Redemption of coco farmers II

COMMENTARY

by Jose V. Romero Jr.

Second of two parts

THE development of the coconut industry, though dependent primarily on small-farmers implies much more. It encompasses:

a) Efforts to raise both farm and non-farm rural real incomes through job creation, rural industrialization, and the increased provision of education, health and nutrition, housing, and a variety of related social and welfare services;

b) A decreasing inequality in the distribution of rural incomes and a lessening of urban-rural imbalances in incomes and economic opportunities; and

c) The capacity of this sector to sustain and accelerate the pace of these improvements over time.

It is axiomatic that the development of the coconut industry is vital to national development. This is not only because the majority of the population is located in coconut areas but also because the burgeoning problems of urban unemployment and population congestion must find their ultimate solution in the improvement of his sector of agriculture which sustains millions of subsistence farmers.

Accordingly, more governmental support to agriculture in general and to the coconut industry in particular is necessary. Indeed the success stories in food production are to be found precisely in those nations where the state was actively involved through a technically competent extension service.

There is need to support enterprises of family size in the coconut industry. This requires economic conditions that can ensure sufficient income to enable the coconut-based family to live a decent life. To attain this end, it is necessary not only that coconut farmer be given up-to-date instruction on the latest methods of cultivation and be technically assisted in their profession, but also that they form a flourishing system of cooperative undertaking.

The cooperative focuses on the fact that in agriculture, as in other sector of production, association or cooperation of farms is a vital need, the more so as this sector has its base the family size enterprise, as in the case of the coconut industry. Coconut workers should therefore be made to feel a sense of solidarity one with another and unite to form cooperative and such associations, which, are both necessary if the methods of production are to contribute in an efficacious manner to defend the prices of their products, and if they have a voice in political circles as well as in organs of public administration, for today almost nobody hears, much less pays attention to, isolated voices. This was precisely their problem during the levy period.

The coconut industry still practices traditional agriculture. This industry can be modernized in two ways. The first is technological: specific inputs and techniques can be combined to produce higher agricultural production. Technological modernization deals with such issues as the role of chemical fertilizer and the relationship of fertilizer’s impact to the availability of improved plant varieties and adequate supplies of water. The second approach to the modernization of the industry concerns the mobilization of agricultural inputs and techniques.

There is need to teach coconut farmers sound knowledge of the relevant subsystems in agriculture: crop, water, and soil cycles for crop production; in animal husbandry, fodder and livestock sources for animal production; technical infrastructure; marketing systems; labor management and assistance in maintenance services of farm mechanization and management; and the external economic, socio-economic, physical and market factors. Moreover it is important for the government to make available agronomists, agro-economists, livestock experts, food technologists, and rural development planners to answer specific technical or economic questions of the coconut farmers as well as to work out solutions for complex and integrated development projects.

To be globally competitive the coconut industry must be cost-efficient which can be achieved by carrying out internal and external economies of scale.

By vertical integration, it is possible to cut costs of transportation through bulk handling cargo consolidation. Nucleus estates, which promote resource, based processing, cut back on high transportation cost of bulky commodities like copra to export points (the present location of the bigger mills). By hauling coconut oil that is only 60 percent of copra weight, transport economies can be derived. If copra-handling cost is considered, the reduction in transport expenses can be substantial.

Cargo consolidation through the optimum use of tank facilities by the bigger mills in ports allows for volume export. By minimizing ports of call, shipping companies are not reluctant to grant volume discounts to shippers. Export points can then approximate the operation of tank farms in San Francisco, New Jersey, New Orleans, Rotterdam and Hamburg.

Revising development strategies will necessarily require a development plan for the industry; it must necessarily be comprehensive and cover the production, processing, marketing and financing sectors. Necessary as well are the synchronization of research to bring the industry to the state of the art cutting edge technology and the synchronization as well of research undertakings. This will require coordination among implementing R&D entities. Also, there must be a shift in emphasis from production maximization, i.e., maximization of yields per tree, to the optimization of the utilization of land areas planted to coconut. Monocropping must give way to multicropping. Killing copra culture to give way to the fresh coconut system which will adopt the full value recovery of the coconut.

This will develop CNO carbon chains to produce valuable downstream products from fatty alcohols, acids, glycerine, MCT, Monolaurin, etc.; Farm consolidation and cooperation as a vehicle for greater efficiencies in the economic activities of the farmers to improve their economic well-being must be emphasized. This can produce economic-size farm which must produce a critical mass of raw materials to support processing plants, thus reducing transaction costs; and last but not the least market research and development program to provide the environment for sustained marketing and trading of coconut products in both foreign and domestic markets.

There is need for a coconut industry development paradigm shift. To arrest the potentially inequitable situations, government should now spearhead the restructuring of policies for economic growth. This should emphasize that from now on priority will be to ensure that the benefits of growth shall accrue to small coconut farmers, farm workers and coco-based entrepreneurs, who should become the primary determinants and benefits of policies effecting the coconut industry.

The new development philosophy must aim at increasing the levels of productivity, incomes and employment in the coconut farm through vertical farm integration and product diversification.

Monocropping must give way to multi-cropping, subsistence farming to cooperativism. With the call for an increase in Buko Pie (Productivity, Income and Employment), the new policy must be farm-focused, rather than product-centered.