1 Philippine Coffee to 2020

As a result, there has been a huge investment in coffee and a large hectarage was planted to coffee in Asia making the continent a major coffee producer, particularly of robusta coffee. Coffee trading is increasingly becoming dependent on world trade because of its excess production. Cortee producing countries have entered the world agricultural commodity market for coffee. Without an international agreement and cooperation to cushion the impact of excessive supply, the coffee sector must be able to determine how it can manage sustainable coffee growing. Members of the Association of Coffee Producing Countries (ACPC), most of who are major coffee-producing members of the International Coffee Organization (ICO), agreed to launch retention plan in order to cope with the gap between demand and supply, but failed. Some of them reached an accord to withhold 20 percent of their exportable coffee stocks and are looking into the possibility of destroying low quality/grade coffee although others are not totally in favor of the retention plan.

and Extension Direction

Alejandro C Mojica, PhD Coffee Sllb-network Leader Director for Research, Cavite State University, Indang, Cavite

1.2 Coffee R&D Investment

The Philippines is part of the more than 50 producing countries in Africa, Asia and Latin America, and also contribute to a large extent in coffee consumption to a long-term consumption growth. The increase in coffee production in other producing countries as a result of their aggressive research and development (R&D) program has consequently resulted to an all time low market prices of coffee. However, in spite of its low prices, the country's coffee industry continues to be very important from the viewpoint of employment creation, economic growth, regional and provincial development and income distribution. It has also been a powerful motor of economic and social development in many regions of the country. One thing that may alarm the country is the fact that though there is an excess production of coffee in the world market. we are not producing enough beans for our domestic consumption. As a result, we are continuously draining our dollar reserves for the last couple of years. Last year, the country has imported around 20,000 metric tons of coffee from Vietnam and Indonesia amounting to 12 million US dollars just for coffee green beans. Our low volume of production resulting to our importation may have been due to the low price of coffee in the world market that force our farmers to venture to other crops, but may also be due to the lack of government support to boost its productivity and to the lack of direction as a result of poor R&D programs. It is for these reasons that the government may take a closer look at the way it is treating its Research Development and Extension (RD and E) needs.

INTRODUCTION
1.1 The Coffee Crop Sector The world coffee industry comprises the production and trade of coffee. As a major part of the agricultural sector, it plays an important role towards economic growth and dollar earnings. Although the industry is experiencing an all time hardest crisis, as with other agricultural commodities, the fact still remains that coffee continues to be one of the world's most widely consumed beverages. There are four varieties of coffee grown in the world, namely, robusta, arabica, excelsa, and liberica. Of the four varieties, arabica and robusta coffee are of greater importance in terms of world trading. However, excelsa and liberica coffee also find its increasing export market in the Middle East. The Philippines is one of the few countries that can produce all four varieties of coffee. The coffee sector suffered from an all- time low in prices of green coffee beans as a result of an over supply of about 4 million bags. Its price has been fluctuating for the past four decades. In the past, coffee prices were quite favorable.

2 Philippine Coffee to 2020

In many coffee-producing countries like the Philippines, support for coffee RD and E is inadequate while in other countries like Brazil, Columbia, Kenya, Indonesia and Vietnam, coffee research is being pursued at high levels. In major consuming countries their advance research facilities and expertise are coming out with new findings on quality and health-related aspects and are insisting on the producing countries to supply the coffee of their choice. These countries have made considerable investments in technology and productivity. The government has allotted only a small amount of money for coffee R&D projects despite its big contribution to the country's economy.

The Philippine coffee sector must actively participate in many fields of agriculture and industry. The government must act to strengthen all the links in the production chain, from the farm to the beans and from the beans to the cups if only to help the industry. The wide gap in research from the production stage to the consumption stage is likely to hit the producing countries very badly in the coming years, unless they reorient their research priorities and approaches to meet the new challenges under the World Trade Organization (WTO) regime. We cannot allow this thing to happen if we want to protect an industry that is worth billions of pesos. The country should, therefore, invest correctly on its R&D.

2. WORLD CONSUMPTION 2.1 Consumption

Coffee continues to be one of the world's most widely consumed beverages. More than a thousand million people in the world habitually drink coffee. This represent 20 percent of the world's population with its global consumption reaching 105.5 million bags equaling 760 billion cups. The world coffee consumption continues to increase with a 1-2 percent 10ng-te11Il growth rate. (Figure 1)

In terms of per capita consumption, people from Scandinavia have an annual consumption of 12 kilograms per year followed by Denmark and Holland with 11 and 9 kilograms per person per year, respectively. (Table 1)

3 Philippine Coffee to 2020

By region, the European continent ranked first in the world coffee consumption an actual consumption of 2,012 (1.7% growth rate) and 2,380 (1.3% growth rate) thousand tons from 1983 to 1995 and from 1993 to 1995, respectively. Europe's projected consumption for year 2005 is at 2,736 thousand tons. European Community (EC) ranked second while North America and the United States of America (USA) ranked third and fourth, respectively, in the world coffee consumption. (Table 2) Table 2 also shows that the Philippines' actual consumption of coffee from 1983 to 1985 was 28 thousand tons with an annual growth rate of 5.5 percent. From 1993 to 1995, its actual coffee consumption was 48 thousand tons with a growth rate of 0.4 percent. The country is projected to consume 50 thousand tons of coffee by year 2005. Surprisingly, the country ranked seventh in the world's top 10 soluble markets for coffee (Table 3). The top 10 account for 60 percent of sales. Though low world prices and fierce competition between roasters boosted use in 1999, in recent years, there has been generally little growth and some losses in many traditional producing countries.

4 Philippine Coffee to 2020

5 Philippine Coffee to 2020

3. WORLD SUPPLY
Table 4 presents the total production of exporting members, crop years 1996 to 2001 from the ICO statistics on coffee. During the crop production period evaluated, Brazil consistently topped the list of the world coffee-producing countries with an average of 29,574.50 thousand bags of coffee. Three other countries completed the consistent top world coffee producers: Colombia, Indonesia and Vietnam. In year 2001, Vietnam was able to surpass Colombia as the world's second top producer resulting from an over supply of coffee in the country due to its extensive massive production and government support to each research and development. This, however, consequently brought about the all time low in the prices of coffee affecting the entire world coffee industry. Figure 2 clearly shows the trends in the total production of the exporting members. Interestingly, most of the world's top coffee producers have a strong and extensive research and regulatory board on coffee with a stable back-up support from their respective governments. For instance, Vietnam has established Vietnam Coffee Research Institute while India has its Indian Coffee Research Institute as well as Brazil and Ivory Coast, all coffee R&D of which have been intensified. Figure 3 shows that the average world coffee production totaled 5,682 thousand tons from 1995 to 1997 with Brazil as the top coffee producer with an average of 1,324 thousand tons during the time bracket. Brazil also topped the production list in the years 1998, 1999 and 2000 with 2,073, 1,630 and 1,734 thousand tons, respectively. Colombia ranked second followed by Indonesia and Vietnam. Despite the decline in production in some countries, it is worthy to mention that the losses were largely compensated by increased production in Cote d' Ivoire, Ethiopia and Uganda. Vietnam, the largest producer of robusta coffee produced 450,000 tons following extensive planting.

