Roadmap/Masterplan for the Philippine Coffee Industry Presented - - PowerPoint PPT Presentation
Towards a Roadmap/Masterplan for the Philippine Coffee Industry Presented during the Industry Roadmaps & AEC Gameplan: Roadmap Localization for Competitiveness on May 28-29,2015, Baguio country Club, Baguio City. Joan Dimas-Bacbac, HVCDP
Presented during the Industry Roadmaps & AEC Gameplan: Roadmap Localization for Competitiveness on May 28-29,2015, Baguio country Club, Baguio City. Joan Dimas-Bacbac, HVCDP Regional Coordinator, DA-RFO CAR
Supported by:
Department of Agriculture Department of Environment and Natural Resources Department of Agrarian Reform Department of Trade and Industry Philippine Coconut Authority Government Financial Institutions Local Government Units National Competitiveness Council
Crafted by:
Farmers, Processors, Coffee Manufacturers, Industry Associations, Exporters, People’s Organizations and the Academe
PERFORMANCE: Area, Yield and Production (2011) Item Philippines Indonesia Vietnam
Planted Area (ha) ~120,000 ha (a) 1.3 M ha 537,000 (90,000 ha Robusta, 19,000 ha Arabica, 9,000 ha Excelsa and 1,400 ha Liberica) (1.04 M ha Robusta, 251,000 ha Arabica) (500,000 ha Robusta, 37,000 Arabica) Yield (ton green beans /ha) 0.20 - 0.30 0.67 2.4 Production (tons green beans) 25,000 – 30,000 (b) 634,000 1.2 M Planting density 500 – 1,700 trees/ha (Robusta) 800 – 2,000 trees/ha (Arabica) 1,100 trees – 2000 trees/ha 1,100 trees/ha (Robusta) 5,000 – 6,000 trees/ha (Catimor) Average farm size 0.5 – 1 ha 0.6 ha 0.5 – 1 ha
PERFORMANCE: Farming and Processing Costs Investment costs are comparable Item Philippines Indonesia Vietnam
Average establishment cost/ ha (Robusta) PhP 50,000 – 82,000 PhP 78,000 PhP 71,000 Average cost per kg green beans PhP 49 – 68 PhP 23 PhP 65.10 Price per kg of green beans (farmer’s selling price) PhP 79.38 PhP74 PhP 83 Payback period 4.3 – 6.3 years 4.9 years 6.2 years Financial Internal Rate of Return 8 – 36 percent 31 percent 21 percent Processing costs per kg Roasting Php 10 PhP8.10 Grinding Php 10 PhP8.93
Exchange Rates: PhP42/US$1; VND20,800/US$1; IDR9,400/US$1
Item Philippines Indonesia Vietnam
Credit Mainly through government financial institutions (e.g., LBP) and informal sources LBP loan ceiling for coffee : New planting: PhP100,000/ha (US$2,381) (payable in 5 years, 10-12% interest per annum, 2 years grace period) Existing plantation (maintenance): 2nd year: PhP42,500 (US$1,012) 3rd year: PhP55,000 (US$1,310) 4th year: PhP63,000 (US$1,500) 5th year: PhP72,000 (US$1,714) Rural Bank of Indonesia small scale lending and micro finance (none for new plantings)
Vietnam Bank for Agriculture and Rural Development (VBARD or Agribank) Credit for planting (mainly for existing plants or rejuvenation and not for new plantings), and Credit for harvesting, processing and export trading (short-term loans with terms of one year and three to six months, respectively; interest is 13% p.a.) State Bank of Vietnam short term loan (up to 12 months) with maximum interest of 15% p.a.
