Australian Agricultural EConomics COnference ,February 9-11 1988

A POLICY PBRSPECTIVBON COCO~T PROCESSING IN TUB

SOUTH PACIFIC ISLANDS

Dan M.. Stherington1

Economics oepertmentf

Research School of Pacific Studies, Austra ian National universltt

canberra, ACT 260!

ABST!U\CT

ror.Jaany island nations of h"te South pac!fic the ;coconutpalll is the most inplrtant smallholder tree crop. MOst attenpta to intrcduce processing beyond the cOpra stage have failed. At the

.. e.$Oe time thete is a declining trend in copra prlce$. Unlike IIC)stother major coconut prQducing cou..'ltries (Philippines, India, In&lnesia. Sri tanka, and 'lbailand), the SOUth Pacific nations do not have significant expanding daltestic urban markets. As a result they IWSt look to alternative export. markets and direct output to higher income, non-traditional market niches.

'Ibis paper I part of M on-going rec98reh project, presents arguraents in fa~'OUr of an export 'demand-pull' strategy for the coconut industry based on a re-examlnatlon of the coconut as a total resouree rather than only as a source of a raw vegetable oil. 'Ibe effective use of this t.'esourcerequir.es that the fruit be processed asa mature fresh ,lut anci that all 1.. arts of the nut are used. '!be strategy ilplies a switch in research priorities, away frOll plant breeding and dlsea$e control towards processing, tiaDestic and in-eemational shipping, energy policies and market aevelopDeb"lt. Improved mt.t'kets k'OUld in tum give renewed b:petus to the continuation of the excellent plant breeding work that has already been done.

~ people who provided useful con:ments on an earlier ' in house' discussion paper have stimulated me to revise it for wider circulation. I am particularly grateful to David Hagen of sawaii for his major input on many technical and engineering issues faced ~ the project. I remain responsible for all shortcomdngs.

Am.tC!lPIRSIiEC'l'lVE (Ii axxH1r l'RlCBSSM IN mE

BOOm PACIllC ISLlHlS

l",M,~

Coconut ,paltns(Cqcosnucifera) and their large fruit are ubiquitous in the islands of the south Pacific. 'Ibe fruiting of this palm 1s so regular and itsprQQucts so numerous that many refer to it as the "tree of life". The nutsfoJ;ll1 an important part of the loc,al diet as a drink, -fresh food and as an ingredient; in cooking. For.many Pacific Island coomunities,the dried flesh of th~ lnatur~:l\\t(f capra') is their most important e2tpOrt catrnodity. ror some it is their only trade good. Prices of ·.'Opra in recent years havefluctuate(i dramatically , from a noI'lU of, about US$300/tonne (1!IF Rotterdl4n) toaver$8()Ojton-qe in 1984 to only $150/tonne inmid-1986 but recovering somewhat wring 1987 • While coconut production isa rolatively eawoccupation because the palms are hardy, 1i ve 1009 (over 60 years) and procluceall the yeartounQ, the proc~ssin9 of the fresh flesh to produce copra i6 a dirty and arduous task. For the people of the South Pac~fic to continue to do this 'WOrk the ,returns to their labour are critical. In anat.tempt to increase the retums to growers and the value added to the nations , island governtlW!nts have sought to undertake dcmesti.c copra milling for the resultant coconut oil and live.'st.ockfeed-cake. Few sucb undertakings have beensuccossful tNal! 1986).

'Ibis paper starts by setting a number c,f policy gol11 q for the industry. It then reviews the process of structural transformation and it~ significance fo~ tbeislands. 1'his is foll~ by a brief sketch of the $mIl si;e and rUlltene.s of the islands and their dependency on for6ign trade and aid. 1becurrent situation of the coconut industry is then outlined. 11le policy perspective is developed and then applied todevelopr.ent strategies fOJ; the industry. The paper ends with specific recaIltW!ndations for the dit6ction of research and poses a lot of questionu. which need to bel anGWereci.

1.1. Policy Goals

I accept Stewart and streeten's 1976 definition of a strategy' as includin9 both the objectives and the set of policies designed to achieve those objectives. Here, with a "Logical Framework" (or tt~N9frame") structure in adnd, the t.op-lwel goals are to:

1. Baise the economic and social welfare of Pacific Island r~tions by improving the utilization of and the value added to existing resources.

2 Raw, or green, copra hts a moisture content of 50\. 'lttis has to be reduced to less than 7% before the copra can be traded. Cilild (1974) and Banzon et al (1982) describe how copra is made and how it is further processed to produce edible coconut oiL. Brookfield (1985) gives figures from Fiji on the typical labour requirements for producing copra.

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I

-~~--~----;-~"""'-----'--. -. ---.---

a.A .. I.S. conference t 1988 Coconutl'rocessingPolicy Etherington

2411 Stell the Jdgratlon from outer islands and emi.gratiM fromtbe illand nations.

3. Ilf?rove nat.ional self-sufficiency in food and fuel t and diversify their induStries ·ana eaports.

4 0 l~rcwe int.ra ... national caummicatiQns and encourage the social conesiortof caraunityorganlzattons.

S.I1lp\rttechniealskillsand retain th$ll within the islands.

'lhat these lofty ideals are the overall goals of policies focusing on, the coconut seetor of the island economies is ,due to tlw widespreadpresence of the palms,tbe characteristics of the nut i teelf and modem technological develQPl'lents.

lallo accept the challen9f~ of Chambers (1978) for social scientist$ to understand and be involved in research anddevelopnent (R ,. D)a$ it could affect ruralpeople rather than simply analyze events after they have taken place (see also Longworth 1981). Chambers' age~ requires that we pay speciflcattention to finding out what scientists and tech­nologists are currently wrking on; to leaminqfrom rural people; to ensuring environt.lental specificity and to having a lfuture-orientation' (Chambers 1978 p 5). Pertinent examples of n~ technologies for small seale, tetlOte,rural proees$ing pllants would include thtt use of micro­processors (reducing managerial requirements) I co-qeneration power units, and the use of renewable-energy resources in the face of medium term projections that indicate a tightening of world oil supplies. SUch a future orientation needs to keep in mind not merely the productivity of a sys'cem but its stability, sustainability and equitability (Conway 1985). Q1e of the intentions of this paper is to establish research priorities for agriculture - although they are not derived from a formal model (Davis and ~Jah 1987, navis et 211 1987).

Historically, the process of econoadc development sh~ a steady decline in the share of agricult.ure in the national income, and in the proportion of the labour force in the agricultural sector. Eventually the actual mJltibers eq>loyed in agriculture decline. The basic reasons for this process of structural transfo~tion are well understood (Chene~ 1960, J(uznets 1957, Johnston & Mellor 1960, Johnston & Kilby 1975, Johnson 1987). The transfor.mation from an agrarian to an industrial/service society is a catt>lex process. This is evident from the economic and social difficulties being faced within and among any cross-section of societies. Nevertheless the overall trends of structural transformation show a consistent pattern for good reasons. In general terms, the agricultural sector produces many of the basic necessities of life: without food we die. But necessities have income elasticities of demand of less than one. Thus as real incomes rise, the demand for the sum of all fa~ products grows more slowly than does the demand for all other goods and services. Not only are income elasticities of demand for food

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A_A.E.S. conference, 1988 Coconut Processing Policy Etherington

less tb.an one but they decline as incCDes rise. 'lbe general weakness of thedomestic demand. growth for agricultural products is well demonstrated by eguation (1).

(1)

Here ·the '4' is the rate of growth of demand for agricultural products; 'p' is therJte of growth ofpopulationi 'n' the income elasticity of .a.and and 'g'the rate of growth of per capit& incomes.'1'he lower 'n' for ~ 1ncare 9rowthrat~, the 10W'erthe rate of growth in domestic demand.

on ~ "-1PPly side, if agricultural prod\.\ctivity increases at abput .tl'\e P...a8 rate as other sectors of tre econ,auybut 'has an incQJDe elasticity l'S8 ·than one, '~griculture'sf~te is to shrink' (Johr..son1987, p.3). AUstralia and ·New ~ealandareoften cited af; evidence that this fat~~i is ~~teltrictedtoaclosed economy butillso affects small countries with ,an ab'llOlute advantage in agricultural p·coduct1.on.

libi1. t:hegeneral 'scenario for the ;.-gricWLtural sectOr is fora steady decline in its relative impOrtance, in a closed economy the relative fortunes of industries within thesectr.o[ will vary accorQing to the procluct specific income elasticities of dfA'Dand and the rates at which supply $bifts (productivity isrpr01Je1Aents)take place. At the onee)tt.reae there are the a.;~rcby staples. of rlee, w'Jleat,maizeandroot.cropasuch as potato, .weetpotato, and cassava 1mich fOrJl\ tbebulk of human food. IncOlle olasticities of deJland for (.Neh catPOdities t.end tobe very low • . '!be . proportion of . food . expencUtures spent3ditecUy on starchy staples d$cline$ as inca;res incre~se (8e'ntlett 1954) • At the other: ~xtr_, agricult.\lrep~oduces '~uxuries 6'Jch lAS caviar, spices, es.sential oils and Olt flowers.. Sebleen these extrt.tmeG t..he;:e is a wiae range of agricultural prodUcts some of whose income elasticities of demand are close to one.

St.rategic planning for 'lw.nu:y' i .:ricultural products can be safely ignored in a closed econosy t'JUt within ~ll open econoQdes suchproducts are likely to be crucial in raising rural and national incaues. '!'hey should fOnl a key COIIpOllent of the agricultural strate<jies of the 'micro' island nations of the South Paelfic. 1hls argument will be developed following an outline of the tat.ting.

3 lndirect expenditures are not nearly as income inelastic because in maqycountries the ,nirJals that provide the protein in human diets are fed with grain.

4 Such a brief sketch does great injustice to the enor,mous diversity 1Eounc1 aeong the islands and their peoples, but to do justi.ce at this poin' .. 'H'OUlddivert the central argument .. 'fh.e SOUth Pacific Agricultural &Jr:v=/, edited by ward et al (1980) provides an excellent country by country rcwiew of agriculture in the islands. '!be Islands/AUstralia WOrking paper series of the National Centre for Develop:aent Studies, AUstralian National tkliversity covers aany other issues.

