Luzon leads effort to revive RP coffee industry

Luzon is spearheading moves to revive the local coffee industry, but Mindanao is fast-catching up and may very well be the country’s center for coffee production and export trade in the next six years.

Cavite, currently the leading coffee producer in the country, along with Batangas and Benguet provinces in Luzon, are said to be losing their competitiveness to areas in southern Philippines.

In contrast, Mindanao is projected to be supplying 80 percent of the country’s coffee requirements and is seen establishing a niche in the global coffee market including China and Middle East by 2010.

"Given its favorable agro-climatic conditions and competitive advantage, there’s no doubt southern Philippines will be the dominant coffee producer and exporter of world-class coffee in the coming years," Agriculture Secretary Luis Lorenzo Jr. said.

Citing a Mindanao coffee industry road map prepared by DA and industry players, Lorenzo said for the plan to be achieved, industry and government will have to work together to immediately rehabilitate 15,900 hectares of coffee farms in southern Philippines until 2005 with the goal of attaining a sustained yield of at least one ton per hectare.

This year alone, nurseries will be established and millions of cloned planting materials will be produced in priority provinces in Mindanao in the coming months. In six years the region will account for 73 percent of the total 21,900 hectares earmarked for rehabilitation.

Lorenzo identified the priority areas as Sultan Kudarat, which has 3,000 hectares set for rehabilitation, Bukidnon and Compostela Valley with 2,000 hectares each, Basilan with 500 hectares and Sulu with 300 hectares.

Also lined up for rehabilitation and production are Davao City, Davao del Sur, South Cotabato, North Cotabato, Surigao del Sur, Agusan del Sur and Norte and Maguindanao.

Mindanao coffee farmers, along with their Luzon and Visayan counterparts, used to produce quality robusta from the late 70s to the early 1990s.

Production dwindled however, when world market prices made it unattractive to grow coffee. Local growers opted to sharply reduce production and cut further losses by abandoning their farms and not planting new trees at all.

In contrast, Vietnam and Brazil intensified their coffee production for the export market and this also subsequently aggravated the world coffee glut.

The global oversupply in the last five years caused world coffee prices to plunge from $3,500 per metric ton (MT) in 1997 to about $400 per MT in 2002.

Moreover, urbanization and changing land use pattern in southern Tagalog region, notably the conversion of coffee areas to housing subdivisions and golf courses have made matters worse.

As a result, the Philippines experienced severe shortage in domestic supply from 20,000 MT in 1997 to as high as 35,000 MT in 2002 considering that local demand has been steadily rising from 50,000 to 55,000 MT during the five-year period. The production cutback also resulted in a drop in coffee output from 30,000 MT to 20,000 MT.

The government and the private sector have in recent years, been closely working together to revive the industry, enable it to achieve self-sufficiency and also regain its lost stature as a key player in the export trade.

Last year, coffee exports went up 76 percent to 740 MT valued at $2.019 million from 420 MT worth $1.144 million in 2002.