Coconut grower’s perilous plight

by Coconut grower

(November 23, Colombo, Sri Lanka Guardian) Unless the government acts to protect the coconut grower we may soon see not only the end of the economic coconut holdings but even the small one acre coconut lands. This would no doubt be a national disaster considering the importance of coconut in our daily life.

The coconut palm and the paddy field form an intrinsic part of the social fabric that has sustained the way of life of our island nation. Failure to protect the paddy farmer against escalating production costs can be seen as we travel up the Kandy road and observe the pathetic state of the paddy fields. Failure to protect the coconut grower will undoubtedly result in an equally sorry state of affairs for the coconut industry. The unsightly spectacle of yellowing leaves, tapering trunks and a few measly nuts on our coconut trees will most certainly be the outcome of neglecting our coconut holdings. Neglect brought about due to the shortsighted policy of depressing nut prices below those which ensure a reasonable financial return.

Is this the way forward to safeguard the traditional way of life of a small but proud and independent nation with a civilization and a way of life known to have flourished for more than 2,500 years? Any self respecting country would be proud to support these essential components contributing to its tradition. Take Japan for example where the paddy field is considered sacrosanct.

No other industry other than coconut plays such a dominant role in the rural economic structure and the upliftment of the living standards of the people in the North Western Province (Wayamba) and Gampaha District, and to a lesser extent in the Districts of Colombo, Kalutara and Hambantota. Besides the 50 acre coconut properties, there are over 600,000 coconut small holdings in the country of which around half, serving around one million persons, depend on coconut as the major source of income and livelihood. Currently the coconut growers have problems - the worst since the year 2000 - with respect to obtaining a remunerative price for coconuts and obtaining fertilizer at competitive price; yet the national budget for the year 2009 presented on 7 November 2008 does not speak a word about the coconut industry.

Coconut price

* In the coconut triangle, the farm gate price has been coming down from a high of Rs 25.00 at the beginning of the year to around Rs 14.00 per nut currently (November 2008). In the North Western Province ( Wayamba), which produces nearly half of the annual production of coconuts in the country, the traders offer the smallholder Rs 13.00 per nut as at first week of November and are hesitant to buy nuts expecting further reduction in price.

* The 50 % drop in the farm gate price during the course of the year is occurring at a time when the price of all other commodities and the cost of living index has escalated to around 25 %, according to official sources during the same period. The coconut grower needs to get a minimum of Rs 20.00 per nut at the farm gate at this point in time.

Palm Oil

* The drop in coconut price is mainly due to the glut of cheap palm oil which is continued to be imported at 15 % import duty, without any limitation on the volumes imported. This is despite the slogan " Api Wawamu, rata nagamu" The palm oil price which was USD 1,200 per ton in June 2008 has continued to come down and has now (04 November) plummeted to $530 in the producing countries (Malaysia and Indonesia). Helped by low prices, palm oil importers have stocked palm oil to last 2 to 3 months of the country’s requirement.

* The small coconut oil mills, spread in every village in Wayamba and Gampaha District, have either closed down or are running at low capacity and many persons have been thrown out of employment.

Cost of Fertilizer

* Growers fertilize their lands during October to December. This year, most growers have given up fertilizing. The fertilizer price which was Rs 18,000 per ton of Adult Palm Mixture (APM) in the year 2006, rose to Rupees 29,000 per ton in the year 2007. In the fourth quarter of year 2008, the fertilizer price has risen to Rs 64,000 per ton. In the 2007 fertilizing season, a coconut grower needed four nuts at an average price of Rs 23.00 to buy three kg of APM fertilizer. Today, at the price of a nut at Rs 15.00 (farm gate price) the grower needs 13 nuts. When the cost of dolomite, transport and labour to apply manure is added, requirement rises to 16 nuts.

* A small holder who owns one acre of coconut land having a density of 60 trees, and the national average production of 2,700 nuts per year, 45 nuts per tree, will spend one third (15 nuts) for the fertilizer. At Rs 15.00 per nut he will be left with Rs 20,250 for the year, which is Rs1,700 per month to support his family. He is unlikely to attend to other cultivation practices needed to arrest the declining soil fertility, conserve moisture and replant. The neglect of these will eventually spell disaster for the coconut industry in the coming years.

* For the paddy farmer, urea and other fertilizers, given at Rs 350.00 per 50 kg bag carries a 95 % subsidy. The tea smallholder is to be given fertilizer at Rs 1,000.00 per 50 Kg bag. For the coconut grower fertilizer is given at Rs 3,200.00 per bag. This is after a reduction of around Rs. 50.00 per bag, not by a state subsidy but by the use of cess funds collected from coconut exports. In India, irrespective of the crop they grow, a 50 Kg bag of fertilizer is given at Rs 900.00 (Sri Lankan rupees). The coconut grower need to be given at least a 50% subsidy to encourage him to apply fertilizer

Consumer price

* Though the price of coconuts at the farm gate has dropped down to the level of the cost of production on a well maintained plantation, the coconuts in the city centres are continued to be sold at around Rs 28.00 for a medium size nut, due to the manipulation of the middle men. There needs to be mechanism to bring down the large margin in price between the grower and the consumer. Consumer price can be made reasonable by channeling the nuts produced by government owned coconut estates numbering a total of around 40,000 acres which can supply around 8 million nuts a month to the city centres and cooperatives at least during the week ends during the lean cropping season.

* This will have a ripple effect on bringing down the price paid by the consumer so that despite a remunerative price for the grower, the consumer pays a reasonable price. Nonetheless, coconuts remain the only commodity for which the consumer is paying 25 to 40% less than the price they paid at the beginning of the year.

The government needs to immediately take measures on an urgent basis to ensure a minimum farmgate price of at least Rs. 20.00 per coconut.
- Sri Lanka Guardian