Table 4. Total production of exporting members, Crop Years 1996-2001.

6 Philippine Coffee to 2020

7 Philippine Coffee to 2020

Table 5 presents the worlds 10 producing countries as of crop year 1998/1999.

Table 5 shows that as of crop year 1998/99, Brazil topped the list of coffee producing countries with a 34,700 thousand bags followed by Columbia (11,000) and Indonesia (6,600). Close to Indonesia is Vietnam (5,888) and Mexico (4,400).

Just recently, Vietnam, a major producer quadruples its coffee production over the past decade surpassing Columbia in year 2000 as the world's largest coffee producer after Brazil.

4. WORLD TRADE 4.1 Import and Importing Countries

Global imports of coffee beans in 1999 increased by 4 percent, mainly due to the growth in demand by the United States, the second largest importing country. Imports by the United States grew by 10 percent in 1999 compared to shipments in 1998 and accounted for 26 percent of the world total. Japan, the largest importer (44 percent of the world import volume in 1999) and the EU (8 percent of the world total in 19990 also increases in imports of 1 percent and 9 percent, respectively (Figure 3 and Table 6).

8 Philippine Coffee to 2020

Recent statistics on world coffee imports from May to October 2001 shows that US is the largest importing country with 1,900,665, 1,757,035, 1,939,014, 1,670,101, 1,515,403 and 1,610,500 60-kilo bags in May, June, July, August, September, and October, respectively. Statistics shows a fluctuating trend in the imports of USA. The US was closely followed by Germany in terms of the volume of coffee importation (Table 7).

3.2 Exports and Exporting Countries

Table 8 shows the world coffee exports from 1995 to 1999. World exports of green coffee beans in 1999 exceeded 5.1 million tons, almost 14 percent more than the average for 1995-1997. Bram exported almost 1.4 million tons, 27 percent of the total and some 300,000 tons more than in the previous year. Elsewhere, the pattern was mixed, with Guatemala, Mexico, Uganda and Vietnam registering substantial increases but Colombia and Cote d'lvoire posting losses. A consequence of increased exports was a reduction of about eight percent in producer stocks.

9 Philippine Coffee to 2020

10 Philippine Coffee to 2020

Table 9 presents the exports of exporting members to all destinations from November 2001 to November 2002. The table shows an increasing trend in the coffee exports volume in a one-year period.

Table 9. Exports to exporting members to all destinations.

Country 1-Nov CROP PRODUCTION MONTH (60 KILOGRAM BAGS) Oct-o1 to Nov 1 Dec-00 to NOV-01 Nov-00
1/

Oct-00 to Nov 00

Dec-99 to Nov-00

Total Colombian Milds Colombia Kenya Tanzania Other Milds Bolivia Burundi Costa Rica Cuba Dominican Republic Ecuador El Salvador Guatemala Haiti Honduras India Jamaica Malawi Mexico Nicaragua Panama Papua New Guinea Peru Rwanda Panama Papua New Guinea Peru Rwanda Venezuela Zambia Zimbabwe Panama Papua New Guinea Peru Rwanda Venezuela Panama Papua New Guinea Peru Rwanda Venezuela Zambia Zimbabwe Brazilian Naturals Brazil Ethiopia

7,188,685 1,438,089 1,253,089 100,000 85,000 1,024,278 7,000 35,978 134,050 14,400 13,000 72,987 14,091 91,162 7,000 24,122 147,500 2,000 9,698 115,789 16,501 11,000 81,000 186,000 17,000 11,000 81,000 186,000 17,000 11,000 6,000 7,000 11,000 81,000 186,000 17,000 11,000 11,000 81,000 186,000 17,000 11,000 6,000 7,000 2,725,918 2,616,918 108,000

1/

13758762 2,733,081 2,376,899 207,000 149,182 2,214,523 16,000 71,078 250,932 16,400 14,498 155,962 41,176 171,332 14,000 28,003 334,384 3,789 17,711 259,142 56,436 14,000 180,000 497,000 42,680 14,000 180,000 497,000 42,680 12,000 8,000 10,000 14,000 180,000 497,000 42,680 12,000 14,000 180,000 497,000 42,680 12,000 8,000 10,000

1/

89604927 9,787,377 1,201,410 883,456

6772358 1,427,240 1,198,330 128,890 100,020 1,387,159 6,000 29,301 169,866 13,500 7,661 68,567 73,468 201,460 7,000 17,368 125,733 2,169 8,650 309,864 61,487 6,600 81,140 180,859 5,120 6,600 81,140 180,859 5,120 0 5,088 6,258 6,600 81,140 180,859 5,120 0 6,600 81,140 180,859 5,120 0 5,088 6,258 1,788,102 1,678,132 108,970

13,006,990 2,424,373 2,026,410 258,499 139,464 2,816,032 13,000 72,222 304,141 14,179 12,011 144,824 164,836 328,607 19,000 29,846 306,616 4,289 18,910 552,815 90,989 8,700 172,110 520,863 20,860 8,700 172,110 520,863 20,860 0 7,090 10,124 8,700 172,110 520,863 20,860 0 8,700 172,110 520,863 20,860 0 7,090 10,124 3,807,104 3,584,776 221,328

88,977,394 11,266,465 9,191,739 1,301,008 773,718 29,207,288 114,730 441,668 2,022,739 127,919 171,331 735,953 2,554,530 4,840,637 73,283 2,829,058 4,526,626 30,289 56,425 5,348,944 1,356,733 65,564 1,035,105 2,358,803 282,217 65,564 1,035,105 2,358,803 282,217 71,640 53,458 109,727 65,564 1,035,105 2,358,803 282,217 71,640 65,564 1,035,105 2,358,803 282,217 71,640 53,458 109,727 20,482,106 18,456,231 2,016,060

11,872,243

24,827,076 122,625 313,039 2,062,932 92,626 104,963 773,907 1,590,705 4,256,808 74,000 2,467,875 3,974,083 27,858 68,969 3,343,319 1,410,353 75,303 1,068,124 2,397,494 288,973 75,303 1,068,124 2,397,494 288,973 157,300 61,145 95,016 75,303 1,068,124 2,397,494 288,973 157,300 75,303 1,068,124 2,397,494 288,973 157,300 61,145 95,016 24,338,477 22,921,314 1,406,163

