The Philippine Coffee Industry: A Primer

FACT: Two hundred years ago, the Philippines was one of the world's top coffee producers. Today, we produce only .012% of the worlds' supply.

THE COFFEE BELT
Circling the equator between the Tropics of Cancer and Capricorn is an area called the "Coffee Belt". Here there are only two seasons a year, and the weather is temperate with just the right mix of heat, humidity and cold that is so perfect for the growth of coffee trees. Thus the name "Coffee Belt."

Coffee is the second most traded commodity in the world - second only to petroleum. Thus, the countries within the coffee belt have taken to harvesting the highly valued crop, and for many, coffee has become one of their biggest income earners. About 200 years ago, the Philippines was on the list of the world's top coffee producers--we were once the fourth largest coffee producing nation.

Today, we produce only .012% of the world's coffee supply.

AN HISTORICAL PERSPECTIVE
250 years ago, Spanish friars brought coffee over to the Philippines, turning much of the country's highlands into coffee farms. After about 150 years of getting rich on the world's addiction to caffeine, a blight hit the country. "Coffee Rust" as the infestation was called, wiped out many of the Philippine coffee farms. Seeing we were unable to keep up with the world demand, the Latin American countries saw the opportunity and took over - Brazil in particular.

Today, only two countries hold sway over the world's coffee prices: the United States, who is the top buyer; and Brazil, who is the top producer, supplying 30 %of the world's demand. What happens in Brazil determines what happens to coffee trading prices around the world. If not for some unfortunate twist of nature, that power could have belonged to the Philippines.

SURVIVING THE BLIGHT
The blight, however, was not the end of our coffee glory days. As soon as our coffee farms got back on their feet, we moved back into being one of the world's top producers. Up until 1986, the Philippines was earning at least US$150 million a year in coffee exports. Coffee had always been one of our biggest dollar earners -- up until 10 years ago.

Today, we make only around US$500,000 a year from coffee and only 10% of our yearly harvest is exported. The fact that our coffee production has dropped is odd considering the local demand for coffee increases by 3% each year. The local demand for the year 2000 was 60 million kilograms. Production, however, was a mere 45 million kilograms.

THE DEATH OF AN INDUSTRY
What happened? Simple. It is no longer profitable for many of our coffee farmers to farm coffee. Why? For several reasons. One: They have absolutely no control over their coffee prices. The world price dictates local price, as do the big local buyers, thus there is no way the farmers can guarantee themselves a profit. Two: Much of what was once rich coffee land has been declared industrial, commercial or residential land. When this happened, many of our farmers couldn't cope with the increase in land taxes so they sold off their land.

Then there is the technology problem. In many coffee coutries, coffee production is largely mechanized, cutting down on time and labor cost. In the Philippines, except for the larger coffee farms, nearly everything is done by hand. It is labor and time intensive. The smaller farmers cannot afford even the most basic machines like hullers.

Infrastructure is another problem. There are not enough farm-to-market roads. Thus, getting the yield to the markets is difficult.

As a result, many farmers whose families have planted coffee for generations have sold their land or have switched to planting more profitable crops.

Recently, another problem has emerged. With the lifting of the ban on coffee importation, local farmers are worried that that may put a severe dent on the demand for locally-produced coffee.

GETTING THE PHILIPPINES
BACK ON THE BELT
In the last ten years, we have lost about 80,000 hectares of coffee farms. Only about 120,000 hectares of productive coffee land remain, mostly concentrated in the mountains of Batangas, Bukidnon, Benguet, Cavite, Kalinga Apayao, Davao and Claveria.

Sixty to eighty thousand coffee families are left but their numbers continue to fall. It is to help these families, and make coffee a major dollar earner for the country once more that the Figaro Coffee Company created the Figaro Foundation Corporation. Its thrust is very simple - boost production and provide aid to our last remaining coffee families.

TURNING THE TIDE
Since its birth, the Figaro Foundation Corporation has spearheaded many projects aimed at getting the Philippines back on the belt.

A continuing communications campaign has made more and more Filipinos aware of our coffee industry's plight and the Foundation's efforts. As a result, many land holders have switched crops, or turned idle land into new coffee farms.

In 2000, Barako became the focus of the Foundation's efforts, as a result, the then nearly extinct Barako has become a staple in many local coffee shops and restaurants, as well as Filipino homes.

While "Barako" has become a generic name for all coffee from Batangas, real Barako refers to Philppine Liberica and is known for its particularly strong taste, powerful body, and a distinctly pungent odor. It takes its name from the Tagalog word for wild boar. These creatures are rather fond of dining on the plant's leaves and berries.

Barako has an annual export volume of 1,200 bags valued at US$0.15 million. Most of it goes to Saudi Arabia.

CAVITE -- THE CENTER OF A NEW BEGINNING
In the quiet hills of Cavite, much has already been done towards the rehabilitation of our coffee industry. As proof of what is possible: The national average yield is ½ tons per hectare, or 2 kilograms of green beans per tree every harvest. Since coffee is harvested once a year, those are also the stats per year. In Cavite however, where programs have been implemented to boost production, the average coffee tree now yields 3 tons per hectare -- six times the national average! That boosts production up to 12 kilograms a tree, and a whopping 1,200 cups of brewed coffee from a single tree in a single harvest!

Today, the Figaro Foundation Corporation is working in close partnership with the Municipal Government of Amadeo in Cavite, and the Cavite State University (CavSU) -- the National Research Center for Coffee.

Together, the three bodies have launched and are cooperatively maintaining a Barako Pilot Farm. Nestled in the lush Cavite hills is a 1.7 hectare property lent to the project by ex-Mayor Tik Ambagan of Amadeo. The farm implements new farming technology and good farming practices, and is planted solely to Barako from seedlings raised by Dr. Andy Mojica of CavSU. Barako was chosen for this project to support the Foundation’s project to save it from extinction. Barako also fetches a higher market price than Robusta -- the variety most commonly grown in Cavite. This project is projected to increase the income of coffee farmers from P15,000 per hectare per harvest to as high as P85,000 per hectare per harvest.

At the helm of this project are Mayor OJ Ambagan, the Municipal Mayor of Amadeo; Councilor Rene Tongson of the Municipality of Amadeo; Dr. Andy Mojica, National Team Leader - National Coffee Development Board; and Chit Juan, CEO - Figaro Coffee Company.

Plans are underway for other activities. The Figaro Foundation Corporation is constantly in search of good ideas and opportunities to save both Barako and the local coffee industry. We need as much support as we can get. The country needs as much support as you can give.

http://www.savethebarako.org/primer.htm