October is also known for another beverage. We have been celebrating Philippine coffee since President Fidel Ramos declared October as coffee month in 1997. In malls, promotional activities include free coffee every day for two to three weeks.
The nonprofit Philippine Coffee Board Inc. (PCBI) was established in 2002 by then Agriculture Secretary Cito Lorenzo as the National Coffee Development Board. It was later incorporated as a nonprofit with the sole mission of promoting Philippine coffee. Back then, consumers did not know we were a coffee-growing country, much less what a coffee tree looked like. That era started a coffee revolution of sorts in the domestic arena.
The Philippine Statistics Authority reported last year, however, that while coffee consumption continued to increase, this has been served largely by imports from Vietnam and Indonesia.
On the consumer behavior side, the “3-in-1” coffee sachet became the convenient way to have one’s morning brew. Instant coffee became an essential good that even the Department of Trade and Industry monitors its price movements just like with rice and canned goods.
Brewing at home
As coffee shops mushroomed all over the country, thus increasing consumption in the roast and ground category, farmers got better prices for their produce. It also helped that PCBI partnered with the Coffee Quality Institute (CQI), which introduced the Q system of grading coffee, resulting in the first ever competition called Kape Pilipino in 2017.
Production of “quality” coffee increased and consumers took to Philippine coffee in cafes and online stores. Demand for this category increased, buying prices went up, and farmers became more quality-conscious.
When the pandemic forced many cafes to shut down, people turned to getting their caffeine fix at home, and a “brew at home” culture became the order of the day. Consumption still increased, making farmers happy to get better prices.
But even with increasing consumption, why is the Filipino farmer still poor?
The main problem is yield. Our national average yield is 700 kilos per hectare, while Vietnam averages 3,000 to 5,000 kilos per hectare.
The second challenge is logistics. A farmer in faraway Quirino province will have to transport his or her coffee to the closest consolidator, maybe in Ifugao or Kalinga, or hope to find a buyer through the Department of Agriculture’s Agriculture and Marketing Assistance Service. That removes his “brand,” or the origin of the coffee. So how do we close the import gap?
First, we need to plant more trees. Coffee trees can last for 40 to 50 years.
The private sector is encouraged to do the planting so that there is less red tape on seedling production, nursery establishment and other barriers to expanding coffee areas.
Second, we need to increase yield of existing coffee trees with the right application of organic fertilizers, which the farmers can prepare on their own.
Third, rejuvenation of old trees can also give an aging tree a new lease on life.
With these challenges and other global issues like climate change and deforestation, there is no better time to plant trees than today. And if we plant coffee, they can thrive well with tropical cash crops like banana, papaya, pineapple and peanuts. That means farmers can have cash while waiting for their coffee to bear fruit (usually two to four years depending on variety).The PCBI is launching a program named “Plant coffee, Pilipinas!” where donors can choose from various sites designated by the group such as: Sagada, Mountain Province; Kasibu, Nueva Vizcaya; Amadeo, Cavite; Iloilo; Negros Occidental; South Cotabato; Sultan Kudarat and Sulu. All these sites will be monitored by member farmers who will sign a commitment form to assure donors that their “adopted “ trees will be taken care of until they bear fruit.
The coffee lovers who donate will “see” their trees via GPS coordinates to be given by the farmers. This is where technology and sustainability will work hand in hand.
To help out farmers who wish to learn the right way to process specialty coffee, a seminar on post-harvest processing was held on Oct. 16 via Zoom, conducted by CQI processing professional Robert Francisco, a known coffee expert in primary and secondary processing of the bean.
For those who want to learn more about specialty coffee and how to taste or “cup” coffee, another webinar titled “Basics of Coffee Sensory” will be held on Oct. 23 to help farmers or producers make the grade, so to speak.For marketing coffee here and overseas, a special webinar by research firm Global Data will be held on Oct. 26 also via Zoom with the cooperation of Asean Coffee Federation (www.aseancoffee.org), where PCBI is an active member.
So what is the economics of coffee? From being known only as a producer of Robusta coffee, the Philippines is creating new demand for its other varieties like Liberica (or known locally as barako) or specialty Arabica. These have new demand in micro markets like Switzerland, Sweden and Japan.
This way, farmers can get better prices rather than having to stick to commodity spot prices. In fact, Philippine specialty coffee prices are higher than world market prices, but domestic demand is still strong.
Coffee prices are inelastic (changes in global prices have little effect on demand) as more and more people take up the habit regardless of its price.
We must be conscious of two markets: instant or soluble, and roast and ground (this includes specialty coffee). The latter gives farmers the ability to price their coffee depending on the effort and attention they gave their produce. The former is not as selective, spoiling producers to harvest even unripe fruits, merely selling at commodity prices.
Do we hope to close the import gap and give billions of pesos to our Filipino coffee farmers instead? It starts with recognizing our assets: heirloom varieties, organic fertilization and continued growth of a specialty coffee market. For every consumer we convert to demand good specialty coffee, more farmers will stay the course and produce better beans.The promotion of Philippine coffee here and abroad has been the impetus for farmers to continue expansion of their coffee areas. They just need a leg up from the private sector. Note that countries leading in production charts even have subsidies.
Competing in price sans subsidies, the Filipino coffee farmer will still succeed with private-sector led programs. Plant coffee, Pilipinas!