5,111,895 4,901,553 209,342

11 Philippine Coffee to 2020

Table 9 continued
Country 1-Nov Panama Papua New Guinea Peru Rwanda Venezuala Zambia Zimbabwe Brazilian Naturals Brazil Ethiopia Paraguay Robustas Angola Congo, Dom. Rep. Ghana Guinea Indonesia Liberia Nigeria OAMCAF Benin Cameroon Central Africa Republic Congo, Dom. Rep. Cote d'Ivoire Equatorial Guinea Gabon Madagascar Togo Philippines Sierra Leon Sri Lanka Thailand Trinidad and Tobago Uganda Vietnam
1/ Provisional ICO Statistics on Coffee

CROP PRODUCTION MONTH (60 KILOGRAM BAGS) Oct-o1 to Nov 1 14,000 180,000 497,000 42,680 12,000 8,000 10,000 5,111,895 4,901,553 209,342 1,000 3,699,263 1,500 38,000 8,000 4,000 782,000 0 0 742,837 0 117,000 5,000 0 480,000 0 0 124,000 16,837 519 7,000 0 29,283 0 303,124 178,300 Dec-00 to NOV-01 75,303 1,068,124 2,397,494 288,973 157,300 61,145 95,016 24,338,477 22,921,314 1,406,163 11,000 28,567,131 18,800 95,896 40,276 38,929 4,500,202 0 1,983 5,374,825 0 1,172,537 114,108 0 3,599,375 0 2,752 302,383 183,673 2,951 21,323 4,847 1,131,020 342 3,011,609 14,324,125 Nov-00 6,600 81,140 180,859 5,120 0 5,088 6,258 1,788,102 1,678,132 108,970 1,000 2,119,857 850 14,456 1,921 2,003 356,125 0 121 326,111 0 41,238 1,400 0 236,050 0 250 34,383 12,790 619 2,771 8 5,917 0 227,519 1,181,436 Oct-00 to Nov 00 8,700 172,110 520,863 20,860 0 7,090 10,124 3,807,104 3,584,776 221,328 1,000 3,959,481 2,600 29,572 5,912 4,751 831,235 0 545 750,599 0 89,273 7,300 0 537,832 0 250 87,966 27,978 635 10,891 18 55,367 0 366,304 1,901,052 Dec-99 to Nov-00 65,564 1,035,105 2,358,803 282,217 71,640 53,458 109,727 20,482,106 18,456,231 2,016,060 9,815 28,021,535 24,885 220,459 31,414 29,404 5,161,978 0 16,250 7,671,313 0 1,216,596 193,540 0 5,754,646 179 284 202,886 302,882 4,699 72,036 799 987,700 1,997 2,646,633 11,151,968

11,000 81,000 186,000 17,000 11,000 6,000 7,000 2,725,918 2,616,918 108,000 1,000 2,000,400 900 15,000 3,000 2,000 321,000 0 0 387,000 0 61,000 1,000 0 261,000 0 0 57,000 7,000 380 2,000 0 12,000 0 150,120 1,107,000

Based on the data, the robustas are the most exported coffee in the world with an average of 11,394,611 60-kilogram bags followed by the other milds (10,246,059 60- kilogram bags), Brazilian milds (9,708,933.7 60-kilogram bags) and Columbian milds (5,186,915 60-kilogram bags. Meanwhile, Table 10 shows the total production of exporting members during the crop years 1995/96 to 2000/01 by 6O-kilogram bags. The world exports arabica and robusta coffee varieties. The highest value of coffee exports was attained during the year 2000 (110,991) and the lowest was in 1995 (85,647).

Table 10. Total production of exporting members, Crop Years 1995/96 to 2000/01

12 Philippine Coffee to 2020

Country

CROP YEAR COMMENCING (60 KILOGRAM BAGS) Variety 1995 85,647 20,439 (R) (A) ( A/R ) ( A/R ) ( A/R ) ( R/A ) ( R/A ) (A) ( A/R ) (A) (A) (A) (A) (R) (A) (A) (A) ( R/A ) ( A/R ) (A) (R) ( R/A ) (R) (A) ( R/A ) (A) (R) (A) (R) (A) (R) (R) ( A/R ) (R) (A) ( A/R ) (A) (A) (R) (A) (A) (R) (A) (R) ( R/A ) 62 151 15,784 434 1,888 5,865 785 91 1,002 45 1,871 330 131 3,463 12 285 886 506 850 897 27 53,745 0 663 108 12,878 1,099 2,684 2,532 2,586 2 2,800 2 57 4,002 104 1,909 3,727 43 1,664 5 5,527 985 53 209 44 36 1996 102,495 42,861 71 133 27,664 401 1,993 8,299 849 49 1,089 40 1,806 293 14 3,016 14 366 519 429 890 765 33 56,618 0 1,432 208 10,876 794 2,126 4,528 2,534 1 3,270 2 32 4,524 148 2,004 3,409 54 1,246 5 5,324 793 46 211 41 37 1997 95,964 36,260 64 153 22,756 297 1,191 7,759 623 61 1,076 34 1,922 194 130 3,278 3 300 941 435 935 624 40 56,426 0 889 115 12,211 800 2,500 3,682 2,175 2 2,916 3 28 4,219 172 2,564 4,729 46 882 5 5,045 1,084 45 218 50 58 1998 106,285 49,634 85 150 34,547 356 1,206 8,458 992 64 1,351 34 2,022 222 147 2,627 3 280 422 442 685 739 56 54,024 0 1,114 214 11,092 644 2,350 2,042 2,056 1 2,745 4 45 4,892 140 2,195 4,372 29 1,173 5 5,051 1,073 46 192 24 35 1999 114,313 44,632 55 184 32,342 501 1,245 5,432 460 59 1,387 28 2,506 308 125 3,057 3 318 694 402 739 937 64 66,624 0 1,370 241 9,335 360 2,404 5,899 2,835 0 3,505 2 36 5,201 114 2,985 5,457 39 1,502 5 6,442 1,535 71 167 69 38 2000 110,991 44,550 60 179 32,010 337 901 6,667 333 63 1,041 31 2,539 273 116 3,083 3 300 680 418 775 850 57 63,358 1 1,505 128 12,000 837 2,494 3,167 1,603 5 3,686 2 55 4,500 120 2,683 5,020 40 1,984 5 4,600 1,150 50 207 40 45

Total 1-Apr Angola Bolivia Brazil Burundi Ecuador Indonesia Madagascar @ Malawi Papua New Guinea Paraguay Peru Rwanda Zimbabwe 1-Jul Congo Rep. of @ Cuba Dominican Republic Haiti Philippines Tanzania Zambia 1-Oct Benin @ Cameroon @ Central Africa Rep. @ Colombia Congo Rep. of @ Costa Rica Cote d'Iviore el Salvador Equitorial Guinea @ Ethiopia Gabon @ Ghana Guatemala Guinea Honduras India Jamaica Kenya Liberia Mexico Nicaragua Nigeria Panama Sierra Leone Sri Lanka

