Pass the coco levy trust fund now!



(Last of 2 Parts)
THE development of the coconut industry, through dependent primarily on small farmers implies much more. It encompasses:

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

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

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 improvements of this sector of agriculture which sustain 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 in the diffusion of food-growing technologies, particularly 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 farmers be given up-to-date instructions 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 sectors of production, association or cooperation of farms is a vital need, the more so as this sector has as 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 united to form cooperative and such associations, which are both necessary if the members are to benefit from scientific and technical progress in methods of production, if they are to contribute in an efficacious manner to defend the prices of their products, and if they are to attain an equal footing with other economic groupings which are likewise usually organized. They need to organize to 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 is the use of agricultural inputs and techniques.

There is need to teach coconut farmers sound knowledge of the relevant subsystem 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 affected by realizing internal and external economies of scale.

By vertical integration, it is possible to cut costs of transportation through bulk handling and cargo consolidation. Nucleus estates, which promote resource-based processing, cut back on high transportation costs of bulky commodities like copra to export points. By hauling CNO that is only 60 percent of copra weight or high-value products which will weigh even less (and have longer shelf lives), 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 the 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. The synchronization of research to bring the industry to the state of the art or cutting-edge technology, and the synchronization of research undertakings is necessary. This will require coordination among implementing R&D entities. The shift in emphasis from production maximization, i.e., maximization of yields per tree, to the optimization in the utilization of land areas planted to coconut. Monocropping must give way to multicropping. The copra culture must now 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, MTC, 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 farms which must produce a critical mass of raw materials to support processing plants, thus reducing transaction costs; and last but not the least, a market research and development program to provide the environment for sustained marketing and training of coconut products in both foreign and domestic markets.

2. Policy review
Policy research is a continuing need of the coconut industry, as in other industries, especially now that efforts to make the industry more dynamic are being done. Restructuring of the industry has the primary objectives of increasing employment and labor absorption, of adding value to the economy, and earning foreign exchange, among others. Comprehensive research work will be done vis-à-vis the following.

Areas for review:
Institutional policy – This refers to executive and legislative policies that have discriminated against the farmers, which produces negative protection for them.

The copreros – This refers to policies related to extension services and other moves designated to increase productivity and improve farm technology.

Industrial policy – Approaches which can gear the industry toward forward integration, also, policies which can make economically useful coconut industries viable and feasible, will be studied. The proper restructuring of the industry – its production and exports – may have to be involved in the research for industrial policy positions.

Financial policy – Funding implication and the financial requirements of all projects or programs of the industry will be studied.

Fiscal policy – The incidence of tax incentives and disincentives will be analyzed through the use of statistical models. Efforts at quantifying the impact of fiscal policies on the industry will be made.

Commercial policy – This will involve a study of the trade structure of the industry in perspective. Its past, present, and future trends will be looked into and the strategy in dealing with the market.

With the passage of the coco levy trust fund law, all the above can be addressed by a board of trustees composed of technocrats of high integrity and recognized competence in the areas of farm productivity, agro-industrialization, domestic and international marketing, research and development, finance and social welfare. These appointed trustees must be well-compensated and given tenure to preserve the integrity of the funds and to effect the highest increase in the levels of productivity, incomes and employment for this marginalized sector of the economy to which belong the greatest concentration of poverty.

The author is a former chairman of the Philippine Coconut Authority


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