The Status, Opportunity and Challenges. . . . 27 August 2014

Report
THE STATUS, OPPORTUNITIES
AND CHALLENGES OF THE
PHILIPPINE PALM OIL
1/
INDUSTRY
Pablito P. Pamplona, Ph.D. and
April Grace D. Pamplona2/
1/ Paper prepared for presentation during the Malaysian Palm Oil Council
Forum on Malaysian Palm Oil in Cebu City, 27 August 2014.
2/ Secretary and Board of Director, Philippine Palmoil Development
Council, Inc. and Assistant Manager, Triple P Farms and Nursery.
1
Southern Visayas and Mindanao are among the
places which is highly suitable to oil palm
Thailand
 Potential area >
1,000,000 ha
 Area planted >
625,000 ha
 Per capita income
> US$ 8,051
 Palm oil export >
US$ 400 million
15o
10o
Krabi
Malaysia
 Potential area >
5,000,000 ha
 Area planted >
4,850,000 ha
 Per capita income
> US$ 13,800
 Palm oil export >
US$ 17 billion
Philippines
 Potential area >
1,000,000 ha
 Area planted > 54,748
ha
 Per capita income >
US$ 3,516
 Palm oil import > US$
225 million at P6.68
billion in 2010 and to
increase to P27.26 in
2022
Songkla
5o
Malaysia
EQUATOR
5o
10o
15o
Indonesia
Indonesia
 Potential area >
10,000,000 ha
 Area planted > 7,500,000
ha
 Per capita income > US$
4,160
 Palm oil export > US$ 15
billion
Member countries of the ASEAN within 10o North and South of the equator which have
areas highly suitable for palm oil production. These include the whole of Malaysia and
Indonesia, Mindanao, Philippines and Southern Thailand.
2
Potential Production Area (has), Philippines, 2012.
REGION
R IVB – MIMAROPA
R IX – Western Mindanao
R X – Northern Mindanao
R XI – Southern Mindanao
R XII – SOCSKSARGEN
R XIII – Caraga
ARMM
TOTAL
AREA PLANTED (has)
16, 300 (1.68%)
102,000 (10.46%)
154,000 (15.8%)
104,000 (10.7%)
112,000 (11.5%)
384,000 (39.4%)
103,000 (10.6%)
975,300 (100.0%)
Source: PPDCI
3
The current. . . .
Areas (ha) planted to oil palm in the Philippines as of April 2013
(Pamplona, 2013).
Regions
I-IVB LuzonPalawan
2003
March
2005
2007
June 2009
June 2011
April 2013
-
-
1,450.00
3,592.00
4,600.00 (8.4%)
6,250.00
3,994.15
5,300.00
6,506.00
6,506.00
6,506.00 (11.9%)
6,500.00
IX – Western Min.
0.00
0.00
0.00
62.00
320.00 (0.6%)
800.00
X – Northern Min
190.00
413.30
920.00
1,128.00
1,820.00 (3.3%)
3,280.00
XI – Southern Min.
217.38
244.38
810.00
1,217.00
1,960.00 (3.6%)
3,500.00
6,766.81
6,905.81
9,274.00
13,961.00
18,200.00 (33.2%)
26,470.00
13,461.72
15,404.29
16,020.00
17,252.00
18,102.00 (33.1%)
20,160.00
ARMM
596.89
735.89
1,420.00
2,890.00
3,240.00 (5.9%)
6,500.00
TOTAL
25,226.95
29,003.67
36,400.00
46,608.00
54,748.00 (100.0%)
73,460.00
VII- Central Vis.
XII – SOCSARGEN
XIII – CARAGA
2014 preliminary data = 73,340 ha
4
The current. . . .
Milling plants, location and capacity.
Name of Company
(Ownership/Yr. established)
Filipinas Palmoil Plantations Inc. (Filipino –
60%, Indonesian – 40% - 1981)
Agusan Plantations Inc.
(AGUMIL INC.) Singaporean-60% Filipino40% - 1983
KENRAM Industries (Filipino- 100% - 1967)
Buluan Palm Oil Mill (2008)
Phil. Agric. Lnd Dev’t. & Mill, Inc. (PALM
Inc) – (2005)
ABERDI
Palawan Agumil Inc. (2010)
Univanich Milling Plant (2014)
Location
San Francisco,
Agusan del Sur
Manat, Trento,
Agusan del Sur
Capacity
(MT FFB / hr)
40
20
Isulan, Sultan
Kudarat
Buluan,
Maguindanao
Carmen, Bohol
30
Bukidnon
Palawan
10
30
Carmen, Cotabato
30
TOTAL
45
45
250
5
Univanich Milling
Plant, Carmen,
Cotabato
6
7
THE FUTURE OF OP . . . NATIONAL SCENARIO
Increasing Huge National Shortage of
Vegetable Oil. Shall We Produce or
Import?