1/ 1/ 1/ 1/

1/ 1/ 1/ 1/ 1/ 1/ 1/ 1/ 1/ 1/ 2/ 1/ 1/ 2/ 2/

13 Philippine Coffee to 2020

Table 10 continued
Country CROP YEAR COMMENCING (60 KILOGRAM BAGS) Variety (R) (R) (R) ( R/A ) (A) (R) 1995 1,317 85 18 3,244 1,364 3,938 1996 1,403 290 18 4,297 1,200 5,705 1997 1,293 222 20 2,552 986 6,915 1998 916 321 17 3,298 991 6,947 1999 1,271 263 16 3,097 717 11,648 2000 1,418 334 15 3,200 1,100 11,667

Thailand Togo @ Trinidad and Tobago Uganda Venezuela Vietnam

R - Robusta A - Arabica 1/ - Under correspondence 2/ - Estimate to be confirmed 3/ - Estimated ICO - Statistics on Coffee

3.3 Price Development

It was reported that on September 4, 2001, ICO indicated prices for other Mild Arabica and for Robusta were 57.89 and 25.13 US centst1b, respectively. The average prices for these types of coffee in the 1950's, where no market support mechanisms were in force, were 60.10 and 40.77, respectively. In constant terms, prices today should have been 380 and 270 US cents to maintain 1950's prices in real terms. Today's price represent a drop in real terms of some 85 percent in 50 or 80 years (Table 11) The report also stated that with the current collapse of world coffee prices, many exporting countries are suffering from one of their worst economic crises for years. Throughout 2001, the slide in prices worsened. For over two (2) years, exporting countries have been living through a painful period of lower market prices and a sharp decline in foreign exchange earnings, from coffee. The annual average of these earnings, which is so vital to the development plans fell from some US$ 13 billion in 1997 to US $ 8 billion in 2000. In consequence, nearly all the producing countries are experiencing real economic hardship with production costs in very many cases exceeding revenues. Consumers in importing countries are paying more for one cup of coffee than many farmers get for a daily wage. The price weakness was most marked in the last quarter of 1999-2000 as the trade had already discounted reports of Brazilian crop damage and mutual and managed funds largely cleared their long positions. The average ICO composite price for 1999-2000 was US cents 73 per lb, 19 per cent less than in 1998-1999 and 43 percent less than the average for 1995-1997. Prices fell for both coffee varieties; the average prices of arabica in 1999-2000 declined by nine percent while that of robusta fell by four percent.

Table 11. World coffee price.

WORLD COFFEE PRICE (US CENTS/lb) Average Price Classification of coffee 1995 1997 1998 1999 2000 Q1 Brazilian Natural Arabicas Colombian Milds Arabicas Other Milds Arabicas Robustas
Source: ICO

Quarterly Price 1999 Q2 Q3 Q4 Q1 2000 Q2 Q3 Q4

144

122

89

80

93

91

75

96

84

74

69

163 154 95

143 135 83

116 104 68

103 87 41

119 108 78

120 107 68

103 90 61

124 111 63

125 105 49

108 92 44

94 80 39

83 71 33

14 Philippine Coffee to 2020

In addition, the problem on the deterioration in real export prices has become even more complicated by the increase in price volatility levels. fluctuation coffee prices have shown an annual fluctuation rate of more than 50 percent in recent years whereas during periods when the market regulated prices fluctuated between 10-15 percent around their medium term trend. These high levels of price instability have a very negative effect on the development process. Table 12 presents the indicator prices for coffee as designated by ICO from 1999 to 2001. Table 12. ICO indicator prices for coffee, 199 to 2001
Indicator Price for Coffee (US cents/lb) Other Milds Month Composite Price New York Bremen/ Hamburg Weighted Average New York Robustas Le Havre/ Marseilles Weighted Average Other Price (New York) Colombian Milds Brazilli an Natura ls 88.84 99.43 91.72 88.9 86.14 96.29 91.69 78.13 76.67 70.43 78.74 98.41 109.47 77.82 97.08 91.68 89.93 86.46 87.23 78.32 79.89 70.57 71.14 72.28 68.95 64.39 50.7 62.38 62.5 60.35 55.11 57.19 51.86 46.43 46.49 42.42 38.63** 42.82** 42.21**

1999 January February March April May June July August September October November December 2000 January February March April May June July August September October November December 2001 January February March April May June July August September October* November* December*

85.72 97.63 92.36 89.41 85.72 89.51 86.41 78.21 77.22 71.94 76.36 88.22 95.63 62.81 82.15 76.15 73.49 69.53 69.23 64.56 64.09 57.59 17.31 56.4 52.18 48.27 45.6 49.19 49.39 48.52 47.31 49.38 46.54 43.07 42.77 41.17 42.21 44.24 43.36

101.54 110.99 103.24 103.23 99.69 109.1 104.21 90.85 87.64 81.06 92.22 112.74 123.56 83.31 100.17 101.17 98.26 92.41 91.76 84.1 85.2 74.52 73.83 75.43 70.47 64.81 61.94 64.98 67 65.88 65.68 68.94 63.79 58.47 59.68 57.71 56.53 58.96 55.63

110.88 118.93 112.23 111.86 109.13 117.46 116.22 106.89 102.54 94.3 100.15 114.89 125.91 90.6 116.82 110.19 108.13 101.51 100.99 92.94 93.36 84.08 81.61 80.41 74.63 70 63.14 68.93 67.65 68.35 67.58 69.83 64.08 59.51 59.83 59.39 56.31 58.81 57.4

103.9 112.96 105.48 105.39 102.11 111.07 107.21 94.85 91.37 84.31 94.2 113.38 124.46 85.17 111.11 103.44 100.73 94.61 94.15 86.44 87.35 76.92 75.78 76.66 71.54 66.16 62.28 65.98 67.19 66.5 66.13 69.22 63.9 58.72 59.72 58.07 56.4 58.85 56.72

67.64 81.65 77.68 72.7 68.89 68.28 66.2 62.28 63.8 60.44 59.25 64.3 66.4 40.98 53.62 49.41 47.26 45.21 45.19 43.72 41.93 38.94 39.47 36.55 33.34 30.78 27.3 32.97 31.96 30.96 28.59 29.71 29.33 27.59 25.86 23.79 21.26 22.03 23.57

67.23 83.1 81.68 74.51 69.96 67.44 64.68 60.44 62.97 58.42 57.43 61.75 65.39 39.37 52.41 47.97 44.73 43.31 43.01 41.12 39.19 37.22 37.86 35.51 31.94 30.03 27.49 31.59 31.04 29.87 28.35 29.29 28.89 27.21 25.74 25.08 23.89 24.26 24.63

67.53 82.29 79.23 73.42 69.32 67.94 65.59 61.56 63.07 59.57 58.52 63.05 66.79 40.35 53.18 48.86 46.25 44.45 44.32 42.68 40.82 38.25 38.83 36.14 32.81 30.38 27.54 32.4 31.58 30.52 28.49 29.54 29.17 27.43 25.82 24.27 23.24 23.68 24.35

