Ex-ante analysis of PCAARRD [Phlippine Council for Agriculture, Aquatic and Natural Resources Research and Development] Industry Strategic S [Science] and T [Technology] plan for coconut

Z. M. Sumalde

Date

2023

Abstract

The coconut industry provides the vital economic support to over 3.4M coconut farmers who are highly dependent on coconut farming. However, due to the current major challenges that the industry faces, it become difficult for the coconut farmers to cope up with these struggles. As a result, the farmer's poor income, low palm productivity, limited supply of high yielding varieties, pests diseases, non-application of fertilizer and rampant cutting of palms were just among the effects of such phenomena (PCAARRD, 2012). It is in this light that the PCAARRD industry Strategic S&T Plans (ISP) for Coconut is conceived. The ISP aims to increase the nut yield from 46 nuts/tree/year to 150 nuts/tree/year; increase are planted from 3.56 M by additional 1M ha coastal areas with the utilization of somatic seedlings; and increase farmer's income from PhP33,300.00 or PHP 111.00/day to 44% or PhP 47,876.00 from off-farm high value products. The baseline, benchmarks and targets of the coconut ISP were also validated from secondary data and experts' opinion. Results of the validation showed that the baseline yield 46nuts/tree/year is applicable at the national level. However, at the regional level yields vary and its recommended that baselines should also be done for the regional level as well. The baseline area is also acceptable but the baseline income of farmers is consistent with the data gathered by the ICREDEP 5 projects in Mindoro. For the benchmark, the data used was 120nuts/trees on the production in India that uses hybrid and irrigation. However, from the validation with experts, we can use the data from the Philippines for farmers, who plant pre-selected varieties and practice good agricultural practices, whose average yield is already 130 nuts/tree/year. Indonesia with coconut area of 3.57M hectares was used as benchmark for area. However, it was suggested that we do away with using Indonesia as benchmark since this country has wider area compared with the Philippines. Instead, we have to emphasize the increase in coastal areas for coconut. For income, the benchmark used was from the Cogent data for Vietnam of PhP221/day. However, there are farmers in the Philippines that could earn more than this value especially those who practice good agricultural practices for coconut. The target yield of 150nuts/trees/year, as per validation with experts is achievable at the national level since there are already PCA hybrids that yield from 114-220 nuts/tree/year. However, with the regional variations in yield, the regional target must be adjusted base on the regional baseline yields. The additional 1 million expansion area must be specified that it will be for additional coastal areas. On the other hand, the target income is achievable if the farmers will do intercropping under coconut and adopt good management practices for coconut. With the on-going planned programs/project included in the ISP for the coconut, an ex-ante assessment is necessary to estimate the success of the ISP to meet the target goals as well as its modification or improvement. Thus, this emphasize the importance of conducting such evaluation for Coconut ISP. Thorough ex-ante assessments can measure expected economic value of the strategies. The Ex-Ante Analysis aims to estimate the economic value of the Coconut ISP to rationalize the use of PCAARRD-DOST funds. Specifically, the Ex Ante Analysis aims to validate the assumptions related to the indicators used in the proposed specific interventions of the particular Crops ISPs; trace and analyze the pathways by which the Science and Technology (S and T) interventions will, individually and collectively, result in the projected changes in the target sector; and identify quantity and estimate in monetary terms where possible the likely benefits and costs of the interventions for each specific ISP. Based on the strategies and interventions identified to achieve the targets of the ISP for coconut, the projects were bundled into six namely: 1)Varietal improvement selection; 2)Production of planting materials;3)Cropping system; 4)nutrients and water management; 5)Pest management; and 6)Processing/value adding based on the strategies and projects identified to achieve its targets. Analysis was carried out by bundle and then aggregated for the whole ISP. Results of the analysis showed that the ISP on coconut is worth pursuing. At 6% discount rate the NPV of the ISP from 2012 to 2020 would amount to PhP539.52M with an IRR at 47%. Extending the period of analysis to 2025 showed that the NPV will increase to PhP1,451.50M with an IRR of 54% Bundles 1,2 and 3 would have the major contributors to the aggregate NPV of the coconut IS. Although each bundle of intervention has different payback periods ranging from 2-9.24 years, the whole ISP has a payback period of 7.5 years. Bundle 5 would have the longest payback period of 9.24 years while bundle 3 has the lowest with only two years. To take care of uncertainties and determine what will happen to the economic indicators, sensitivity analysis was done for each intervention bundle. From the above results, it can be concluded that the investments in the coconut ISPs are worth pursuing even if some uncertainties are considered.

Language

English

Document Type

Terminal Report

Pages /Collation

109 leaves

En – AGROVOC descriptors

COCONUTS; DEVELOPMENT PLANS; EX-ANTE IMPACT ASSESSMENT; PROFIT; PRODUCTIVITY; CROP YIELD; FARMERS; ECONOMIC ANALYSIS; ECONOMIC VALUE

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