Government help badly needed in coconut industry


After losing the top spot to Indonesia, the Philippines settled to its current ranking as the second-largest producer of coconuts in the world by the Food and Agriculture Organization of the United Nations. With about 25 percent of the country’s agricultural lands planted with coconuts and an estimated between 25 percent and 33 percent of the Philippines’s over 100 million population partly dependent on coconut for their livelihood, the Philippines exported 1.5 million metric tons of copra, coconut oil, copra meal, dessicated coconut, coco- shell charcoal, activated carbon and coco-chemicals in 2012.

But in November 2013, around 44 million coconut trees were damaged by Supertyphoon Yolanda, affecting over 1 million coco farmers. Followed by other typhoons and the infestation of cocolisap in some coconut- producing areas in the country, the coconut industry faced its biggest challenge, even as it continues to face an even bigger threat today because of the unabated smuggling of palm and canola oil into the country and  the illegal export of partially dehusked coconuts.

Palm- and canola-oil smuggling

Palm-oil smuggling is causing hundreds of millions of pesos in revenue losses for the government. When I was president of the CIIF-Oil Mills Group during the period 2009-2012, we were importing palm oil from Indonesia. Our declared value then was based on the world market price of $1.25 per kilo of palm oil at that time, already packed in plastic containers. But a Cebu- based trader had been importing palm oil also from Indonesia for over three years, with his palm oil importaions’ value declared at only $0.06 per kilo. The gross undervaluation of imported smuggled palm oil from Indonesia did not only result in huge revenue losses for the government, but it also affected the viability of the local coconut industry as it unfairly competed with the locally produced coconut oil in the local market.

My pursuit against palm-oil smuggling, however, paid off when the Cebu-based importer was eventually charged for smuggling by the Bureau of Customs, after my complant against the Cebu trader. Moreover, the value of imported palm oil from Indonesia was eventually pegged at a fairly determined reference value.

Meanwhile, I would discover the other “modus”  to illegally bring canola oil into the country without having to pay its appropriate duties and taxes. I got suspicious over the huge discounts  being offered by some Binondo traders for their imported canola oil. It became a puzzle to me how  they could survive with their huge discounts. I would find out later though, that these traders would import palm oil and canola oil at the same time. And they would misdeclare a big part of their canola oil importation as palm oil resulting in huge losses for the government. Traditionally, the price of canola oil in the world market is significantly higher than the price of palm oil.

Illegal export of partially dehusked coconut

An equally serious form of illicit trade in coconut that poses a major threat to the coconut industry is the illegal export of partially de-husked coconuts. Used as a coconut seedling, China is on a buying spree for partially dehusked coconut in view of its massive coconut planting program in Hainan, China.

If left unchecked, the impact of the continued illegal export of partially dehusked coconut  could be alarming. Philippine Coconut Authorty (PCA) records say the country’s 338 million coconut-bearing trees produce an average 15.344 billion nuts a year. But a large number of these trees are aging and would need replacement. Thus, the illegal export of partially dehusked coconut to China could result in coconut-seedling shortage in the country.

Meanwhile, global demand for coconut is expected to grow even faster. And with these unfolding developments in the coconut industry, only time can tell when the Philippines will  be taken over by China or other coconut-producing countries from its ranking as the second-biggest producer of coconut in the world.

As of this writing, coconut farmers and traders in the Eastern Visayas Region decry the continued illegal exports of dehusked coconuts by a certain consolidator in the area that is allegedly being financed by Chinese speaking individuals in Cebu. Dehusked coconuts from Leyte, Dumaguete, Samar, Bohol and some parts of Cebu are allegedly trucked to the huge Chinese operated warehouse in Cebu and eventually exported illegally to China.

Government support badly needed

The coconut industry badly needs government support. Coconut farmers affected by the cocolisap infestation need help. They need chemicals to fight off the cocolisaps. Much as they also need government help to replace the millions of coconut trees damaged by typhoons.

To preserve the country’s inventory of coconut trees and to hold on to its ranking as the world’s second-largest producer of coconuts, coconut smuggling and other forms of illicit trade in coconut must also be aggressively addressed. To begin with, smuggling out of the country of partially dehusked coconuts can be classified, not only as a form of economic sabotage, but as an act of treason, as well. This would enable the government to apply the full force of the law to coconut smugglers. And most important, this would help keep the country’s coconut industry from dying.

About 26 million Filipinos depend on coconut trees for their livelihood. For the marginal coconut farmers, they depend mostly, if not entirely, on coconut for their need for food, clothing, shelter and education for their children. But while the prospects in the global market for coconut products are encouraging, the current situation in the local coconut industry is, however, challenging, if not alarming.

The timely intervention by the government on the issues now confronting the local coconut industry would be very crucial for its survival. After all, according to  American author and futurist Jamais Cascios, “Resilience is all about being able to overcome the unexpected. Sustainability is about survival. And the goal of resilience is to thrive.”

And, yes, the government must help the coconut farmers and the local coconut industry to be resilient in light of the challenges now faced by this economic sector.


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