Coconut industry

Why the coconut craze isn’t helping farmers

As demand for all-things-coconut grows in the US, coconut-producing countries from Sri Lanka to Brazil are scrambling to supply foreign firms on the hunt for more fruit. What’s less clear is how — or if — this boom will benefit the men and women at the heart of this global business.

In the Philippines, the world’s second largest coconut producer after Indonesia, the government estimates that coconut water exports in the first quarter of 2012 were up 300% over last year as demand in the U.S., Europe and China grew. Coconut oil exports across Asia have also grown 3.3% annually over the past five years, according to the Asian Pacific Coconut Community (APCC), a Jakarta-based industry group.

But what about the men and women at the heart of this global business? For generations, coconut growers like Bandaranaika have been selling to the coconut industry, which traditionally produces whole coconuts, shredded and dried coconut, and copra, the dried meat that is used for oil. It’s never been a particularly lucrative living, due in no small part to the fact that many coconut growers across Asia sell to middlemen, who then resell the coconuts to factories for as much as 50% more.

Rights groups watching the coconut craze worry that as coconut water and coconut-oil products fetch higher and higher prices in western markets, farmers won’t get their fair share of the profit.

“Popularity and an increase in price in the retail sector doesn’t necessarily mean higher wage for poor farmers,” says Ainhoa Galan, a research manager at Fairfood International, a Netherlands-based NGO. Indeed, APCC says that in Asia, the increasing demand for coconut water and oil has yet to translate into higher coconut prices due both to fluctuations in local supplies and, in the case of coconut water, to the fact that the young industry is still dominated by a few large companies.

Some companies are making a conscious effort to ensure that farmers don’t get squeezed out of the deal…..

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