THE PHILIPPINE PALM OIL
INDUSTRY: MOVING TOWARD
A BRIGHTER FUTURE FOR THE
SMALL LANDHOLDERS
Pablito P. Pamplona, Ph.D. and
April Grace D. Pamplona
Paper prepared for presentation during the PPDCI and Province of Sarangani
Business Forum, General Santos City, 28 August 2014.
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Potential Production Area (has), Philippines, 2012.
REGION
R IVB – MIMAROPA
R IX – Western Mindanao
R X – Northern Mindanao
R XI – Southern Mindanao
R XII – SOCSKSARGEN
R XIII – Caraga
ARMM
TOTAL
AREA PLANTED (has)
16, 300 (1.68%)
102,000 (10.46%)
154,000 (15.8%)
104,000 (10.7%)
112,000 (11.5%)
384,000 (39.4%)
103,000 (10.6%)
975,300 (100.0%)
Source: PPDCI
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THE FUTURE OF OP . . . NATIONAL SCENARIO
Increasing Huge National Shortage of
Vegetable Oil. Shall We Produce or
Import?
PALM OIL IMPORT (MT)
1,200,000
1,000,000
 Philippine population of 95.8M
 Palm oil import of 500,750 MT
 Import value of P27.50 billion
800,000
600,000
 Philippine population of 120.1 M
 Palm oil import of 1,000,000 MT
 Import value of P54.50 billion
400,000
200,000
0
2012
2020
2024
YEAR
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OPPORTUNITIES AND CHALLENGES
Opportunities in the expansion of PO industry
1. Overcome the huge domestic shortage of
vegetable oil and for export, provide farmers
with high income. A huge market is awaiting
domestic PO production.
2. Imminovate on massive scale the technologies
currently being used in neighboring countries
for high palm oil yield, productivity and
income on a sustainable manner under the
concept of zero waste management sans
environmental problem.
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3. Investment friendly – early return to investment giving income
through the year.
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4. High income. . . projected income of various crops
in Mindanao under good management (Pamplona,
2013) under USAID study.
TREE
CROPS
YEARS TO
PRODUCTIVITY
Projected annual
income at 10 years*
1. Oil palm
2. Coffee
3. Cacao
2.4
3.0
2.0
75,000
35,000
40,000
4. Rubber
5. Coconut
6. Abaca
3.5**
6.0
2 .0
65,000
15,000
35,000
2 crops/year
2 crops/year
12,000
12,000
7. Rice
8. Corn
* Base on average price..
** Using the new high yielding latex-timber clones.
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Financing strategies on oil palm farming
1. Self-finance – the landowner buys
his own planting materials and
other inputs.
2. Plant-now-pay later – the LGU
provide the poor farmers with
planting materials - good for two
ha. The farmers take care of the
plant with the title (or TD) of the
land as his collateral.
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Financing strategies on oil palm farming
3. SMEs financed – an association/family of
farmers borrow part of the expenses from
the bank – Landbank and other banks.
4. Landbank financing thru coop on a tripartile
agreement to include the investor/miller –
Landbank shoulder 80% of the expenses;
milling plants provide the planting materials
and technical service. Farmers pay the loan
through deduction from the sales of FFB.
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Comparative advantages of oil palm
farming with other crops
1. Easy to plant and maintain
2. Wide range of adaptability
3. Provide early and long years of income even
in adverse condition – rainy days or dry
season.
4. An environmentally friendly crop; almost
pesticide-free as compare to pesticide
dependent crops like coffee and cacao
5. More frequent and higher income than most
high valued crops
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Comparative advantages. . .
6. Easier harvesting and post-harvest
handling
7. Cheap harvesting and post-harvest
handling
8. Least affected by climate change; help
mitigate climate change.
9. Negligible pilferage and stealing
10. Give rise to additional productive farming
enterprises – eg. kalakat making
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INCREASING ADMIRATION OF OP. Once a
misunderstood, despised and neglected
crop now a crop which many farmers would
like to plant. OP has demonstrated to the
Filipinos that:
1. Small landholders (3-5 ha) are
amazingly transformed from surviving
to thriving (prosperous) farmers. The
change from traditional crops to OP
easily liberated smallholders from
poverty.
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Increasing admiration. . . .
2. Fields which are difficult to farm with
traditional crops, risky to invest or for
bank to finance due to low and
uncertain income are transformed to
high productivity with OP. Farmers
are provided with high bi-weekly and
sustainable income thus expanding
the breathe of the Philippine
agriculture.
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INCREASING ADMIRATION. . . OP is
productive in:
 Flooded fields risky for investment to
traditional crops.
 Reclaimed marshlands
 Grass and brushlands
 Second growth forest lands/left over
timber farms providing low income.
