Coffee please!

Is there anything more civilized than a strong, steaming cup of coffee in the morning? Filipinos have become coffee drinkers–we’ll take our caffeine fix at the most unlikely times of the day, insomnia be damned. We revere its taste and are calmed by its aroma. Though we rarely admit it, the daily coffee buzz is not merely a ritual but an addiction.

The explosion of foreign and local cafés has further fueled this national habit and even developed peripheral ones, such as the equally stimulating activity of people watching. Yet a diagnosis of our love affair with the aromatic beverage reveals a strange brew–the Philippine coffee industry is in a coma and needs a high voltage shock to resuscitate it.

During the reign of Spain, the Philippines was a major player in the world coffee market. Spanish friars, frequently blamed for our collective character defects, deserve much of the credit. The clergymen introduced the crop in the 18th century and established sprawling coffee farms throughout the country. Near the end of their rule, pestilence virtually ruined the flourishing industry. The industry rebounded and, up to the 1980s, was a lucrative dollar earner. Until world coffee prices plummeted.

Government neglect and disheartened farmers hastened the coffee industry’s demise–today the Philippines is a net importer of coffee, spending around P750 million annually to satiate the Filipino thirst for the roasted drink. Considering that the country’s population is increasing at a rate that would drive a Malthusian to distraction, and that the country’s coffee culture is becoming even more pervasive, the industry sent a belated SOS to the government.

President Arroyo was sufficiently alarmed about the state of the coffee industry and established the National Task Force on Coffee Rehabilitation in May of this year. The Task Force was mandated to rehabilitate 22,000 hectares of coffee farms and to implement quality standards for local coffee production, milling and roasting. Pacita Juan of Figaro Coffee and Nicholas Matti of Negros Coffee & Grains were appointed co-chairmen. The Task Force–made up of millers, farmers, the academe, retailers, business leaders and politicians–was authorized to have a term of two years.

Juan and Matti soon realized that an even deeper commitment was necessary to save the industry. Last August the incorporation papers for the National Coffee Development Board were signed, says Juan, "to steer the coffee industry through succeeding administrations, through thick and thin."

It’s been a pro bono labor of love with expenses so far coming from their own pockets. "Our meetings are no-nonsense–we’re all driven because we know (saving the industry) is possible. We face the hard facts. As we speak, our people are flying to Sultan Kudarat and other places," says Juan. Matti, a 23-year veteran coffee trader who was unable to decline Juan’s invitation to co-chair the Board, laughs, "I had to say goodbye to the simple life."

The two discovered that the situation was worse than they thought. Land previously used to grow the crop was now being sold to commercial developers. Says Juan, "Batangas, for example, has more golf courses now than coffee plantations! The value of land there has gone up so farmers sell their land and let their kids work in factories."

Further exploration of the industry’s problems forced Matti to concede that much has to be done. "The Philippines has now become a net importer of coffee, basically because our production has gone down from 70,000 to 30,000 tons, while consumption has gone up from 30,000 to about 60,000 tons. According to the estimates, we’ll be importing 25,000 tons of coffee by next year. That’s about P750 million a year! Coffee is at its lowest price right now. Five years ago, robusta coffee, which is about 80 percent of the Philippine crop, was about $3,500 per metric ton. Now it’s about $400," he says.

Other factors have influenced the low production figures of coffee in this country. Yields in the country’s coffee farms, for one, lag well behind those of neighboring countries like Vietnam. Vietnam, which exports some 800,000 tons of coffee to the world although it still imports equipment such as hullers and pulpers from the Philippines, routinely produces four tons of coffee per hectare. Philippine farmers are lucky to extract half a ton of coffee per hectare. "But we have planting material that is programmed to produce a yield of nine tons per hectare under ideal conditions," says a hopeful Matti.

There are also serious problems within the processing systems of the country’s millers. Says Matti, "We’re taking an inventory of the equipment we have in our mills. Much of it is antiquated. We need to have the processing infrastructure in place. We’ll make it possible for millers to avail of loans from government organizations like the Landbank. Farmers can avail of a P350-million facility for their fertilizer loans from Quedan & Rural Credit Guarantee Corporation."

Ironically, land reform is also among the culprits. The division of large tracts of farmland has diminished the competi-tiveness of coffee farming–small landowners do not possess the resources to wait out the three years it takes for arabica coffee, for example, to mature.

Although the Philippines grows all four varieties of coffee–arabica, robusta, liberica and excelsa–the country is most famous for its pungent and full-bodied version of liberica. "Our barako is in a special niche, in a class of its own. We export it a lot to the Middle East because it has a peculiar flavor," says Juan.

Sadly, our flagship coffee is headed for extinction. A hundred thousand barako coffee trees must be planted to forestall this debacle. The romantic notion that Batangas is teeming with barako plantations is nostalgia, but all is not lost yet. "As far as barako is concerned, we’re adopting pilot farms," says Juan. "The market-oriented government of Amadeo, Cavite is willing to ask their 26 barangays to plant two hectares of barako each. Barako fetches a higher price than robusta, more than double.

"We need more value-added products. For example, you can export barako beans, but when it gets to the export market, it’s just plain liberica. But you can export barako in a bag, brand it as a Filipino product and sell it for a higher price," she continues.

Among the Board’s most pressing priorities is to develop a coffee brand name that will make Philippine coffee identifiable in the world market. The "Kape Isla" seal will also be used to classify farms, millers, roasters, retailers and cafés which use 100 percent Philippine coffee in any combination of the four varieties grown in the country.

"That’s our project–to get Philippine coffee to a standard where it has an accreditation seal from planting to milling to roasting to retailing. We want to raise the bar for farmers by teaching them good farm practices, increasing their yield and cleaning their farm," says Juan.

Matti enumerates other initiatives of the National Coffee Development Board. "One thrust of the Board is to establish seedling banks to give coffee seedlings to the farmers," he says. "Some of their seedlings are already 50 years old. Coffee must be rejuvenated and replanted. We also give access to credit through the millers. We facilitate the accreditation."

There are already success stories, he says. "In Cavite, we’re giving farmers who have lost money for years P15,000 worth of fertilizer per hectare, which is a big shot in the arm for them." Moreover, the farmers themselves are beginning to display a new determination to grow the crop profitably. "The new farmers are more enthusiastic about growing coffee because they were never hurt by the collapse in prices. They are open to new technology," says Matti enthusiastically.

The mood during the Board’s regular meetings is optimistic. Both chairmen believe a turnaround in the fortunes of the coffee industry can be achieved in as little as five years. World coffee prices could rise, they say, but the Philippines must be properly positioned to take advantage of any unexpected windfall.

Juan admits that a healthy coffee industry is in their personal best interest. "Okay, no bull…our business is coffee. But the benefits will apply to the whole country–less dollar outflow, increased exports and more jobs," she says.

Doubtless, the crusade to revive the ailing coffee industry is a noble one. But despite the zeal of the members of the National Coffee Development Board, help from the national government is crucial. "We now have about P50-100 million being levied against coffee imports that go to a General Fund. If we could just get some of those funds…we need help but we’re not complaining," says Matti, the self-reliant trader-turned-coffee industry savior.

"We need 100 percent support from the Department of Agriculture for our replanting initiative. We need about P70 million pesos in the next ten years to establish seedling farms and to propagate the seedlings to farmers. In return, the country will save around P750 million–a year!" he continues.

Pacita Juan, the hard-boiled retailer, avers: "In any arithmetic, it’s a winner."

So next time you take a sip from your café latte, spare a thought for the quiet battle being waged to preserve our 300-year-old coffee industry by the men and women of the National Coffee Development Board.