Item Philippines Indonesia Vietnam
Land Ownership CARP Law – Maximum 5 hectares Co-existence of smallholders and large estates Long-term leases from government Price Policy No price policy on
world prices (London exchange for Robusta, New York Exchange for Arabica). There are price speculators
world market prices. No price policy on
follow world prices. No price policy on
follow world prices. Government support (budget for coffee) PhP 470 M Breakdown : PhP 170 M (DA-HVCDP) PhP 300 M (PCA Intercropping) PhP639 M (US$15.2 M) (143 B IDR) (MA) PhP 14.7 B (US$350 M) (7,280 B VND) (MARD)
Labor costs are comparable but fuel and power costs are higher . Item Philippines Indonesia Vietnam
Labor PhP 150 - 300 per day (US$3.57 - 7.14 per day) PhP 134 - 223 (US$3.19 - 5.32 per day) (IDR 30,000 – 50,000) PhP 242 - 303 (US$5.77 - 7.21 per day) (VND 120,000–150,000) Fuel (July 2012) PhP 42 - 44 per liter (diesel) (US$1 - 1.05/li) PhP 53-56 per liter (gas) (US$1.26 - 1.33/li) PhP20.11/li (diesel) (US$0.48/li) (IDR 4,500/li) PhP46.24-46.91/li (gas) (US$1.10 - 1.12/li) (IDR 10,350 – 10,500/li) PhP46.44 - 48.46/li (gas) (US$1.11 - 1.15/li) (VND 23,000 – 24,000/li) Power PhP 6.50 - 6.75 per kwh (US$0.15 - 0.16 per kwh) PhP 1.79 – 3.13 (US$0.04 - 0.07 per kwh) (IDR 400–700 per kwh) PhP 2.02 (US$0.05 per kwh) (VND 1,000 per kwh)
Item Philippines Indonesia Vietnam
Input supply Clones used Mostly Robusta, Some Arabica, Small Excelsa and Liberica Mainly Robusta, Some Arabica Mainly Robusta, Some Arabica and Catimor (Robusta TR varieties – TR 4, 9, 10, 11 and 12) Fertilizer usage Organic and inorganic fertilizers Some farms do not fertilize (e.g. Kalinga) Mostly inorganic fertilizers from government subsidy Heavy application of fertilizers (even reaching 1 ton/ha) Planting density 600 – 1,700 trees/ha 1,100 trees – 2000 trees/ha 1,100 trees/ha (Robusta) 5,000 – 6,000 trees/ha (Catimor) Intercrop Fruits, vegetables, tree crops Mostly monocrop Mostly monocrop Sources of planting materials Wildlings Seeds of existing plants Nurseries (e.g. Nestle nursery) Indonesian Coffee and Cocoa Research Institute (ICCRI) Western Highlands Agro-forestry Science and Technical Institute (WASI)
Item Philippines Indonesia Vietnam
Maintenance activities Weeding Fertilization Pruning Weeding Fertilization Pruning Some farms do grafting Weeding Fertilization Pruning Irrigation First harvest Year 2 Year 3 Year 2-3 Harvesting period December - March May - September August – Jan Harvesting practice Selective harvesting Strip harvesting Selective harvesting Strip harvesting Selective harvesting Strip harvesting Drying Mechanical drying Solar drying Mechanical drying Solar drying Solar drying Mechanical drying Certification Organic, 4C 4C, Rainforest 4C, Rainforest, UTZ, Viet Gap
Item Philippines Indonesia Vietnam
Processing for beans Wet processing (mainly for Arabica) Dry processing (mainly for Robusta) Wet processing Dry processing Wet processing Dry processing Processing plants (ground and instant coffee) Nestle (Nescafe) – market leader Universal Robina Corporation (Great Taste, Blend 45) Commonwealth Foods (Café Puro) Century Pacific Group (Kaffe de Oro) Regent Foods Corp. (Koffie) PT Torabika PT Santos Jaya Abadi Indocafe Nestle Vinacafe Trung Nguyen Nestle Products produced Coffee beans Roasted beans Ground coffee Instant coffee (3 in 1; 2 in 1) Coffee beans Roasted beans Ground coffee Instant coffee Coffee beans Roasted beans Ground coffee Instant coffee
Activity Typical Modern Cropping system Mostly with intercrop (vegetables, fruit trees) Monocrop (Block cropping) Plant propagation practices Use of wildlings Seeds from existing plants Absence of clone selection Use of selected clones from certified nurseries Buying price: PhP15/seedling
Activity Typical Modern Planting density 600 – 1,200 trees/ha 1,500 – 1700 trees/ha Fertilizer application Inorganic (46-0-0) ~ 2 bags per year Organic ~ 68 bags per year Inorganic (16-20-0, 46-0-0, 0-0-60) ~ 10 bags per year Organic ~ 33 bags per year Pruning Not done at all / not regularly done Regularly done (about 6 times a year) Pest and disease control Regularly done Regularly done
Activity Typical Modern First harvest Year 2 Year 2 Harvesting Strip harvesting Selective harvesting
Parameters Typical Farm Modern Farm Planting density 600 – 1,200 trees/ha 1,500 – 1700 trees/ha Average yield (tons gcb/ha) 0.72 1.29 Peak yield (tons gcb/ha) 1.0 2.0 Average establishment cost per ha (Year 1) PhP 50,000 PhP 82,000 Average cash outflow per ha per year PhP 49,000 PhP 63,000 Price per kg of green beans (farmer’s selling price) PhP 80 PhP 80 Average cash inflow per ha per year PhP 58,000 PhP 103,000 Average net cash flow per ha per year PhP 9,000 PhP 40,000 Average net cash flow per ha per year (including returns to family labor) PhP23,000 Average cost per kg of green beans PhP 68 PhP 49 Payback period 6.3 years 4.3 years Internal Rate of Return (IRR) 8 percent 36 percent
