Coffee town of Amadeo, Cavite

Pablo Angcaya, a 66-year-old farmer who in the past four decades has been taking care of a three-hectare plot planted to coffee, is excited to hear that prices of the world's second-most traded commodity continues to go up since hitting bottom at P27 a kilo in the middle of 2002.

As of the third week of January this year, prices of coffee reportedly reached P40 a kilo, providing relief to thousands of coffee farmers in this idyllic Cavite municipality, which prides itself as the "coffee town of the Philippines."

Data from the Department of Agriculture showed that farmgate prices of coffee improved by 18.7 percent to P36.47 a kilo in 2003 from P30.72 a kilo in 2002.

Because of the higher farmgate prices, total value of coffee production hit P3.815 billion in 2003, higher by 16.8 percent than the previous year's P3.27 billion.

However, the total volume of locally produced coffee beans still dropped by 1.6 percent to 104,610 metric tons (MT) last year from 106,300 MT in 2002, as farmers shifted to more lucrative crops. Others planted coffee along with other crops such as banana, papaya, and peanut.

"Many farmers in Cavite abandoned coffee planting in the past few years when prices dipped below the production cost of P30 a kilo. In 2003, prices were better, but still lower than in the 1980s, when we could say we were earning P100 a kilo, based on today's value of the peso," Angcaya said.

Because of improving coffee prices Mayor Albert "OJ" G. Ambagan Jr., who at 26 is the second youngest town mayor in the Philippines, decided to hold the Pahimis Festival earlier this year. Pahimis, according to Councilor Rene R. Tongson, is a local term for thanksgiving. The festival will be held on February 14 and 15, instead of April as was the case last year.

Ambagan said no less than Vietnamese Ambassador Dinh Tich was invited to grace the occasion. It was Vietnam, the world's second largest coffee producer, that the International Coffee Organization blamed for the coffee crisis in 2002, when the socialist country dumped around 800,000 MT of coffee in the world market, dragging prices below the production cost. Prices of Robusta coffee, for instance, reportedly plunged by 90 percent to $370 per MT in 2002 from as high as $3,700 per MT in 1997.

Tongson said the 4,790-hectare uphill town of 26,000 people, located 1,400 feet above sea level and 60 kilometers south of Manila, had coffee plantations as early as 1880. The town, he added, used to devote at least 4,000 hectares to coffee farming. Today, the total coffee area in the town is now down to only 2,300 hectares.

With the help of the National Coffee Development Board (NCDB), a private sector-led organization seeking to revive the country's ailing coffee industry, Amadeo hopes to rehabilitate 1,500 hectares of its coffee plantations.

Amadeo is actually the local government model of the 10-year national coffee road map for the rehabilitation of 20,000 hectares of coffee plantations in 22 provinces including Cavite and Sultan Kudarat, the country's largest coffee producers. The board's overall target is to expand coffee farming to 22,000 more hectares and in the process create 88,000 new jobs.

The NCDB, which is co-chaired by Pacita U. Juan of Figaro Coffee chains and Nicholas A. Matti of Negros Coffee and Grains, launched the Adopt-a-Coffee Farm project in Amadeo, in order to bring in capital for the rehabilitation program.

Guillermo M. Luz, executive-director of the Makati Business Club, which serves as the secretariat of the coffee board, cited the need to promote Philippine coffee to the world. He said this is the reason the board came up with the Kape Isla concept, which seeks to build loyalty to the brand, enhance consumption, boost production and create new jobs.

At least 22 coffee merchants are now carrying the Kape Isla seal, including coffee chains Starbucks, Seattle's Best Coffee and Figaro.

In 2003, the country consumed 55,000 MT of coffee beans or 12 million cups of coffee daily but produced only around 20,000 MT, forcing the government to allow the importation of 35,000 MT worth P1.6 billion.

In the 1970s, the Philippines devoted 160,000 hectares for coffee trees and was known as the world's fourth largest coffee producer, with Liberica or Kapeng Barako as its pride. The country was able to export $140 million worth of these beans in 1986.

Things changed when the United States withdrew from the international quota system in 1989, causing prices to stumble and farmers to shift to other crops. Total size of coffee plantations shrank by half to only 80,000 hectares today. In 2003, the Philippines exported less than a million dollars worth of coffee beans.

Aside from Robusta and Liberica, the country also produces Arabica and Excelsa varieties.

Angcaya said he is hopeful that prices of coffee would continue to rise in the coming months. "If we could only have the same prices in the 1980s, we don't have to plant other crops anymore," he said.

At present, the coffee board encourages intercropping to supplement farmers' income from coffee. Dr. Alejandro Mojica, a noted coffee expert, admitted that farmers need other sources of income on top of the average P11,000 that they get from a hectare of coffee plantation annually.

"In the 1980s, hospitals in Metro Manila were charging higher service fees from residents of Amadeo because we were perceived as rich coffee plantation owners," Angcaya recalled. "We wish we could bring back the old days."

In the meantime, Angcaya said the upward trend in global coffee prices is a sign of the rebirth of the Philippine coffee industry. "There is a reason for Thanksgiving. This is why we will hold Pahimis," he said.


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