116.45 123.07 116.92 117.05 114.02 123.95 121.45 107.05 105.28 97.77 103.69 136.76 140.35 100.25 130.13 124.73 119.51 112.67 110.31 100.3 101.67 91.87 89.98 90.25 84.01 75.81 72.05 75.33 76.7 76.94 78.25 80.92 74.38 69.7 73.5 68.8 62.88** 64.89** 62.33**

* New series for the calculation of the ICO composite and group prices ** Weighted average of the New York and german markets calculated with the new Rules and Indicator Prices

The above table shows that in 1999, the Columbian Milds coffee had the highest value in the world market with an average of 116.45 US cents/lb followed by the other mild arabicas (103.9 US cents/lb), Brazilian naturals (88.84 US cents/lb) and the robustas (67.53 US cents/lb). h1 the year 2000, the following figures were attaine4: Columbian Milds, 100.25 US cents/1b; other mild arabicas, 85.17 US cents/1b; Brazilian naturals, 77.62 US cents/1b; and robustas, 40.35 US cents/1b. In the' year 2001, the following

15 Philippine Coffee to 2020

rankings were attained in terms of the coffee world prices: Columbian milds, 72.05 US cents/1b; other mild arabicas, 62.28 US cents/lb; Brazilian naturals, 50.7 US cents/lb; and other mild arabicas, 62.28 US cents/1b. In terms of the annual prices by type of coffee, it was in 1999 when the average price of other mild arabicas was highest and lowest in 2001. The average price of robustas was highest in 1999 and lowest in 2001. The same results were attained for both the Columbian milds and the Brazilian naturals.

5.1 PHILIPPINE DOMESTIC SUPPLY

Coffee was introduced in the country in 1970 during the Spanish rule and was planted in Lipa, Batangas. The Philippines produces mainly Robusta coffee and is one of the few countries where all four varieties of coffee are grown on a commercial scale. Most of the Robusta produced in the country are dried under the sun before they are milled. The cup produced is slightly bitter with pronounced flavor. Philippine Arabica being produced is with pronounced fermented character. On the other hand, Philippine Excelsa is processed under the natural method and produces an aroma similar to that of Arabica. It is usually used to a high degree in blends of roasted ground coffee. The Liberica variety, popularly known as kapeng barako bears the biggest fruit among these varieties and is characterized by a very pharmacopical taste and flavor.

5.1 Development of Hectarage

In 1990, BAS recorded that there were about 149,657 hectares devoted to coffee production in the Philippines. From then on to 1994, it was slightly reduced to 146,370 hectares and was significantly reduced in 1995 when it has gone down to 144,532 hectares. It was increased to 151,252 has in 1999. The figure however seems to be too large for some industry experts. They claim that in 2000, there may only be 137,000 hectares and 120,000 hectares in year 2001. Alarmingly, the country has an estimated of only 85,000 hectares left planted to coffee by this year (2002) (Figure 4).

16 Philippine Coffee to 2020

The reasons for the unprecedented decrease in hectarage are the on-going industrialization in the Cavite, Laguna, Batangas (CALABA) area and other parts of Region IV and the shift to other crops by coffee farmers due to low net income per hectare of production. The efforts of NESTLE Philippines, Inc., however, in helping increase the production area are very significant especially in Mindanao. New plantings are introduced in these areas and in some parts of Luzon and Visayas. The Coffee Foundation of the Philippines (CFP) also exerts extra effort to expand the coffee plantation particularly in Palawan. The provincial leadership of Cavite took the initiative of revita1izjng their local coffee industry to arrest massive coffee cutting and lead the country in promoting the planting of barako variety in partnership with private companies such as the Figaro Coffee Foundation. In fact, last April 19, 2002, the coffee farmers in Amadeo, Cavite under the leadership of their municipal mayor held the very first Coffee Festival of the Philippines to serve as a catalyst in revitalizing the coffee industry of the country. No less than the President of the Philippines served as the guest speaker where she created the National Coffee Task Force which will study how the coffee industry can be helped revitalized.

In the country, there are five regions with the largest area devoted to coffee. By order, the following are the regions: Southern Mindanao (23.69%); Southern Tagalog (18.79%); Northern Mindanao (17.72%); Autonomous Region of Muslim of Muslim Mindanao (ARRM) (6.86%); and Western Visayas (6.06%). Collectively, these regions contributed 77 percent (114,281 hectares) of the total area planted to coffee in the country as of 1998. Except for Cavite, Batangas and some areas in Davao and Bukidnon, most of the areas planted to coffee are located in public lands, forest reserves and watersheds (Figure 5).

17 Philippine Coffee to 2020

Figure 6 shows the total coffee production in the Philippines from 1990 to 2000. The figure reveals that the highest volume of coffee production in the 90's was in 1991 with 61,080 metric tons while the lowest was in 1998 with 41,100 metric tons. During the time when we used to export, however (late 80's), the country was able to produce more than 70,000 MI. This was our happy moment when the US included us in the quota system where they buy our high quality robusta coffee in premium price the Cavite AA. Today our production volume was very low that it does not able to meet our local demand. With our domestic consumption of 55,000 MT the country was able to produce only 30,000 MT 30% of which is supplied by Cavite farmers The balance of 20,000 MT are being imported from our neighboring countries such as in Vietnam and Indonesia The table shows that the volume of coffee production fluctuates within the evaluated period.

In the case of our average yield per hectare, it follows the same trend with that of hectarage and volume of production trends that declined from 1,150 kilograml1lectare in 1991 to 1, 110 kilograml1lectare in 1995. To the industry experts, the estimate was too high. They claim that a more realistic figure for 1995 would be less than half at 485 kilograms/hectare of green beans. The current yield is way below the ideal of about 1,500 kilograms/hectare. The regions with relatively good yield are Southern Tagalog, Cordillera Autonomous Region (CAR) and Mindanao. Yield in these areas are approximately 800 kg/ha while extreme Northern Luzon and Visayas could only manage 300 kg/ha and 320 kg/ha, respectively. As of 1999, Davao del Notre, Bukidnon. and Davao City, all from Southern Mindanao, is t;lle largest producing provinces in the country (Figure 7). Cavite, home of the Cavite AA robusta beans, averages 1 ton per hectare, which is way below the average yield per hectare of farmers in Vietnam at 2 tons per hectare. .. With the volume of production we have in 2000, the country produces approximately 0.7 percent of the total global production as of crop year 1999/2000 in which 89 percent are robusta, 4 percent arabica and a combined 7 percent of excels a and liberica (barako) varieties. Robusta is mainly used as a main ingredient in the production of soluble or instant coffee. Arabica variety is used mainly for blending, thrives well in high elevation areas and grows well in the Cordillera mountains in Luzon and Mindanao regions specifically in the volcanic mountains of Mt. Apo in Davao. Mt. Matuntuon in South Cotabato, Mt. Kitanglod in Bukidnon and Kalamansig in Sultan Kudarat. Excelsa and liberica (Barako), on the other hand are grown in the lowlands

18 Philippine Coffee to 2020

and are much sought by buyers from the Middle East for its strong distinct flavor. One of the four varieties, Liberica produces the biggest beans of up to 2 centimeter. Foreign buyers classify it as big beans similar in size to Harar coffee of Ethiopia and often command a better price than excelsa and robusta.

