Modernization of Coconut Industry in

the Philippines

This research illustrates how important coconut is to the Philippine

economy In 2013, coconut ranked fourth among crops, behind rice,
bananas, and corn, with a PhP77.4 billion contribution to the national
economy. Approximately one-fourth of the total land area used for
agriculture, or 3.56 million hectares, is planted with it. Coconut farming
accounts for most of the activities of an estimated 3 million farmers. We are
the biggest exporter of coconut oil and coconut meat in the world.

In terms of production of coconuts, we lead the world. How can we maintain

our leadership while also maximizing the value of our competitive
advantage? In other words, how can the Philippine coconut industry be
modernized to increase productivity, global competitiveness, environmental
sustainability, and equity, especially for small farmers who can be and
frequently are undervalued in the haste to modernize agriculture?
 Introduction

Along with more conventional food items like coconut meat and coco water, the
coconut is a source of a variety of raw materials, including coconut oil (CNO),
desiccated coconut (DCN), and copra meal. Due to its more widespread culinary
use, raw coconut is also utilized in a variety of items, including soaps and textiles.
As a result of being praised for their health advantages, coconut products are
becoming more and more popular with people who are interested in their health.
Because it increases engine efficiency during combustion and lowers emissions,
coconut is also used to produce biodiesel.

On the international market, coconut from the Philippines is fiercely competitive

with soybean, corn, and other commodities used to make vegetable oil. To ban
coconut oil from the American market, the American Soybean Association in the
United States has waged a defamation campaign against it in the past. Since then,
several academic studies have debunked this marketing strategy.
 Ideals of Modernization

Let me start by defining what "modernizing" the coconut industry

means. Modernizing does not simply entail adopting cutting-edge,
science-based techniques for agricultural production, processing, and
logistics to boost overall productivity, although it is a major goal.
Environmental sustainability for the present and future generations
of Filipinos, as well as equity, notably for the primary producers (the
coconut farmers), who may be and are sometimes
 Why keep on growing coconuts? Why
not switch to oil palm and rubber?

There are valid reasons why coconut is and will continue to be the main
industrial tree crop in rural Philippine areas.

Coconut can withstand salt and is typhoon resistant. Only very powerful
winds are capable of uprooting and/or breaking coconut. The coconut
loses some fruits and blossoms after the numerous typhoons that make
landfall, but it will grow them back after a year or two. In addition,
because to the topography of our archipelago, coconut is particularly well
adapted to the saline conditions found in coastal locations.

On the other hand, oil palm and rubber are extremely vulnerable to
strong winds. Additionally, the loss might be disastrous for growers given
the high cost of establishment. In Mindanao and Palawan, we can grow
rubber and oil palm for a profit, but most of the Visayas and Luzon
cannot.

 Why keep on growing coconuts? Why

not switch to oil palm and rubber?

Second, coconut has a diversity of uses over

its 60–80-year lifespan which oil palm and rubber cannot
match. If we add them up, the total benefit stream from
coconut exceeds that from oil palm and rubber

The third major source of advantage of coconut is the

opportunity to make full use of the sunlight filtering between
the trees by planting intercrops, both annuals and perennials.

The benefits of intensive multiple canopy farming include

increased employment, more food production, lower food
prices for all, and cash payments to coconut farmers that
frequently exceed the value of the coconuts produced.
Coconut trees are typically spaced 8 to 10 meters apart. Rice,
corn, and other annual food crops can be grown while
coconut trees take 4-6 years to bear fruit. To help farmers get
by during their formative years, they can plant vegetables,
legumes, and root crops.

 How then do we modernize the Philippine

coconut industry?

There are four major pathways, namely:

1. Raising the primary productivity of the coconut tree
itself,
2. Intensive, sustainable multiple canopy coconut farming,
3. Maximum utilization of the coconut fruit and vegetative
parts by conversion into various products
4. Downstream integration with oleochemicals production.
 Raising the Primary Productivity of the
Coconut Tree

In the long run, increasing the genetic potential of the coconut plant itself
by widely replanting hybrids is the key to the productivity, competitiveness,
sustainability, and equity of the coconut industry. 43 nuts per tree per year
are the average yield of coconuts across the nation. The Philippine
Coconut Authority (PCA) has developed a number of dwarf x tall hybrids
that produce 3–4 times more fruit than the average coconut plant.

Every year, we need to replace the estimated 44 million old, ineffective

trees with millions of hybrid seeds. Every year, the PCA nurseries can
produce hundreds of thousands of hybrid seedlings, but this is obviously
insufficient.

The production of seedlings from a few exceptional palm groves of

varieties like Baybay Tall, Laguna Tall, and San Ramon can be done in the
meantime, especially to meet the immediate needs for replanting following
super typhoon Yolanda.
 Epilogue

The aforementioned offer guidelines for modernizing the coconut industry

to make it productive, competitive, sustainable, and equitable. But from
where will the funding come?

The estimated PhP70 billion coconut levy fund, which is currently being held
in trust by the national government while it awaits final instructions from the
Supreme Court regarding the Fund's ultimate disposition, is the most
obvious source.

We support the demand made by coconut farmers that the fund from the
coconut levy be made immediately available for their sole benefit and the
development of the coconut industry as a whole.
 These are the following conditions:

1. Spend only the interest earned from the coconut levy fund to keep it
going forever.

2. Entrust the coconut levy fund to a government owned and controlled

corporation (GOCC) led by the NEDA Director General to preserve its
integrity.

3. That the position of Director in the GOCC for the coconut industry be
regarded as an honorary appointment and a voluntary service, much like
the UP Board of Regents. The Directors will only receive a small monthly
honorarium, approved by the Commission on Audit, plus reimbursement
for legitimate medical expenses up to a certain cap, which is equivalent to
what members of the Department of Science and Technology's governing
councils receive.
 Conclusion

The coconut will continue to be a very distinctive aspect of the Philippine

landscape for a very long time. As the second-best replacement for the
vegetative cover of the original tropical rain forest that they replaced,
coconuts will adorn the coasts where they are best adapted to salty
conditions and on hillsides where they provide essential ecological services.

The following four major complementary avenues can be used to increase

the productivity, sustainability, competitiveness, and equity of the Philippine
coconut industry:

1) raising the primary productivity of the coconut tree itself,

2) intensive, sustainable multiple canopy coconut farming,
3) maximum utilization of the coconut fruit and vegetative parts by
conversion in various products, and
4. integration with oleochemicals production
 Acknowledgement

Cover photos: Philippine Coconut Authority (PCA)

and United Coconut Chemicals, Inc. (Cocochem
The National Academy of Science and Technology, Philippines (NAST PHL)
Level 3 Science Heritage Building DOST Complex, General Santos Avenue Bicutan,
Taguig City 1631 Metro Manila, Philippines Email: secretariat@nast.ph URL:
http://www.nast.ph