Coffee growing is a slowly dying industry. For one, it has not been a profitable undertaking, especially that world prices for coffee beans — to which even local buyers benchmark theirs — are down. Also, it seems government has neglected the sector for years now, evidenced by antiquated farming skills and lack of credit support for the sector. Consequently, a number of growers have diversified to high-value crops or converted lands to commercial or industrial use. Still, other farmers treat coffee only as their secondary crop and therefore intercrop the coffee trees with other major crops. Given this situation, the country ended up importing coffee to bridge the gap between domestic consumption and production. Although coffee is still exported, the volume is anemic.

This was not the case before. The country used to export coffee in significant quantities. The Department of Trade and Industry’s International Coffee Organization Certifying Agency reports that, at its peak in 1986, coffee exports hit 45,000 metric tons (US$132 million), against which the 2001 exports of 180 metric tons (US$260,000) sadly pales in comparison. Blame this on low world prices, as well as the suspension of quotas by the US which made all its old suppliers like the Philippines exposed to stiff competition especially from Brazil and Colombia, as well as its Asian neighbors like Vietnam and Indonesia.

Compounded by adverse local conditions, the local coffee industry was not able to cope with international competition and even with local consumption which saw a 122% increase from 22,140 metric tons in 1977 to 49,200 metric tons in 2001. Coffee production moved in the opposite direction: from its peak of 83,700 metric tons in 1989 to 46,500 metric tons in 2001. What makes this alarming is that, come 2004, when tariffs on agricultural imports will be substantially reduced, the country will find it even harder to play catch up on losses in coffee production.

According to Fr. Roger Bag-ao, SVD, Chairman of the Coffee Foundation of the Philippines, Inc., what the local coffee industry needs is improved farm-to-market roads, cooperatives, accessible post-harvest machinery like hullers especially for small farmers, and of course, the benefits of research and training.

For his part, Emmanuel Torrejon, President of the Specialty Coffee Association, believes that the country is really missing out on opportunities in the fast-growing specialty coffee trade in the US and Asia. During the First National Coffee Congress, he emphasized that “the Benguet Arabica, although sought by gourmet buyers all over the world, continues to be ignored and remains undeveloped.” Torrejon, who is also president of Consolidated Food Corporation, observed that the country remains devoted to the production of the Robusta variety (80% of local production) which a minimal potential in the export market. “The Philippines is known for Robusta, the inferior variety. We, however, have the potential to be known for good quality Arabica from Benguet.” However, Benguet coffee planters are said to have poor technical knowledge in growing coffee beans, and this is further aggravated by the lack of farm-to-market roads to transport harvested beans. Also, Benguet coffee plantations are reportedly 10 to 12 years old. The plantations already need rejuvenation which entails proper technical care and the use of proper organic and inorganic fertilizers. Sad to say, these are areas where farmers need to be assisted.

On the marketing and promotion side, while most of coffee producing countries have established their own brands of coffee – which are in demand in the world as specialty coffees — the Philippines has no established coffee brand to market to the world. While there is the Barako (which now can be bought in local Figaro outlets) as well as other stores and other regional varieties, they have not been established as Philippine brands capable of competing with international specialty coffee brands like cafe de Colombia, Java of Indonesia, Kona of Hawaii, Antigua of Guatemala or Blue Mountain of Jamaica. These names have all been successfully established as exotic, internationally marketable, quality brands of coffee identified with their countries of origin, down to the provinces where they have been harvested. The success of these countries in promoting their coffee may be attributed, in a way, to the existence of an active national grouping which coordinates the promotion of their national brands of coffee. Such national brands would also include Café Mexicano, Café de Puerto Rican, and many others.

Give Coffee a Break
The anemic local coffee scenario did not escape President Arroyo’s attention. She recently established a National Task Force on Coffee Rehabilitation whose mandate include revitalizing and rehabilitating 22,000 hectares of coffee farms; establishing and implementing standards of quality for coffee production, milling, and roasting to be used locally and for export purposes; and marketing and promoting Philippine coffee. She gave marching orders for these activities to be done within the next two years. Within the same two years, the task force will eventually evolve into the National Coffee Development Board.

The Coffee Task Force is composed of 11 members from the growers, millers, roasters, retailers, local governments, and agriculture credit sectors. Pacita Juan of Figaro Coffee Company and Nicholas Matti of Negros Coffee & Grains are the co-chairmen. Members include Alejandro Mojica (Cavite State University), Cornelio Posadas (Countryside Agricultural Livelihood Development Program/Provincial Government of Sultan Kudarat), Antonio Reyes (Department of Trade and Industry - International Coffee Organization Certifying Agency), Josefa Reyes (M&S Company), Guillermo Luz (Makati Business Club), Rene Tongson (Municipal Government of Cavite), Tetchie Capellan (Philippine Competitiveness Institute), Nelson Buenaflor (Quedan & Rural Credit Guarantee Corporation) and Bernadine Siy (Seattle’s Best/ Coffee Masters, Inc.). Luis P. Lorenzo, Jr., Presidential Adviser for Million Jobs and Cavite Governor Erineo Maliksi serve as advisors to the Coffee Board.

Aside from developing a rehabilitation, certification, and credit program, the task force has mapped out a marketing and promotional program for Philippine coffee called Kape Isla. President Arroyo launched Kape Isla on 19 April during the first coffee festival of Amadeo, Cavite. In the President’s own words, “The Kape Isla seal is intended to serve as the industry’s battlecry to develop our loyalty to Philippine coffee, reduce imports, increase domestic production and create new jobs.” Kape Isla is intended for the use of the different players in the industry as a Philippine coffee quality seal.