the status, opportunities and challenges of the philippine palm oil industry 1/ pablito p. pamplona,...
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THE STATUS, OPPORTUNITIES AND CHALLENGES OF THE PHILIPPINE PALM OIL
INDUSTRY1/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.
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Indonesia
10o
5o
EQUATOR
5o
10o
15o
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
Thailand Potential area >
1,000,000 ha Area planted >
625,000 ha Per capita income
> US$ 8,051 Palm oil export >
US$ 400 million
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
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
KrabiSongkla
Malaysia
15o
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.
Southern Visayas and Mindanao are among the places which is highly
suitable to oil palm
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Potential Production Area (has), Philippines, 2012.
REGION AREA PLANTED (has)
R IVB – MIMAROPA 16, 300 (1.68%)
R IX – Western Mindanao
102,000 (10.46%)
R X – Northern Mindanao
154,000 (15.8%)
R XI – Southern Mindanao
104,000 (10.7%)
R XII – SOCSKSARGEN 112,000 (11.5%)
R XIII – Caraga 384,000 (39.4%)
ARMM 103,000 (10.6%)
TOTAL 975,300 (100.0%)
Source: PPDCI
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Areas (ha) planted to oil palm in the Philippines as of April 2013 (Pamplona, 2013).
Regions 2003 March 2005
2007 June 2009
June 2011 April 2013
I-IVB Luzon- Palawan
- - 1,450.00 3,592.00 4,600.00 (8.4%) 6,250.00
VII- Central Vis. 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
XII – SOCSARGEN
6,766.81 6,905.81 9,274.00 13,961.00
18,200.00 (33.2%)
26,470.00
XIII – CARAGA 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
The current. . . .
2014 preliminary data = 73,340 ha
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Name of Company(Ownership/Yr. established)
Location Capacity (MT FFB /
hr)Filipinas Palmoil Plantations Inc. (Filipino – 60%, Indonesian – 40% - 1981)
San Francisco, Agusan del Sur
40
Agusan Plantations Inc. (AGUMIL INC.) Singaporean-60% Filipino-40% - 1983
Manat, Trento, Agusan del Sur
20
KENRAM Industries (Filipino- 100% - 1967)
Isulan, Sultan Kudarat
30
Buluan Palm Oil Mill (2008) Buluan, Maguindanao
45
Phil. Agric. Lnd Dev’t. & Mill, Inc. (PALM Inc) – (2005)
Carmen, Bohol
45
ABERDI Bukidnon 10Palawan Agumil Inc. (2010) Palawan 30Univanich Milling Plant (2014) Carmen,
Cotabato30
TOTAL 250
The current. . . .
Milling plants, location and capacity.
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Univanich Milling Plant, Carmen, Cotabato
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2012 20200
200,000
400,000
600,000
800,000
1,000,000
1,200,000
Increasing Huge National Shortage of Vegetable Oil. Shall We Pro-
duce or Import?
PA
LM
O
IL
IMPO
RT
(M
T)
YEAR
2024
Philippine population of 95.8M
Palm oil import of 500,750 MT
Import value of P27.50 billion
Philippine population of 120.1 M
Palm oil import of 1,000,000 MT
Import value of P54.50 billion
THE FUTURE OF OP . . . NATIONAL SCENARIO
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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.
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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.
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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.
KNOWING THE OIL PALM TREE
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Actual yield = 4.0 t (Malaysian’s national ave)
6
5
4
3
2
1
0
Actual yield = <1.0 t(Phil’s national ave)
OIL PALM COCONUT PALM
Oil
yie
ld –
tons
/ha
per y
ear Potential yield = 5.0 t
YIELD GAP (1 t) Potential yield = 4.0 t
YIELD GAP (3 t)
Comparison of the potential and actual yields of the two palms (Pamplona, 2013).
Oil palm provide a model for improving the productivity of coconut to overcome poverty.
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Opportunities in the expansion of PO industry1. 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.
OPPORTUNITIES AND CHALLENGES
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(a) Yesterday’s income of less than US$ 3,000 =
P132,000
(b) Today’s income of US$ 6,700 = P288,000
Modeling Malaysian success story in oil palm farming in overcoming poverty among small landholders (3-5 ha)
(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.
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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 2.4 75,000
2. Coffee 3.0 35,000
3. Cacao 2.0 40,000
4. Rubber 3.5** 65,000
5. Coconut 6.0 15,000
6. Abaca 2 .0 35,000
7. Rice 2 crops/year 12,000
8. Corn 2 crops/year 12,000* Base on average price..** Using the new high yielding latex-timber clones.
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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.
AVAILABLE financing on oil palm farming
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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.
AVAILABLE financing on oil palm farming
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1. Easy to plant and maintain2. Wide range of adaptability3. 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
Comparative advantages of oil palm farming with other crops
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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
Comparative advantages. . .
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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.
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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.
Increasing admiration. . . .
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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.
INCREASING ADMIRATION. . . OP is productive in:
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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.
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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
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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.
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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.
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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.
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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
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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.
Challenges 4. Overcome misconceptions about oil palm – NOT TRUE
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Comparative fertilizer needs of crops for high and sustainable yield
CROPS FERTILIZER(bags/ha/year)
1. Cavendish/Lakatan 43 – 45
2. Hybrid Corn (2 crops)
18 – 22
3. Hybrid Rice (2 crops)
18 – 20
4. Oil Palm 16 – 18*
5. Coconut 10 – 12*** Can be reduced to 50% if the empty fruit bunch are returned to the field
** For sustain high productivity36
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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.
Insuring success in oil palm farm
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GOOD AGRICULTURAL PRACTICES FOR SMALLHOLDERS
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GOOD AGRICULTURAL PRACTICES FOR SMALLHOLDERS
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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.
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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.
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PLANTING OIL PALM IS EASY AND FUN; FARMERS LIVE IN
ABUNDANCE
Email: [email protected] #: +639189081227 / +639265450437
Website: www.goagribiz.comwww.ppdci.org
THANK YOU