Status and Direction of the Coconut Research and Development in the Philippines1 S&T Agenda Towards Coconut Industry

Revitalization Patricio S. Faylon2 and Juanito T. Batalon2 Introduction The coconut industry is considered a major lifeblood of the Philippine agriculture. Coconut is the countrys top agricultural export, which used to be earning an annual average revenue of US$ 500-800 million. However, based on the 2008 first semester performance of US$822.89, 930,130MT equivalent in copra terms, the Philippine Coconut Authority (PCA) is confident that the industry will be able to earn more than US$1.0B in export revenues this year (The Philippine Star, 10/05/08). The coconut palm is planted in 3.12 million hectares all over the country, dominating the landscape in 68 out of the total 75 provinces. It is a major crop in 1,195 out of 1,554 municipalities. The industry provides vital economic support to the rural communities, with over 3.4 million farmers directly deriving their income from the industry and another 23 million Filipinos for their livelihood. Coconut continues to be in demand everywhere for food, cosmetics, pharmaceutical, handicraft, industrial, and other emerging products and byproducts. The aggressive expansion in coconut areas being undertaken by other coconut producing countries such as Indonesia and Vietnam, among others, is proof that the coconut industry will remain a viable and strategic industry. However, the countrys coconut production and productivity are both declining. Efforts to reverse this current trend, develop farming activities that would increase farmers income, and diversify into development and production of non-traditional and high value coconut products must be put in place. Technological support programs are crucial in sustaining the competitiveness of the industry. It has been noted that support to coconut industrial R&D is minimal compared to R&D addressing coconut production concerns. Historically, political intervention strongly influenced the coconut industry. Existing institutions and interest groups represent various stakeholders. Strong political will to implement necessary reforms and policies is needed to spark further growth and sustain the viability and competitiveness of the industry.
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Paper presented during the UCPB-CIIF Coconut Forum held on October 27-28, 2008, UCPB Building, Makati City. 2 Executive Director and Senior Science Research Specialist, respectively, Philippine Council for Agriculture, Forestry and Natural Resources Research and Development (PCARRD), Department of Science and Technology (DOST).

In 2005, the Department of Science and Technology (DOST) and the Philippine Council for Agriculture, Forestry and Natural Resources Research and Development (PCARRD) in collaboration with various stakeholders in the industry has come up with a draft Industry Strategic Plan (ISP) for the Philippine Agriculture 2020. The Plan envisions the Philippines to be a reliable and competitive supplier of coconut, quality products and by-products, both locally and globally. For the production sector, the objective is to transform coconut farming from subsistence to entrepreneurial system, and for the processing sector, to produce quality high-value and competitive products. Since then, PCARRD has focused and worked out for the relevant R&D translation of the plan considering the main events that have been happening globally which affect our agriculture (i.e. climate change, rising food and fossil fuel prices, increasing peoples health consciousness). Major Issues and Concerns of the Industry In order to come up with the R&D agenda that will support the revitalization of the coconut industry, information on the status, issues and concerns affecting the industry have been consolidated from the various stakeholders of the industry. Specifically, the following are the major issues and concerns identified during the series of consultations conducted: A. PRODUCTION Issues/ Concerns Old and senile palms Current Status 75M old and unproductive palms in 1.03M ha. 25% of existing palms need to be replaced Existing seed gardens can only supply 3.6 M nuts for the replanting program. A deficit of 6.4 M nuts per year National average yield is 43 nuts per tree per year which is only 53% of potential yield of 80 nuts. Yield gap is 48 nuts/tree between unfertilized (38 nuts/tree) and fertilized farms (86 nuts/tree) Total of 1.8M palms (222,000 trees/year or 1,465 ha/year)

Limited supply of HYVs Low and declining yield

Uncontrolled cutting, including productive palms

B. PROCESSING Issues/ Concerns Current Status

No incentive to produce good quality Poor quality and inefficient copra processing, marketing and processing copra (i.e. use better drying facilities) systems High PAH (spell out please) content of coconut oil produced from copra prepared by direct drying (specifically tapahan method) Shortage in raw materials for different products Impact of coconut waste to environment Lack of processing infrastructure for non-traditional products C. TRADES AND MARKET Issues/ Concerns Low domestic consumption of coconut products Current Status Domestic consumption: Phil 20.18% of total production; India 102.5%; Indonesia 71% Per capita consumption of CNO in Phils at 7kg/year is less than half the world average of 16.5 kg. Majority of exported coconut products are copra-based (CNO, copra cake, DCN). 90% of production go to processed oil. Domestic price increase/year is 15.92% while world export price increase is only 4.41%/year
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Nut supply shortage due to competition with other coconut product industry (VCO, CNO, Oleochem) Problem in disposal of coconut water and other wastes from coconut processing plants High cost of machineries for nontraditional products such coco coir