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.• '- =. A.A.B.S. conference, 1988 COconUt .Processing Policy Etherington

3.'-"* S&'ft'DG

The south Pacific island nations are .among the 'IJOstlt\argiMl butpcssibly tNt. lIOatatudied in the world .. '!bey ar., 'marginal' ,in '.many senses: ..-11 in .. pbylical lize and!n numbers of people , on the pel iphery of trade and ~c.ticnrouteli, their very reetenes$ukes .. the1ll1ittlel1Ore ··than ~ ir.ritant to those concerned Jffithtbe 'developlent' of nations. Goodwill towards~· .by high inCOlle countries is mixed with some sense of hope­le$Jt)e.1 'and helplessness as to what can be done.. ror wol;'ldand r_glonal powers, only their .trategic location gives them sCJm8significanee.

t !'4Ible. 1.·DelDJmPdc:..s i.nfxR indicators South ~fic Island Nations 1983

about here 1

1taeir prgbl_ are very real. '!be pcpulationsof most of these nation states a~e bi\rely the ai~e ofaSl4all 'town' or 'city' ( 2,000 - 300,000, _'table lwb1cnallO IbrJwstM variation in populationdensltyand growth rates) • BUt th!s'townris divideclby 'atreets'of water hundreds of aile. wide wlthtbe people ·ofeacb 'SS'Uburb' oft_n speaking a different language. Coaauting it; aeasured in teQlS of hoUrs or days and C::al'l only occur at the ranao. and occasional appearance of a 'bus' (boat) at ooe ·of the f_'.tops' (Whar!s). Aircraft have greatly i~rovedCClllU'licat1on$ but ~t lastill either slowand/or expensive .• Journeys are there­fore not 1I$&de. lightly and' c:aaalting' tends to be..,asured in days and weeks rather than hour.. '.lbere are strong centripetal forces taking the younger ,we, best educatedwlIOst adventurou~J to thecentrcatCM'l or centrifuqalforces encour~gingemigration frOIl the islands to larger t higher incxae rations (particularly frOJ.!!'olyneslan countriesHLucas " McMurray 1986 ) .l.Ibese ' brain-drain 'movt.aaentscan have$!riCJ1U8 iJIPlica ... tions for the bereft COIIUli ties in teUA of future innovation, leadersMp and ccaunity solidarity (Connell 1980, 1983).

!he revarse side of the coin of the relative remoteness of the PacifiC Islands is the resourcefulness of the people. Of necessity, the peQple of the SOUth Pacifie hayehad to. be hi9hly self-sufficient in their life­styles •. hl'IU.ly and.,/or group loyalties tend to be very strong .. 'lbephrase "subsistence affluence" was coined to c.ie$cr!be the livelihoc:xi$ of any of these peoples who lived well by intemational$ttmdards, producingvbat they conau:ae and conSUllling what they produce (risk 1971 and 19a6) • But increasingly this self-sufficiency is being eroded by trade-delin&mSY andai~Iindengr (Fisk 1981). S\1chdepenclencyis not neeessat y bad, but in pc liary product tradt, the prQducers of unprocessed raw materials are subjected to particularly wide fluctuations in prices and to ficklo _rkets. In addition, there are concerns on the import side of the trade

S SUch self .... sufficient societies have provided economists wi tb _ ricbandfruitfUl ground for building econQnie 1!Oiels of various types of subsistence faDling situations and the transition between such faras and caarrcial 8gricu1tu.te. '!bese include the works of Fisk, Nakiji., Nicbolla, ~ine, S<:llUltz, Shand, anc:1 stent. stent 1984 gives a useful rev1ewofthls Ii ter'~ture 11/

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A.A.S.S. Ccnfetence ,1988

tqUat1oo.

3.1.1t' 'B#POtt,tUlde

•

sther:ington

Copra !enter., the 'WOrld ,f!Sts '~, oils .~ket ~S just one ofa large number off«lrcea of vegatableoil" Withintbeseoil$ a_jor dlstinction'r;an·be drawn, botweenannualoilsaeQ ,erQPS( soybeM.$, sunflower,cottonseeci, 9t~t .and· tlllPOJSeed) ,anes pereMi~s (notably, oil pal$A,coconut lU1d olive)" The steady "lncreapes ,inworlct .pJ;'oduet;:!an sin(.;~tbe 1960& of rapeHedoil( 6.8\ per ~, maLruy in west~m EUrope,Cb.i~, lnc;1ia, ,and ~)",aoybean (aboUt6.2\pe~annum, .inlY'in the unltedStates, ESr~U .. mn .~gtnt~)atd ,therapia increat5.:t ,in palat ,011 :productioo in Mia (withKalttyaia'8outputincreas!ng at cmout 19'per'antl\alinee1961) ba$ ,~'enoverall depressiug effect .en" intemat~onaloil$e$d 'ps;ieel,iSince !~ inillport.ing c:ountri~' ha$ ,llOtincre~ed as rapidly (see world Bank .814.186).

Within this 1at:ge: andCQllplexmarket :theSoUth l?aclfic islands are V'ety IIinor ,actots;" ,.npne of ,~ fe.ture·among ~ 23eotltltriesnth annual oil..a ,pr()C\lction exceeding 100.,000, tames ,(llQll19S1 ,p.S2). ,''!be pertinent conclusion to drawisthatthe$e island nations .areprice askers fa<*! Wlthperfectly elaaticJDal'Ketsat Clu:rent p~i<:esfor any ,~rtic:ul~r quality ,of 'product. !Yen ·Wlth1~lthecoconut. 'world' the is1and$arenot VfJr.y :Jigniflcant {Table 2)" NeVertbeless t tracie in coconut prQduebis extr_ly~r:tMt ,for theseindlvidual countries in terms of l:heShare of p;poz:tsaecounted for by tbeseprOCiUcts.vanuatu is anextreme exaJrple:copra -e~ruaccounted for about 68\ of export earnings in 198$ (a relatively "noraal" year).

l'ablQ 2 PqlI11aUon andCocaut statlsticsby CCUltryfor 1985

[ Aboutbere 1

'l'he problem with such dependency is that. instabili ty in tr..e price of copra has been particularly severe over the last decade .anda llalf. Figure 1 shows the fluctuations in real prices at the destination, or cor:un.r t _rkets (CIr). Noraally one ~dexpedt the differencebet.ween the r,a1 eIf and roB to be strongly' rela.ted to the elF price irid to have a po$itive intercept - indiattinq a relatively stable 'marketing margin' and. greater instability in FOB prices. However, there is an unexpected negative intercept, iq?~yingthat the instability in FOB prices is less than that of CIF pricesl '!be actual difference is slight with the

6 'lbese results are based on the statistics reported in WOrld Bank 814/86 Vel II ,Annex Tables 28 an 32. Regressing D - eIF-FOB on eIF (in real terms ) and time (1953-85) in the form D • A + beI!' + ct + u we get:

Parameter A b c

Coefficient -99.97

0.275 2.203

T-ratio 2.11 5.59 1.76

5

Corrected a2 • 0.55

.=

.&.1..1 .• $. Ccnfetrcroctt ,19S8eoeonut 1-roceasing POlicy EthEu:in¢on

CQtf(ict,nt of variation 'f()t ·ftlSprice$ a,irtg 0.30 ~tedto 0.31. ,for CIt .prlces.

·(rigure1 in here)

m~ ~ \C1l·,CXIPRA"",,~ On. 1950 - 1~

,$Udl' ·pd.c.lntitability is 'cause(i by, sbifts in both ,'the, $tipplyof , ,'and· the 'deMnClfo.r "copra.. '~supply~,ift$oceut ~6, the. pt:cXhtcetC:QUntJ:'ie$are hit, ,bYperiQdie d(ouc.;ht$ (EINin<> takesit$ tQl1), flOCidS , aQ(1 de~$tatf.n9 ~l(Jnes. ~.lh1ft6~re pri.rily~e4a$ pr~e$sor:$$Witch be~n COI!JI)8ting Qil$ 4nd oil seeds. " ,Further insWbllJ.t)t ,,¢an' ,btJ,'c::aUledt¥: dIailgtl ,inprlcesuppQr:t, ,p.'llicies,lnlm,Portintl eount;j.~I. aM, by"ths .ave-=t1$1ng caapaigt1SQf cocrpttitors.

~t'iceinstability in the vegetabl~ -oil .tket i$tt~tt~ very dlr.c:tly to CQptaptice$bt!caU$' 64 per cent of the weight (.or ,80 percent of:the lIal: ... ) of this 'o;llMtd'i.1n its all. l4pe,r cent Qfthe ~i9bt (tht!t otbet 20 ,per, cent of the value) is , in "tile by/~ptoduc~ o£ ,.cQPr~-Cl1k."" ,a livestock fet!(i4l ,ibele "prqx>ttiQilS 'contrast .J:k~yw1th$~~ ,whe're .18 par ~t ,of tilewelgJ\t:,i8 in ,the,oil anct 80per: cent in the,_al. , Copra caJce i~curt;fJntly1n .,gQOd '~'in!:U~ope as '~ ,pIece,slng 1,. CWA'.£1 t.. .. re '~,i.t ,by~pas.eQ ,·tht' re$tticl;i,OIl$allgr~~nlJrJPOrts~ ~gi$lnti~ action fr_illl<Jup grainimp'J,ts could elimir.aate this _rk~t~~9bt.

While faQle1ls 'canbeprotec~ ag4in$t iMtability ,a$, demon$tJ;ated.~ t.ne Yer:ylNcce$sfulstabillzation 'f\lnd.s, forcoffee·ardcop7;4 i.nPapua ,new' Gw;n.a ,and copra in tbeSolO1tQn lsl~, b:llanee of payments figure$ can "yo-yo". , rorel(QJDple, in the, Solotaons, earnings £ tOIl Copra elCpO~t' fl",ctuatedfr:<a 81$8.4 aillion in 1983. to $32"m1l~"ion ln1984,to ·$23.5 Jlillionin 1985 f andback to only $6 million in 1986.

However, .tl1ereis even gceater eoncemc>verthe pricetrenc1a. OVer the whale period given in Figure 1, the real prices show a decline of 1.44 per

'lbeexplanationfor the unexpected ne~ti ve intercept may lie in tIw pooled nature of the $tatistics ,andaay not hold for individual countries.

7~, if the nat\1ral Vl.!garies of the we~ther and standard interna­tional trade were not enough of a problemt two further trade threats have JftMlfested them$elves recenUy: the Al.w!rlcan Soybean Association ,of the United $tates has mounted a ujorpublic caJillpaign against "Tropical Oils" - aupposed1y onhea.1.th grounds (see 'A New Kind of Oil Crisis' in Mi8lM8ek Sept 6, 1987, pp~5S-S7.And on the bealtp ".&sue, the US congressional testimony HR.2148, 10 $ept 1987). In Europe, .~ tlroposed tax on vegetable 011s haa again been UO'.lted.