Item Typical Modern Incremental Planting density 850 trees/ha (with intercrop) 1,667 trees/ha (mono) 817 Average yield (tons green beans/ha) 0.72 1.29 0.57 Average income/ha at PhP80/kg green beans Gross income PhP58,000 PhP103,000 PhP55,000 Gross income PhP23,000 (a) PhP40,000 PhP17,000 Average area to get preferred net income of PhP94,000 (poverty threshold, 1H 2012) 4.09 ha 2.35 ha (1.74 ha)
Activity Typical Modern Cropping system Mostly with intercrop (forest trees, fruit trees) Without or with intercrop (forest trees, fruit trees) Plant propagation practices Use of wildlings Existing plants Absence of clone selection Use of certified seedlings Buying price: PhP25 –30/seedling
Activity Typical Modern Planting density 600 – 1,200 trees/ha 1,200 – 1,500 trees/ha Fertilizer application None / Minimal fertilizer application Inorganic ~ 18 bags every three years Organic~ 90 bags every four years Pruning Regularly done Regularly done Pest and disease control As need arises Regularly done Harvesting Year 2 – 3 Year 3 Harvesting practice Strip harvesting Selective harvesting
Parameters Typical Farm Modern Farm
Planting density 600 – 1,200 trees/ha 1,200 – 1,500 trees/ha Average yield per ha 0.5 tons dry parchment (0.40 tons gbe) 1.1 tons green beans Peak yield per ha 0.6 tons dry parchment (0.50 tons gbe) 1.5 tons green beans Average establishment cost per ha PhP 37,000 (Year 1) PhP 135,000 (Years 1-2) Average cash outflow per ha per year PhP 29,000 (Years 2 - 10) PhP 65,000(Years 3 - 10) Price per kg (farmer’s selling price) PhP 100/kg of dry parchment PhP 200/kg of green beans Average cash inflow per ha per year PhP 49,000 PhP 229,000 Average net cash flow per ha per year PhP 20,000 PhP 164,000 Average net cash flow per ha per year (including returns to family labor) PhP36,000 Average cost per kg PhP 58 per kg of dry parchment PhP 59 per kg of green beans Payback period 4.9 years 4.1 years IRR 31 percent 53 percent
Item Typical Modern Incremental Planting density 800 trees/ha (with intercrop) 1,250 trees/ha (with intercrop) 450 trees Average yield 0.49 tons dry parchment coffee (0.39 tons gbe) 1.14 tons green beans 0.75 tons green beans Average price (PhP/kg) PhP 100/kg dry parchment coffee PhP200/kg green beans Average income
PhP49,000 PhP229,000 PhP180,000
PhP36,000 (a) PhP164,000 PhP128,000 Average area to get preferred net income of PhP94,000 (poverty threshold, 1H 2012) 2.61 ha 0.57 ha (2.04 ha)
Inputs for Nursery Developm ent Inputs Farm Production Primary Processing Marketing Logistics Secondary Processing Logistics Market
selection
bags
equipment
equipment
Selection
preparation
Grading
to green beans
/ Shipping
beans
ground coffee
coffee
Shipping
Input Supply Farm Production Primary Processing Marketing/ Trading Secondary Processing Marketing
Seedlings
nurseries Land Access
Financing
DENR, DA-HVCDP, Phil Coconut Authority, LGU Fresh cherries
Farmers
Mountain
Farms
Green Beans
Farmers
Local traders
Mountain
Nestle
Households
stores
chains
Training/Tech Assistance
Research, Dev’t & Ext’n
Mountain
Policy Advocacy
Other Related Cross Cutting Segments
TARGETS 2015 2016 2017
New Planting (ha) (All Regions)
70,747 78,919 253,433
Re-Planting (ha) Kalinga,Northern Mindanao, Davao, Soccsksargen
2,008 2,008 8,032
Rejuvenation (ha) Kalinga, Davao, Soccsksargen
572 572 2,388
Total seedling requirement (including 10% mortality allowance) (million)
62.5 67.5 215.7
Investment Cost (PhP million)
4,645.1 5,224.4 16,309.6
‰
„
„
in the same area „
green beans, to grow by 3% per annum
remain stable
to be available in the existing nurseries
targets by the various stakeholders
Key Result Area Performance Indicators Action Programs Time Frame/ Working Group
Establishment of accredited/ certified mother clonal gardens and nurseries
certified mother Clonal gardens and Nurseries
accredited/certified seedlings produced Invest in mother Clonal gardens and nurseries (1 per major coffee area) Train prov’l reps on Nursery development Promote accreditation/certification
2013-2016 LGU, Private Sector, DA- RFUs, BPI, SCUs Training of propagators and provision of IEC materials
conducted
materials produced Conduct trainings for nursery establishment Reproduce and distribute IEC materials to farmers DA-ATI, TESDA, LGU,Industry Associations, Private sector
Key Result Area Performance Indicators Action Programs Time Frame/ Working Group Training on proper handling
Improvement in quality and availability of accredited/ certified seedlings
conducted