 Unproductive cogonal idle lands
 Fields planted to low income forest
plantations are transformed to OP with
high and regular income.
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INDONESIAN SUCCESS STORY IN OIL PALM
FARMING IN OVERCOMING POVERTY
Before
After
Typical house of a small landholder in Indonesia before and after
engaging in oil palm farming. From: * Janurianto, A. 2011. Paper
presented during the International Conference and Exhibition of
Palmoil, Jakarta Indonesia, May 11 to 13, 2011.
The World Bank credited the major role of OP in
reducing poverty in Indonesia
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Malaysian success story in oil palm farming in overcoming poverty and
promoting prosperity among small landholders.
(a) Yesterday’s income of less than
US$ 3,000 = P132,000
(b) Today’s income of US$ 6,700 =
P288,000
(c) Tomorrow - transform the smallholders (5.0 ha) to
high income society earning US$ 15,000/year or
P645,000 by 2020 to promote countryside
prosperity.
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LGU North Cotabato successful strategy;
a model for other provinces
 Capacitate the poor farmers to plant oil palm
on PNPL* couple with effective extension
services on good agricultural practices (GAP).
 Planting of over 4,000 ha on PNPL which
provided 2,000 farmers with high and stable
income, increase rural business and tax
income.
 Found oil palm the best crop to overcome
poverty.
* Now converted to Plant Now Take Care.
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Smallholders’ training and oil palm seedling distribution on PNPL in Carmen, North
Cotabato headed by Mayor Rogelio T. Taliño and Gov. Emylou “Lala” Taliño-Mendoza of
North Cotabato – a new innovative grass root program to generate rural employment,
and create community’s prosperity, wealth and progress through overcoming poverty.
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Accomplishment for 2012-2013
PROVINCE OF NORTH COTABATO – OP SEEDLINGS RELEASED
2012-2013
TOTAL NUMBER OF OIL PALM
MUNICIPALITY
NO. OF HECTARES
SEEDLINGS RELEASED
Alamada
4,512
32.00
Aleosan
1,410
10.00
Antipas
15,422
109.38
Arakan
11,280
80.00
Banisilan
27,354
194.00
Carmen
4,354
30.88
Kabacan
19,174
136.00
Kidapawan City
4,512
32.00
Magpet
1,692
12.00
Makilala
1,128
8.00
Matalam
13,466
95.50
Midsayap
564
4.00
Mlang
19,458
138.00
Pigcawayan
5,640
40.00
Pikit
3,948
28.00
President Roxas
2,256
16.00
Tulunan
22,073
156.55
TOTAL
158,243
1,122.29
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Accomplishment for 2014*
 90,908 OP seedlings good for 644
ha
 60,000 OP seedlings for distribution
for October to December for 430
ha for a total of 1,072 ha.
* Several municipalities in North Cotabato have
similar PNPL program with a total seedling
distribution for 300,000/year.
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A model: North Cotabato has
developed a corrupt-free unique
techniques of distributing oil
palm on plant-now-take-care for
high farmers’
income above the
poverty threshold
level.
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Help in the successfully negotiation with a private company from
Thailand to construct an OP milling plant in Carmen, Cotabato.
Another milling plant will be built up by an Indonesian Company
in Pres. Roxas, Cotabato.
A Univanich palm oil milling plant in Carmen, Cotabato started
milling in July 2014.
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A model OP Farmer
The transformation of Mr. Sagadan of
Dunguan, Mlang, North Cotabato from
poverty to prosperity.
 Poverty brought about by planting of low value
field crops prevented him to financially support
his eldest daughter to finish a college degree.
 Planted OP on PNPL and using GAP enable him to
earn high income to buy enough food for the
family and financially support his five children to
finish degrees in Law, Accounting, Social
Services, Physical Therapy and Pharmacy.
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An economically transformed OP farmer
Mr. Sagadan (center) in his oil palm plantings of various ages as he finds the oil palm easy
to plant, maintain and expand. His first planting in years 2000 (a), then in 2009 (b) and
2012 (c). The latest plants which came from Triple P Farms and Nursery (TPFN) have
become productive in just two years.
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OP + GAP = High Income!
(a) Mr. Sagadan implements good agricultural practices in OP farming, (b) OP in
occasionally flooded fields are provided with mounted platforms to allow the intercropping
of lowland rice and (c) intercropping of corn is made in the upland for income during the
immature stage of the palm trees. Matures trees are kept almost weed-free and provided
with adequate fertilization for high and sustainable yield income.
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Created jobs and livelihood!
 Gross income from oil palm
comes from regular
biweekly sales of fresh fruit
bunches (FFB).
 Major expenses constituting
25-30% of the gross include
payment of salaries of eight
laborers and cost of fertilizer.
