THE Department of Agriculture (DA) is planning to set aside as much as P200 million for the coffee sector in 2010 to expand plantations and boost production.

Agriculture Secretary Arthur Yap said the government wants to make the country sufficient again in coffee production.

“We have committed an additional P100 million to P200 million in 2010 to increase plantings so that by 2015 to 2018, we can become self-sufficient again in coffee as we were a decade ago,” said Yap.

The amount will be used to fund the coffee self-sufficiency plan drawn up by the Philippine  Coffee Board (PCB) in 2008. The plan called for making the country self-sufficient in seven years, or by 2015, through a variety of measures, including new plantations in Mindanao, rehabilitation of existing coffee farms and rejuvenating old trees.

Last year the DA initially released P50 million to bankroll the PCB’s coffee self-sufficiency plan. 

The DA chief said the government wants to “displace” the 35,000 metric tons (MT) to 40,000 MT which the Philippines imports from Vietnam each year.

“In the next five years, we want the local coffee sector to be able to supply this volume,” said Yap.

Earlier, the DA noted that until the early 1990s, the Philippines was considered one of Asia’s top coffee exporters. Shipments peaked to about 43,000 MT in 1986, which generated some $122.5 million in revenues for the country.

But declining coffee-bean production due to the senility of trees and the country’s ascendancy to the World Trade Organization (WTO) in 1996 placed the industry in trouble. As a WTO member, the Philippines had to allow entry of imported coffee that enjoyed low tariff rates.

Domestic coffee prices dropped and triggered widespread unemployment, which prompted growers to abandon their farms as they incurred heavy losses.

The resurgence of the coffee industry, at least in the domestic market, is fueled by the growth of consumer demand for ground and brewed coffee.

Major players in the instant-coffee segment include Nestlé Philippines Inc., Universal Robina Corp. and San Miguel Foods. In ground and brewed coffee, the significant local players are Figaro, Monk’s Blend, Café Amadeo and Batangas Brew.