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A,,".I~St! ~e~ft~, 1989 ,COce_t. l-tOCIIslng l'Ollt;yJ$tbe'tington,

cent ;~t~'ot . an ,avefa9,eanr~4ecli .. ~c~,bout 'tts$11 :perton.8 ''!be ~l'd' trettdl,s .~t4!d.i:n 'the. f4fOrld'~ iro;ectidnawith , .. te~~ e~ted ,in 'tlwl.ate1980 •. f~Ql.l'~ lowpr. ~l) Q! 9,85 Ind ~986. tn f(lot,. ptlce •• tattld,~,tQ .tec()VJ,.11.it&. 1907 .JJld···ar:e l!kelytobe fut:ther ~tI(J ·aJ· '~._ffect. of drQU9ht .,ana. c:yclone$ in the Philippines in 1986/1' dt;t-J.ve~.tl.alt ~layed ~~et. '01\ .world$Uppli~s. GlobalISt," CoPra .is ,a$a-tic ~t.ry'\dt:h'.$t(i.u,lydeeltningJliareof the wotlc3 'fats ~ :oil,_.rk«!t..Xt iI' '11ttlt 'WQJ't4er ~.\tlt 'M$':.~ de$crlbea ~'J ·~t i~t~... .~r:t th& .... t~f~fi9',)te~~tt~te. ~'. ovetall Jif.gnlfi~' .qf ~ta Yitbitt,~ ac.ati(!e~es Qf '1ndi"1~lcount~1.$. _ ;J>I't' '~pi~ . i~igllre.in ~te2 .. ' ,91"4 a . ,b$tt~tlndicatlon o~this, .. J're.h 'n:utllatt .an: ~~t~t ~tCft of fC)Od~. VatNAt\1 te ,an e~treree~., .t~, apcltt :ffCQ ~tt$t. percat>ita~ticn i$ teportecl to' be'. 15 '11i1ltSp'rbqusebQld ,per:aay ,(for 'both h\Jaw}S(6] .·aOO·.livel~"k191) ;(~' 19&GipA! 234;5).

3~1.'2. IIIPOrt ttldtt

!tbe,tearebAl' ,.jOt: cotlcerns \dthb~ effeetsC)ft~~peracl$nc:y QI\: the 11()Ott a1&1 of ·tbetrodebalance. ,and .on .. t:be..lI1ands 'trad$t;'onalpt).lt,lon 'ofre:\ative self ... tell~ce.rlrstt tbt,l=eia 'tbepr¢bl_o!' tbeability of the ,1~landsto eont~ tQ, feed . ,theu~lve •. in· the fac,.ofa Cllanglng populationdf.$ttibution. ?tis wlll~. ,t~~, ~p later. .S$condly ,tbet~ ;18 the i$SU& .. 9fenet91~li6S •. '~solO1bOn l$land8ptov1dea.ne~1~Qf ~. 'tl,ipicalpattemof .energyuse1n ~ Southfaclf1~; t.wQ-Wtd$ o~ the 'tobdffnalenergy ·demand· is met . bylndigenQU$·biomaasin the tot:m ·of tuel.WQd<l. ~'. rest .c~sftcmpE!ttoleu;n~ 'J.bepettolet.l1!t ~l$i1tecmti:~ely ,iapor~ .·and.llc~tfor about ~ntypercentof 'tilt value of !saport$. ~Qn haa incr.~slfi .. ·byow'rn1ne per cen(.p9r ··atu'lUlldUring ·t:h<t·1SaOs (Jalle'iticz~ 1981). Oieseloilaceounte<i for. tllr"quartet$ . of ~ ... 'fuel iJlpOJ:t$ i~ 1986. Electricity in the Solomon Islands is entirely dieQl generated althougb 'the major ~. fC)t .die$e:" is.f<>r 'marine, operations and' 'rQadtr~rt. Typically in .:the islat)d$electt'iclty, where avail"'" able, i8~~natve - tatl9in9 from abOUt;US$O.15to 0.20 per kilowatt hour.

Anene~gy i~rt&!perldency ratio of one third tdgl1t be considered to be quiteaecep'~le, until it is reeQ(Jnisedthatthis third is consumed ,entirellr in theBXiem sectoraf the economy and that p!troleum procluct$ .me up one fifth of iq:orts. '1flus the manufacturing aM transport sectors and the ~lance of payments are extremely vulnerable to any future increases in international Qil prices (Complex Systems 1986).

8 The real prices are those obtained by deflating the current annual average prices ~t$be Manufacturing unit Value (MW) index. For the equation Y .. At! where Y ls the real price of copra deflated by the MUV index, r is the compound rate of growth, t is time (1953-85) and u the err-c)r t.erm,the following re5Ults were obtained:

parameter coefficient Ln A 6.599~ r -0.0144

T-ratio 73.97 -3.15 Corrected R2 • 0.2185

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3.1.,l\ld'.·~

to~ .. 19n Jli~ i~ncy.l.ala(.t ~tt'~ :~ 'tbeSouthPeleific·nati<;>rlS .J:.;~' .~t ,eapltiJ, ;,ecoipt$ are amot19the 'highest in thewotl.d. ,Such ... 1ve lliCl .~~~ ,bas ~eh .t.btt., .~. ~et$e, 'Dutch dit;e",' "ffe~$ on'~e :(ltH/elQ$J"Ant a~ .. A;MjOt .mineraldi$C~ty I rai.sing a.. ,e,ccl1ange ,t:.~ -.nd,._~tL9.1ocal 1ndustti~s l~s$ c~titlve in1ntemational t;8Oe (COle and, P~u:t1 '.986). ,.'ltti.'~d'depeudency"set;'i()USl V .dlstoJ;~s 4Otaest1c faetOr~!f.~tf!r,~lng . agriettltu,re " atel~ti.V'ely unat~ractiveplJe.of $lpl~4nt ,(rl.$~ 19a1:~'\)d' 1986') '.~ ;lilf! t&eremi ttlmr;es()f mig'~t8 ,have the ~~ .,~fUl;~t distortill9 tne link ~tweenproaucttve {tcti vitY 'ana ~t.icn lc#vell tConnell1980}~

A (Jtfat ,~ ob$~r:vets. of the' south 'fac1iitha~9rappl~, tri.·tt\the¢~lex ~'!U8si1WOlved in theec~e 4evel~nt. ·of em !sl$DdS.~re ar~ cettainly no 1>bV1OUSfSOlutions- {Sf!9 s~ '~19aOJ ,warc1'~ ,.l'roc.tQt (~dl 19Sthfai.'tbaitn 19Q5; 6r()Okf1eld~ ~li$,. :WArc;i19SSl CQle;ard Patry {ed) 19,66) Ji eutt'unl.es$ancI'Until tbe~-. island $tates ~nget CI0lfl[ to e~c' .self:...tell.ance, 'they. r~tnQependent Oil-the, ~ll. Qf, a!d dOnO~s' (Arndt 1986) .lnsale' ca"s, ~lioratianor thmsituation is seen J.nthede~l~nt of:' to\iriSll,fisheries ana. forestry.HQ'VfeVer" :tor ·the .9ticultu~a1 ~etQ:r $a\1e$,p!ak Qf ~ "l1eed of rest'(Uct:tlrt-ng ·tlW·JU~¢d ("i.t~nc •. and,qasn ctopping) , ,r;mall.h()ldetfat'l'l$ . t.owa~(ls a 'plantatlm :IddeOf,~~tt (wardetal 1980). ~Aa11ho1derp&aSMt Clgricultute is (txplicJ.tly ruled out as , foni1ng ,~",iable ~&is ,fortuture ~'Vel~nt ($eVele 1980) - not l~aGt bec~seof l~ tm'Wreconflietsbe~n aspiring indiviauals and tradU;.iQMl cl~n netwClrks>.NtWer:thelessf 'the s.llhol&!t& of .~ l'acU!ie i$l~$ have shcWn them$&lV(!s ,Asre$pot1$.ive to et-(JQtJId(lln~ntiv~S$ince ·the Second'Wot;ld~~r (.$ee ,for ;ex&1ple, C~ll 1978, :SOlll\t;d 1979 #Stent 1984, Etherington & catrad 198$ .and·rleldng& itatdaker1986) ,astheircOUl'1t.~tb;irtJ\Sia did befart! ··WW I and Afrlea <ddbetween -,the world ,wats ("9int. 19.64 ,chaj?t$t ,~, J~$ . .1960). ,FO~ e~le, witlU.n . the c~onut ,sector, Ether.ingt<>n ~.~tr:ad t1985; p.88) r..ote the $chievs;entQfsaallho.lderS:in 'the SQlctratIslands in pr~cinq 70 percent of 30, 000 tOnMsof dOp'ra .in 1980 as ,against only 10 'percent of 20,000 tons forty years ~a~lier,. lfQlle excludes tenyea-=stQr: -the. :l.c;t ;of WOrldW~r II ttdld it$ aftermath, the annual rate of increase in product.ion ,l\a$baenover 7 pet ''ent.

II it possible to conceive ofa feasible and realistic development .trategy -wni.'ch .makes better use of th$coconut resourc, and provides a ,JlQrerewarding teturn to the farmers than copra production? 'Ibis is altey qtl8stion. We now tum, to consider SOID$ of the policy issues to be faced in developing such a strategy.

4. ,&\'RIE'JSBEYISI'l'!D

4.1. llaE.tic~<i

~9rowth of domes-tic demand shown in equation (1) can be decomposed into turaland uro.,n cat:pOnents by recognising that tEte total growth rates (of popolation'pr and irtcome'9') are the sums of the rural (r) and urban (u)growtb rates w1ghted ~ .. ~"9 relative size of the sectors. This is done in !9Hs1tion (2):

8

'",

(2)

_ete<~ ,SqD$cript$ It' ancJ.'u'refe,t it.Q t1lr~ and 1lrbanandPt; Pu, Gr, ,~ ·GlI· reter to t.Qe.pr(!pOrt.ions 110 tbetotals) of t'\lral .and llr~popula­,tlQit ,.~ in~ .te~f!tively.

~ ;fanapopulatiOO$ o~the l'aci.fic islanc}s are rel.at;.v~ly well off by the s~rdJ5, .of p1ral ~es generally, so the ;.ncO(Qeelast1cities, of deund :fcJ:: fOod ate likely to ~ law~ aeneeth~ incQ'Qe ef£ectsin equation (2) artt likcalytQba ''Ve~ much le$s 'than· thf.:populationeffect~'IfiEi high proportion of 'tlWpopulation . intheruralt"~etorE1Ir} in .thes$:cQUPtriest ilPli~s that t.he9tOW'th Of rural population -ylillc;iominate mediuaa tem c1cI!aesti'¢. ~ for l\¥)stcountries. l' "w Of these countries haW! 'large l1rban populations.