By island, :Mindanao is the largest supplier of coffee in the country. In 1998, about 71 percent or 86,649 metric tons of the country's coffee output comes from this island. Luzon, on the other hand, contributes 24 percent or 29,720 metric tons while the Visayas region accounts for the remaining 5% or 5,717 metric tons. On the regional level, the top producing regions are: Southern Mindanao (31.68%) or 38,673 metric tons; Northern Mindanao (15.55%) or 18,979 metric tons; Southern Tagalog (14.05%) or 17,155 metric tons; ARMM (10.75%) or 13,121 metric tons and CAR (6%) or 7,451 metric tons. These five regions contribute for 78.03% or 95,379 metric tons of the total coffee produce (Figure 8).

19 Philippine Coffee to 2020

6. DOMESTIC TRADE 6.1 Exports

The Philippines exports the four coffee varieties in its raw/green, not roasted, not decaffeinated form. In 1994 and 1995, Robusta accounted for the bulk of exports, recorded at around 3,646 metric tons (89%) and 1,638 metric tons (68%), respectively. In value terms, Robusta variety accounted for US$7,450,633 (FOB) in 1994 and US$4, 790, 798 (FOB) in 1995 a decrease of around 36%. From among these varieties, Liberica variety dominated the Philippine exports in 1996 and 1997, which registered a total export of about 262 metric tons (US $760, 576, FOB) and 246 metric tons (US$578,469, FOB), respectively. For the year 1998, Liberica variety topped the Philippine exports at 299 metric tons valued at US$652,549 (FOB). The country also exports extracts, essences and concentrates of coffee and preparations. From 436 metric tons in 1994, exports decreased by 16.7% the following year. In value terms, an increase was observed by as much as 23.4 % in 1995 compared to the year 1994. Exports in 1996 and 1997 further increased to 438 metric tons (US$ 3,223,593) and 540 metric tons (US$ 3,186,485), respectively. In 1998, however export was recorded at 280 metric tons, a decrease by about 61 % from the previous year level In 1998, Singapore was the major market for the Philippine Robusta. For the Arabia variety, Taiwan was the largest buyer absorbing 64.40% of total exports. On the other hand, Oman and Singapore are the major destinations for the Excelsa and Liberica varieties with Oman absorbing the Bulk of Philippine exports. (Excelsa-61.56%; Liberica- 73%). For the same period, Oman is the Philippine sole market for roasted, ungrounded, not decaffeinated coffee absorbing 0.27 metric tons valued at US$ 1, 539(FOB). On the other hand, Singapore accounted for around 8% (169 metric t~) of total exports of the extracts, essences and concentrates of coffee preparations valued at US$ 1,050,293 (FOB) Philippine coffee exports in 1998 were dominated by raw/green (76%) and extracts, essences and concentrates of coffee preparations (22%), a combined total of 98%. The remaining 2% was co-shared by roasted ungrounded, not decaffeinated coffee. Figure 9 presents the country's export volume from 1976 to 2001 based from the statistics provided by the Department of Trade and Industry -International Coffee Organization Certifying Agency (DTI-ICOCA). The highest coffee export volume was attained from 1985 to 1986 with approximately 44,000 metric tons followed by 1984 to 1985 with 34,000 metric tons of coffee exports. Third in rank was during 1988 to 1989 with 29,000 metric tons followed by 1982 to 1983 and 1983 to 1984 with 26,000 and 25, 000 metric tons of coffee exports, respectively. Statistics shows a tremendous decreasing trend in coffee export volume from 1990 to present. An all time low on coffee export volume was experienced in year 2000 to 2001 nearing a very low 1,000 metric tons of coffee exports.

20 Philippine Coffee to 2020

Meanwhile, Figure 10 shows the trend in the country's exportable volume of production from 1976 to 2001. The highest value was attained in 1998 to 1989 with 50,000 metric tons of coffee followed by the year 1984 to 1985 with 45,000 metric tons of exportable coffee. The graph shows a fluctuating trend in the coffee exportable volume from 1976 to 1992 until it suddenly moved downwards from 1992 to 2002. The industry suffered from negative values of exportable coffee volume from 1998 to present. This implies that the country has not been exporting coffee for 10 years now.

The country was a net exporter of coffee in various forms: green beans, roasted ground coffee, and soluble/instant coffee (Figure 11). Prior to 1990, 15% to 30% of our total production was sold abroad. However, when the International Coffee Agreement collapsed in 1989, world price dropped down making exports unproductive. Thus, from 1991 to 1996, exports shrank to a mere 0.3% to 2.7%. The trade balance from 1992 to 1996 followed an erratic trend. Export earnings fell to US$ 4.6M in 1996 from a peak of US$ 8.2M in 1992. Nestle Philippines Inc., maker of Nescafe products, reportedly covered 85% of the instant/soluble coffee market, while the remaining 15% was shared by Commonwealth foods (Cafe Puro), General :Milling Company (Kaffee de Oro), Universal Robina Corporation (Great Taste) and others. Extracts, essences, and concentrates of coffee comprised the bulk of coffee exports, mostly bought by Singapore (Figure 11). Oman is a lucrative market for green liberica and excelsa. Following the removal of quantitative restrictions, imports ballooned to US$ 2M in 1996 from US$ 0.4M in 1995 (Food and Agribusiness Yearbook, 1997).

21 Philippine Coffee to 2020

The Philippines have exported various forms of coffee ranging from green bean, roasted ground coffee and soluble/instant coffee. During the later part of 1980's, around 15-3Opercent of the total production was sold abroad, Neste Philippines, Inc., maker of Nescafe products, reportedly commanded the coffee market through its 85% share. Commonwealth Foods (Cafe Puro), General Milling Corporation (Kape de Oro), Universal Robina Corporation (Great Taste) and others share the remaining 15% (BAS, 1997) (Figure 13). Export dropped to 0.3% in 1996 due to the downgraded world price of coffee. The trade balance from 1992 to 1996 followed an erratic trend. Export earnings fell to US$ 4.6 M in 1996 from a peak of US$ 8.2 M in 1992. As a summary, Figure 13 presents the trend in the Philippine exportable volume side by side with that of its export volume as separately discussed earlier.