trained Conduct trainings on proper handling of seedlings SCUs, BPI DA-ATI Private Sector TWG, LGU
Key Result Area Performance Indicators Action Programs Time Frame/ Working Group Yield improvement
kg/ha to 1.0 ton/ha (Arabica) Ave. yield from 700 kg/ha to 1.5 tons/ha (Robusta) Net Income > PhP84,000/year Improved harvesting practices IEC campaign on GAP/best farm practices including seed selection 2013 to 2016 Private Sector, DA ATI, PCARRD LGU - PAO, MAO, NGOs Production Expansion-new planting and replanting areas Total expansion area ≥ 100,000 ha to address deficit? Develop PPP for planting and replanting projects Continuing
party group
Key Result Area Performance Indicators Action Programs Time Frame/ Working Group Adoption of GAP and GMP
certified farms
certified processing companies Benchmarking and best practices dissemination Conduct trainings
processing practices DA, ATI, SCUs, Private sector, LGU Enhanced quality
certified nurseries Conduct trainings
and management DA, BPI, LGU, ATI Trainings on proper harvesting and pruning
farmers/farm workers Conduct trainings Private Sector, TESDA, LGU, SCUs, ATI, NGOs
Key Result Area Performance Indicators Action Programs Time Frame/ Working Group
Lower processing costs
Power cost per kg Labor cost per kg Material cost per kg Better recoveries Enhance processing efficiency 2013-Private Sector, DA, DTI, Philmech, DOST
Increase capacity utilization of plants
Volume of gcb marketed Higher recoveries Improve supply of gcb Inspection and upgrade processing plants Private Sector DA, DTI LGU
Quality discipline
Better prices of gcb Establish guidelines in sale of gcb Incentivize compliance to product standard Private Sector DA, BAFPS, DTI
Key Result Area Performance Indicators Action Programs Time Frame/ Working Group Adequate post- harvest facilities No.of drying, hulling, storagefacilities Coordinate with PhilMechre: village level facilities e.g. small dehuller/ depulper Private Sector, DA, PhilMech More value adding on farm
products produced Evaluate/ monitor field processors TWG, SCUs, DA, Private Sector
Key Result Area Performance Indicators Action Programs Time Frame/ Working Group Transparent pricing linked to world market Farm price as a percent of world price Daily world price access from DA website/SMS Private Sector, DTI, DA, LGU Geographic branding and standards for coffee
brands and standards for Philippine coffee products Convene concerned
settle standards BPS, DA, BAFPS, TWG, Industry Associations, DTI- BETP, CITEM Enhanced market access and marketing strategies for specialty coffee
markets accessed Find alternative markets DA –AMAS, DTI
Key Result Area Performance Indicators Action Programs Time Frame/ Working Group Inadequate market intelligence for specialty coffee
explored Tap agricultural/ trade attaches in Philippine embassies Private sector, DA- AMAS, DTI, Industry Associations, DOST
Key Result Area Performance Indicators Action Programs Time Frame/ Working Group Access to long term financing Longer grace and Repayment periods
Lower interest rates Review financing program for coffee DA to endorse proposal to LBP 2013 –LBP, DBP, AGFP-ACPC Private Sector DA LGU
Key Result Area Performance Indicators Action Programs Time Frame/ Working Group Farm to Market Roads Length of FMRs to coffee farms Lower transport cost/ton km Advocacy to prioritize FMRs Industry assns. LGU, DA, Private Sector Establishment of Tram Lines
established Identify areas Industry assns. DA, PhilMech Private Sector, LGU
Key Result Area Performance Indicators Action Programs Time Frame/ Working Group Strengthen National Coffee Research, Development and Extension Center (based at CavSU) Number of coffee scientist/experts Multi-year budget allocation for coffee Establish three research stations (BSU, SMIARC*, SK State University) CavSU, BSU DA-BAR, DOST-PCARRD Private Sector
Key Result Area Performance Indicators Action Programs Time Frame/ Working Group Improved policies (e.g. land access) Land ownership ceiling Land consolidation for development Public lands opened to investors Review CARPER Review land use policy Review IPRA Law Advocacy with DENR Development of military reservations and abandoned mined areas DAR, DENR, DA PADCC-NCI NCIP Private Sector DND-AFP
Key Result Area Performance Indicators Action Programs Time Frame/ Working Group Improved collection and recording of industry data (e.g.production, area, trade, demand) Industry data aligned with private sector estimates Review official data in consultation with the private sector Industry associations, BAS, Private Sector, DA , LGU
structure Aligned government and private sector initiatives Conduct seminar
development Team building Industry assns, DA, Private Sector
The following principles are important:
GAP.