At ,·the ~ti.tla the gtow"Jtr~tecfthedd~stic '.~ .. for ptll'thaae.4 fc:»Od$ lin ·theurban sector} . can be 'lery'higb because of an initially ~11 w:~lJaS~ t . . high .. rural/Ur:ban wAge, .. differentials. ·ana·tbe bighr:ate$ of utban.popul~tlOtl growth wi ththe .m.igration fromouter: ar:(!as land one m1ghtnote, fraa to\tt,ism). 'In island ecaflOlDies thisiqJli~s the need'to ~lop ~_rketin9 ~tt"lJli$pott infrastructure. otberwi$~, ifl\'Otted C"()nWni~n~ food$ m.ll dc#.dnateurban farkltouri$t).rkets 'ana remove this potentially .important(;ource pftut~,l ilashincOl\\$s.unfortunately" ,it; is. oftt1!Q ve-q ,lI¥.tch c.heaper to .bIport. food. to the major towns of l$,land Niticns than it ista :grow it. domestically and transport :it mthiil an i$lmKl Cit between islands. staples in ,particular are bulky and have low Vf;Uue $0 tllat lnter~islandshil'Jl'ents Will bro! limited. Many are too perisMble to stand slow and ir~egvJ.ar sh1ppin~r (see Dunbar 19.B2for tbe case of Vcmuat\11. 'lbe standarci JDa.rketin9 functions relatin9 'to. fotlj, plaee and· tilDe are exceedinglY difficult . to perform ldth ·tbe· degree of consis~ncy e;q,ecU!d by urban dwellers .'.iU.ce ~tialj.$lU'tends tobave lSbsolutesway. Furthermore, as ur.banincomes increase'9supetmat,ket-tastes f1.lrther di$tat\ce urban consumers frau national fa,tme.rs.

SUch weak actual and potential dOIn!f!stic linkages imply that th~ growth of the major urban markets (particularly the capital cities and significant &!ep-water ports) may not have ·the demand pull on the agricultural sector tMt is a feature of the traditional model of structural transfOD1ation. ~ 'm1r&sing links' in the production and markE':ting chain will ,require substantial investments.. If such investments. alte not to worsentha high wage scenario painted by Fisk (1986), they will. have to be linked to productive activities.

F~on (3) is.a Jrodification af equation (2) and shows the components o ·the· ~ate of growth of the demand for purchases of any specific agricul­tu~ ~ "IClIDOdity (i) in an open economy (Johnston & Kilby 1975 p.67) ..

it _ w1

(pu + ni9g) - wtAi + w]Xi (3)

Here the notation ia the same as before but with the addition of the rate

9ror e$ample; food (16%) and beverages and tobacco ( 4%) make up one fifth on Solomon Islands imports in 1986 (Central Bank S.1.1981, p.xviii).

9

4.2. ;l1tport_tkets

Lar:grt!OIJen ~conauiestsuchas 'l1lailanQwith its 'rice and cassava exports, C;i!n' 'afford' to di.rept theiragricultUJ;al e2tpOrt tradetowzu:d$ l~tc:e wl._ of 'bulkycaJlllOditie$. aowtver, $mall open econcai~~ need to lQOk far l~v()l1J!lW!t. high un! t~~lue export cCIIlI\1Odi tiesailOedat selected ma~ket niches. Three corollaries follow:

firat l the less. (levelopedthe d()me$tic inftastJ;Uctu~et·the ,gteater the need to foatet'the exporto~ high unit-v~lUJ eQIIaOditie$. 1n the islanc1sof the SOUth ,acific, ~rt c~itie$lS\lSt be able to beat tbehi.gh, costs: of intet-island .anQ tranll-OCeanic trMSport. tn ~tHu~alta9rl.cultur~1 c~ities .eting this J;(!qUir_nt .tat, "l~rie$t ·and. will have a relatively higher roe value added. ('lbe export of vanilla .by Tonga iaa goodexcmple) .•

~, tbe JDOfe one ,qan eC01'lC&ically f-cQllcentrate f , orptQttss, & pr«\uet GO .~$ to i1'lcrea.e tilavalueper unitvolUl1'le by ei,that' increasing the value(~tter quality) orr«!ducil1q the vol., the better.

1'J.rta11y, Whete i.rtstu:~ in ·a raw form, it i$mc)stlikely that at. the end of thettade route, th$t is, 00 the motere~te isl8n(is, iwp>ttsub$titution . in the . fora ·of self-sufficie '1:1.$ likely to pay thegteate$t dividends.. 'lhe use of domestic \ • .trgy resources .cather: than i~ttedMl oil is a ease in point.

4",~. Be~;b prlo~it1e.

Are these eonel\1$ions felevant wi thin th~ south Pacific island environ­ment? Of this envit<Xl$ent it has been said that '·cash cropping.s an

adjunct to subsistence fatming within the Ddxed 8ubsistence-c~ab cropping mode largely precludes good mana~nt. Iftheparticipant is content snerelyto obtain, alindted cash inc~, the system may be adequate., lf, however, aspirations are high, productivity pos­sibilities are limited by the scale of operation, even if sound technology is available~ ••• The alternatives open are to specialize in fewer crops or seek increases in the size of the holdings.' (SUmbak in Ward et a1 1980, p.243).

one cannot help but wonder at how foreign experts 'llOUld have advised the Japanese a centu~ ago in regard to a suitable development strategy for their agriculture. t suggest that they would have been astonished to then learn that:

'·One of the characteristics of the $0 called ItJapanese Modeltt is that. the bulk of the nation's farmers have been involved in increases in agricultural productivity associated with the use of iDlproved varieties, fertilizers, implements and other complementt.:y il\~ts within t.Ile almst unchanged organizational fraaewtk of the

10

~nut Pr;oc:essing ltolicy ~thetington

.u.tin9 -""l~acale ~ ma.t (Ohkawa 1912,p,2i1).(My ~S15 ~l.

It il :tc,eQ9td.s~tnat nar:$l1,teaQjU$tment gecisions faT:, Jap.Ul~se~grlC\ll­tut~wt¢e '~volde4 'b1" ~~p iqxu:ts of, staple prochlct~lf)':an , ~ject ·:stater, $kl by ~l.t,r t.p14 j.~triallz~tlon .ichpermtted beavySUbli4ieJ toagJ:itulture"NeveJ!'thel.~S$l , it., ,'is, "important to ask "Wbether ~t is possible tQ .:on.sideX~Yflt.tate9ies for QevelOpl1entin 1!he isl~. that leaves tal*Jst~'smallholder ,fanning syste., ,~t "have 1)een r.ferJ:ed to as essenti~lly 'ten,ainal' (EpS~ln 1963, lIowlfltt 1913, lkM1Qtt eta! 1976" and ward eta! 1980}. It is 'the (:ontentilM of this papeJ: that this ,cOUld be ,possible, for the, CQCOIV)t pr¢duCfJrs ,of tile, ;'slM<ls given ,a radical c&nge in, the sttategic research 1priorities oftbe industry ~way ftana ptQdu~ion orientatiprt tow~M:d$prQCes~tng and .rkettng.

lrt July 1984 , the Second South Pacific IsIAntlsltegional YJeeting ,fot :t$seatch, developaent, .)Ctenslon andtr~inin9 In(;oconut was held in ~tu.. 1be. nine .pages of ree~ndations have but :meshc.rt paragraph devoted to processing and this refers to improved copra dt'linQ .me~ .. MOst other re~ndations relate to various aspects. of f!&ldptQ8uct!on: iq;)J:overnentof varieties ;agrooo1I¥ (plantnutri ti'on, intfJreropping tand r$planting); ~ pe$t$ and di$easesl6 only under fl minot: sub-heading 1(1 tbt!rereference to the n4!!ted to 'undertake resear-ch intrJthe 4eveloptent and· U$e of coconut by-products including feeds,fllel, t.itaber and~encin9 .tefial. t (Persl(!y 1984, Annex E" p. 7). In hisdisCtlSsion of r$se$rd\ priottties on coconuts in the Southpacifie,itaff ~19S4) concentrates entirely on issues relating to the various aspects offield pr~ction. A ,si$i.l~r e-q:»hasis sees to be at lQhe core of t.he FAOA$ia;Paciflc coconut Project (Persley 1984, p.32).

such reseatchrecoauendations 1rrply developnent strategies led by 'SllpPly shifts, that is, lowering axisting farmers' costs ~f prodUction. The frank question DIlSt be asked: are the improved planting materials awl culb)ral practices that $Uch research generat~s gOing to be adopted by saallbolderfarmers while current low priceEI perSist? the answer must be negative, 9iven the evidence for economic rationality implied in the positive response of farmers to price changes (Fletning 6c Hardaker 1986). A 'supply-shift' development strategy is highly unlikely to resolve the dilezrmas of the industty ,1lllch less those of the islands. BUt wcb reconmendations raise the further question: r.ow are increased incentives and profitability to be achieved fat: this vital sector of the island eCQnQmios?

In terms of overall agricultural sector policy for th~ islands, Fleming at al (1987, p.S) have correctly stressed the need for 'improvements in the marketing system'; 'OVercaning institutional impediments to develop­ment'; and 'StUW,atlng rural industries'. These 'key components' of a &llallholder: developaent strategy are seen as t~ecessatY complements to the , Introduction of improved production technologies'. This too is the

10 It ltlay well be that such 1:esearch priori ties were guided by the very high copra prices of 1984, prices which the regional meeting anticipated would continue for aDJUt five years (Raff 1984, p.2).

11

A .• A.E.S.Cotifet'ence, lssa Coconut Processing Polic¥ Etherington

-implication of the 1;aIDe authors 'earlier detail.ed di$cussiQn.of th(! .ritSQf thr:etla1ternat1ve a9ricultural developnent strategie$. Whether tl\ttledevelopf a) around the existing village bal;$d semi-subsistenc, AgcitUlture,. Ql' (1)1 around nucleus-estatesor (c} with plantations, ilrproved.t'k$ting is seen as essential (Hardaker et al 1986).

Fisk makes a fd.lU!llar: pleat

, ••• wi thin thel rural sector i tselt,i t is not su1:ficient to deal only with proble1dS offaou management and agronany, tut th4! economic and social infrastructure, and all the factors that ·contribute to it •.••• ' Fisk .(1986, p.19).

s. A .. lJ?'MNI) .J:ULL S'l.1Wl'!m'

Inkef!ping with these views this paper callsior a strategy for the coconut industry l.ld by changes in processing and marke'ting. While not ignoring the i.l tance of productivity changes at the faPti level (see Etherington 1984), this strategy for both research and develq::ment is, primarily, a 'desatld pull' rathetthan a 'S1Jl:l)1y pwm' .strategy. It is interesting-to note that such a strat~ is ruled out of current assess­aent$ of national and international agricultural reSlearch priori ties because these expli(titly assume static d~mand situations ,{Davis and Ryan 1987 p.9). Li~ewise, and almost by definition, Farming Slrstems Research, tends to omit ~ st:udies from its purview (see Re1net,tyi 1985). And yett asSundquiGt (1984) points out in relation to the United Stat(!s:

''tecbnology ha.J ~\lso changed 9reat~y in those segments of the farm and food system which lie beyond the farm gate. Since World War II this ltpost ha~-vest· or "processing and distribution" Stlctor of the food system. has grown steadily in importance.'

5 .. 1. Sea! tbeoty

In situations in which an agricultural conmodity is processttd into a new form or has improved marketing, such ~s in technol0<311 represent a demand shift lOL th~ pitoducer of the raw material. '!his is clearl~ laid out by rreebaim, OC\vis and Edwards (1982) in their discussion of the research gains in multistage production systems. A sliibtlymodified veraion of their diagram is given in Figure 2.

