It was probably the last thing that delegates of the 23d International Coffee Conference expected to hear when the regional manager of Hanns R. Neumann Stiftung Asia Pacific Dr. Dave D’haeze pointed out:
“Philippines has a potential of becoming the third coffee tiger in South-East Asia if international coffee platforms grant their support”
In the situation of a global coffee supply shortage of up to 30mln bags (60kg) anticipated by 2020, the industry has to find complex solutions for increasing productivity in the developing coffee growing countries.
So far Vietnam has been a key exporter of green coffee beans in South-east Asia. The Vietnamese coffee sector showed remarkable growth over the last 20 years reaching the average of 2.5 Mt per ha thanks to the active support to farmers from the national government, intensive agricultural trainings and introducing new highly efficient varieties by local research institutes. Although the area for growing coffee can no longer be expanded in Vietnam, the yields will keep growing slowly as a result of a state rejuvenation program aiming to replace the old trees with new varieties over the next two decades. At the moment, only 10% of the area has been rejuvenated.
Another country that can influence the regional coffee production volumes is Indonesia, currently having twice the area, they produce half as little as Vietnam. HRNS projects demonstrated that by applying a bunch of agricultural methods that have previously been proven efficient in Vietnam, Indonesian farmers double their yields. Most of those methods are so called no-regret measures, requiring no or very little investment yet helping the farmers proactively deal with changing climate conditions. For example, a simple grassy layer of ground cover naturally fertilizes the soil, improves soil organic matter content and soil water infiltration, provides better drainage during the heavy rainfall events and at the same time reduces evaporation which is important considering the annual precipitation decrease. This and other methods such as pruning, grafting Robusta on Excelca, intercropping with shade trees, composting and using simple post-harvesting technologies like solar dryers pay off in overall 40% productivity increase over 3 project years with some farmers reaching 1,7 Mt per ha.
Why don’t they do the same in the Philippines where over the last 26 years 4bln US$ has been spent by the national economy to import coffee which can actually be produced in the country, covering the domestic demand and creating thousands of jobs for local farmers? Currently typical coffee trees in the Philippines are generally old and up to 5 meters tall requiring ladders for harvesting modest 0.3 Mt of green beans per ha. Training the farmers and supporting rejuvenation would totally change the situation.
“But most importantly, there is still plenty of land in the Philippines, waiting for coffee farmers to come”
For example, coconut plantations in southern Mindanao are perfectly suitable for intercropping with Robusta. Planting high-yield varieties and applying right agricultural methods can turn the country from a coffee importer into one of the larger-scale producers in South-East Asia.
Of course, that would entail funding. Lots of decision makers from public and private sectors still actively invest in traditional coffee origins where farmers already reach up to 3 Mt per ha, whereas for filling up the supply gap it would be more sensible to start investing in Indonesia and the Philippines. Scaling the HRNS Indonesian example to the Philippines Dr. Dave D’haeze estimates that 60mln US$ will be necessary for the country to build up a sustainable coffee sector and break even in 6 years, which means an annual investment of 10mln US$. That sounds rather moderate compared to 4bln spent on coffee import over the last quarter-century. If they keep applying GAP in Indonesia, where the return on investment for HRNS projects is estimated at 211% over the period 2014 to 2019, increase GAP adoption rates and continue the rejuvenation in Vietnam and if public and private donors start investing in the Philippines to boost productivity and triple the coffee area, the three tigers of South East Asia will be able to increase their overall production by 26mln bags.
“The efficiency of the outlined country models can be enhanced with future development of South-South exchange in expertise, trading and research”
Without re-inventing the wheel the countries can collaborate in sharing the methods of agro-climatic coffee zoning, enabling policies to create income-stimulating environments, exchanging and testing of new coffee varieties, partnering up to develop a regional coffee roadmap instead of isolated national strategies, and raising public sector awareness towards investments in struggling areas and not just reach only for the low hanging fruit. In that way, South-East Asia can become a frontrunner towards matching the coffee production with the growing global demand.
The vision of Asian coffee industry’s potential developing presented in Dr. D’haeze’s speech raised vivid interest of the conference participants and some international media (Bloomberg). The ICO director, foreign roasters and Vietnamese officials continued discussing the topic with Dr. D’haeze during the informal part.