The palm oil industry, which catapulted Malaysia and Indonesia into the global oils trade, may emerge as a new lifeline for the troubled island of Mindanao.
The Philippine Coconut Authority (PCA), the Southern Philippines Development Authority (SPDA) and the Mindanao Palm Oil Industry Development Coordinating Council (MPOIDCCI) signed a memorandum of agreement (MOA) to fast track programmes for the development of the palm oil industry and the private sector's commitment to invest in palm oil production.
PCA administrator Danilo Coronacion said that the country presently has 19,817 hectares of oil palm plantations, producing an average of 54,333 metric tons of palm oil as against the average consumption requirement of 94,400 metric tons.
"The increasing palm oil needs, particularly in the fast food business and fish canning industry in SOCSARGEN, have further amplified our need to import palm oil that depletes our meagre dollar reserves," he said.
Coronacion stressed that in order for the palm oil industry to establish ground in the country to be self-sufficient by 2010, the government must engage the participation of all stakeholders and appropriate sectors to formulate and forge consensus on a policy and strategy framework on the development of oil palm industries.
"By 2010, we should have 35,315 hectares of full bearings palms complemented with seven units of oil mills with a 20-30 ton fresh fruit bunch (FFB) per hour capacity," he said.
However, Coronacion emphasised that the policy and strategy framework must include conditions that may adversely affect the environment. Such conditions include that planting oil palm shall not be done in coconut areas; production in areas covered by agrarian reform and ancestral domains shall be under a contract growership scheme; identification of market niche for palm oil, like for food use to minimise competition and provision of complementation scheme with the coconut oil; and monitoring and regulation in the use of chemical input.
The PCA and SPDA have identified some 447,000 hectares of potential areas in the Mindanao and Visayas region suitable for oil palm planting.
Foreign investors from Malaysia, who recently visited Mindanao, categorically affirmed that the region, compared to Indonesia, is an ideal location for oil palm projects since Malaysia's available lands have become limited.
At present, Indonesia's peace and order situation and investment tax policies are also discouraging further investment in palm oil development.
They indicated that Mindanao has a favourable investment climate with clear land tenure arrangements, competitive labour costs, consistent and predictable investment policies, and sound bureaucratic processes.