Here, with the simplifying ass~tion of linear demand and supply curves, the diagram shows the eanparative statics of the gains to farmers (Gfl1 consumers (G) and the aggregate gains (G) from that reduce 'marketing cosb or lCMir farm production costs.. Retail or final consum~r demand is 1'?r. The c®stant per un! t. cost of providing marketing servicel. is M.. 'lhe aerived der.and fer the farm product is D • 0 - M. The 1:arm product aupply curve is S. Wi th these assfimptiofts, the initial equilibrium poSition is where thi quantity of output is Q, ret.ail price is P r and the farm price is P f.

11 'Marketing' is placed in quotation ~rks because here it pools all trans&att, storage, processing and actual marketing/selling costs.

12

r--------------------..... ---_-__ ~--......... - ...... _ ...... --...._ ...... T--__.--Coconut. processing !'oliey

P1pe2

Difltributim of Gains f~ ~09Y ;bp~t in :_keting ( about_reI

CQnsidera ~ lntecbno,lQ9Y in the 'll~rketing' stage. 'l'bi.$ could involve. reduction. in at.orlJC)e, traru.;port,proce$sinq iUld/or di.trl~tiO(l <=osts. Sere the eosti$ redw:ed .. b!t""w' per unit" .1hus the t.ta.il~fara _rgin 'l'ells from M. tG II' )teadlng to atJ upfard shift Of the fomproJuet ~«:c!r: ~rk;fn; !~~~$l)~fe7l)r -H' •. '.t1)e re1Spec;tlv~ 9~inafr:aa

(1) Gal 1;2(1' - P' ·)(0 +0') C' r r

(2)Gf - 1/2(.1" f - Pf ) (0 +Q')

(3) G -1/2 V (0 + Q').

(sbad¢d area 11/11111111

IshO!ded area I\\\'\\\\t )

(are,lmoc ]

A~r of conclusions fol:tow frOlllFre:ebaiJ:n et al's detailed algebraic amipW:.ations, two of .... )tell are blportant to the 1)resentpurpQse. rl;at, both c:o~r. artdfatRet.~Ul gain frca technologl¢al chang~lt. SeeoncU.Yt the gaiL'I to fa~r. is. greater (than the gain to r.:QIlSUaers1f th$slope of the ~1 Ctltve is flattertha:nthe slope of thefaDll\JPPlyeurve •. b authors prove this _tbeJl-.ati~llly in t.etmaof demand. and supply elas­ticities.

·'1beGecatd result is very iat3o~tnnt for the coconut industry oftht SOUth P$ciflc because not only is each natioo faced with a ~rftctly ~lastic deJIand curve, but the ~nole regf.on, with well less than ten per cent of tm.tIBrketfor ~t products {Gee ~le :1> , is taeed -·tri.th a flat c:'leEnd c:urve.. At the aamatime the short run supply elasticities of copra appear to be relatively inelastic (Flexlling , sardaker 1986). In suCh clrC1.mtt)~s aost of tlit,.-s gains from technological change, bft it in aarkllting or in fameosts, Call be to thefatemers'benefit provided the clvJnges do not simply spillOVltr to all other coconut procblcing countries.

In addition to the reduction in "marketing' costst in the case of the coconut industry of the SOUth l'acific, ther, is the real possibility of an upwardshift in the market dnmandcurve (D) with the sale of quality coconut food products (coconut milk, creim, powder etc) and new com­modities (for the islands) such as colI' and activated carbon.

5.2. SUCceuful exaIIIples

5.2.1. 'ltIe Anand Killt tllion

The developnent of the cooperatives of the Indian National Dairy Develop­JIef1t soard is a classic calse of the success of such a 'demand pull' strategy. The Anand Milk Wion initially interfered minimally with traditional ownership patterns and livestock production syste~ but provided the requisite processing channels which later led to the demand by producers for iq}roved n:Ma~ment options. By 1977 the union was collecting apeak (in winter) of 600,000 litres of ndlk a day through

13

Co<:onu;tProcessingPOlicy Etherington

collecti.on centre. with a totallleJlbetsh1p of nelltly 300,000 owning about 290 I 000 buffaloes and 37, 000 C()W$. !lere, basedon the micro-produCer ownin9 only one or ,two 1I11king aniJels,alt lnfrasttucture of collection polntJ,processing plM\ts and, later, vetetinar:y services was developed (Bames 1980). A key,feature waS the !\\lOre) effective use of an existing resourcsbase.

5.2.2. .lteDya .. tnboldettea

1bedevelq:aentof tbesallholdur t.ea indu$try in I&rtya can tie placed in ~siJl11arcategory. Although toa was a new ~$h crop fo~ thefanaer., it was. introduced into the existlngfar,ung structur~.Ctuclal. to the aucce •• of the field activities of the .1~armer&1 was tile &Mtl0(8nt of.. fA CCIIIpl __ entaryir1frastructureofe~tensi()ni the prOVision of plantin~r.terial.B, and of transport, .processir1gandurketil\9 $ervices(Etberl.ngton 1971, World Bank 1982) • 1te rapid illereas8 in smallholderteaprociuction in mmya . was essentially the M:lustment to' disequilibriUJl ~l\1Sed by the raoval of the technical, l~Jal, fimmcial, ana adminis':ratiVf con­straints that fo~rlypreven~ted AfriCbllS from 9rowingt~ea. for tbl international .rket' (Etberingf~on 1973) • 'l'bemarket wan openea to .SII5llholder$ and the mearu;; to l,espond to that market were pltoviOea. 'lbe demand function for the exeellen~t black. tea prQduced by the tm'all.h.Ql&lra inttenya i.e a quantum leap ftOHl the sun-dried, home-made,tea typical of 6pon~lY9rown saallholde:r tea in other countrie. (E~rlngton 1974).

It is not being arguad from the:$e two examples of the S\1ccess of a deund ~ s. trategy that such a $t~ategy. is ca~l.a of 98ner~ ~PP1. icatlon. Ratner, that it is specificall:y relevant to the coconut ind~sttY of the South Pacific. 1bis strategy requites that the coconut paba be viewed as lA total resource X'ather than simply a source of copra. And, as in the Indian itlk cooperative ex~le, such a strategy is particularlyat.trac­tive in lIiUing more efficient use of an existing and widesprElad, although diffuse, renewf~e resource. '11'n45, if effective, the strategy would bave a marked i.ct on the overilll ecor4CDY of many of the inland nations because coconut is both a traditional crop and also an itlp)rt41nt cash crop for.any of tt.:em.. Given the \lbiqui taus presence of the coconut pam in the lowlands of the islands, tbis 8P9roach will link in ideally with a village based strategy for thEl agricultural sector as a whole. ~s is particularly so if new processirq facilities are of modest scale 60 that they are dispersed ~ not con<:entrated at one point in a COJUtltry. AmoncJ the significant features of the Kenya smallholder tea devel.opoent is the location of the tea factorinG in rural areas. The linka~Je effects are substantial and essentially fOlrcecl investment in rural lCoads and the associated infrastructure (Set! ntern 1972, Etheringtot'l 1971). 'Itlis infrastructure is used for many pul'")?Oses other than the transport of tea.

A ' deund pull' strategy for the coconut industry of the islands turns away frOll the defeatist agric:ul tural developnent policiefs of so much of

12 Schluter (1984) in exploring the extent to which Kenya's agzicul­tural development strategy should explicitly seek out hi9h~t income market niches for its vegetables, fl(lWerS, beverages and anirBal pre-ducts, was essentially examining the possibilities of a 'demand pull' strategy.

14

UNA,. %

A.A.B.S. Conference, 1998 Coconut processing Policy Etherington

the writing on tile Pacific !noplaces the islands' agriculture at the leadi.rlg edge. of the tCJtal developa;tent proces~, (see Mellor 1985 in a parallel cpntext). Given ,uffleient incentlves,farmer& in the pacific are likely to be willinrl to iftProve their cultural practices on the existing stockef coeanu,t .pWts and possibly to use new planting ate rials when replantiJl9 or planting new !.e.reas. ('l1le urgenc:yfor replantinq large tracts of senile palB$ in the islands has often been Itrea$ed- see risk 198G tl.25 and rsason 1981 - but for a contrary view for theSol~I81Mds see £1Uterington & Cart&!. 19(5).

~. next $Uba~tive sacf.:ic:m of thi~paperlC".)kl$ at thekeyiaf;Nes that need to be addtelSfJd inimpluaent1n9 a t,!eJandpullt strategy for the lrdwltryin tho light C')fPlst~rlence$ (Jf COCQWtprQCessing in the SOUth Pacific. onthf: .srurface, the past il; n~~t very eneouraging.

6. '.~. 'lUI.8!'1CNDIJ'l

6.1.futAt~

!be worltl 'Bank .regards agrop-=oee$aing ;.ndu$tries al\'the fitst and most natur~ step taAt&s 1ndustrial!zation' (WOrldDewloplftlt RIpOrt 19G6, p.126) andt.be A$ila'~loptent Bankadviaed the 'Hestem Sa!DJn GQveP\­amt that '1ileprOf.."f)$sing ofeopra, tbe'l C()Untty's majoragd.cu.ltural cash crCJl) and export ccaaQdityatpated.a. logical step'. 11lese are the Qpming quotationtJ in a paper by wall (1986) where he presentsaconvlnc-11'l9csse that cepra processing shoUl.dnot ~ Ukingplaee in the islanas. OneCCl'lclusicn il that if the nation11l govet:namts insist on doing so, the proc:e.singindustry'i$ likelyw r~re continuing $Ubsidies from the gove~t exc:bequer .~"l ~rise$ thet general case as to .why ~ country whim axports lA pri~ty product _y not be in a CCJIIpJtitlve locationforprc:cessing that COIII'rJdi ty;

, {\he CO"A'lt!{:yluy not be a coaptitive producer of the product itself; it 'fN!fI.y not pt'oduce enough ~f the product to sustain process­ing; itfltay ~ve factor erdowents inconsistent with the factor requirements of pr.oeessing; it .ybe non-coapttitive in the supply ofotber raw uter!als tet.JU1reclj it 'IIJaY have ill$ufflcient skilled labour to undertake, mana~'p andJl'arket the processing; it may not be abl~ to export coq;N!titively due to transport or marketing costs; it _1' nat be able to OV!~u:ccae the effect Of cartels and 1CSOnQpaoniem, etc; and, there.y be ~Gtic policies which themselves limit the prosp!cts for competitively exporting the processed product.' (wall 1986, p.l)

wall uses such criteria in his analysis of the performance of the copra proce&sing indus/~riea of Fiji and western samoa.. He conc100eS that in both cases

'the industries ute a net drain on national resoutces, making financial losses and giving a negative economic internal rate of return ... 6. It alse" needs to be recognised that both western samoa and Fiji are ~elatively high wage econesies ~ coconut producers. 'lhe level of 8Up[.ort prj.ces needed to pr~/ide an adequate flow of nuts to the mills, 9i1/~n the expectation of continued lower world prices of {vegetable} 01i1, would require subsidies on a permanent

15

ba#d.."lrur:theDlO~e,l Internal. ShiiiJping costs .i:equJ.red to collect the .... tc·f-=ca tb!.'many islandS are anotber~lc1able co#t ,rai_ing 'fact,Qr in tlut· Pacific •• " 0 '

fIn ,aQdition:to bavingno ~titlve~~ge lncoconut pr~ 'tionneitber country has.a cOIlpUtitiveadWntage ill CQPraa1tl,tng. ''ltd. ill primarily ·dueto their tr~rteostdisadv$nf:age. vi .... "!. theirCQSlp!t1tors in the !Min .rlr.ets, and due· to tbeit laCklnq ·sufficient ·technicaland JIlaJlagetial skills to ,tun.anc1 aaintai~,oil. ptoees$i,n9 . ffsilities on the~sisofindigencu. ,!about • (Wall 1986 p.34-5).

