Grassroots & Governance
By Teresa S. Abesamis
BusinessWorld
No one will dispute, not even Eduardo “Danding” Cojuangco, Jr., that coco levy funds collected from coconut farmers around the country were used to purchase First United Bank (FUB) from his cousins who were then on the wrong (Ninoy Aquino) side of the political fence. This bank was later on renamed UCPB, since the presidential decrees and other directives signed by his friend the Dictator Ferdinand Marcos during martial law stated the purpose for such a purchase was to enable coconut farmers to have easier access to credit. Thus, UCPB was aptly named United Coconut Planters Bank, purchased in 1975 by order of a presidential decree “for the benefit of the coconut farmers.”
Today, almost 40 years after the creation of UCPB, supposed to be the coconut farmers’ bank, credit is still tight for the coconut farmers and for farmers in general. Technological innovations, such as cold-process virgin coconut oil and value-adding products such as coco nets (for soil erosion control) and coco peat (soil conditioners for higher farm productivity) have opened up opportunities for farmers to share in the value-adding from their produce, thus enabling them to approach prosperity. And yet, coconut farmers are unable to participate fully in these new opportunities because they are unable to obtain financing for the equipment required for them to produce the new products that have generated demand domestically, as well as overseas. Ironic that they can’t borrow a little; since Danding Cojuangco was able to borrow so much from the bank they supposedly own.
Now that it looks like the last bastion for obtaining justice, the allegedly venerable Supreme Court, has decided in favor of the consistently lucky Danding Cojuangco, shall we just wring our hands and say, well, there goes P85B of the coconut farmers’ money, which is the estimated value of the 20% shares in San Miguel Corp. that Cojuangco has won back. The government is filing a motion for reconsideration. Meanwhile, since this seems like, almost, a lost cause, given the present composition of the Supreme Court, what can we do to help the farmers tap new opportunities to rise above poverty, so that they can send their descendants to college, and break the cycle that, with increasing numbers of descendants, condemns them to long-term penury?
Perhaps the UCPB bankers need to learn to be more creative and imaginative they should be able to, if they focused enough on the alleged purpose for its existence: the welfare of the coconut farmers.
I am not a banker, so I could make some technical errors in making some of my suggestions. However, I am just issuing a challenge to the bankers to be more creative in order to achieve their fundamental missions, in addition to enhancing bottom lines and shareholder value (do we know who these shareholders are now?)
For example, Dr. Justino Arboleda, who came up with ideas for value-adding coco nets, coco peat, and other by-products from copra meal extraction processes (from coconut husks) can hardly meet the international demand for his innovations because the coconut farmers, whom he wants to be his suppliers, do not have access to credit so they can own the decorticators and other equipment that will enable them to process the husks into marketable products that they can supply to Arboleda’s company.
On the domestic market, President PNoy himself, upon the endorsement of DPWH Secretary Rogelio “Babes” Singson, has endorsed coco nets for soil erosion control in public works products all over the country. As the Philippines is so typhoon and flood disaster-prone, this is a boon to infrastructure construction. The coconets will hold the hillsides and shoulders of highways so that vehicles can run safely through highways protected from landslides. Soil on the hillsides and roadsides can be held together by roots of vegetation planted through the coco nets that decompose in time. Homes, too, can be protected from the onslaught of typhoons passing through newly constructed highways.
In Australia, cattle raisers have discovered the blessings of coco peat, which they scatter on the ground beneath the cattle in their ranches. The coco peat catches the manure which, when dried, they gather up with the peat and turn into organic fertilizer, now in demand with the trend for green technologies.
The German car manufacturers use decorticated coconut husks as upholstery material for their cars and mattresses in lieu of fossil-fuel-based products which they were using before, again, as a gesture toward green technologies. A friend of mine asked me why here, we are still using imported oil-based upholstery materials. I said, “You know how it is.” (Which means, no, I don’t know.)
The opportunities are there to tap. What can the banks do?
They will have to come up with new ways to ease access to credit for farmers. On this, the UCPB, which has a mandate to help them, should pave the way. Perhaps they can put up guarantee mechanisms to make it easier for rural and other provincial banks to take risks with the coconut farmers. Perhaps, being a unibank, they can put up venture capital and go into joint ventures with the coconut farmers that enable farmers to redeem low-priced “preferred shares” within a five-year period or so, thus enabling them to solely own the ventures in time. There must be many more innovations that creative UCPB bankers can come up with. It is a matter of focusing on their fundamental mission. What I am saying is that it is probably a matter of “using their coconuts.”
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