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Waiting
for coffee to brew Things don’t look too perky for the coffee industry as it tries to salvage whatever is left of the recent years’ price collapse of world coffee beans. Our coffee import bill — now hovering between P1.4 and P1.6 billion — continues to rise as more Filipinos indulge in this fragrant but addictive brew. Presently, the two-year-old National Coffee Development Board composed of private and public sector representatives involved in coffee farming is still arguing among themselves as they develop a definitive roadmap. The Coffee Board, however, agrees that the country must at least be self-sufficient in coffee. Just when and how this would happen is the million-dollar question. Last year, local production was just at 20,000 tons whilst consumption was already at 55,000 tons and growing at more than two percent per year. Ironically, the Philippines is the only country in the world that exports coffee but does not meet its domestic requirement. We shipped out about $2 million worth of coffee beans last year, mostly to Japan and some to the Middle East, but imported 60 percent of what we drink from Vietnam. It seems such a waste that the country is paying Vietnamese farmers for coffee that our own farmers should be earning. Debates Percolate In The Board Initially, the nine-man Coffee Board was trying to fast track its plan to rescue the industry to four years after prodding by some members, mostly from the government sector. But there could be no shortcuts since the logistics needed in a catch-up game to achieve self-sufficiency was going to be tough. Government has already allocated P1.4 billion for infrastructure and guaranteed P318 million through Quedan and Rural Credit Guarantee Corp. for loans. Existing farmers, however, are saying that such sums of money would best go to propping up farm gate prices. Members of the Coffee Board think otherwise. The approach on how to cultivate at least 40,000 hectares of coffee land in the next 10 years continues to be debated. Some board members just want to focus on opening new plantation-style farms; others feel that more attention ought to be given to rehabilitating existing lands with coffee farms. Go Big Advocates in the Coffee Board say that large coffee plantations have the benefit of mechanization and economies of scale with production costs lower and more competitive. The only catch is that these plantations are usually lowland, the worst place to grow good quality high-value coffee beans. However, plantations can sell their robustas to soluble coffee manufacturers Nescafe and Great Taste, which are currently importing more than half of their roasting requirement. Solubles account for about 95 percent of the coffee drank in the Philippines. Mindanao is regarded as the preferred place. Existing banana farms in the area can be intercropped with coffee trees and increasing production in these plantations is supposedly easier and faster, and entails lower costs. Think Small On the other hand, some members of the board think that there is more than sentimental value in rehabilitating the small farms that in the past made the country a leading exporter of coffee beans. The farms have the potential of generating employment. When world prices started to drop in 1988, coffee families eventually abandoned their farms and employment in coffee farms correspondingly decreased. There are now just 70,000 coffee farming families left from the 180,000 families in the 70s. At four workers per family farm, a little less than 500,000 people were forced out of jobs. Getting farmers to go back to their lands, however, is going to be difficult. With present coffee prices, the old farms just don’t make money. Current harvest rates, even at extreme bounty yields of 1,000 kilos per hectare, were still lower than Vietnam’s almost two tons per hectare. The key, it seemed, is to raise productivity. New or rejuvenated farms would have to be planted with those new super hybrid varieties that can bear two kilos per tree. Farmers would also have to learn intercropping to raise quick income from the farms while waiting for the new trees to mature. Not Enough Seedlings The biggest hurdle, however, remains technical. The bottleneck is in supplying enough of the hybrid seedlings and cuttings for planting in any new or existing farms. The Coffee Board is enticing private entrepreneurs to put in as much as P25 million to open nurseries that will cultivate cuttings and seedlings of high variety hybrids, and sell them to farmers. The nurseries will also double up as training centers where coffee farmers could learn new agricultural technologies. The challenge of finding local investors does not look easy as most are usually looking at quick returns. Coffee plants, no matter how exotic, cannot be hurried to grow. What should be hurried though is for the Coffee Board to finalize its policy and start working. Contribution from coffee growers and farmers is urgently needed for the sustained growth in the agriculture sector, a sector that is critical as we keep our economy and our heads above water. ‘Breaking Barriers’ With Tourism Secretary R. Pagdanganan "Breaking Barriers" on IBC-TV 13 (11 p.m. every Wednesday) will feature Secretary Roberto "Obet" Pagdanganan of the Department of Tourism (DOT) on Wednesday, 18th August 2004. As the government with the assistance of specialists from the World Tourism Organization formulates a series of policies to revive tourism in the Philippines, tourism officials should not forget some mundane matters, details that may derail the costly and grandiose plans to boost tourism. For instance, it’s such a turn off when visitors to tourist spots – like the spruced-up Intramuros – have to pay for toilets that don’t work, or can’t get a copy of local area maps, an item one can easily get in other more tourist-oriented countries. Also, it is not all bright spots in the tourism business. There are traps and quagmires where one can easily fall. In our aggressive drive to get more visitors into the country, we may just allow flesh merchants and drug dealers, disguised as tourists, to come in and bring more havoc to our society’s more vulnerable sectors. As it is, there is already a rampant inflow of illegal aliens and smuggled contraband goods. How much more when we bare open our country in the name of tourism development? Watch it. Gloria’s Promises On TV "Isyung Kalakalan at Iba Pa" on IBC News (5 p.m., Monday to Friday) starts today with a discussion of the President’s promises for the next six years. During her State of the Nation Address, she announced five main thrusts that her administration would pursue: job creation through economic growth; anti-corruption through good government; social justice and basic needs; education and youth opportunity; and power independence and saving. How will she deliver on these promises? Is she on the right track? Watch it. Should you wish to share any insights, write me at Link Edge, 4th Floor, 156 Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at reygamboa@linkedge.biz. If you wish to view the previous columns, you may visit my website at http://bizlinks.linkedge.biz.
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