Monday, September 3, 2007

[PBN] The way forward for Copra Sector in Fiji


Monday, September 03, 2007

IT has gone down in the history books of Fiji as once having been, next to sugar and gold, the backbone of the economy.

But it failed to bounce back and was soon replaced with tourism. The demise of the copra industry has left a great open agricultural wound in Fiji's economy.

The country is reminded of just how deep the wound is whenever import and export figures are highlighted.

The Fiji Islands Bureau of Statistics recently highlighted a survey report on the analysis of poverty in Fiji which comes as no surprise. The report highlights that those residing in the rural areas are the most poverty-stricken groups and more Fijian people (32 per cent) are experiencing "effective unemployment" than Fiji-Indians (22 per cent).

To create employment in the outer islands is to return copra industry to its glory days.

About 100,000-plus people today still depend partly or wholly on the copra industry for their livelihood. The average income of these people is the lowest in the country with an estimation of less than $500 per household per year. In the 1950s, the coconut industry produced more than 40,000 tonnes of copra a year but today, it barely produces 11,000 tonnes despite creating the Coconut Industry Development Authority (CIDA), which is a statutory organisation established in 1998 to revive the coconut industry.

CIDA has been in existence for about 10 years and so far, the production level has not increased despite taxpayers' money being sunk into the institution.

The copra industry has not modernised with time as seen in other countries. It operates in the similar manner as it did during colonial time. We are still talking in terms of copra rather than the whole nut concept which has been embraced by many countries to truly reap the benefits from this wonder tree.

The copra industry in Fiji is barely surviving because of lack of attention to the many problems being faced by the producers. We need the copra industry more than ever to move toward alternative fuel such as biofuel as a response to recent increases in fuel prices.

Vanuatu is already using coconut oil for its biofuel. Why can't Fiji do the same? Recently, the producers involved in the copra industry decided to raise their grievances with the Consumer Council of Fiji rather than with CIDA. It must be noted that CIDA is the regulator, buyer and miller but it has done little to motivate the copra farmers and take the industry to greater heights. The Consumer Council wishes to highlight the plight of the producers by looking at the problems encountered by the producers along the supply chain, that is, from the farm to the milling stations. The problems faced by producers are many.

Weight of copra

The final weight and grading of copra is done in the milling stations in the absence of the producers who have no choice but to accept whatever payment is made to them by the buyers. There is always a shortfall in payment which producers fail to understand.

Loading of copra

Before copra is loaded on to a ship, producers weigh their bags of copra and carefully place a shipping mark to differentiate their bags from other producers. The weight and number of bags loaded by the producers are documented on a shipping receipt issued by a shipping officer on the assigned vessel.

Upon arrival at the destination wharf, the shipping company is required to issue a manifest to the buyers notifying them of the copra cargoes, the names of the producers or consignors of the copra, the number of bags being supplied to each buyer (as well as their respective shipping marks).

This important document, although required, often fails to exchange hands.

Unloading of copra

The initial problem arises at the point of unloading from the assigned ship where the buyer delays the collection of copra bags, sometimes for many weeks.

Meanwhile, in the absence of a proper storage facility, the copra is left unattended and exposed to conditions that affect the quality of copra. This also gives an opportunity for people to remove few bags without having anyone account for it. The council initially became involved in the issues of the copra industry after receiving complaints from producers regarding their missing bags of copra at the time of shipment. The council considered the complaints from a service-provider perspective.

Carting of copra

The copra bags are also off-loaded from the ship without due consideration given to the identification marks placed on each bag by the producers.

The problem also arises with regard to the carrier who loaded the bags from the destined wharf for the millers. The weight of the product becomes immaterial during the off-loading and carting phase, indeed is only important when it reaches the millers where the product is weighed to determine the producer's remuneration. However, since no document was produced on the weight of the copra collected from the wharf area, it becomes impossible to cross-check it against the weight stated by the producer.

Hence, it is a common occurrence for copra to be "pinched" from the bags during transportation. Consequently, the weight is affected and the producers get less for it than they expected.

For example, a producer who shipped 10 bags weighing a total of 450kg might still get paid for the right number of bags (10) which will be shown on the buyer's receipt but the weights documented by both the producer and the buyer are likely to differ. The producer may therefore only receive an end-payment for 390kg, since the weight of the copra supplied would have been affected during the various stages of transshipping, handling, and delivery. The question as to who should be held accountable for improper documentation and missing copra needs to be answered.

Price of packing bags

Producers buy bags to pack copra. About $17 is used to pack a tonne of copra. A single bag can be used three times before it wears out. Some millers slash the bags so there is no bag to return although return freight of the bags is deducted from the payment made to the producer. Producers therefore lose out twice financially when they are unable to reuse the bag to its maximum duration and when the return freight is deducted for bags which producers never received.


The problems faced by producers range from complete lack of transparency in the manner the producers are paid for their shipment of copra. The final weight and grading of copra is done in the milling stations in the absence of the producers. Producers have no choice but to accept whatever payment is made to them by the buyers. For example, Qalitu Enterprises were paid $490 per tonne instead of $500 as prescribed by the copra board. The agencies established to look into the plight of copra producers are not bothered and that's why producers are so disheartened and copra production is on decline.

Copra cess funds

For every tonne of copra sold to the buyer, $20 is deducted as cess levy. The levy is deducted by the buyer and credited to the producer's account with the Fijian Development Fund Board (FDFB). All acess deductions need to be paid to FDFB within a month of receipt of the copra being supplied by the producers. Apparently, cess levy is being deducted by the buyer but the money is not being forwarded to FDFB in a timely manner. The cess fund was set up to help producers in their time of need such as payment of children's school fees or other developments in the village. FDFB, which comes under the Ministry of Fijian Affairs, has also failed to issue statements to the producers and the FDFB is updating the accounts. In fact FDFB has not met in the past 10 years. The last statement received by the producers was in December 2004. The Consumer Council understands that there are only two millers in the country who are operating below capacity. Because of the "rip-offs" described above, many producers receive few benefits and are being forced to give up copra farming. Producers and millers are both affected as a result.

It is in the government's interest to revive the industry for a number of reasons, because it will:

Improve the quality of life for our rural people by increasing their income level and helping them to walk out of poverty,

Improve the shipping services to the outer islands and hence the state can save the franchise funds. Some of the shipping companies are making trips to the islands because of copra production. If the industry ceases to exist, these shipping companies will not consider services to the outer islands viable,

Create an alternative fuel at a time when the world price of petrol is on the increase, and

n Reduce trade deficit by increasing our export.

To make the industry viable, copra producers must be encouraged same as the sugar industry to return the copra industry to its glory days. The council asks the government to:

Revamp CIDA so it operates as a commercial company and not an arm of the Ministry of Agriculture,

q Address the plight of producers so 18,000 copra producers can contribute to Fiji's economy, and

Introduce an incentive scheme where producers receive rebate in cash for producing XXX tonnes of copra or reduced shipping charges or complete waiver of shipping charges.


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