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Policies And Development Intervations In The Coconut Industry : The Philippine Experience

Being export-oriented, the Philippine coconut industry is greatly impacted by global market forces responsible for price distortions among competing fats and oils. To protect their interests in a highly volatile market, the industry's varied sectors must add value to their object of trade - copra - as it is conveyed from the farm gate through barrio and town buyers, traders, wholesalers, processors to the exporters. While all these industry sectors make profit in this manner, the coconut fanners who only produce and sell copra earn the least as they have no control over setting the price for their product. In an effort to improve their marginalized situation, coconut fanners mobilized to put up the vertical integration program, a strategy by which fanners became involved in the trading and processing of their products. This intervention initiated from the grassroots positively resulted in increased farm income and paved the way for the creation and implementation of other industry policies such as price support and supply management which transformed the Philippines into a price setter from being a mere price taker in the world market. While the government has from the very begiiming practically denied the coconut industry of any fmancial support, coconut has been a wellspring of government revenues. The exaction of the coconut oil excise tax from 1934 to 1966 and the sequestration of the coconut levy from 1986 to the present are illustrative of how government intervention has imperilled the coconut industry.

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