intercrop those lands between the coconut trees.  Convert unsuitable lands (because of soils and topography) into something more profitable.

From there, coconut lands become multi-product, and many coconut farmers will have diversified and less risky sources of incomes. Then they will have several value chains, not just one, to maximize income streams. This is neither rocket science nor molecular biology. It is sound common sense.


Going forward

We must have a deep examination of conscience regarding society’s attitude towards the coconut farmers. There must be a one, unified approach to poverty reduction, not a fragmented one due to turf issues. There must be a council for the levy fund that is guided by a board composed of farmers, processors and exporters following Southeast Asian models. Only then will there be hope for the coconut farmers.

(The article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines. The author is the Executive Director of the Center for Food and AgriBusiness of the University of Asia & the Pacific. Feedback at [email protected].  For previous articles, please visit <map.org.ph>)

Originally posted at http://business.inquirer.net/114003/coconut-industry-decades-of-poverty-decades-of-waiting