How Philippines is battling to cash in on coconut craze

(CNN) — It’s hailed as a super food and its uses extends to hair conditioner and mosquito repellant. The world is having a love affair with all things coconut.

As the world’s second biggest producer of the fruit, the Philippines is a major source of these products consumed around the world. But an aging tree population and damage from natural disasters are challenging the industry as it tries to keep up with growing demand.

‘Tree of Life’

Sometimes called the “tree of life,” that moniker couldn’t be more true in the Philippines where the coconut industry provides a livelihood for one-third of the country’s population, according to data from the Philippine Coconut Authority.

Each year the country’s 338 million coconut-bearing trees produce on average 15.344 billion nuts a year, second only to Indonesia.

Philippine coconut product exports, usually headed for the U.S., Japan, Germany, and China, have grown at an exponential pace, surging 1,000% in the last 7 years, from 1,600 metric tons in 2008 to 22,681 metric tons in 2014.

But despite the incredible growth and the massive interest worldwide, statistics show that 60% of Filipino coconut farmers live below the poverty line.

The many layers of middlemen with cartelized pricing and expensive transport and handling costs mean farmers get pennies on the dollar for what the end product sells for, a U.S. Congressional report found.

Earlier in the year, the Philippines government held its first coconut-based farming investor summit to address ways to make the sector more profitable for all.

Coconut water thirst

Philippine Coconut Authority Administrator Romulo Arancon said at the February conference that coconut water, which is gaining popularity among the health conscious, could provide $450 million in income a year but the industry was failing to take advantage of the craze.

“Our highest export so far of coconut water was in 2012 worth $18.5 million, only 4% of the potential,” Arancon said.

The industry needs to move away from copra, or dried coconut meat products, to ones with untapped potential such as coconut oil or coconut sugar.

And better marketing is not the only issue to address.

The Philippines is combating an aging tree population problem. Many of coconut trees on farms today were planted 50-60 years ago following the end of World War II, and have gone past their prime nut-bearing years, Hiroyuki Konuma, Asia Pacific representative for the UN’s Food and Agriculture Organization (FAO) said earlier this year.

Disaster risk

At the same time, the Philippines is the world’s third most exposed country to natural disasters, the FAO said, and its disaster prevention and response systems are poor. Battered yearly by typhoons during the monsoon season, it was hit especially hard by Typhoon Haiyan in late 2013.

The super storm killed more than 6,000 people and the toll on the coconut industry was no less than devastating. It destroyed an estimated 44 million trees, throwing the livelihoods of around two million farmers into jeopardy.

Coconut seedlings take an average of six to eight years to become productive again.

To help farmers get back on their feet again, the agency helped train them on intercropping (growing two or more crops in close proximity) and how to utilize the land between their coconut trees. It also helped with simple measures like providing sturdier and pest-proof storage containers for coconut seed. And because coconuts grow along coastal areas, mangrove forests are being planted to help prevent erosion and to provide a natural buffer against storms.

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