THE PHILIPPINE PALM OIL INDUSTRY: MOVING TOWARD A BRIGHTER FUTURE FOR THE SMALL LANDHOLDERS

1. THE PHILIPPINE PALM OIL INDUSTRY: MOVING TOWARD A BRIGHTER FUTURE FOR THE SMALL LANDHOLDERS Pablito P. Pamplona, Ph.D. and April Grace D. Pamplona Paper prepared for presentation during the PPDCI and Province of Sarangani Business Forum, General Santos City, 28 August 2014.

4. Potential Production Area (has), Philippines, 2012. Source: PPDCI

6. THE FUTURE OF OP . . . NATIONAL SCENARIO • 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

7. OPPORTUNITIES AND CHALLENGES Opportunities in the expansion of PO industry Overcome the huge domestic shortage of vegetable oil and for export, provide farmers with high income. A huge market is awaiting domestic PO production. Imminovate on massive scale the technologies 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.

8. 3. Investment friendly – early return to investment giving income through the year.

9. 4. High income. . . projected income of various crops in Mindanao under good management (Pamplona, 2013) under USAID study. * Base on average price.. ** Using the new high yielding latex-timber clones.

11. Financing strategies on oil palm farming Self-finance – the landowner buys his own planting materials and other inputs. 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.

12. Financing strategies on oil palm farming SMEs financed – an association/family of farmers borrow part of the expenses from the bank – Landbank and other banks. 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.

13. Comparative advantages of oil palm farming with other crops Easy to plant and maintain Wide range of adaptability Provide early and long years of income even in adverse condition – rainy days or dry season. An environmentally friendly crop; almost pesticide-free as compare to pesticide dependent crops like coffee and cacao More frequent and higher income than most high valued crops

14. Comparative advantages. . . Easier harvesting and post-harvest handling Cheap harvesting and post-harvest handling Least affected by climate change; help mitigate climate change. Negligible pilferage and stealing Give rise to additional productive farming enterprises – eg. kalakat making

15. 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: 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.

16. Increasing admiration. . . . 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.

17. INCREASING ADMIRATION. . . OP is productive in: • 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.

20. INDONESIAN SUCCESS STORY IN OIL PALM FARMING IN OVERCOMING POVERTY Before After Typical house of a small landholder in Indonesia before and after engaging in oil palm farming. From: * Janurianto, A. 2011. Paper presented during the International Conference and Exhibition of Palmoil, Jakarta Indonesia, May 11 to 13, 2011. The World Bank credited the major role of OP in reducing poverty in Indonesia

21. Malaysian success story in oil palm farming in overcoming poverty and promoting prosperity among small landholders. (a) Yesterday’s income of less than US$ 3,000 = P132,000 (b) Today’s income of US$ 6,700 = P288,000 (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. (a) (a) (b) (b)

22. LGU North Cotabato successful strategy; a model for other provinces • Capacitate the poor farmers to plant oil palm on PNPL* couple with effective extension services on good agricultural practices (GAP). • Planting of over 4,000 ha on PNPL which provided 2,000 farmers with high and stable income, increase rural business and tax income. • Found oil palm the best crop to overcome poverty. * Now converted to Plant Now Take Care.

23. Smallholders’ training and oil palm seedling distribution on PNPL in Carmen, North Cotabato headed by Mayor Rogelio T. Taliño and Gov. Emylou “Lala” Taliño-Mendoza of North Cotabato – a new innovative grass root program to generate rural employment, and create community’s prosperity, wealth and progress through overcoming poverty.

24. Accomplishment for 2012-2013 PROVINCE OF NORTH COTABATO – OP SEEDLINGS RELEASED 2012-2013

25. Accomplishment for 2014* • 90,908 OP seedlings good for 644 ha • 60,000 OP seedlings for distribution for October to December for 430 ha for a total of 1,072 ha. * Several municipalities in North Cotabato have similar PNPL program with a total seedling distribution for 300,000/year.

26. A model: North Cotabato has developed a corrupt-free unique techniques of distributing oil palm on plant-now-take-care for high farmers’ income above the poverty threshold level.

27. Help in the successfully negotiation with a private company from Thailand to construct an OP milling plant in Carmen, Cotabato. Another milling plant will be built up by an Indonesian Company in Pres. Roxas, Cotabato. • A Univanich palm oil milling plant in Carmen,Cotabatostarted milling in July 2014.

