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Nur Aisha Abd. Wahab


Business Mirror



What the coconut sector truly needs
Business Mirror (28/08/2019) - The Philippines is currently celebrating what it regards as the “tree of life” and it has been doing so for the past 33 years. The government, through this year’s National Coconut Week celebration that kicked off on August 24, wants to remind (again) the nation of the importance of the tree of life to the country’s economy. Various activities have been lined up by government agencies to remind people of the benefits that can be derived from the coconut.

However, more than three decades after the Philippines first celebrated National Coconut Week, the perennial problems faced by the industry, particularly by farmers, have not been addressed. Until now, farmers continue to grapple with low farm-gate prices. Planters incur losses when traders buy their crop at prices lower than their production cost.

This is because the Philippines remains hostage to the movement in international prices of various vegetable oils, including palm oil. When the price of palm oil goes down, coconut oil—the top farm export of the Philippines—also becomes cheaper. Cheaper coco oil means traders will offer lower quotations for farmers’ copra. Unfortunately for farmers, the Philippine government has not yet found a way to expand the shipment of other coco-based products, which are potential dollar earners.

Apart from extracting the oil, the Philippines could export other coco-based products. The Philippine Coconut Authority (PCA) said in 2011 that processing just half of the 12 billion coconut husks that the country produces annually will allow the Philippines to earn $225 million in export receipts. According to the PCA, geotextiles or “cocomats” serve as erosion control material that are laid on mountain slopes, riverbanks and dam embankments.

The PCA also said coconut fibers may be transformed into twine or yarn, while fine coco fibers may be used in making beds or mattresses. Coconut peat or dust can serve as organic fertilizer, soil conditioner or animal beddings. Based on data from the Philippine Statistics Authority (PSA), however, the Philippines remains dependent on coconut oil. Of the total value of coconut products shipped by the country last year, coconut oil accounted for nearly 75 percent of export receipts.

With palm oil prices fluctuating due to factors beyond the control of the government, it must now turn its attention to other coconut-based products. The Philippines cannot continue relying on coconut oil to beef up the country’s export receipts. The government must also not wait for the coco levy before implementing initiatives that will increase the incomes of farmers.

Sadly, farmers relying on the tree of life are now starving due to the steep fall in the price of copra. And dole outs in the form of cash transfers are unsustainable simply because the amount is not enough for the basic needs of farmers and their families. What makes matters worse, the coconut sector is not attracting investments that could help end its reliance on government assistance.

Farmers and the coconut sector in general need access to cheap credit and policies that will entice companies to go into the manufacture of coco-based products. Simple tweaks in policies, such as expanding the use of coco coir in infrastructure projects will be a big boost for the industry. The government must also invest in research and development so that more products can be created from the tree of life.

Read more at https://businessmirror.com.ph/2019/08/28/what-the-coconut-sector-truly-needs/