CIIF Oil Mills Group embarks on coco farm development program

The CIIF Oil Mills Group, one of the country’s leading coconut oil (CNO) exporters, will embark on a P200-million Coconut Farm Development Program (CFDP) to rehabilitate some of the country’s ailing coconut lands.

"There is a need to implement a program involving the massive fertilization of existing coconut farms, plant in new identified areas and replanting of senile coconut trees if the Philippines intends to maintain its dominance in the global export market for coconut oil," said Danilo Coronacion, president and chief exeutive officer of the CIIF Oil Mills Group.

The CIIF Oil Mills Group, which comprises Legaspi Oil Co., Inc., Granexport Manufacturing Corp., San Pablo Manufacturing Corp. Cagayan de Oro Oil Co. Inc. and the Southern Luzon Coconut Oil Mill Inc., jumpstarted its CFDP with the recent signing of separate memorandum of agreement (MOA) with the Philippine Coconut Authority (PCA) , the Department of Agrarian Reform (DAR) and the National Anti-Poverty Commission-Farmers Sectoral Council (NAPC-FSC).

"We will be working with these organizations in implementing our own CFDP. The first thing we have to do is to make sure that we improve the productivity of our ailing coconut farms, a great number of which are experiencing declining harvests because these are senile or old coconut trees and do not get enough nutrients from fertilization. As a result, there has been no major improvement in coconut production in the last five years," said Coronacion.

Coronacion noted that average copra yield is only 700 kilos per hectare, but with fertilization this could go up to 2,000 kilos per hectare annually in the next four years.

The CFDP is in line with the PCA’s broader five-year (2006-2010), P2.5 billion coconut rehabilitation program for 800,000 hectares of low-yielding coconut farms nationwide.

The PCA’s strategy is to replant old coconut trees in 150,000 hectares annually. This will cost P500 million a year and will also include tapping local government units, especially in major coconut-producing regions, to raise counterpart funds to undertake the fertilization of coconut lands. About 750,000 hectares will be fertilized while about 1.2 million hectares of new coconut lands will be developed, mostly in idle government lands in Mindanao.

Coronacion noted that under the PCA-CIIF agreement, the latter will pay the agency the cost of seednuts supplied for the CIIF coconut planting and replanting program. The PCA will be supplying the required number of high-yielding coconut seednuts produced from its seed gardens in Zamboanga, Cotabato, Bohol and other PCA certified sources of coconut palms. It will also provided CIIF personnel technical assistance in the establishment of nurseries, marketing, distribution of coconut planting materials, coconut fertilization and pest management activities.

The CIIF and DAR, on the other hand, will enter into a joint venture project on coconut entrepreneurship development that aims to increase the income share of coconut farmers-agrarian reform beneficiaries through the full use of the whole coconut processing scheme, including value-adding in coconut enterprises like production of geotextile and cocopeat fertilizer, copra and charcoal production.

DAR will mobilize farmer agrarian reform cooperatives while CIIF will make available existing facilities in Quezon, Eastern Samar and Davao del Norte for the processing of coconut husks and organic fertilizer. CIIF will fund and supervise coconut replanting, fertilization, nursery development and intercropping of jatropha crops for biofuels.

Under the CIIF-NAPC-FSC agreement, beneficiaries will sign with specific members of the CIIF Oil Mills Group a more detailed scheme to implement a joint venture in toll crushing, co-production and other processing and production components consistent with the group’s business plans.

"What we’re essentially doing is to implement a program that encourages backward integration that would in the end, not only improve coconut production but also stabilize supply and prices," stressed Coronacion.

The PCA had earlier warned that the local coconut industry faces supply problems in the next two to three years unless government steps up plans to rehabilitate and fertilize old coconut trees.

The PCA’s research and development extension branch (RDEB) data on the country’s coconut field supply already show a declining trend because of unfavorable weather and no major follow-through programs after the World Bank-assisted Small Coconut Farms Development Project ended in 1998.