:r:n tbe~ti.te par~graph of bis.psper,wall cca!ts to the vital conclusion that

'In -.tiition. totbe for;eign ~ltcbangegaii~ .by qporting1.1nproceuad copra, th<!ckIIie.tiereasources ttsed inprocelling could ~.witd1ed to _UFPOrtpri-vate Actor baud export-orientecl ptcduet.lon.·$Xb t'IppOrb.m.t1ea .. tat .both _thin the COCCII.tt tector If-=eahll.ttll4' COCf'..D¢~,activabid catbOnand .U*r) and fot: alternative ~~leult\lra1 ~roduets " •• ' (~lp,,3s--6, 'ttrJ ~is)

.Here,attM cd. of hisQtudy ,wall recOgnise, that there .maybe .,re ~cuSQ .of<:oCOnUtsthancopraproduction -letaloneprocea'1n9 the ~1)ta. ~ "sontisl eleaentaiasing in Wall' a atudy isa fcil\lr. 'to build Ql MY l'ecogn1timthatthe c~tpalla,as lueht :11 A valuabl. r.lOUft~.se pltenti~ts9t'O$lly unaerratea if it ally .$ftfl ata source of oil (or ~ other lingle useproduet, such al de.lc:~tedcocanut). Cop~a pr~~t:;ion aayhave .ervedtM islandG _11 in tb$·paatbut1t. i, ~callyand~eally an extre2!!llelywasteful use Of the total C)CfJt'tUt t,asource. 'the .losses and tecbnieal inefficiencies of 'C'OiiU prCi!iiCtlon In clli South Pacific include the alaost CQIIple~ wa.~of .~ ~ and shell, and an extreme fora of de-natutlng afresh foocl to ptlld\lce a dirt:.y and'· l:anc!id prodUct requiring COIIiplex cbesdcalr8flning to obtfoiJ1 tb& pute blanaoil requited for fOOd and industrial _r:ketJ;.It 1. ha~y surpti$$ir4 that Jose RoM!ro, tho headof the PhilipPines Coconut J\utbor:lty aairltbat. 'tbecopra ptOCe8S, the .,.tprild.Uw in ·tho _1:14 "'.-l.~ to tba .~. age. It involves aflatoxin contmdnat.ion and reduce. tM! value of endprcduct8 for the producer who ,has to carry the adattional I%:oots bruugbtabout by free fatty acids, high .,iature content tend heavy !~l!i.i.ght. ~tsl~' 14(Keynote &ddress to the ASia and Pacific Coconut eo..m­tty,. .!lIly 1981).

13 Bather than the blame reSiding with the tecbt.ical and llanagerial skills of indigenous labour, this is testimony to the negative iJllact on these aocieties of the permanent emigl'at1on of .-rw i,landef.'swith ·precl1lely ttsr.e&e skills. In 'l'dnga a sad joke is voiced: t.he be;t $1d tbf1 'WOrst.·TQngana live atbroad, look for them. in the e~ecutive offices and the pr,iacns.

14 'In ~trslian terms, the parallel to the copra trade would be 1f the annual offtake fx:Q&\t the ~t.i!mal flock of &OllIe 160 1\111100 $he<$p were aU slaughtered ontMfarms and the _at sun-.-dried. '.this seat would be tbenexported in bulk to ~rope, Japan and the united states where it

16

, ( ; "1 , . .

,f,i.2. ttWJ~ re-e ... IDICI

'~~r.:,3 oatll •• :~ofthepotftt1al pr:~. and'irduJtriel'that 'ean be 'dem!lQpedftaathecaconutpala., 'In, .,.t-Of ·thelal~, 'prOCft"~ i!'9' ,,1. lUdted 'tQ ,tbose ,prQduCts ,above ,tbedottedline. Strategic p1~ing 'an<l,-=esercb tlnd daVelopilltntfor "t!'ttt, future of tIwI, coconut ,Metor -.,u:stkeep the 'toW,reJOUrce'perlp!Ctive of figUre 3 clearly in ld.r41n q agenda for: .deVelQPllll!l\t.,

'lb\t,~t .~ 18 ~'a1 aacng'por:~al ftUit-. tres, in ,tbefYagularity' QfiUprQduetion. , AlthOugh the _turaticn ofHc:h b:nch of nuts,tak ... ahQutfourye.r.j • newfl,ores<*lCeis ~productdabouteveq , • .)nth ;(l2ta 14 per ye_r),. , lUa:the....,r., "tt..t:ure '~nttt ,r .. lnadQ~t- for up to alxweek.\ \fte,tit, fall'or, i_C\tt 'Clown' (adld 1974) .1'ht~ ',4aPllOCY ,1f .x~ '~.,nuta ,baWl bun,,~tMd in ua _ttlr. '%be ,nut; ,11· extr-.ly .11 pr~ ,by the bQIk, itflcatJ Md ~,bebaa(ll" ~'QU9ltlY. , ' SUcb, '~fl9lll.r'pr~'on 'lnCl·, excellentltoragequaliti •• 1na taw .. tectal are iiIp()~tfor the~-=-,offood proeu,lngt .b)ckpll.lngregUir ..... ts .~.Idnira1 .. t(b 'and,acuato.1Hdpl~t ,~tUn,athigbcapacltythrQU9haut thtyear. rurtMQlQr.,..-ay' of 'tbt coc:omlt.prC>duet.,' 'can bePL"OCb:ed jointly .a"" .te highly CCIplaentaryWith, ,eachotbir. To 19noresucb ~ltllltntatlti..l.to iIIpoa. ~,.be~ CO$t penalty ·en the1tdlstry.

Uw'current 'Wltageof .biQUL,powetreaourcesilluatrates tbesitulticn. ~. 3 giws tlle"a~~urage eight .of tbe 41ffetent~" of ~ CO¢OIlOU deliver;cto the·cMliCd.ltecl ;c:oconutf~~~1". '1be ... _taldardenergy convetsicnfactor.fora tc;Jntteo£c:oconut husk (fibre 'ancidust) ana .• ll are O~41·ana.· 0.51 ~s of'. 011 ~~ent( .. .LO£) ,toapecti."ly. aw. 'hRtafe Qf ,_tw:e .~ should yield6,'CWO to 20,000 nuts ,pet :,::e"r lIitba total weight of babl!aen ·ahoUtS ,Md.·, '-7 tonne. 91Vlng'betwen 31>3 Md',11 toMe. of' .husk ·ana· .aboUt 1.2 to 4tonneliof. abel1.'!b1arepreaents bet.wHn~t2 :and 6.5 ~ .... t ,~ 'plr ' ... ~ Very 11tUeue 18 .. of this .. rgrin the.i.laildl -ldJAtabellla, UHd, is butntfor c:cokin9 and for drying tSQae of the copra.

[table 3 .. wei91t of CoIponeQts, of a !)pial! ox:cx.lt about here t

A Jpecific 'XUlple better illustrates the .• &1109 of these nuJilers. TcInga hasa~.t copra Jaillingplantwbich operated ana 24 hour schedule for 248da1l in 19S6. It processed nearly a,ooo tOll113s of copra uaing 24 Ii. t' •• of diesel per hour plus electricity frca the Min grid (generatad \1d Ul,1aIpQrted diesel). 'Ibis Jeans ~t the total fuel ·used was about 345

would be cle,aned, rehydrated, deboned, lIinced and canned as pet-food. Highet valuet QeS (cuts of the IIltton/lamb) would be ignored ancl the wool ancl :hides \IIQUld be thrown away or bumtto assist the drying procesi.

15 'Wcx:drOPf (1919) # lists more than 360 uses of coconut of which about 200 relate to food use.

17

'.rQ&. (,for ,C) ,b,illof ,over$T200,OOO for theYt~1;or $T25per tonne ,of,cop~~ P1:oetllua). 'lbe~t'9f . available ,in 'the husks'and shell$ of tJte nutJ ~. ,.tQ p;odUce8' .'thoUs&nd tonne, •. of copra, ,is 12,800 !roI.lJh1s Cliff.rence 1$ 1I1nct. boggling. It repre~t$ ~equi.valentinenftt-gy tem6 ofO'VE!r 90 t 000'1»(r.1& Of ,crOOe .oil per year • "Nd' this frCl$tbedisca~ husks and shells of tim ,nuts needed to produce onlY~tOOOtons of copra. $W:h re$QUree.,can be used: Levers., $Ola.r4 at: the .largeplantat.i.Oll$ on 'tbeB.UiHU t$laiiliha~ r~ce4 ~ir COlts of copra dcying, frQll$50to $10 1"'" '. tQilPe .h1sWitcbitl9. fr9Bdieselito, bioaas$ driers. BrQOkfield rctpotts on an,~st:ate In' Jriji Whicb Ins~leda$te~btated copradrler which 1., linked, too. ste~ngine,generat.orptoducinq ..,lectricity aaa,b.Y'­ptQduet.. ''!be fuel . U$ed .il prbaarllybUsk and Jilnel1 (Brookfieldin 1'$"ooltfl.1detal 1985,p,204). Mode.rnactvances in COgeneration and reciprocating ate_engines pr~se *lehgreater fUeleffleiencyin the · "~ situatiorls(xanaffet .al 1987).