PALM OIL IMPORT (MT)
1,200,000
1,000,000
 Philippine population of 95.8M
 Palm oil import of 500,750 MT
 Import value of P27.50 billion
800,000
600,000
 Philippine population of 120.1 M
 Palm oil import of 1,000,000 MT
 Import value of P54.50 billion
400,000
200,000
0
2012
2020
2024
YEAR
8
Direction of oil palm expansion under
PPDCI
1. Help overcome part or the whole of the
domestic vegetable oil shortage.
2. Produce palm oil to reduce the pressure of
using coconut oil as domestic vegetable oil so
coconut oil can be positioned to a higher
price in the oleochemical market.
3. Focus the OP expansion to large idle and
underutilized upland; areas devoted to
coconut and remaining virgin forest be left
out.
9
Direction . . . .
4. Focus the expansion to improved small
landholders productivity help promote peace
in Mindanao and improved the socio-economic
lives of indigenous people in the upland.
5. Consider OP expansion for the enhancement of
environmental quality, agricultural
productivity and sustainability.
10
KNOWING THE OIL PALM TREE
 Known as Asia “Miracle palm tree”, it has
yield potential of over 60 tons of FFB/ha;
best current yield in Malaysia 35-40
tons/ha per year; farmers yield in the
Philippines of 18 to 25 t/ha per year; best
yield of over 30 t/ha per year.
 There is an increasing demand of palm oil
for food, oleochemicals, biofuel, etc.
 This high yield enable farmers to earn high
income – higher than with most crops.
11
Oil palm provide a model for improving the
productivity of coconut to overcome poverty.
Oil yield – tons/ha per year
6
Potential yield = 5.0 t
5
YIELD GAP (1 t)
Potential yield = 4.0 t
4
Actual yield =
4.0 t
(Malaysian’s
national ave)
3
2
YIELD GAP (3 t)
Actual yield = <1.0 t
(Phil’s national ave)
1
0
OIL PALM
COCONUT PALM
Comparison of the potential and actual yields of the two palms
(Pamplona, 2013).
12
13
OPPORTUNITIES AND CHALLENGES
Opportunities in the expansion of PO industry
1. Overcome part of the huge domestic shortage
of vegetable oil and for export, provide
farmers with high income. A huge market is
awaiting for domestic PO production.
2. Imminovate the technologies/programs
currently being used in neighboring countries
for high palm oil yield, productivity and
income on a sustainable manner under the
concept of zero waste management sans
environmental problem.
14
Modeling Malaysian success story in oil palm farming in overcoming
poverty among small landholders (3-5 ha)
(a) Yesterday’s income of less than
US$ 3,000 = P132,000
(b) Today’s income of US$ 6,700 =
P288,000
(c) Tomorrow - transform the smallholders (5.0 ha) to
high income society earning US$ 15,000/year or
P645,000 by 2020 to promote countryside
prosperity.
15
16
3. High income. . . projected income of various crops
under good management (Pamplona, 2013)
under USAID study.
TREE
CROPS
YEARS TO
PRODUCTIVITY
Projected annual
income at 10 years*
1. Oil palm
2. Coffee
3. Cacao
2.4
3.0
2.0
75,000
35,000
40,000
4. Rubber
5. Coconut
6. Abaca
3.5**
6.0
2 .0
65,000
15,000
35,000
2 crops/year
2 crops/year
12,000
12,000
7. Rice
8. Corn
* Base on average price..
** Using the new high yielding latex-timber clones.
17
18
AVAILABLE financing on oil palm farming
1. Self-finance – the landowner buys
his own planting materials and
other inputs.
2. Plant-now-pay later – the LGU
provide the poor farmers with
planting materials - good for two
ha. The farmers take care of the
plant with the title (or TD) of the
land as his collateral.
19
AVAILABLE financing on oil palm farming
3. SMEs financed – an association/family of
farmers borrow part of the expenses from
the bank – Landbank and other banks.
4. Landbank financing thru coop on a tripartile
agreement to include the investor/miller –
Landbank shoulder 80% of the expenses;
milling plants provide the planting materials
and technical service. Farmers pay the loan
through deduction from the sales of FFB.
20
Comparative advantages of oil palm
farming with other crops
1. Easy to plant and maintain
2. Wide range of adaptability
3. Provide early and long years of income
even in adverse condition – rainy days
or dry season.
4. An environmentally friendly crop – less
use of pesticides than most high value
crops.
5. More frequent and higher income than
most high valued crops
21
Comparative advantages. . .
6. Easier harvesting and post-harvest
handling
7. Cheap harvesting and post-harvest
handling
8. Least affected by climate change; help
mitigate climate change.
9. Negligible pilferage and stealing
10. Give rise to additional productive farming
enterprises – eg. kalakat making
22
INCREASING ADMIRATION OF OP. Once a
misunderstood, despised and neglected
crop now a crop which many farmers would
like to plant. OP has demonstrated to the
Filipinos that:
1. Small landholders (3-5 ha) are
amazingly transformed from surviving
to thriving (prosperous) farmers. The
change from traditional crops to OP
easily liberated smallholders from
poverty.
