Politics of Poverty

Rihanna, Madonna, are you listening?

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The Philippines could use some help rebuilding it’s coconut industry after the typhoon

Responding to the emergency is the most important thing right now.  Thousands, perhaps millions of Filipinas and Filipinos need urgent assistance after their country was rocked by the one of the strongest typhoons to make landfall.  People are vulnerable and lives can be saved.  That’s the most important thing right now.

But sometime in the weeks ahead, you may start hearing about coconuts.

Jire Carreon/Oxfam
Oxfam staff came upon a village in the East of Samar that had not had access to clean drinking water for two days. To try to help the situation the staff clubbed together to buy water for the village. Photo: Jire Carreon/Oxfam

The Philippines is the world’s second-biggest coconut grower, with about 1/4 of global production.  Coconut oil is a major export product and coconuts contribute to the livelihoods of one in every five Filipinos.  The Philippines has been a major source for the coconut water that has become a beverage rage in the last few years, growing by 100% in one year.  Coconut water has caught on as a “natural low-calorie source of vitamins and electrolytes.” It hasn’t hurt that celebrities like Madonna and Rihanna have gotten in on the act.

Even before the typhoon, industry analysts had started noticing that coconut prices have been rising.  Demand for coconut products has been rising about 10% a year, but production is growing only about 2% a year.  It’s not yet a crisis for the coconut water companies, partly because their profit-margins are so high that they can afford higher costs for raw materials.  But at some point, investing in more and better coconut production will be needed to sustain the coconut water boom.

One problem is aging trees.  Coconuts are most productive between ages 10 and 30, and many of the existing stock of trees were planted after World War II, so they produce as little as half of what they could.

The typhoon has flattened coconut plantations in the Philippines.  Even before the storm, the Philippines Coconut Authority already had a modest coconut replanting program operating, but the scale and speed of replanting will need to accelerate to avoid a longer-term problem for millions of Filipinos who depend on coconuts.

Replanting and rebuilding the Philippines’ coconut industry would be great role for the big coconut water companies (including DrPepper, Snapple Group, Coca Cola, and Pepsi) to help with.  Public-private partnership, anyone?

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