7. CXJI:tDU(J$

'TbePQliCY~rspectivePtesentedintbispaper atguestliattbereSOUrce e~ts oft:he islandJ1(ltions of the Sout:hPacific require that tesearch and· ,devel~ntin tMc()COnUt irdustrybe redirected traa fleld agrbr)Clly and breedi.ngtQward$iq;>rQved 'processing and marketing.. . 1\ &D at.st concentrate OIl4!txportproducts ofhigll unit-value and onilport subatitutlon at the 'tbiestic end of trade routes. BUt SUM~ps~t be witlUna totalpoll¢y 'frpewor!tincotporates thtt~utM¢tor .~ tbe 1ndivi~national economi(!sasa whole. ~reare major eapl~t anel balance of payments iSS\1esinvolved.figure3 show'$ a galaxy of ~rtunities. Initial fieldwork and teviews of~\ literatureJUggest tbatfot the IslandG ~rac1i¢i,\l break must come wi·-th theproce$$ing of fresh .turenuts unders(XDe fOgl of 'wet' ot:'~!$' ,pracessin9 (see Hagenmaier,1980; Banzon ttl ,l 1982; WItlO/lOD, 377 Vol .1V and v) for fOod products (tf ~rtquality. To elCploi ttne ~l potential of suchan approach theplantJllUSt be an integrated tmitmaking concurrent \lse of the s~ll and the husk.

·nte technology already exists for 'aqueous processing' for products such as virgin caconutoil, coconut cream, coconut 'milk', spray dried powder and, indeed, desiccated coconut. Processing plants range in size frau village level units handling 2,000 nuts per day in the Philippines(ATI 1981, .RuqUi 1986) tomssive operations in Brazil handling 220,000 nuts per day (SOCOCO, no date). &my technologies exist for hcmdling husks and shells for fueland/or other purposes (see 0000 1980, Jaonan et al 1986,

16 such calculations when grossed up for the Philippines are indeed i~ressive and are even ~re startling when it is realised that the regularly falling petioles (fronds) represent note than as much ener9Y again (Banzon , Velasco, 1982, p.309).

17 As Wall {198S) has shown, some of the trOre advanced island nations have bad .. fficulty in processing copra for crude coconut oil. '!be Islands certainly do not have the resource base to follOW' count!: ies such as the Philippines along the route of sophisticated further processing of copra fo~ , cococheIU.cals' ..

18

ateag-o etal .19$4).. .. tn,*-,ta~ . processing' poleS .,'JOany ·~sticos for tb$ l~:"'t.ar.theapprO!lriate prOduCts. for ,tbttillariClJ ,toprrdUee .. ana for ·Wb!dt_rket.s?-.t 1, ··tbe ,$pproptiabt .. iJizeof:proce.,.1ngunit1 CQuld \ln1ta, be de.l~ toile located in prov~ncialgr~centrt\!B ,10·" '~ pr;ovidef lQCal. ". Ikilled .-.pl~t ' .. ,ana cheap~r .fQrother .rural prOCfJGiillg' incm.trJ.eJ? 'WOUld.the. e~e. .ofsCJle ,1nproduclng.aa.ny Dallar pl.ts.t .lll8m,,- '~ntr~iDCl .• 1nt~ crew) "(f$Ultin gr.ater benefits:~ lawer~ts Qfptodqction 'than .~ .. 1argtJ. ~ff, cent~laed pl~t? .. Would a caJliblnation of. plants'be .PQlliblet ,with.- set of .-.11 t:Cf9i~ 'pIanbt ptodUcing 1*~~tsSl11teQ t0ftjrtber Cfmtr~iaedproce.a­in9 (for eQ1lIPle,charcoal :~' ;activated: ~J;bOn)? Wbtch way'do ··tbtt . .xJer;n. developl!rttJin ~(aneteChnolagy (JQne"1~S7;cJel.J<oAridetal 1.~86li in'~ratlon, in iJaproved ga.lft'.tsU'Ol~ «!t al1983), in 1U~ro-~ pJ:oceaaora,. in ,contaiMrizatiQl'i(QroQk~ield 1984} 'cmdin ·«tt$l-gOi119 cataaranstip·tbebal~? 1beseancl. -.nyotherqueatiil)DS 'need~t­i.ng •.. 'out ·of ,the llteraturo,-,view ,~.kncMledgeof tberesou(ce bale of the·l,landl8pec;ifi(: 'qc:bnical ·ptQbl., r.-dtO·.be identif'iedand be~ the· IUbject of detailed r~"aJ;c.b.

'lbi ••. papet .bas not6OU9bt to ~rthe. ~stlons bUt: rather .tQaet the .tage andp:>M ~a ,.challel;~ for .a ... radicalreconsidEtration ofte .. ar:ch pr:lorJ.tie. fQ~ the ~tindustriesof the, .$OUtb Pacific. AUStralia 1s pJ:obabl)' .~ttet pla~ than . .any otheraic:l dOnorc:QUntry to Met tlds cbl~llenge and '~J:~e6Uch.resectrch.

19

"",",,(, "J , Ell!'!

Ether~rtgton

.A1'CC:(1986) ,. CQcQmt. statistical Yead)ook198S. Jaxat ~.atAsia ~·Pacific CdCQaut eoa.mity,w

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~,~. (1979) • .Agr!ctiltura!prQj6Ct deslgnaD!leval~tlQllinan lal.an4 ~.1t'f. 'Monograph .15 •. ANU,Canbetra~Dev~l~nt St\dies Centr:e.

BBtJ\G,. G .. R., ~, .A.f., :PADDCN,A.li. " lU)BINSCIf,A.B.(1984). ''lhe ,Qesigntc()nstructionand operation of a unit for the carbQnisatlon Qf ,coconut shell w;i..th recQVeryof waste heat .. ' ,~rtof the YropictAl Devtilqaent. $tXl,_search lnstiW,b!, G1Sa, iv+18pp. London .. April.

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CDt'!'EU\L SANK OF THE ~ ISU\NDS (198'l). Ann'tJal Report 1986. Honiara, Solomon IsIMds"

CHAMBDS.R. (1978) .. 'Tcr4rds rural futures: An approachthtough the planning Qf technologies. ' OisC\1ssion Paper 134, Inst! tute of DeV610pnent Studies, university of SUssex, Brighton.

(lfILD, R. (1974). CocalUts Second Editionot LOndon, Longmans.

CHENEl\Y1 B.B. (1960) 1/ 'Patterns of inCiustri.al growth. t Allerican Eccx1Caic Qeview. Vol 50 (Sept):624-54.

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20

·Etherington

. ~ ~ b$FARat .. ·.~(lg8~).,.eeyood 011: th(t tfi(eat to fdana fUel .~; the «aiDg;~~universityof NewRalnp$bire ,"Bal.linger 1?u1ll1sblng:Col'

~'. ,3 .... -(lS78)·. 'traia lUlong ~=. t1le~luti.anof ~i~tw:e in· a SOl~nllmlClsc.r.-i.ety.MOnograph 12.ANt1, canbetl:a, .Pevelopnent Stua!es Centre.

~,j .. <1980l. t Remittances I( t\1ral d~velopnent: migration, dependency & . inequality :In . 'th$ .. SO'Q.tb Pacific .. " Occasional PAp'r NO .. ~22. ANf)'tcanbetra, J)evelopnent Studies Centre.

tcR$LL, :1.(1983). Higrati(ln, bpl~t' :Devel~ in tbeSjl~$c:J.fic. VariC)us COQnt~studie$.NoU1l1eatSQuth pacifie CamU.ssion'.

cm~, G.R. , (198$) ... ' Agricul.tural.ee01Q9Y and :farmin9S!.,:st~ research .. ' in ~. 1m» (i985l .

MVlS, .J"S.,and J:1Y1\N, J.G .. (1987,) Ii> 'l'rio;d.tyassesSJl(!rtt inagr!QUltural. r~searclulntemat.ionaland' national' perspectiv~s.' Contribut¢d pape.r ... AUStralian. Agtiqultural Economics SocietyConfetence, Mela1~, rabruary. 37p ..

IYlVIS, ".'S. ,OIU\M, ,~ .. A. and RY1\N, J.G .• (1987) .. AsBeSSMDt ()fAgricultural _1$Oa~cbPtiorit1es: An IntemationalPet:~qtiVE).. Monogta~Nb. 4 AUstralian C6ntrefor I·terPgticu1tural lle$earch, canl:Ier:ra, AUstralia ..

del ROS.ABIO;E.J. f PAPA, G.M., BERGCmA..H.A. &m:yES, C.S.(1986) .. 'CDnc.entrationofcoconut water by plate-and-frame reverse osmosis usingcell\Jl.ose acetate mambranea.' ~··toed Journal Vol.. 2NQ. l~March ..

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~, D.M. (1971). 'Economies of scale and technical efficiency: A caoe study in tea production'. Kampala, East Afrimn J. of Rural DeVelopaent. 4:1p72-87.

~, P.M. (1973). An Econ.cEtric Analysis ofSlallbolder Tea in ~-a. Nairobi, East African Literature Bureau.

E'mElUN3l'CN, D.M. (1974). 'The Indonesian Tea Industry.' Canberra, Bulletin of Indc:Jnesian Econcaic Studies. 10:2 p83-113.

~~,D.M .. (1984). 'The design and economic evaluation of ugrofore­stry technologies for the South Pacific.' Chapter VII in Schirmer, A, (Ed.) '1be PDle of Aqroforestry in the Pacific. (DSE, DOC 1233). p.71-SS.

21.

~therington

~~/J)'.M. &,~t B., (1985). 'Production policies for tre, drops in .the: \SoUtht>aclfic:,C011flietsor, inb,rest" and ,perception in :i?~pua tieW' Guinea and, tbesolarcn, Islands .'ftee CrQp6, - ,84: GrOWiOg~., Proceeging$ofthe ,Sf1!cOfid ;A'tlsttalasianCOnfer~nce on 'l'{$!;andNut Crop's.Sp~ingval~; Victoria, Natural Resour~es con$e~tipnL.t!ague! of victoria. p.87;"'101.

tAlB$URN, T .I.J.. (1985) .1slaQd ~es: Studie$ frOll ~htb bclfic.SUva~ IQ$titute of Pacific studies.

nl~K, E"k.(1962l 'Planning in a primitive econOlI¥lspecial problems of JJ~pua ,New Guinea .' BcOncaic~)J:di 38; 462-478

'InK, E.K. (1964) 'Planning in ~ prj.ndt1ve eCQnomy; from p,tre sub$b~tence to proc;lUction Q~a trlar.ket sut:plus. t ~c~rd, 40t156-t-174

I~I~SK, E.K. (1971), 'Labour 'absorbtion capaci40- ... i ~.ubsi$tence a9rtcultur~h' ~c BeC(u:u, 47:366->378

'Ins.!" E.K. (1981) 'Aid in the South ,Pacific; ,too much or not enough? ' Seminar paper; .. AW, Economics Pept, R.S.Pac .. S. 17/3/81 2.4p

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J?tJ!2Wl;, S.M. .~~, J.B .. (1986). 'AgJ;icultut'alsupplyre:$pon$ein the :Sou.th J?acific. l:egion .. ' IslandsjAustralia Working t'aper No. 86/1.6 ANtJ, Canberrat National Centre forDevel~ntStl~es. 39p.

~i !.M.'~I J .. B. and JC!mS, S .. C. (1981). qAgrarian Develop­ment strategies of South pacific Island Countries,' Paper presen­ted at the Australian Agricultural Economics Conference, Adelaide,

-February.