Heavy dependence on traditional export products and markets

Coconut oil is a mere price taker in the fats and oil trade in the world market

Inadequate government intervention in coir industry. Limited support for market promotion Limited knowledge of the market potential of novelty items from coconut Limited information on health benefits negative perception about the effects of CNO to human body Multilayered marketing system of traders and wholesalers

No specific authority for PCA to intervene with coir fiber industry

The prospect of the industry will remain bright as long as the end-users of the coconut industry are confident that the supply will continue to be stable. But with coconut production and raw material supply taken care of by the agriculture sector, the expansion and advancement of the manufacturing sector will provide the needed impetus for totally revitalizing the industry. To ensure sustainability of the industry in the long term, equal importance should be given on the manufacturing side to complement efforts on agricultural production. Coconut R&D in the Philippines For the past decades, the scientific community aimed to address some of the constraints besetting the industry through R&D and S&T interventions, a goal which should have been part of a holistic and synergistic approach with other stakeholders to fully propel the industry forward. The stakeholders include the farmers (landowners, owner-tillers, tenant- tillers, farm workers), buyers, traders, exporters, oil millers, oil refiners, desiccators, food processors, industrial processors, their respective workers and their dependents, as well as the R&D sector comprising of researchers and scientists, teachers and students in private and state colleges and universities. Other stakeholders include government agencies involved in policy and trade, civil society, and the private sector including national associations, national federations, research, and financing institutions. The agencies from the public sector heavily involved in coconut research and development undertakings are PCA, with its 3 research centers (Albay Research Center, Davao Research Center, and Zamboanga Research Center), the University of the Philippines Los Baos (UPLB), Regional Coconut Research Center (RCRC) based in Visayas State University in Baybay, Leyte and some institutes under DOST like the Forest Products Research and Development Institute (FPRDI), Industrial Technology Development Institute (ITDI), and Food and Nutrition Research Institute (FNRI). From the private sector, two (2) institutions composed of the Philippine Coconut Research and Development
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Foundation, Inc. (PCRDF) and the United Coconut Association of the Philippines (UCAP) are likewise actively involved in coconut R&D activities. Coconut R&D Investment Priority R&D activities in coconut have always been directed towards technology development to increase farm productivity and income through efficient production of diversified, high-value products from coconuts, intercrops and by-products. However, in spite of its substantial contributions to the Philippine economy, coconut research receives lower funding support compared to other commodities. Coconut research covers the area of varietal improvement/seed system, agricultural production, biotechnology, marketing, socio-economics and processing. Agricultural production (includes pest and disease management, and cultural management), varietal improvement/seed system, and coconut biotechnology had the most number of researches and funding support. To help boost the industry, coconut R&D has received substantial amount from PCARRD and DOST during the period 1990-2007 (Table 1), of which bulk of the investment was received from 1997-2002. This investment led to development of key technologies and information such as enhanced production of quality makapuno planting materials, control of economically important pests, increased utilization of new varieties, and development of new products, among others. Table 1. DOST-PCARRD R&D Investment in Coconut (1990-2007) R&D Area/Discipline Varietal Improvement/Seed System Crop Production/Cultural Management Crop Protection/Pest Management Makapuno R&D Coconut Biotechnology Product Development and Processing Piloting/Technology Transfer TOTAL Total Budget (P) 41,218,207 2,500,400 3,770,925 8,166,080 27,381,558 902,065 1,467,500 85,406,735

On the other hand, the Bureau of Agricultural Research of the Department of Agriculture (DA-BAR) shared a total of P44,068,103 while PCA invested a total of P169,759,560 excluding the personal services and maintenance expenditure for the 3 PCA research centers during the same period. Significant Research Breakthroughs in Coconut From the numerous research and development activities that have been conducted in coconut, the following are some of the notable technologies developed/generated, and promoted by different research institutions and agencies. Varietal Improvement/Seed System Nine local hybrids and one tall variety in support of the coconut replanting program. The hybrids flower and bear fruits earlier than the local cultivars, with potential yields of 4-6 t/ha copra per year First synthetic cultivar (synvar) of coconut as strategy in mass propagation of improved materials Embryo-cultured makapuno seedlings, with 75-100% success

