|
|
The Philippines is the world's second largest producer of coconut products,
after Indonesia. In 1989 it produced 11.8 million tons. In 1989, coconut
products, coconut oil, copra (dried coconut), and desiccated coconut
accounted for approximately 6.7 percent of Philippine exports. About 25
percent of cultivated land was planted in coconut trees, and it is estimated
that between 25 percent and 33 percent of the population was at least partly
dependent on coconuts for their livelihood. Historically, the Southern
Tagalog and Bicol regions of Luzon and the Eastern Visayas were the centers
of coconut production. In the 1980s, Western Mindanao and Southern Mindanao
also became important coconut-growing regions.
In the early 1990s, the average coconut farm was a medium-sized unit of less
than four hectares. Owners, often absentee, customarily employed local
peasants to collect coconuts rather than engage in tenancy relationships.
The villagers were paid on a piece-rate basis. Those employed in the coconut
industry tended to be less educated and older than the average person in the
rural labor force and earned lower-than-average incomes.
Land devoted to cultivation of coconuts increased by about 6 percent per
year during the 1960s and 1970s, a response to devaluations of the peso in
1962 and 1970 and increasing world demand. Responding to the world market,
the Philippine government encouraged processing of copra domestically and
provided investment incentives to increase the construction of coconut oil
mills. The number of mills rose from twenty-eight in 1968 to sixty-two in
1979, creating substantial excess capacity. The situation was aggravated by
declining yields because of the aging of coconut trees in some regions.
In 1973 the martial law regime merged all coconut-related, government
operations within a single agency, the Philippine Coconut Authority (PCA).
The PCA was empowered to collect a levy of P0.55 per 100 kilograms on the
sale of copra to be used to stabilize the domestic price of coconut-based
consumer goods, particularly cooking oil. In 1974 the government created the
Coconut Industry Development Fund (CIDF) to finance the development of a
hybrid coconut tree. To finance the project, the levy was increased to P20.
Also in 1974, coconut planters, led by the Coconut Producers Federation (Cocofed),
an organization of large planters, took control of the PCA governing board.
In 1975 the PCA acquired a bank, renamed the United Coconut Planters Bank,
to service the needs of coconut farmers, and the PCA director, Eduardo
Cojuangco, a business associate of Marcos, became its president. Levies
collected by the PCA were placed in the bank, initially interest-free. In
1978 the United Coconut Planters Bank was given legal authority to purchase
coconut mills, ostensibly as a measure to cope with excess capacity in the
industry. At the same time, mills not owned by coconut farmers--that is,
Cocofed members or entities it controlled through the PCA--were denied
subsidy payments to compensate for the price controls on coconut-based
consumer products. By early 1980, it was reported in the Philippine press
that the United Coconut Oil Mills, a PCA-owned firm, and its president,
Cojuangco, controlled 80 percent of the Philippine oil-milling capacity.
Minister of Defense Juan Ponce Enrile also exercised strong influence over
the industry as chairman of both the United Coconut Planters Bank and United
Coconut Oil Mills and honorary chairman of Cocofed. An industry composed of
some 0.5 million farmers and 14,000 traders was, by the early 1980s, highly
monopolized.
In principle, the coconut farmers were to be the beneficiaries of the levy,
which between March 1977 and September 1981 stabilized at P76 per 100
kilograms. Contingent benefits included life insurance, educational
scholarships, and a cooking oil subsidy, but few actually benefited. The aim
of the replanting program, controlled by Cojuangco, was to replace aging
coconut trees with a hybrid of a Malaysian dwarf and West African tall
varieties. The new palms were to produce five times the weight per year of
existing trees. The target of replanting 60,000 trees a year was not met. In
1983, 25 to 30 percent of coconut trees were estimated to be at least sixty
years old; by 1988, the proportion had increased to between 35 and 40
percent.
When coconut prices began to fall in the early 1980s, pressure mounted to
alter the structure of the industry. In 1985 the Philippine government
agreed to dismantle the United Coconut Oil Mills as part of an agreement
with the IMF to bail out the Philippine economy. Later a 1988 United States
law requiring foods using tropical oils to be labeled indicating the
saturated fat content had a negative impact on an already ailing industry
and gave rise to protests from coconut growers that similar requirements
were not levied on oils produced in temperate climates.
Data as of June 1991
|
|
