|
Philippines Coconut Industry
The Philippines is the world's second largest producer of
coconut products, after Indonesia. In 1989 it produced 11.8
million tons. In 1989, coconut products, coconut oil, copra
(dried coconut), and desiccated coconut accounted for
approximately 6.7 percent of Philippine exports. About 25 percent
of cultivated land was planted in coconut trees, and it is
estimated that between 25 percent and 33 percent of the
population was at least partly dependent on coconuts for their
livelihood. Historically, the Southern Tagalog and Bicol regions
of Luzon and the Eastern Visayas were the centers of coconut
production. In the 1980s, Western Mindanao and Southern Mindanao
also became important coconut-growing regions.
In the early 1990s, the average coconut farm was a
medium-sized unit of less than four hectares. Owners, often
absentee, customarily employed local peasants to collect coconuts
rather than engage in tenancy relationships. The villagers were
paid on a piece-rate basis. Those employed in the coconut
industry tended to be less educated and older than the average
person in the rural labor force and earned lower-than-average
incomes.
Land devoted to cultivation of coconuts increased by about 6
percent per year during the 1960s and 1970s, a response to
devaluations of the peso in 1962 and 1970 and increasing world
demand. Responding to the world market, the Philippine government
encouraged processing of copra domestically and provided
investment incentives to increase the construction of coconut oil
mills. The number of mills rose from twenty-eight in 1968 to
sixty-two in 1979, creating substantial excess capacity. The
situation was aggravated by declining yields because of the aging
of coconut trees in some regions.
In 1973 the martial law regime merged all coconut-related,
government operations within a single agency, the Philippine
Coconut Authority (PCA). The PCA was empowered to collect a levy
of P0.55 per 100 kilograms on the sale of copra to be used to
stabilize the domestic price of coconut-based consumer goods,
particularly cooking oil. In 1974 the government created the
Coconut Industry Development Fund (CIDF) to finance the
development of a hybrid coconut tree. To finance the project, the
levy was increased to P20.
Also in 1974, coconut planters, led by the Coconut Producers
Federation (Cocofed), an organization of large planters, took
control of the PCA governing board. In 1975 the PCA acquired a
bank, renamed the United Coconut Planters Bank, to service the
needs of coconut farmers, and the PCA director, Eduardo
Cojuangco, a business associate of Marcos, became its president.
Levies collected by the PCA were placed in the bank, initially
interest-free. In 1978 the United Coconut Planters Bank was given
legal authority to purchase coconut mills, ostensibly as a
measure to cope with excess capacity in the industry. At the same
time, mills not owned by coconut farmers--that is, Cocofed
members or entities it controlled through the PCA--were denied
subsidy payments to compensate for the price controls on
coconut-based consumer products. By early 1980, it was reported
in the Philippine press that the United Coconut Oil Mills, a
PCA-owned firm, and its president, Cojuangco, controlled 80
percent of the Philippine oil-milling capacity. Minister of
Defense Juan Ponce Enrile also exercised strong influence over
the industry as chairman of both the United Coconut Planters Bank
and United Coconut Oil Mills and honorary chairman of Cocofed. An
industry composed of some 0.5 million farmers and 14,000 traders
was, by the early 1980s, highly monopolized.
In principle, the coconut farmers were to be the
beneficiaries of the levy, which between March 1977 and September
1981 stabilized at P76 per 100 kilograms. Contingent benefits
included life insurance, educational scholarships, and a cooking
oil subsidy, but few actually benefited. The aim of the
replanting program, controlled by Cojuangco, was to replace aging
coconut trees with a hybrid of a Malaysian dwarf and West African
tall varieties. The new palms were to produce five times the
weight per year of existing trees. The target of replanting
60,000 trees a year was not met. In 1983, 25 to 30 percent of
coconut trees were estimated to be at least sixty years old; by
1988, the proportion had increased to between 35 and 40 percent.
When coconut prices began to fall in the early 1980s,
pressure mounted to alter the structure of the industry. In 1985
the Philippine government agreed to dismantle the United Coconut
Oil Mills as part of an agreement with the IMF to bail out the
Philippine economy. Later a 1988 United States law requiring
foods using tropical oils to be labeled indicating the saturated
fat content had a negative impact on an already ailing industry
and gave rise to protests from coconut growers that similar
requirements were not levied on oils produced in temperate
climates.
Data as of June 1991
|