Crop Production Sequential coconut toddy and nut production technology (SCNPT), which could increase farm net income Common salt as effective and cheap fertilizer for coconut Coconut leaf pruning technology to increase light intensity, making it more amenable to intercropping

Machines and Equipment Low-cost and efficient coco husk decorticating machine Improved copra dryers Mechanical briquettor for making charcoal briquettes from coconut shells and husks

Value Adding Products/Technologies Coco wine and champagne Cocogro, a natural product from coconut milk or water that promotes plant growth and development Coco milk yoghurt, already adopted by small scale processors Nata de coco and coconut water vinegar production, which are widely adopted by small- and large-scale processors Coco sugar, already adopted by some small-scale processors Coco skim milk and flour
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Virgin coconut oil processing technologies Cocowood-based wares and handicrafts Coco veneer laminated panels Cold process technology in soap-making

PCARRDs Science and Technology Agenda for Coconut The development of Science and Technology Agenda (STA) is a major step which PCARRD conceptualized and is currently being implemented to provide realistic and relevant S&T that would cater to the needs of the various stakeholders in the Agriculture, Forestry and Natural Resources (AFNR) sector. The STA for coconut was crafted to focus on fewer but strategic areas of S&T investments due to the following: a) Need to be consistently relevant with the needs of clients and beneficiaries b) Small and dispersed investments in R&D activities c) Lack of impact of coconut R&D program d) Relatively low S&T contribution to the coconut industry and on economic development, as a whole Specifically for coconut, the strategic programs/projects being packaged under the STA would develop technologies and information that would increase coconut productivity and farmers income in strategic locations, enhance production of quality planting materials, and develop high-value products. These strategic R&D areas would help solve some of the concerns identified in the ISP. Under the STA, coconut has been identified as a priority crop for R&D investment in five (5) regions, namely: a) Region 4; b) Region 5; c) Region 7; d) Region 9; and e) Region 11. With the STA, strategic R&D investment will continue in coconut but priority where to give support for implementation of R&D projects will be given to the regions indicated above. However, the results of such research endeavors will not be limited to these regions, but will also include other likely impact areas. The following research and development agenda has been identified for coconut which can be gleaned as strategic and/or urgent. 1. Coconut planting expansion in selected provinces and coastal areas Bicol Region and Other Selected Provinces Accreditation of farmers plantations as sources of quality planting materials Accreditation of provincial and municipal coconut nurseries
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Establishment of coconut seedgardens for the production of recommended coconut hybrids Establishment of seedfarm per province for the production of synthetic coconut variety

Coastal Areas Coastal land resources inventory, socio-economic survey and economic valuation Extensive rehabilitation of 500,000 ha through judicious fertilization and new plantings (i.e. coastal areas of Ilocos and Cagayan Valley regions) Coconut farm diversification in coastal areas to enhance productivity and farm income Biomass generation, nutrient recycling and carbon sequestration

The proposed development projects in the Bicol Region and coastal areas can be supported by the planned poverty reduction project and biotechnology projects. 2. Makapuno Expansion of makapuno planting Continued production of embryo cultured makapuno Development of affordable and efficient system for makapuno propagation Development of new food and non-food products from makapuno

3. Biotechnology Somatic embryogenesis Characterization of previously identified proteins associated with somatic embryogenesis and undesirable developments during induction and maturation of somatic embryos Improvement of plantlet conversion in coconut by improving nutrient medium for somatic embryogenesis Training on coconut somatic embryogenesis technological advances

Molecular markers Characterization of 98 accessions conserved at PCA-ZRC Development of kits for use in marker-assisted breeding program Packaging of DNA marker technologies developed

4. Brontispa research Pesticide management of Brontispa Identification of other predators of Brontispa in addition to earwig Population dynamics study with the natural enemies and develop strategic control interventions Development of other control methods including the use of volatiles

5. Production of high-value products Production of natural hand-made carpets and rubberized coconut fiberbased products Market research for VCO, coconut sugar and geotextiles Development and testing of efficient machineries for the production of high-value coconut products (i.e. freeze drying coconut sugar, efficient village-level decorticating machines and high-quality VCO production, mechanical drying of coconut fiber, etc.)

