Quality and value-adding will give Philippine coffee farmers an edge in Southeast Asia, where commodities are expected to become cheaper as an integrated Asean dismantles tariffs on many products, including coffee, according to an industry group.
This year Philippine Coffee Board (PCB) Cochairman Pacita U. Juan told the BusinessMirror farmers have set their sights on further improving their skills in the cultivation and processing of quality coffee beans.
Juan said these efforts are expected to increase yield and make coffee crops “superior” in quality.
Stakeholders in the coffee industry have rolled out various initiatives in view of the Asean economic integration, which would make it easier for traders to just buy coffee from other Southeast Asian countries.
Currently the Philippines imports about 45,000 metric tons (MT) of coffee to plug the shortfall in domestic production. Annual domestic demand—estimated at 70,000 MT—continues to outpace yearly local output pegged at 25,000 MT, data from the Philippine Council for Agriculture, Aquatic and Natural Resources Research and Development (PCAARRD) showed.
Juan said imports could increase in the coming years as the Asean free-trade agreement, which abolished tariffs on many farm products, would make it easier to ship coffee into the country.
The Philippines used to rank as the fourth-largest exporter of coffee in the world up until the second half of the 1800s, the PCAARRD said. Also, Prof. Carmen Lagman of the De La Salle University (DLSU) said the Philippines used to export $100 million worth of coffee yearly before the 1980s. Free trade, which allowed cheaper imports to flood the local market, made it difficult for coffee farmers to compete and survive.
Experts believe that Philippine coffee has a competitive edge compared to those produced in other countries. According to the Department of Science and Technology (DOST), the Philippines and other major producers such as Vietnam are in the so-called coffee belt.
Philippine coffee farms, however, continue to experience low productivity. The DOST said this is due to inefficient farm-production practices, old coffee trees, incidence of pests and diseases, poor postharvest facilities and farmers shifting to other crops.
To increase productivity and improve coffee quality, the DOST suggested the distribution of good quality planting materials, expansion of coffee-production areas and the implementation of “appropriate coffee management regimes.”
The PCB, for its part, said adding value to local coffee products would improve the income of farmers and entice them to plant coffee.
“If you can’t compete in terms of volume, you can compete in terms of quality and value-added features,” Juan added.
For one, she said coffee is grown organically in the country, as most farmers cannot afford to buy chemical fertilizers and pesticides.
The group trains farmers on how to properly plant and process high-quality coffee products. This year, the PCB said there will be “numerous” improvements in farmers’ techniques for the production of better quality coffee, as more farmers agree to undergo training.
Farmers are taught that coffee beans should be picked only when it’s ripe, and should undergo a washing process. This, she said, will increase the buying price of the coffee.
“Now we’re telling [the farmers] there are people willing to spend P100 to P120 per kilogram for robusta, as compared to the normal price of P80 per kg. There are also people paying premium price for washed coffee,” Juan said.
Farmers will also be trained to use organic fertilizer, which will help them boost coffee yields. This is expected to translate into higher revenues for farmers.
The PCB is involved in efforts to increase the number of coffee trees in the country. For instance, in Old Panamao, Sulu, the 300 members of the People’s Alliance for Progress cooperative are targeting to plant an additional 2 million coffee trees by 2020.
These people, Juan said, did not have any source of income until they went into coffee farming. Now, she said each family earns P120,000 a year. The PCB also said it is encouraging third-wave coffee shops to use locally grown coffee.
“We’re encouraging the coffee shops to use local coffee. That’s how we promote it,” Juan said.
Some coffee varieties have penetrated the export market, such as the barako, or liberica coffee. Juan said the barako coffee is in demand in the Middle East and Japan. The coffee products from Sulu are also being shipped to Korea and Japan.
Juan said the volume that’s being exported to these countries is very minimal, as there is a need to prioritize the local market.
The PCB official said some local coffee products have already won in international competitions, making it easier to promote Philippine coffee abroad.
“For example, we have an arabica coffee that has won awards in Bangkok, which was from Mount Apo. That one sells higher now, as high as P300 per kg,” Juan said.
Due to its potential, PCAARRD Executive Director Rey Ebora said the agency has included coffee as one of its priority areas in its Industry Strategic Science and Technology Program (ISP). The PCAARRD has allocated P96.78 million for the funding of all the coffee-related projects under the ISP.