 The laborers and their
families get extra income by
webbing slitted proned OP
fronds into “kalakat” or
“amakan” which Mr.
Sagadan buys and sells for
low-cost house walling.
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IMPROVED
QUALITY OF LIFE
IN OP FARMING
Mr. Sagadan’s wooden house renovated
using income from oil palm in 2008
Mr. & Mrs. Sagadan infront of their D-Max pickup and soon to be finished executive dream
house; the second house constructed with his
income in oil palm farming.
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Mr. Sagadan – catalyzed the transformation of an economically
depressed to a prosperous barangay of 100% Muslim population.
 His neighbor observed that income in his eight ha
OP enable him to provide college education for his
children, construct a concrete house, buy a brand
new D-max and leased land for OP expansion to
over 20 ha. He shows that OP is easy to farm.
 He modeled the successful planting of 700 ha of
marshland to oil palm by over 200 poor farmers in
his barangay. This brought the transformation of an
economically depressed barangay, Dunguan – once
the gateway to the jungles of Liguasan marsh of
law-breakers, kidnappers and rebels into an
economically prosperous and peaceful community
of 100% Muslim.
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Insuring success in oil palm farming
1. Planting at suitable sites.
2. Use F1 hybrid – quality planting
materials
3. Application of good agricultural
practices.
4. LGU support to technology dissemination
and construction of farm to milling
roads.
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Site suitability/limitation of oil palm farming
PARAMETERS
1. Annual rainfall (m)
2. Dry months in a year
3. Mean annual temperature (oC)
4. Slope (%)
5. Drainage
6. Depth to hard rocks (cm)
7. Distance of the farm to readily
accessible to farm road (m)
IDEAL
+2000
0
+25
0-5
Moderate
to well
+100
<500
MODERATE
LIMITATION
<1600
<2
<22
NOT
SUITABLE
<1400
>3
<18
<14
Imperfect/
excessive
(75 cm)
75
1000
>24
Poor
<75
>2000
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Major components of good agricultural
practices
1. Good land preparation
2. Planting of quality F1 hybrid seedlings
3. Adequate fertilization/nutrition
4. Adequate control of weeds, pests and
diseases; adequate drainage system
5. Harvesting and transporting fruits at
the right time.
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Challenges: Overcome misconceptions about
oil palm – NOT TRUE
1. It does damage the habitat of wild life e.g.
Orangutans – the Phils don’t have any.
2. Does not reduces soil fertility or soil erosion;
adequate fertilization makes soil more
sustainable.
3. Does not accelerate – only mitigate climate
change.
4. Does not requires high fertilization; only
adequate nutrition for high yield and sustainable
income.
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Comparative fertilizer needs of crops
for high and sustainable yield
CROPS
1.
2.
3.
4.
5.
*
Cavendish/Lakatan
Hybrid Corn (2 crops)
Hybrid Rice (2 crops)
Oil Palm
Coconut
FERTILIZER
(bags/ha/year)
43 – 45
18 – 22
18 – 20
16 – 18*
10 – 12**
Can be reduced to 50% if the empty fruit bunch
are returned to the field
** For sustain high productivity
Future innovation – making smaller OP seedlings more
accessible to small landholders for low-cost and convenient
to transport. OP seedlings in 10x10” plastic bags at 4.5
months at 70% of the cost of the large size plants.
Many commercial nursery operators in Thailand and Indonesia produced planting
materials by the millions in smaller plastics of 10x10” using light fertile growing medium
to conveniently transport the seedlings to far flung and remote farms in the countryside.
The cost of the seedlings is much cheaper than those in the conventional techniques.
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AVOIDING PAST MISTAKES
1. Planting of F2 seedlings.
2. Releasing OP seedlings as PNPL to farmers
without providing adequate training.
3. Poor land preparation/drainage system.
4. Inadequate fertilization, weeding and
pruning.
5. Total dependence on inorganic fertilizer.
6. Poor harvesting and FFB handling.
7. Inadequate LGU support to smallholders.
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About the presentors
Dr. Pablito P. Pamplona, a graduate of UPLB is a retired
University Professor. He was honored on March 14, 2013 by
the DA-Khush Award of Distinction – the highest award given
to a crop scientist by the Federation of Crop Science Society
of the Philippines. Previous awards include the National
Outstanding Agricultural Scientist Award, Outstanding
Philippine Civil Service Award and many other national
awards.
April Grace Pamplona is a graduate of BSAgribusiness at
UPLB and is accepted at UPM Malaysia to pursue an MS in
Plantation Crops starting at September 2014.
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PLANTING OIL PALM IS
EASY AND FUN;
FARMERS LIVE IN
ABUNDANCE
Email: pabpamplona@yahoo.com
CP #: +639189081227 / +639265450437
Website: www.goagribiz.com
www.ppdci.org
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