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FRE!BA.IBN, J.W., MVIS, J.S. and EJ»lARI)S, G.W .. (1982) .. 'Di.stribution of Research Gains in multistage production systems.' All J. Ag Bcon 64:1, Fe~t"J.:ary p:-S9-46.

m\GENMAlER, R .. D. (1980). Coconut AqUeoUS processing. Cebu City. San Carlos Publications. pp. xi + 213.

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22

COCOJlut Processing Policy Etherington

BA1~, 3.9. and·~f.$.M. (1986b). '!'oliey is$Ues in agricultural markl!!t de\welopnent in the South Pacific region. ' tslands/AtlStt:aliaWOrklng paperNo. 86/17. 49p. ANU, can1)e~ra, NatfOQalCenttt! for PevelopDent StU(iies.

1~;D. (1913),. 'Terminal developnent: from tribalism to pea$aAtry,.' -in aROOItFIEtaD t K. (Ed,. J .. ',dle1'acific in Transitipn.<.;eagraphical PeE'~ive. on ~Uc£';and Cbange. New york: .$t Mart'In'S P.

~,D.·,HIDS, R., & ~,E, (1976). au..bo: lSSU8,; inr,evel~t. ~rra,Development Studies Centre Monograph No. 4, A.N.D.

liOYIS, 8.S". & HIt.LING, D .. (eds) (1984). seaportsystea and S'eati~ change .. . LondQrl,. JOMWiley & SOJls,Ltd.

JASlmiICZ, J. (1981). 'Energy con$ervaion issues in fiolQl1On Islands •. ' Restrioted report for united Nations EconomicC~$sion for Asia and the Pacific. Honiara, sol~Isl~s .. April ..

J.AB.Mi\N, e.G., & ltOPPINS,S"R.J • .(1986). 'An industrial profile of coconut fibre extraction and processit1g .'Report of the TtopicalD?velop­sent and Research Institute. Gl89, viii+l04pp. tA>ndon. Oct.

JOHNSON, D.O. (1987).. tWorld agriculture in disarray revisit~.j:lenal=Y paper presented to the AUstralian Agricultural ECor~cs Society Conference, Adelaide, February.

J~, B. and KILBY, P.(197.5). Agriculture and struct.ural Transform­tion: Economic strategies in late--developing countries _ London, Oxford university Press.

JOP'4m'IGf, 8. and MELLOR, J.W. (1960). 'The nature of agriculture's contributions to economic developnent. t Food Besearoh Institute Studies 1:3

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KNmFF, S., INA'LL, E.K. & WHELAN, R.E. (1987). 'A range of high perfor­mance inflow reciprocating steam en9ine~ powered by solar, biomass and other sources of steam. ' paper presented to the ISES Conference, Hamburg, September.

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LCH:;WO;RTH,J.W. (1987) tBiotechnology - Scientific potential and socio­economic iTnplications for agriculture.' A paper presented to the Australiart Agricultural Economics Conference, universi~ of Adelaide, Februa~ 1987.

23

A.A.B.S. conference, 1988 coconut Processing Policy Etherington

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HYINT, H. (1964) .. '!be I!:concBics of the Developing Countries. Chap 3 Lordon, Hutchinson & Co ..

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24

qr rwwzas - .:VI r •

coconut Processing Poliqy Etherington

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lterlJa. Paris, Developoent Centre of the OECD.

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stRQ.JIST, W.B. (1984) .'Technology and Productivity Policies for the ruture.' PalllPhletNo 4 of a series on'~Farm and 'FOOd &"yStem in Transition; Emerging POli~ Issues.' PUblished by the Cooperative Extension Setv'ice I Michigan state university, Michigan.

WIOO (1980) .eoc:anut Proces$ing Techt1ology IJOQamts. Seven volumes. tlnDO/lOO.377.

tmLLl D. (1986). 'CVConut processing, in the Pacific tslands.' Islandsl Australia Working Paper No. 86/18. ANU, canberra, NationaL Centre for Develo~nt Studies ..

tZARD, G.R. 'PROClT)R, A. (ed. )(1980). South Pacific Agriculture:OIoice. and constraints. South Pacific AgrlculturalSUrvey, Canberra, AND Pr~ss.

iUU:D Bl\NK (1982). Cantrol, Accountability, and Incel1tivesina successful developent institution: 'lbe 1bmya Teanevelqaent Authority. staff working Paper No. 550. Washington.

VQ\LD Bl\NK (1986). Price Prospects for _jot PriJlary 'o.aodities .• Report t~.. 814/86. Vol II: Food products and fertilizers. washington. October.

25

.. -"

2.2 .r :ZIP. nr

A.A.E.S. CotlferenCtt., 1989

Table 1. ~cand inCc:at indicators

South P~fiC::ItJland NatiOll8 1983

<ii<>.

POpUlatlClO Dar.$ ... t:.. 4/Pt GNP* QI.J ll}$r camtry 'l'otal ~'Otftb (~Qlt.io CI/pita.

rate per 1a2)1980

( '000.) ,a no. ,6 $USa $US

.CookIslands 22 92 20 909 I'iji 670 1.8 37 61 1190 1176 FrenCh Polynesia 154 41 1260 8182 Ri£'iilati 61 aa 30 492 Nauru 3 143 70 23333 New caledonia 146 8 1140 1808 Niue 3 12 3 1000 Papua NeW' Guinea 3190 ~.3 1 88 2510 787 SOlCS1Cft Islands 254 3.5 9 90 160 630 Tokelau 2 200 1 500 Tonga 104 0.9 149 68 80 769 TuValu 8 30& 4 500 vanuatu 127 2.8 11 82 8f) 630 western SU'tOa 161 0.6 55 77 11.9 739

TOTAL 4905 9 6'661 1359 IIZIII ia,\'J •

SOUrces: statistical Annex Pacific EcQnaIic aulJ,etin July 1986

a Lucas & McMurray (1986) and McMurray (198~)

b prjPt is the ratio of Rural to Total population. 1bese

u_

are 1 - the urban ratios 9iven in Ahlburg (1986) Table 11, p2S.

• Although the figures for twP are given here, it is the opinion of many that they are of little use and very misleading.

26

A.A.B.S. Conference, 1988 Coconut ProcesSing Policy

Table 2. Popilation andCOCoout Statistics for Selected Countries, 1985

Etherington

Popilation CCcoIlUt PrQcJuction COcanuta zstiatedBxport COConut ViUue of IXP as ,

RJt COp~ pet COCoUnt 'COCCQlt '1'otal aid-1985 Fqu1valent apdva1ent capita area PJ:cducts Dplrts

(mJ.llions) (lIilliortsHOOO ton) nuts (OO@ hal fit US$ FOB , AK'C* .CXDrl'lttBS ltl96.SS 33159 6339 30.79 8986 1003.26

India ~ 792.92 6887 1028 8.69 1193 24.36 .28 of which

Kerala 25.5 3395 507 133 689 TaailNadu 48.4 1627 243 33 153 brnatMa 37.1 1011 IS1 27 194

XndOnetJia 16$.15 9050 1810 54 .. 80 3060 149.55 .80 Malaysia 15.28 1165 221 76.24 315 51.43 .38 Papua New Guinea 3.26 1255 250 384.97 241 58.30 6.34 "Philippines 53.35 10749 2051 201.48 3275 551.95 12.00 Soloer.on I.lands .21 209 46 782.17 63 14.56 22~60 Sri Lanka 15.84 2958 601 186.74 419 119.75 9.00 !tbailand 50.20 706 200 14.06 .281 9.37 .13 Vanuatu .13 402 56 3140.63 69 12.35 68.00 Western .~ .16 248 50 1559.75 42 7.35 33.39 t .S.Mi.cronesia D/a 60 12 nics 14 1.40 n/a Palau n/a 70 14 n/a 14 2.89 .n/a

c

OTHER PACIFIC (1983) 668 134 n/a

fiji .67 263 5l 392.54 Tonga .11 69 14 627.27 Others n/a 336 67 nja

0l.'H!:R ASIA 1983 804 161 AFlUCA 1983 1943 389 AMERICAS 1983 2524 50S

TOTAL 39698 7528 • m~_~·~~ ______ ~. ____ ' ______________________________ L

Source: Mia and PAcific Coconut Ca=unity ( - .. APCC), Coconut statistical Yeatb:lok 1985. Jakarta, November 1986. Various tables.

a To give average figures for the whole of India is misleading since ~rly 90 ~r cent of production occurs in just three of India's 31 St,at.es:Kerala, Tamil Nadu and Karnataka. 1111.' state )?OpWation figures given here are for the 1981 census so the per capita production figures are only a rough guide.

27

·- 'If~'

A~.$.S. Conferenc;e, 1988 coconut Processing Policy

~

08lJcamt: aJSk'!1r Shell flesh··

weigbt (kg) .55 .2 .4

Per cent 41 15 30

"a. third oftbe husk is fibre and two third$ is dust.

** ·me· flesh (endosperm) is itself 50\lllDisture.

I, ...

rrigure1

I .t .1 .t •• I , , ,

Etherington

water '.to'.D\L

.18 1.33

14 100

O'l:~~;-~~~~~~~~--~~~~~ ____ r-~~~ tN I'" t_ 1., 1- 117'D.176 1_ t-. ... l_ am t

- ~ eY r"'U'~'NUHQ \lilt 'If'UE ttIN) ltUX --O£FiILtElJ tty us ... t'Ef'LfmIt

So\U:'ce: WORLD BANK (1986)p.284

28

coconut Processing policy \EtIu!t'ington

ri~2

Dlatd.but1CXi. of Gfd.na. lEca .'l'ttCI:I.,logy ~t1nlfatketing

'R ~

t'f ; .s

1'f

o Q Q

Qu.Q.nttt~ of {4Vl1\ o .... tr-l .. t 6I\C:lrttrt .. \t O&tt,tLt (el.e.t1n.4ld il'\ WrJ't s oJ t<t'"" ou.tpu.t)

29

.,

&Q • -Etherington

"

7P1U1

·A~ /~mm& ~~ ~ :~/T~'-.. f,::--- ~~ · ~

com .. ~. .. :.~ ~ • • CAlUOI .'. I'BlmLlUR II

.. CXlPBA.. . .

ltSbredd1D9lt • • ~

Ultra fine •• _/_ _ ~

I Shred

ILECTRlCtTY EDIBLE

T~c OIL ~ KIId{ ~~s: ~ER OIL /01: ~ , ~ GLYa:RQJ:, DETmGEN'l'

I ""DRY FOOD PROOOCTS PROCESS-

~ CREN4 ETC

BBIT iEa r I~s:rm BP.lXJ!S I P.OPE I RUBBERIZED

CCJOETE I com BEINFORCING

VEHICLE! AIRCMFT SE"A.."'S

Notes: Products are given in UPPER-case and processes in lower-case letters. Dotted line shows level at which most island processing takes place.

30