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Coconut renaissance

/ 09:14 PM January 11, 2013

Over 340 million coconut trees occupy 3.56 million hectares of arable Philippine land, annually yielding 15 billion nuts. Directly or indirectly, the industry employs some 25 million Filipinos. This makes coconut truly the Philippines’ “tree of life.”

Aging baby boomers continue to enjoy the benefits of virgin coconut oil (VCO) and other derivatives like cocowater, -sugar, -flour, and -lumber, and even geotextiles from coir. These give the industry room to grow, but getting and keeping a share of the world’s coconut markets won’t be easy.

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Indonesia has overtaken the Philippines as the nation with the biggest number of coconut trees. India, Thailand and Brazil lead in product development and manufacturing. Yet the Philippine coconut remains the envy of most producers. Its inherent sweetness and processing adaptability are advantages stemming from geographical location and unique weather patterns.

But the Philippines cannot rely on nature alone to ensure coconut competitiveness. Its 3.5 million coconut farmers average a measly P10,000 annually, with copra traders cornering the bulk of production revenues and leaving no incentive to increase yields. The manufacturing sector is grossly underdeveloped, earning just $1.5 billion yearly from coconut exports. Legal wrangling prevents the multibillion-peso coconut levy funds from being used to improve the miserable lot of coconut farmers and modernize the industry. Government neglect has also created statistical voids since 2004, making it hard to plan a modernization program.

Still, the Philippines must revitalize its coconut industry ASAP. The devastation wrought by Typhoon “Pablo” in Mindanao adds more urgency to this task, which must assess global market trends, harness converging infocom and processing technologies, and rationalize value chains.

Niche markets can shape the modernization program. Coconut is no longer just  buko, copra, cooking oil and dessicated nuts, the anchors of the industry when the Philippine Coconut Authority (PCA) was formed in the 1970s and installed the country as king of coconuts and cooking oil. Health and wellness issues, ecological consciousness and technological advances have catalyzed many a coconut-based product and manufacturing process. Whether as a new seedling,  tuba  source, young  buko, mature  niyog  or senile tree marked for cocolumber and  ubod, the coconut can be transformed into food, drink and a host of other products.

In the 1980s, the soya and palm oil lobbies created the cholesterol scare to discredit coconut cooking oil, triggering a tailspin from which the Philippine coconut industry has yet to recover. Soya and palm producers took the cooking oil market away from the Philippines, which then controlled up to 65 percent of world coconut oil capacity. As copra prices plunged, life got more difficult for our impoverished coconut farmers. Decades passed before recovery seemed possible.

An industry comeback is palpable today. But choosing the product to manufacture and market can be a problem. Products need technical research documentation (as in VCO, geotex, and maybe cocowater) and loyal market niches (as in cocosugar, lambanog and cocoflour). A session with the Intellectual Property Office-Philippines is necessary for issues like patent or trademark registration and ISO certification of the manufacturing processes.

The products named above have handsome gross margins and export potentials. But for quick benefits for farmers, tuba-based cocosugar and  lambanog  can become favorites as their manufacture is skewed toward developing rural communities and creating sustainable livelihoods that also spark bamboo and vegetable production.

Technology is another element of the modernization plan. Documenting and testing manufacturing processes will set standards and quality controls to satisfy health concerns and build product integrity. Plant cleanliness and material-handling protocols will be critical, with research labs and quality checks becoming integral to all manufacturing facilities, even at the grassroots level.

Consciousness of scientific disciplines will bring more breakthroughs.  Tuba-based technologies to make cocosugar and  lambanog, as propounded by Lawrence G. Lim of Coco Vita Enterprises, exemplify the desired processes. Breakthroughs can even extend backward to agricultural production: Creating a major stir in some circles is the possibility of raising annual tree output from 43 to over 100 by using a soil conditioner from Kinetics Philippines Inc., whose protocols have improved yields from such crops as rice, corn, sugar, banana, tobacco, rubber and vegetables.

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Then there are the converging information and communication technologies (ICT), which can track coconut trees, farmers and communities and quickly update the Department of Agriculture (DA) and PCA databases. If local government units (LGUs) can be simultaneously coopted while the Kaanib program of the DA and PCA is being launched, this will link a dynamic network of committed farmers and self-reliant communities that can then work in concert to develop coconut consumables for export.

Of 340 million Philippine coconut trees, 15 percent are senile, leaving just 290 million to produce the industry’s raw materials.  Even if that number falls to 270 million because of Pablo, the Philippines can still produce, at 43 nuts/tree annually, an output of 11,610,000,000 coconuts. That’s a billion more than India, which ranks behind the Philippines in coconut production. If the soil conditioner can raise output to 78 nuts/tree, the Philippines can produce more nuts annually than Indonesia’s 21 billion.

Accelerated replanting can also bring more coconuts to the North Luzon coastline (from Zambales to Ilocos Norte to Cagayan down to Isabela). Already, former Sen. Ramon B. Magsaysay Jr. is mobilizing his clan in Zambales to plant coconuts as its legacy to the province. With such efforts, the Philippines can reestablish itself as the world’s top coconut producer, and with a stronger value chain rationalized by the ICT-generated database and farmer-inclusive Kaanib co-ops.

Island-provinces can promote community livelihoods (like cocosugar for men and VCO for women) and establish  lambanog  distilleries. Dehuskers (like those designed by  balikbayan  Ramon A. Laconico) and decorticators (such as those already in PCA equipment inventories) can be brought to island-provinces to properly bale coir and have it processed into geotex products. And copra trading posts can be maintained to take any residual copra to nearby oil mills, and the manufacture of other products (soaps, lotions, even cooking oil) can be largely localized to cut the waste of petroleum products in the round-trip transport of raw materials and finished products.

But for this plan to succeed, it must be inclusive. The DA must provide a policy framework, regulatory enforcement and seed funding that can draw private-sector investment. It must also involve the Department of the Interior and Local Government, which can provide both supplementary investment and political will at ground level. Countryside entrepreneurship movements like Balik Probinsya can mobilize volunteers to create sustainable livelihoods in coconut communities. The PCA, as a regulatory body, can mobilize LGUs, private investors and partner-farmers, as well as provide technical help when needed.

Not only government budgets and coconut levy funds can fund this program. Professional managers like Florencio B. Orendain and entrepreneur-industrialists like Rene E. Cristobal believe they can mobilize investments from the reintegration of overseas Filipino workers, whose $20-billion annual remittances can help provide enterprise equity.

If the program becomes a full-fledged movement, inclusive coconut modernization may be the key to Philippine economic and political emancipation.

Jose Osias is president of Balik Probinsya Inc., which advocates job generation in the countryside and integration of OFW returnees in the labor sector. He holds a master’s degree in business management from Ateneo de Manila University.

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