22 Philippine Coffee to 2020

6.2 Imports
The Philippine imports coffee in different forms, such as roasted, raw green extracts, essences and concentrate\s and other forms. In 1994, the country imported .166 metric tons of roasted coffee (ground, not decaffeinated) from Netherlands valued at US$ 89. 70. Importation of this was increased in 1995 to 8.5 metric tons, 98% higher than the previous year. A slight increase of 16% (8.502 metric tons) was recorded in 1996. The year 1997 posted the highest import recorded at 292 metric tons valued at US$ 459,645 (FOB). For the period 1994-1997, importation posted at n average annual growth rate of 88%. Imports of coffee extracts, essences and other preparations increased from 7 metric tons in 1994 to 912 metric tons in 1997, an annual growth rate of 95%. An increase of about 72 percent was recorded in 1997 compared to 1996. h11997, value of exports was recorded at US$ 2,048,221 FOB), 25% higher in 1996 value recorded at US$ 1,535,632. In 1998, Indonesia supplied 95.32% of the Philippine requirement for raw/green coffee, Robusta variety. For the same year, total Philippine imports of Excelsa variety, which accounted for 2,839 metric ton valued at US$ 206 was all, sourced from the USA. Australia, in 1998 was the main source for the Philippines' roasted, ground decaffeinated coffee. Moreover, the three major suppliers of roasted, ground not decaffeinated coffee were: USA (39%), Australia (29%), and Italy (19%). For coffee extracts, essences and concentrates, the USA, accounted for 394% (217.44 metric tons of the total import volume, valued at US$ 389,259 (FOB). Singapore ranked second with 19% share and 12% from Hong Kong. Almost all of the Philippine imports in 1998 were the raw/green (not roasted, not decaffeinated) form it accounted for 95.40% of total imports.

6.3 Price Development

Figure 14 shows the domestic price trends of roasted coffee according to the following varieties: arabica; excelsa and robusta. For the arabica coffee, it was in 1998 when its price was highest at P180.15 per kilogram and was lowest in 1990 at P78.65 per kilogram. For the robusta coffee, the price was highest in 1995 when a kilogram was sold at P132.42 and was lowest in 1990 with 47.64 per kilogram. For the excelsa variety, the year 2000 marked the most expensive price of coffee at PII0.34 per kilogram while the cheapest price happened in 1990 with P44.42 per kilogram. The table reveals a general increasing trend in the prices of both arabica and excelsa varieties. On the other hand, from robusta's highest price in 1995, a declining trend in its price was observed onwards.

23 Philippine Coffee to 2020

24 Philippine Coffee to 2020

6.4 Domestic Consumption Figure 15 shows the country s domestic coffee consumption in metric tons from 1990 to 2002 based from ICO statistics. As revealed in the table, the year 2002 marked the highest domestic coffee consumption using up 55,000 metric tons of coffee. The year 1999 closely followed by the year 2001 consuming 53,000 metric tons followed by 1997 with 51,180 metric tons. The lowest domestic consumption within the evaluated consumption period happened in 1990 consuming only 43,200 metric tons. Statistics revealed a very stable and consistent domestic consumption experiencing no drastic plunges or climbs in the volume of consumption.

7. PROBLEMS OF THE PHILIPPINE COFFEE INDUSTRY

The Philippine coffee industry is not spared with the usual problems experienced by other industries. Major industry players, especially the fanners, feel these problems. Low volume of production, poor quality of coffee beans, unstable market prices, and low yield and income per hectare are among the most overwhelming problems. Low yield and production are attributed to the limited technical know-how on appropriate production technologies such as fertilization, pruning techniques, cropping systems, post harvest handling and processing. These problems are mostly centered on the extension delivery of our agricultural technicians who finds themselves at a lost due to the recent devaluation system of our government. The old age of existing coffee trees also contributes to low productivity. This problem is also aggravated by the reduction in land area planted to coffee as a result of industrialization and land conversion. The lack of marketing intermediaries and on the other hand, too many of them in some places is also seen as a problem confronted by many local fanners. Aside from this, the price of coffee is affected by fluctuations in the international market that triggers instability. With these problems the challenges for the coffee industry is to "produce enough consistent quality coffee to take advantage of the market opportunities". Enough in the sense that we are still importing coffee to our neighboring countries such as Vietnam and Indonesia. We must produce more to avoid importation, which means dollars going out of our country. We must help our farmers to capture more added values by selling more processed coffee directly to consumer. To attain this much faster, we should eliminate individualism and promote cooperativism. We should also work for diversification projects that would make farmers less dependent on a single crop. Foremost, we should train and encourage them to enter the more lucrative especialty coffee niche. All these problems must be translated into an R D & E framework that will address the industry until the next 10 or 20 years.

25 Philippine Coffee to 2020

8. DESIRED INDUS1RY SITUATION

For a while, coffee has been a neglected commodity in the country. Records show that to date, there were only few researches conducted on coffee, the result of which has not been consolidated. Package of production technologies are also very limited. A critic assessment of the real status of the industry is in order. There is also a need to update our knowledge of the coffee international market.

This is a prerequisite if the local industry is to become competitive in the world market. The industry should also develop additional products from coffee and its by- products and intensify its market promotion. Given the decreasing hectarage of coffee production areas, increased production of quality beans can be done through modern production technologies. Farmers should also be adequately supported in terms of extension services, credit facilities, marketing assistance and provision of post harvest facilities. To increase our robusta and arabica production we need to provide technologies that would increase the yield per hectare from 0.4 ton to 1.5 tons. Farmers must be given information on how the quality of our coffee beans can be improved. We also need to rehabilitate/rejuvenate old plantation to increase their yield. Expansion for robusta and arabica plantation should be supported by the government for self-sufficiency. For the coffee industry, it is hoped that after the program, it shall be improved. Production area has been increased from 124,000 has to at least 150,000 has. The national average yield has been raised from 800 kg/ha to 1000 kg/ha. The quality of our coffee beans has been improved as that of other Asian countries. The per hectare profit of farmers has been increased from P 50,000.00 or more per hectare ultimately, the export earnings of the country shall have been increased.

The coffee RDE program within the next 20 years will embark on a comprehensive approach to arrest recent challenges to the industry in the current World Trade Organization (WTO) regime. Rea1izing the vital role of the industry in employment creation, economic growth, income distribution, regional development, and environmental protection, the program will focus on the overall aspects that will also cope with the problem of globalization. The program main focus of the program is on increasing the coffee yield per unit area at a lower cost of production. Improved efficiency can be enhanced through modern technologies that will involve the use of new cultivars, biotechnology, fertilizer usage, proper pruning techniques, and the use of irrigation facilities.