23
Increasing admiration. . . .
2. Fields which are difficult to farm with
traditional crops, risky to invest or for
bank to finance due to low and
uncertain income are transformed to
high productivity with OP. Farmers
are provided with high bi-weekly and
sustainable income thus expanding
the breathe of the Philippine
agriculture.
24
INCREASING ADMIRATION. . . OP is
productive in:
 Flooded fields risky for investment to
traditional crops.
 Reclaimed marshlands
 Grass and brushlands
 Second growth forest lands/left over
timber farms providing low income.
 Unproductive cogonal idle lands
 Fields planted to low income forest
plantations are transformed to OP with
high and regular income.
25
26
27
28
Drivers and supporters . . . 4. The
banking institutions - special mention of
Landbank which show faith in the
capacity of the FILIPINO farmers and oil
palm to bring countryside prosperity to
the Philippines.
 Other banks on the pipeline include
DBP, ONB, Enterprise Bank, etc.
 Coming soon? – BDO, East West, etc.
29
Drivers and supporters . . . 5. The Muslim leaders and to
include the MILF leaders. Mr. Gadzali Jaafar, Vice-Chairman
of MILF who gathered and lead Muslim community leaders for
training on OP with Mr. Charlie Dumile, of Yara and Ms. Marisa
E. Garcia of USM and the presentor as resource person.
Planting on
grass and
brushlands
for high
income and
mitigate
climate
change
30
6. PCA – provided a working budget for oil palm which
is expected to be expanded.
PCA Administrator Romulo N. Arancon, Jr. and PPDCI
officials discussed the direction of oil palm expansion
in the Philippines on July 8, 2014.
31
Challenges 1. Enhance the
capacity of the LGUs to promote oil
palm expansion – corruption free.

A symposium to share
strategies, improve
initiatives and
expand activities
maybe needed.
32
Challenges 2. Attract more investors
for infusion of capital and technologies
 There is a need to help create a clear
and friendly investment opportunities
into the palm oil business for foreign
investors.
 There is a need to incorporate in the
expansion the improvement in the
lives of small landholders and the
indigenous peoples.
33
Challenges 3. Help
promote OPF in the
BANGSAMORO to bring
peace and transform the
depressed Muslim
communities to prosperity.
The senior presentor conducting the
OP production training among Muslim
leaders.
The fruits of OP makes Mr. Jaafar happy
34
Challenges 4. Overcome misconceptions about
oil palm – NOT TRUE
1. It does damage the habitat of wild life e.g.
Orangutans – the Phils don’t have any.
2. Does not reduces soil fertility or soil erosion;
adequate fertilization makes the soil more
sustainable.
3. Does not accelerate – only mitigate climate
changed as high CO2 sink.
4. Does not requires high fertilization; only
adequate nutrition for high yield and sustainable
income. Also less pesticide use.
35
Comparative fertilizer needs of crops
for high and sustainable yield
CROPS
1.
2.
3.
4.
5.
Cavendish/Lakatan
Hybrid Corn (2 crops)
Hybrid Rice (2 crops)
Oil Palm
Coconut
FERTILIZER
(bags/ha/year)
43 – 45
18 – 22
18 – 20
16 – 18*
10 – 12**
*
Can be reduced to 50% if the empty fruit bunch
are returned to the field
** For sustain high productivity
36
Insuring success in oil palm farm
1. Planting at suitable sites.
2. Use F1 hybrid – quality planting
materials
3. Application of technologies on good
agricultural practices.
4. LGU supported technology dissemination
and construction of farm to milling
roads.
37
GOOD AGRICULTURAL PRACTICES FOR SMALLHOLDERS
38
GOOD AGRICULTURAL PRACTICES FOR SMALLHOLDERS
39
CONCLUSIONS
1. The expansion of the planting of OP in the
country was slow and is now gaining momentum
with increasing supporters. Gov’t support is
badly in a big way to overcome the large
vegetable oil import, low agricultural
productivity, high rate of poverty and help
solve the high unemployment problem of the
country.
2. Accelerated expansion shall provide farmers
with high income to overcome poverty,
promote rural prosperity and help develop the
countryside upstream and downstream OP
industries.
40
About the presentors
Dr. Pablito P. Pamplona, a graduate of UPLB is a retired
University Professor. He was honored on March 14, 2013 by
the DA-Khush Award of Distinction – the highest award given
to a crop scientist by the Federation of Crop Science Society
of the Philippines. Previous awards include the National
Outstanding Agricultural Scientist Award, Outstanding
Philippine Civil Service Award and many other national
awards.
April Grace Pamplona is a graduate of BSAgribusiness at
UPLB and is accepted at UPM Malaysia to pursue an MS in
Plantation Crops starting at September 2014.
41
PLANTING OIL PALM IS
EASY AND FUN;
FARMERS LIVE IN
ABUNDANCE
Email: [email protected]
CP #: +639189081227 / +639265450437
Website: www.goagribiz.com
www.ppdci.org
42

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