Coconut Industry Development Project for the Caribbean
Challenges in the Coconut Industry and Strategies to Overcome Them

Challenges in the Coconut Industry and Strategies to Overcome Them

CHALLENGES TO BE ADDRESSED

The Strategies being proposed with respect to rehabilitation, conservation and development of the
Regional Coconut Industry are designed to address the range of issues impacting on the Industry
thereby contributing to its decline. These include:

(vi) the alienation of land under Coconut and conversion to other uses

(vii) The range of pest and disease that are fatal to the industry

(viii) The limited range of commercial products/vale added from Coconut and the need to
improve on the quality of refined Coconut oil

(ix) The failure to invest in rehabilitation works, mainly the replacement of the old
diseased trees.

(x) The need for a comprehensive breeding programme with a view to the development
of varieties that would optimization production of the main end products such as
Coconut water and Coconut Oil.

STRATEGIES / INDUSTRY DEVELOPMENT PLANS

We now outline the Strategies designed to address the industry challenges /binding constraints identified
above.

Protection / Conservation of “SENSITIVE” Coconut Groves
Earlier in this Report we highlighted the important environmental role that Coconut plays, firstly
in terms of its protection of coastal resources (beaches, mangrove and built development) that are
prone to erosion / degradation from hurricanes and tropical storms and secondly with respect to
its beautification of coastal landscape. In the context of the Caribbean, coastal resources are
particularly valuable to the country having regard to the dependence on tourism and the fact that
much of our development is located along the coast. Protection of coastal resources is therefore is
significant potential benefit to Caribbean countries.

In order to ensure that Coconut groves continue to provide society with its environmental benefit, we propose the following measures:

(vi) Zone Coconut groves that provide important environmental services as “Sensitive”

(vii) All Coconut Groves designated as “sensitive” should be zoned for restricted use – limited to Coconut production only – that is, no conversion to built or other uses would be allowed

(viii) Where a private owner wishes to dispose of his property, the restriction that the groves not be converted to other uses remains.

(ix) Where a Coconut grove /estate owner is unable to secure a buyer, the State becomes a buyer of last resort. Transaction is to take place at market value.

(x) A fiscal incentive to retain Coconut groves under Coconut is proposed, the amount of support being based on financial losses that an entrepreneur realizes from his operation. We propose that financing of such a subsidy / fiscal incentive may be funded from environmental taxes or head tax on the tourism sector where these exist.

 

R & D to Address the Major Development Needs of the Coconut Industry
1. Pest and Disease Problem in Coconut
The widespread incidence of a range of fatal diseases and their destruction of the regional
Coconut Industry is well noted. To date the Region has had minimal success in controlling /
reducing the impact of these diseases. The effort and resources dedicated to addressing the
problems of pest and disease in the Coconut Industry at the Regional level has also been limited
and well below what may be required to address an Industry-wide problem. Initiatives have been
primarily at the country level with limited collaboration as well as coordination at the regional
level. Additionally, efforts have been sporadic and not sustained over the years.

In a Region with limited resources and a common problem one would have expected that the
R&D assault on the diseases in the Coconut Industry would have been a regional initiative with
participation of the various countries and industry stakeholders.

2. The Development of Varieties of Coconut that Optimize the End Product
As discussed in Section 3, the Region has recently experienced rapid growth in the Bottled
Coconut Water market. However, in some countries the market is facing supply constraints. Also,
the fact that many Coconut groves in the Region are aged means that trees are tall with
implications for the cost of harvesting nuts. There is also the need to select Coconut varieties
specifically suited to the water nut market with respect to flavour, yield and ease of harvesting.
R&D could also improve the yield and profitability of Coconut intended for the Bottled Water
market or Coconut intended for other uses such as Oils or fibres.

3. The Development of Value Added / Industrial Products

We noted in our review that the while a range of products is possible from Coconuts, in the
Caribbean production is largely limited to Coconut Oil and margarines. The improved profitably
of the Coconut Industry depends on our ability to expand the range of products that are possible,
focusing on high valued products. Investment in product development is therefore essential if the
viability of the industry is to be enhanced.
R&D Proposal: Our proposal to finding a solution to the pest and disease problem, better
varieties and higher valued products in the regional Coconut Industry calls for an aggressive
R&D programme. Clearly this is a medium to long term proposition. Given that the problem is
regional in scope, we propose the initiative as a Regional Effort with the involvement
/participation of the key stakeholders – Caribbean governments, the private sector involved in the
Industry (whether production, processing or marketing) and R&D institutions.

Specifically, we propose:

(v) The establishment of an R&D fund for Coconut Industry Research Programme (CIRP) with contribution from stakeholders and the donor community. We suggest the wider Caribbean rather than only CARICOM given the fact that the problem extends to other Caribbean countries.

(vi) The CIRP should be established as a CONTESTABLE R&D FUND – that is R&D Institutions would be invited to bid for resources from the fund to undertake specific research relating to the problems /issues discussed above. We suggest that participation in the bids should not be limited to Regional R&D institutions but should be open to institutions outside of the Region.

(vii) The CIRP should be managed by a Committee comprising the key stakeholders

(viii) Bids for R&D should emphasize sustainable and cost effective solutions, including genetic and biological technology options

 

INCENTIVES TO ENCOURAGE REHABILITATION OF ESTATES,
PLANT MODERNIZING & INVESTMENT

Given the Industry’s aging Coconut trees, its Plant and equipment (except one of the Plants in
Guyana), improving productivity and profitability in the Industry calls for replanting Coconut and the refurbishing / modernizing Plant and Equipment. However, this is unlikely without adequate fiscal and other support from Government given the recent poor performance of the Industry.

Specifically, we propose the following interventions as incentives to induce the private sector to undertake rehabilitation/refurbishing works:

(iv) Provision of disease free seedlings to growers, specifically selected based on the intended product /market

(v) A programme of fiscal incentives (subsidies, tax credit etc) to encourage rehabilitation and refurbishing.

(vi) Review of the CARICOM Oils and Fats Agreement, including the CET on competing products.

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