Philippines : tree crops for rural development - issues and strategy options (Vol. 2 of 2) : Annexes

Report No. 19281-PH Philippines Tree Crops For Rural Development Issues and Strategy Volume 11 Annexes June 22, 1999 Rural Development and Natural Resources Sector Unit East Asia and Pacitic Region Document of the Wod Bank  CURRENCY EQUIVALENTS (as of December, 1998) Currency Unit = Pesos (P) US$1.00 = P 40.0 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS A&D = Alienable and Disposable AFMA = Agriculture and Fisheries Modernization Aact ARB = Agrarian Reform Beneficiaries ARC = Agrarian Reform Communities CARL = Comprehensive Agrarian Reform Law CARP Comprehensive Agrarian Reform Program CEF = Competitiveness Enhancement Fund CocoFed = Coconut Federation of the Philippines CPO = Crude Palm Oil DA = Department of Agriculture DAR = Department of Agrarian Reform DENR = Department of Environment and Natural Resources DOST = Department of Science and Technology DPS = Direct Payment Scheme DTI Department of Trade and Industry FELCRA = Federal Land Consolidation and Rehabilitation Authority (Malaysia) FELDA = Federal Land Development Authority (Malaysia) FFB = Fresh Fruit Bunches HVCCP = High Value Commercial Crops Program ISF = Integrated Social Forestry LBP = Land Bank of the Philippines LGU = Local Government Unit LOI = Letter of Instruction MTPDP = Medium Term Philippine Development Plan NES = Nucleus Estate Schemes ODA = Official Development Assistance ORRAF = Office of the Rubber Replanting Aid Fund (Thailand) PD = Presidential Decree PTF = Government-owned Plantation (Indonesia) RA Republic Act RCF = Rural Countryside Fund SAFDZ = Strategic Agricultural and Fisheries Development Zones SCU = State Colleges and Universities VLT = Voluntary Land Transfer VOS = Voluntary-Offer-to-Sell Vice President :Jean-Michael Severino, EAP Country Director :Vinay Bhargava, EACPF Sector Manager :Geoffrey Fox, EASRD Task Team Leader :Richard Anson, EACPF  PHILIPPINE S TREE CROPS FOR RURAL DEVELOPMENT: ISSUES AND STRATEGY ANNEXES ( 11) Annex 1: Overview of Tree Crop Production (Levels and Trends) Annex 2: Classification of Tree Crop Production by Different Tree Crop Farm Types Annex 3: Tree Crop Support Services, Institutional Roles and Performance Annex 4: Government Policies Affecting Tree Crop Development Annex 5: Philippine Experience in Tree Crop Development (A) Overview (B) Summary of Lessons from Case Studies (23) (C) Past and Present GOP-supported Tree Crop Programs: Key Features (D) Budgetary Allocations for Tree Crop Development (Working Paper includes summary assessment of relevant East Asia Regional experience in tree crop development) Annex 6. International Price & Market Prospects Annex 7. Financial Impact of Tree Crops on Smallholders Annex 8. Current Financing of Tree Crop Planting and Options for the Future Annex 9. Economic returns from Tree Crop Investments Annex 10. Alternative Investment and Management Systems for Tree Crop Development Annex 11: Tree Crop Specific Strategy Frameworks * Overall Summary Table (by tree crop) * Indicative Frameworks for the Main Tree Crop Strategies (includes 9 Attachments: coconut; coffee; rubber; oil palm; mango; banana; cacao; other fruits; timber trees) Bibliography  Annex I Page 1 of 8 OVERVIEW OF TREE CROP PRODUCTION AND MARKETING I. TREE CROP PRODUCTION IN THE PHILIPPINES Importance within Agriculture and Linkages with Other Sectors I. Tree crops comprise a significant part of Philippine agriculture. Of the 10 million ha of farmland, about 4.5 million ha are devoted to tree crops, of which coconut accounts for about 3.3 million ha. The balance are in coffee, rubber, oil palm, mango, banana and other pure and mixed stands. 2. In 1997, tree crops contributed about 12.5% of agricultural Gross Domestic Product (GDP); coconut alone contributed about 5% while coffee, rubber, mango and banana, another 6%. The relatively low contribution largely understates their potential contribution as average farmn productivity is far less than what are being achieved in good farms. Table Al: Tree Crops in Agricultural GDP and Value of Production in 1997 (At Current Prices) Gross Value Added Value of Production Amount Share Amount Share Crop (Pesos, million) (%) (Pesos, million) (%) Coconut 28,730 4.7 29,529 5.9 Coffee 4,520 0.9 5,020 1.0 Rubber 1,500 0.3 1,671 0.3 Mango 8,970 1.8 10,554 2.1 Banana 12,170 2.7 14,921 3.0 Subtotal 55,890 11.5 57,695 11.6 Others (A) 4,840 1.0 5,380 1.1 Total Tree Crops 60,730 12.5 63,075 12.7 Total Crops 287,640 59.1 340,638 68.2 Total