26 Philippine Coffee to 2020

.The control of pests and diseases shall also be regarded as a primary factor in varietal improvement and efficient coffee production. The need of the growing consumers on good quality coffee shall also be given emphasis. This will include strategies that will help the farmers capture more added values by selling more processed coffee directly to the consumers. New marketing strategies shall also be considered. To realize the goal of sharing them the windfall they reaped. Individualism shall be eliminated in favor of cooperativism. The different forms of coffee products shall also be looked into as well as the post harvest and packaging equipments that will be best used for them. The program also seeks to help the farmers and the industry as a whole with technologies on a more lucrative specialty product that command high prices in the market particularly excelsa and liberica coffee. The production of organic coffee shall also be looked into. Another important part of the program is closely looking into sustainable coffee production, which shall include studies that will promote soil conservation organic fertilization and crop and animal production

for diversification projects that would make farmers less dependent on single crop fanning. Farmers should also be assured of guaranteed economic returns.
Finally, a program that will help the farmers improve the quality of coffee berries shall also a prime concern of the program, with no less than the ICO pushing for the development of strategies that will only select good quality seed in the market. It is imperative that we improve the quality of seed beans in order to be globally competitive.

9.2 Program Goal

To develop the coffee industry into an equitable, sustainable, environment friendly, and a globally competitive one for a better quality of life of the Filipino people and for the improvement of the nations economy.

9.3 General Objectives

The general objective of the program is to increase the production of high quality coffee beans at less cost for local and international market, develop coffee by-products for niche market, and promote sustainable coffee production.

9.4 Specific Objectives Specifically the program intends to:

1. Conduct a critical assessment of the industry and its position in terms of production system/technology policies, processing and manufacturing for local and international markets; 2. Develop, test. And verify production technologies on technology, pruning techniques, varietal improvement, farming systems, pest management, irrigation, shade management, postharvest and processing systems; 3. Establish demonstration farms and seed and clonal nurseries in selected areas; 3. Formulate strategies for the development of new coffee products; 5. Provide a scheme that will ensure support to workers in the industry such as policy analysis and advocacy, credit and crop insurance for farmers, institutions, and human resource development; 6. Package available technologies for publication and conduct training programs to enhance capabilities of fanners, local government writs (LGUs) and non- government organizations (NGOs) that are involved in coffee production; 7. Establish coffee trade and info11llation centers in strategic areas of the country;

8. Establish postharvest and processing centers in selected areas;

9. Coordinate/link \\lith other stakeholders of the industry;

27 Philippine Coffee to 2020

10. Establish a Geographic Information System (GIS) for profitability and productivity assessment of coffee;

11. Intensify market promotion of coffee and coffee by-products in local and international markets; 12. Collect, evaluate and improve coffee varieties that are promising in the world market; and 13. Establish the National Coffee Research and Training Center. 9.5 Program Components The national integrated research, development and extension program for coffee shall consist of the following components: I. Research and Development Industry Assessment and Policy Analysis/Improvement
This shall include a critical assessment of the industry. Although it has already been done in the past, an updated data is very important in the analysis and formulation of policies concerning the industry. Assessment shall include the policies and production systems/technologies that are being practiced by fanners. The local processing, manufacturing, local and international processing and marketing systems shall also be assed.

Technology Generation on Production and Post Production

As a very important component, this shall focus, on the research and development of new production technologies that will help coffee farmers improve the production efficiency. Included are the establishment and maintenance of germplasm collection of three islands Luzon, Visayas and Mindanao. It shall also focus on varietal improvement, development of more appropriate coffee-based fanning systems, nutrient management studies, pruning techniques, pest management and biotechnology researches. This component shall also include the development of post harvest processing systems and establishment of post harvest facilities.

Saving Bio-Diversity and Protection of Environment

This program shall also address problems on coffee agro-eco system, fertilizer and pesticide usage, and soil erosion.

Industry Support
This component shall take care of the individuals/institutions that are involved in the industry. Focus shall be put on policy analysis and advocacy activities. Marketing intelligence activities outside of the country shall be included. This component shall take care of the development of the farmers' credit and crop insurance system.

2. Training and Extension

This shall cover the packaging of available technologies, publications and training of fanners, LGU's and NGO's that are involved in the industry. This also includes the establishment of demonstration farms and seed and clonal nurseries in selected areas. Institutionalization and networking is a major part of this component. Local and foreign study and cross farm/country visits by key individuals in all network shall also be included. This shall also include the establishment of "Coffee Research/Trade/Information Centers" that will also house post harvest facilities for coffee and its by-products.

28 Philippine Coffee to 2020

Institution and Human Resource Management

This program shall engage in a strong institution/network and manpower development. These include provision of in housing training, and participation to trainings and tours outside the country for technology verification and generation. Acquisition of needed equipment and facilities vital to research and development shall be included. This include at least a laboratory facilities and vehicles for the program.

Monitoring and Evaluation A systematic scheme shall be pursued in monitoring and evaluating the program. It shall also include the establishment of zonal and regional GIS for coffee production areas. 9.6 Strategies of Implementation
Linkages and Networking The first step in the implementation of the program is the establishment and operationalization of national network linkage with various NGOs, LGUs, and other stakeholders in the industry.

Creation of National Coffee Development Board Establishment of National Coffee Research/Information Trade Center
Coffee research/information/trade centers shall be established to handle all activities included in the program. The center will house a publication and training center for the conduct of seminars, training, workshops and technology promotion activities. The center shall include post-harvest and processing centers accessible to small fanners.

Establishment of Demo-Farms, Seed and Clonal Gardens

Demonstration farms showcasing the recent technologies on coffee production shall be established in three areas particularly in Luzon, Visayas and Mindanao. The demo-farms shall also include a seed and clonal garden for massive production of quality planting materials

Establishment of GIS for Coffee

A geographic information system center for coffee shall be established to monitor and assess production and profitability in different production areas of the country.

Monitoring and Evaluation Regular monitoring and evaluation shall be done to assess the impact of the program especially during the termination of the program.

29 Philippine Coffee to 2020

30 Philippine Coffee to 2020

31 Philippine Coffee to 2020

32 Philippine Coffee to 2020

33 Philippine Coffee to 2020

34 Philippine Coffee to 2020

35 Philippine Coffee to 2020

36 Philippine Coffee to 2020

37 Philippine Coffee to 2020

38 Philippine Coffee to 2020

39 Philippine Coffee to 2020

40 Philippine Coffee to 2020

41 Philippine Coffee to 2020

42 Philippine Coffee to 2020

43 Philippine Coffee to 2020

44 Philippine Coffee to 2020

45 Philippine Coffee to 2020

46 Philippine Coffee to 2020

47 Philippine Coffee to 2020

48 Philippine Coffee to 2020

49 Philippine Coffee to 2020

50 Philippine Coffee to 2020

51 Philippine Coffee to 2020

52 Philippine Coffee to 2020

53 Philippine Coffee to 2020

54 Philippine Coffee to 2020

55 Philippine Coffee to 2020

56 Philippine Coffee to 2020

57 Philippine Coffee to 2020

58 Philippine Coffee to 2020

59 Philippine Coffee to 2020

60 Philippine Coffee to 2020

61 Philippine Coffee to 2020

62 Philippine Coffee to 2020

63 Philippine Coffee to 2020

64 Philippine Coffee to 2020

65 Philippine Coffee to 2020

66 Philippine Coffee to 2020