28. A model OP Farmer The transformation of Mr. Sagadan of Dunguan, Mlang, North Cotabato from poverty to prosperity. • Poverty brought about by planting of low value field crops prevented him to financially support his eldest daughter to finish a college degree. • Planted OP on PNPL and using GAP enable him to earn high income to buy enough food for the family and financially support his five children to finish degrees in Law, Accounting, Social Services, Physical Therapy and Pharmacy.

29. An economically transformed OP farmer Mr. Sagadan (center) in his oil palm plantings of various ages as he finds the oil palm easy to plant, maintain and expand. His first planting in years 2000 (a), then in 2009 (b) and 2012 (c). The latest plants which came from Triple P Farms and Nursery (TPFN) have become productive in just two years.

30. OP + GAP = High Income! (a) Mr. Sagadan implements good agricultural practices in OP farming, (b) OP in occasionally flooded fields are provided with mounted platforms to allow the intercropping of lowland rice and (c) intercropping of corn is made in the upland for income during the immature stage of the palm trees. Matures trees are kept almost weed-free and provided with adequate fertilization for high and sustainable yield income.

31. Created jobs and livelihood! • Gross income from oil palm comes from regular biweekly sales of fresh fruit bunches (FFB). • Major expenses constituting 25-30% of the gross include payment of salaries of eight laborers and cost of fertilizer. • The laborers and their families get extra income by webbing slittedproned OP fronds into “kalakat” or “amakan” which Mr. Sagadan buys and sells for low-cost house walling.

32. IMPROVED QUALITY OF LIFE IN OP FARMING Mr. Sagadan’s wooden house renovated using income from oil palm in 2008 Mr. & Mrs. Sagadaninfront of their D-Max pick-up and soon to be finished executive dream house; the second house constructed with his income in oil palm farming.

33. Mr. Sagadan – catalyzed the transformation of an economically depressed to a prosperous barangay of 100% Muslim population. • His neighbor observed that income in his eight ha OP enable him to provide college education for his children, construct a concrete house, buy a brand new D-max and leased land for OP expansion to over 20 ha. He shows that OP is easy to farm. • He modeled the successful planting of 700 ha of marshland to oil palm by over 200 poor farmers in his barangay. This brought the transformation of an economically depressed barangay, Dunguan – once the gateway to the jungles of Liguasan marsh of law-breakers, kidnappers and rebels into an economically prosperous and peaceful community of 100% Muslim.

34. Insuring success in oil palm farming Planting at suitable sites. Use F1 hybrid – quality planting materials Application of good agricultural practices. LGU support to technology dissemination and construction of farm to milling roads.

35. Site suitability/limitation of oil palm farming

36. Major components of good agricultural practices Good land preparation Planting of quality F1 hybrid seedlings Adequate fertilization/nutrition Adequate control of weeds, pests and diseases; adequate drainage system Harvesting and transporting fruits at the right time.

37. Challenges: Overcome misconceptions about oil palm – NOT TRUE It does damage the habitat of wild life e.g. Orangutans – the Phils don’t have any. Does not reduces soil fertility or soil erosion; adequate fertilization makes soil more sustainable. Does not accelerate – only mitigate climate change. Does not requires high fertilization; only adequate nutrition for high yield and sustainable income.

38. Comparative fertilizer needs of crops for high and sustainable yield * Can be reduced to 50% if the empty fruit bunch are returned to the field ** For sustain high productivity

39. Future innovation – making smaller OP seedlings more accessible to small landholders for low-cost and convenient to transport. OP seedlings in 10x10” plastic bags at 4.5 months at 70% of the cost of the large size plants. Many commercial nursery operators in Thailand and Indonesia produced planting materials by the millions in smaller plastics of 10x10” using light fertile growing medium to conveniently transport the seedlings to far flung and remote farms in the countryside. The cost of the seedlings is much cheaper than those in the conventional techniques.

40. AVOIDING PAST MISTAKES Planting of F2 seedlings. Releasing OP seedlings as PNPL to farmers without providing adequate training. Poor land preparation/drainage system. Inadequate fertilization, weeding and pruning. Total dependence on inorganic fertilizer. Poor harvesting and FFB handling. Inadequate LGU support to smallholders.

41. 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.

42. Thank You PLANTING OIL PALM IS EASY AND FUN; FARMERS LIVE IN ABUNDANCE Email: pabpamplona@yahoo.com CP #: +639189081227 / +639265450437 Website: www.goagribiz.com www.ppdci.org