Agriculture 486,850(b) 100.0 499,457 100.00) a) kruitinres, tre nuto, o- palm, etc. (b) Including Forestry (c) Excluding Forestry Source: Bureau ofAgricultural Statistics (for Production Values) National Statistical Coordination Board (for Gross Value Added) Mission Estimates 3. In the 1980s, the GDP of major tree crops declined compared to the slight increase in total crops. This was primarily caused by contractions in coconut and banana. In the 1990s, tree crop GDP registered higher growth than total crops GDP due to dramatic expansion in mango production. As a result, the contribution of tree crops to agriculture growth was largely negative in the 1980s, but turned positive in the 1990s.  -2- Annex 1 Page 2 of 8 Table A2: Estimated Tree Crop GDP Growth, 1980-97 (In million pesos at constant 1985 prices) Ave. Annual Growth (%) Crop 1980 1990 1997 1980-90 1990-97 Coconut 11,956 7,084 7,700 (4.6) 1.3 Coffee 2,320 3,001 2,538 2.8 (2.3) Rubber 373 718 744 7.5 0.5 Banana 3,935 2,698 2,871 (3.5) 0.9 Mango 2,200 2,330 4,628 0.7 11.3 Total 20,784 15,831 18,481 (2.5) 2.3 Total Crops 81,027 85,870 99,006 0.6 2.1 Total Agriculture(a) 125,030 153,414 182,383 2.1 2.5 ta) rxuurng toresy_ Source: National Statistcal Coordination Board Bureau ofAgricultural Statstics Mission Estimates Table A3: Changing Structure of Agriculture Growth, 1980-1999 (In Percent) Ave. Growth Ave. Share Contrib. to Growth 1980-90 1990-96 1981-90 1990-96 1980-90 1990-96 Crops Palay 2.7 3.4 16.2 16.2 112.9 50.1 Corn 3.5 (1.6) 6.8 6.4 63.9 (10.0) Coconut (4.6) 0.5 7.3 4.2 (100.6) 1.7 Sugarcane (1.6) 6.1 3.1 2.9 (31.6) 10.7 Banana (3.5) 0.6 2.5 1.7 (25.5) 0.9 Other crops 1.5 2.1 23.4 23.5 81.0 46.5 Subtotal 0.6 2.0 59.1 54.9 100.0 100.0 Livestock 5.9 3.9 9.4 11.2 Poultry 6.5 6.6 6.3 9.1 Agri Act. & Services 4.1 2.3 4.3 5.0 Fishery 3.9 12 20.8 19.8 Total Agrculture() 2.1 2.4 100.0 100.0 IJbxCEtualng rtclStry. Source: Natonal Statistical Coordination Board 4. Tree crop areas have not grown significantly during 1980-1990. In the 1980s, coconut areas - the dominant crop - contracted, followed by marginal expansion in the 1990s. The bright spot was the dramatic expansion in oil palm (albeit from a small base) in the early period, and that of mango in the later period. These changes were generally reflected in production trends. Table A4: Major Tree Crop Area (In Thousand Hectare) Ave. Annual Growth (%) Crop 1980 1990 1997 1980-90 1990-97 Coconut 3,236 3,112 3,314 (0.3) 0.6 Coffee 116 150 150 2.3 (0.1) Rubber 65 86 93 2.9 0.9 Oil palm(") <5 <15 <15 12.0 0 Mango 48 53 90 1.0 8.9 Banana 277 300 328 0.8 1.0 Memo item: Palay 3,470 3,319 3,842 (0.3) 2.2 Corn 3,199 3,820 2,726 1.9 (4.6) taktcmm, Source: Bureau ofAgricuitural Statistics Mission Estimates  Annex I Page 3 of 8 Table A5: Major Tree Crop Production (In Thousand Tons) Ave. Annual Growth (%) Crop 1980 1990 1997 1980-90 1990-97 Coconut 13,369 11,940 12,053 (1.0) 0.3 Coffee 110 143 121 3.1 (2.2) Rubber 32 62 65 7.3 1.0 Oil palm (CPO)(a) 17 46 70 10.5 6.5 Mango 319 390 670 2.5 9.0 Banana 3,283 2,972 3,391 (0.6) 2.1 Memo item: Palay 7,646 9,319 11,268 2.2 2.9 Corn 3,050 4,854 4,333 4.9 (1.5) ta) Estimate - Source: Bureau ofAgricultural Statistics Mission Estimates Export 5. Tree crop exports heavily contribute to agriculture exports. In 1997, products derived from tree crop earned at least US$1 billion or more than half of the total agriculture exports. Products derived from coconut earned about $765 million. Table A6: Tree Crop Exports in 1997 (In US$ Million) Item Value Products derived from: Coconut 764.3 Coffee 4.4 Rubber 25.1 Mango 45.1 Banana 240.4 Cacao 19.2 Total 1,098.5 Source: National Statistics Office 6. The general trends in exports at constant prices indicate a marginal growth following significant differences in crop performance. Export of coconut product shows notable expansion in coconut oil and dramatic decline in copra. Desiccated coconut export fell in the 1980s but recovered in the 1990s. Rubber products posted increases over the long period and similarly for fruits (banana and mango). Table A7: Export Earnings In Million US Dollars (At Constant 1985 Prices) Ave. Annual Growth (%) Crop 1980 1990 1997 1980-90 1990-97 Coconut 642.4 735.4 625.8 5.0 0.9 Coffee 35.9 20.7 1.2 5.1 2.6 Rubber 4.7 11.3 20.5 16.8 11.2 Mango 10.2 19.1 43.6 7.8 14.5 Banana 136.7 131.9 185.3 0.6 6.1 Cacao 12.5 34.3 24.3 26.4 (3.8) TOTAL ABOVE 842.3 952.7 900.6 3.2 0.8 Source: Foreign Trade Statistics of the Philppines  -4- Annex 1 Page 4 of 8 Table A8: Export Volumes (In Thousand Tons) Ave. Annual Growth (