Philippine government begins the barter system.
This is one of several measures adopted by the government to increase coffee exports pending the resolution of the International Coffee Agreement between coffee producers and consumers, said executive director Antonio Reyes, of the International Coffee Organization-Certifying Agency (ICO-CA) under the Department of Trade and Industry.
The list of products in these Eastern European countries with which Philippine coffee will be bartered is being finalized. Many of the products, however, will be those needed by the Philippines for development. Among the initial products under consideration are military equipment from former members of the Soviet Union, like Romania.
Initial contacts on the barter system, director Reyes said, have been made with members of the Commonwealth of Independent States, but no final arrangements and commitments have been made. The barter system will be handled by the state-owned Philippine International Trading Corp. under the Department of Trade and Industry.
Russia makes offer
In a related development, Russia has offered to buy Philippine green or processed coffee, but at comparatively lower prices than the current domestic prices, said Reyes.
Current selling prices of green beans in the Philippines are higher than those in the world market. The prices average 32 Philippine pesos (PP 32=US$1.28) per kilo, against PP 22 in the international market.
The suggestion to dilute the content of Philippine processed coffee for export to Russia, to bring down prices, was declined by local exporters-notably roasters and processors--as this would destroy the good image of Philippine coffee, said Reyes.
Meanwhile, Philippine processed coffee continues to enjoy the confidence of both traditional and non-traditional buying countries. According to Reyes, the increased demand somehow compensates for the depressed export of green beans in view of the continued suspension of the International Coffee Agreement.
The ICO-CA has relaxed the rules on coffee exportations by granting special export authorizations to local coffee exporters and producers not necessarily accredited with the agency. The agency has adopted other measures, including marketing and promotional efforts for processed coffee and marketing assistance, to help exporters and processors.
Since the suspension of the world quota system in 1989, the Philippines posted a mirritual increase of 9.5% of its exports in 1988 to 1989. The worst record came in 1990 when the country shipped out only 9,836 metric tons of coffee, the lowest performance since 1980. Expectations are high, however, for recovery in 1995.
Reyes predicted that world coffee consumption would slowly increase over the next couple of years, and coffee prices are anticipated to increase as a result of a decline in coffee production.
Farmers Appeal for Assistance
Filipino coffee farmers have appealed for assistance from the government and the private sector to help reduce production costs. The appeal was made in a recent gathering of coffee farmers sponsored by Nestle Philippines and the Cooperative Union of the Philippines. They recommended:
* A coffee rehabilitation program involving cost-saving technologies, as well as training to enable farmers to obtain higher yields at lower costs. This can be taken care of by coffee experts from both the government and private sectors.
* The organization and strengthening of farmer-cooperatives to obtain bargaining power for farm inputs and marketing of inputs.
The Department of Science and Technology has indicated interest in funding a coffee rehabilitation program to invigorate the industry through a training program using low-input production techniques. This program will be initially implemented in selected coffee growing areas, like Cavite, Panay, and Bukidnon. It will be coordinated by the Philippine Council for Agriculture, Forestry and Natural Resources Research and Development (PCARRD) based in Los Banos, Laguna province.
These appeals and moves are an initial implementation of the country's 10-year Coffee Industry Development Program, which consists of 11 projects intended to develop an integrated and sustainable farmer-based coffee production, processing, and marketing activity.
The 11 projects are:
1. Preparation of a 10-year industry development plan.
2. Assessment of the existing coffee production and processing systems, and the quality of coffee produced in the Philippines.
3. Collection and selection of outstanding Philippine coffee (Arabica, Robusta, Liberica, and Excelsa).
4. Development of an integrated pest management scheme.
5. Study on domestic consumption.
6. Rehabilitation and crop diversification in existing coffee farms.
7. Establishment of appropriate processing centers in selected areas.
8. Survey of Philippine domestic coffee consumption, patterns and trends.
9. Training on international marketing of coffee and coffee products.
10. Export promotion of Philippine coffee in Eastern Europe.
11. Establishment of a management information system for the Philippine coffee industry and trade.
The production aspect basically enhances the participation of farmers, traders, millers, processors, government and non-government organizations, and financial institutions in the total development of the industry, according to Reyes. The program seeks to produce good quality coffee beans that can be competitive in both domestic and export markets.
The processing factor seeks to maximize efficient development and utilization of the industry's human and bio-physical resources that are ecologically sound and environmentally friendly. The marketing side aims to develop an internal marketing system to identify marketing margins in the market supply chain, narrowing the gap between farm gate and retail prices. It, likewise, seeks to develop an external marketing system through ICO members and non-member countries.
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|Author:||Palacpac, Orlino Sol.|
|Publication:||Tea & Coffee Trade Journal|
|Date:||Sep 1, 1993|
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