Much a-brewing in Sulu

For generations, residents of Parang, Sulu have accepted their poverty. No more. They are literally placing all their coconuts in a P38-million commercial coffee plantation project funded by the Land Bank of the Philippines.

Each farmer’s investment is his land, which is currently planted to coconut. In return for his land, the farmer becomes a shareholder and automatic farm laborer of the project. This ensures the farmer will be earning money from his land even before the coffee beans (with an estimated project yield of 2.5 million kilos) are ready for harvest. The farmer will also earn additional income from cash crops like peanuts and corn, which will be intercropped with the coffee plants and the coconut trees.

"We hope to double time on our planting, hopefully before the expected El Nino towards the last quarter of this year," said Parang Mayor Magdar Loong in his June 27 memorandum to Presidential adviser on job creation, Luis Lorenzo, Jr.

Of the project’s targeted 1,000 hectares, 506 hectares have been planted so far, directly employing 506 workers and indirectly benefiting 2,530 (at five members per family). Come harvest time , the labor requirement can run to 5,000.

When completed, the Parang project will have developed nurseries, post harvest facilities and other ancillary civil works.

Pilot project

The Parang coffee project is part of a P350-million coffee rehabilitation program of the Quedan and Rural Credit Guarantee Corp. , which has secured the financing from Land Bank. It is expected to be replicated in other coconut-growing areas of the country.

When released to Quedancor, the money will be channeled to roasters/millers–who already know the linkages in coffee production and marketing– for relending to farmer cooperatives.

The interest rate to roaster/millers is 11.4%, the lowest rate in the agricultural sector.

Upon maturity, the farmers’ loans are collected by the roaster/millers who then repay Quedancor. In turn, Quedancor repays LandBank.

Upon harvest, the produce of these commercial coffee plantations will be sold in the local market, particularly to Nestle Phils., which currently imports nearly 20 million kilos of beans and buys only 100,000 MT of coffee beans locally. Nestle’s market share for locally grown coffee is 85%, of which 75% is used to produce Nescafe Classic.

Production

The total area planted to coffee in the country is 138,000 hectares as of 1996, while total production was 118,830 metric tons. Mindanao accounted for 44,344 MT or 37.2% of total production.

Locally produced beans are limited to four: Robusta, 85%; Arabica, 5%; and Excelsa and Liberica, a combined 10%. The target export markets for Robusta is Asia; Arabica, Europe and the United States; and Excelsa and Liberica, the Middle East. In terms of locally supplying Nestle, the Robusta would be ideal for the Nescafe brand; Arabica, Master Roast; and Excelsa and Liberica, Nestle’s decaf line.

As the quality of their beans improves, farmers and millers will be able to compete with each other for the Philippine version of the Kafe Isla, an internationally-recognized seal of quality, which will be given to the region or province adjudged to have the best beans. The quality seal will be given by the private sector-dominated Coffee Board.