With both local and global demand for coffee showing no signs of diminishing, P-Noy’s new administration would do well to make increasing local coffee production a part of the country’s agenda

There is much to be said about the coffee you drink every morning.

Long before Starbucks, Seattle’s Best, et. al. came along, the coffee produced in the country in the 1800s was internationally beloved—so much that the Philippines was the world’s fourth largest, proudest coffee exporter. Coffee, otherwise known as coffea rubicae, has four well-known species grown globall —namely Robusta, Excelsa, Arabica and Liberica—all of which are grown in different parts of the archipelago.

Today, the Philippines still ranks among the major producers of coffee in Southeast Asia. However, while short and sturdy coffee trees still flourish, the Philippines produces only 0.012 percent of the world’s coffee supply.

“Right now, we are way below in coffee production,” says Pacita Juan, co-chairman of the Philippine Coffee Board (PCB), a private sector-led group established to develop and promote the Philippine coffee industry. “When we were hit with coffee diseases and rusts in 1899, we never really recovered.

A lot of farmers also stopped planting because prices were low. And with our coffee consumption increasing 2 to 3 percent every year, almost like our population growth, we are now importing P4 billion worth of coffee and that goes to Indonesian and Vietnamese farmers. I think we could very well  put some money into the coffee industry and gain back the P4 billion we spend on imports.”

From Crop to the Last Drop

When the Philippine Coffee Board was established in 2002, coffee supply in the Philippines was at 25,000 metric tons—and dwindling. “What we did was to try to arrest that decline by encouraging farmers to plant again,” says Juan. “We give them alternative markets for coffee. It used to be that instant coffee manufacturers were the biggest buyers of coffee beans. The farmers just sell green beans, but value actually adds the closer you get to the consumer. So what we did was we told them that there are other markets apart from instant coffee.”

Programs like the Pilipinas, Gising Na at Magkape (PGAM) were initiated by the PCB to educate farmers about potential markets, from creating and marketing their own brands to managing the entire value chain of coffee. Today, says Juan, there is a growing consciousness among coffee farmers around the country. “From my travels, I’ve seen a segment growing where people grow their own coffee, sell their own coffee and serve their own brew, and they put their own name. In a way, it also promotes town pride. Like we went to Ifugao, and there’s the Lagawe Blend; there’s also Bukidnon Coffee—so the whole value chain is already managed by the community growing the coffee.”

The Philippine Coffee Board, composed of members from the grower, miller, roaster, retailer, local government and agriculture credit sectors, also sees to it that local coffee farmers are properly educated when it comes to harvesting the beans. “We encourage them to harvest the beans red,” says Juan. “In the past, farmers just go for volume so they harvest the beans green. Now we tell them that they should harvest it all red so that it is quality coffee. That way, we can compete with the world.”

The Bean That Wakes Up the World

What’s exciting about coffee, says Juan, is that it is the only product where the market is not a problem. Caffeine is the most widely taken psychoactive drug in the world, and coffee is its foremost delivery system.

“The biggest economies of the world—United States, Germany, Japan—they don’t grow their own coffee,” says Juan. “Coffee grows in a belt around the equator where there is equal night and day. It’s the perfect weather for coffee and all the coffee-growing countries are in this belt, including the Philippines.”

With so much global demand for the breakfast brew, the Philippine Coffee Board is urging both local and national government to make coffee a part of the country’s agenda. Most Filipinos may be unaware but Philippine coffee comes from over 22 provinces around the country. Barako may be the best-selling Filipino brew, but other areas of the country like Ifugao, Benguet and Kalinga are fast becoming prime organic coffee producers.

“What we’re looking at now is, what if China decides to drink coffee?,” says Juan. “They’re a tea-drinking country but a lot of Chinese have traveled abroad. And when they travel, they bring with them what they learned to drink—wine, espresso—so a lot of the returning Chinese are now coffee drinkers. So we foresee that China’s coffee consumption will increase. Even if only 10 percent of China drinks coffee, that’s still almost half of the United States.”

Brewing a Better Future

A lot of innovation has been introduced into the coffee industry the world over. Today, coffee is available in many formats—roasted beans, pods and teabags, even in capsules. If instant coffee revolutionized the way Filipinos drank coffee in the 1940s, today’s researchers are finding a host of ways to make the act of brewing more convenient for consumers.

“I don’t think coffee demand will fall because coffee is known to have anti-oxidants and anti-cancer properties,” says Juan. “So I think coffee-drinking will even increase.” With global demand showing no signs of waning, it would indeed do well for the national government to support the PCB in its efforts to revive what was once a dying industry.

Coffee presents a clear growth path that will help further boost the country’s economy. “In the early ’80s, Vietnam, from nowhere, suddenly became the second leading exporter of coffee, mainly because they had state support,” says Juan. “I think that’s also possible to do here in the country. We have a lot of areas in the country to grow coffee, and we should plant more trees.”

The goal, says Juan, is really for coffee farmers to get to a point where they want to continue cultivating coffee. “Incentives, like tax breaks, must be cited to encourage coffee production,” she says. “I think it would also do well for the new administration to continue with our programs. They can help encourage farmers to plant more coffee trees because coffee, you can just leave it there. It can be your gravy. You plant everything else around it that’s your cash crop, and during harvest time, coffee is your icing on the cake.”

Published in the Business Agenda section of Manila Bulletin, August 23, 2010