6. Coconut oil for biodiesel Comprehensive testing of CME related to effect on engine, environment, health and economy Field testing of filtered coconut oil as biodiesel for motor vehicles and stationary engines Comparative study of coconut biodiesel using CME and filtered coconut oil to determine efficiencies and comparative advantages

7. Medicinal and nutriceutical research Clinical and nutritional trials on the use of VCO and coconut sugar for HIV and diabetes control, respectively Chemical analysis of the composition of coconut sugar and coconut flour Nutritional studies for coconut flour (dietary fiber benefits)

Focused Programs Priority will be given to R&D activities that would support the establishment of coconut seed farms and nurseries for the production of recommended coconut hybrids and synthetic variety developed by PCA. Particular attention will be given in coastal areas and strategic locations (selected provinces) where poorest people live and greater nut requirement is observed. It is noted that higher coconut yields are observed in coastal areas than in inland areas, and there is no other crop than coconut that can be commercially grown in coastal areas, hence no competition with other food crops.

Special attention will also be given to R&D activities that would promote coconut farm diversification activities in order to enhance farm productivity and income of the coconut farmers. Establishment of coconut seed farms and nurseries Paramount to realizing the vision of the Philippine coconut industry of being globally competitive and reliable supplier of high quality coconut products is to resolve the declining and low coconut productivity in the country within the next two decades. The sustainable growth of the coconut industry rests on the countrys ability to significantly increase coconut productivity through increased yield of existing productive palms through balanced fertilization on the short-term and new planting or replanting of old senile palms using high yielding varieties/hybrids on highly suitable areas in the long-term. Comprehensive planting/replanting program in strategic locations has to be put in place so that projected increase in productivity can be realized. Imperative to this is establishment of coconut seed farms and nurseries in selected locations to produce the required quality planting materials. The use of high yielding synthetic varieties and local hybrids in the replanting program could increase production 3-5 times. Selected tall populations and the synthetic variety could yield about 16,000-22,000 nuts per hectare or 4,000-6,000 kg copra/ha/year. Coconut Farm Diversification The rehabilitation and fertilization program complement the intercropping program under the poverty alleviation strategy, allowing farmers to continuously earn from the farm while waiting for the replanted coconuts to start fruiting and makes full use of the available land in the under storey of tall and still productive palms. Inter-row cultivation and fertilization of the intercrops will also benefit the coconuts, increasing coconut yield by at least 25%. There are coconut-based farming systems and coconut processing enterprise modules already developed and implemented successfully by some local farmers and entrepreneurs and proven to work in other countries that can be adapted in coconut-growing communities. Establishment of pilot coconutbased agribusiness centers in major production areas in the short term and in all the 57 coconut provinces in the medium term are the targets of the coconut strategic industry plan. As demonstrated in the PCA-COGENT project, the lives of coconut farmers can be improved if given the chance to access opportunities and resources in establishing income-generating activities that are technically feasible, financially viable, socially acceptable and environmentally safe such as
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a) production of high-value coconut products from all parts (husk, shell, meat and water); b) intercropping cash and food security crops; c) integrating with livestock; and d) establishing community-managed coconut nurseries. P3B Investment for the AFNR From this set of proposed R&D initiatives, priority projects that will be funded up to 2010 were identified as part of the P3B investment for the AFNR. The coconut R&D has been categorized as part of the Aggressive Programs for Export Development, and Support to Allied Agricultural/Forestry/Fishery Services as shown in Table 2. This investment is in addition to the ongoing and new projects being funded by DOST and PCARRD. Conclusion Small coconut farmers and workers remain poor because coconut farming is unprofitable and can no longer support even the most basic needs of the farm household. Poverty in coconut communities needs to be addressed without them losing interest in coconut. For the coconut industry to remain viable and gain competitive advantage in the global market, there has to be assurance of a steady supply of high quality raw materials from the production sector. Special attention has to be given to increasing coconut production and productivity. No amount of improvement in the efficiency of the other sectors would matter without the support of the supply line. It is hoped that with the proposed R&D initiatives, strategic and doable technologies, products and information as well as services would provide significant contributions to the cause of the coconut farmers, processors, consumers and other stakeholders in the industry.

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