Sri Lanka is one of the leading countries in coconut production. It has a significant share in the world coconut market mainly through the supply of Desiccated Coconut (DC). The Sri Lankan coconut industry is governed by the Coconut Development Act No 46 of 1971 and is monitored by the Coconut Research Board, the Coconut Cultivation Board (CCB) and the Coconut Development Authority (CDA).
In addition, the coconut industry is protected by the Plant Protection Ordinance (1981), Plant Protection Act No 35 (1999) and the Coconut Land Fragmentation Control Act No. 20 (2005).
The major portion of coconut holdings in Sri Lanka (nearly 75%) belong to smallholders while the rest belong to the estate sector where both private and government companies hold ownership. Even though the contribution of the smallholding sector to the total annual coconut production is 70%, this sector is not yet organised well and is thus managed far below optimal levels.
Current production in the country varies from 2,500 to 3,000 million nuts.The coconut sector strategic development plan focuses mainly on increasing yields to achieve a target of 3,600 million nuts/year. This quantity is necessary to satisfy the demand for both domestic consumption and the processing industry. The strategic plan to increase yields includes measures such as, climate change mitigation, soil fertility enhancement, reducing land fragmentation, replanting senile plantations, managing pest and diseases and minimising wastage in the household use of coconut.
Current situation of the coconut industry in Sri Lanka
In 2017, the export earnings from coconut was US dollar 598.19 million which is a 3% increase compared to that of 2016. Since the coconut processing industry in the country, especially, the kernel based industries, have done well during recent years, much of this growth can be attributed mainly to the tremendous growth in existing industries like Virgin Coconut Oil (VCO), fresh king coconut, coconut cream and coconut milk. The annual coconut yield for 2017 was 2,450 million nuts which shows a 17.5% yield reduction compared to 2016.
This reduction is primarily due to the prolonged drought which prevailed in the major coconut growing areas since the beginning of 2016 going to mid 2017. However, the estimated value of 2,450 million nuts shows a 4% increase compared to the amount forecast by the CRI, due to favourable weather conditions which prevailed towards the end of 2017. Due to the shortage of nuts, a negative growth was recorded in the DC industry. Further, the export of 30 million fresh nut export was suspended.
Besides the reduction in yields, the drought has impacted on palms resulting in decline in vigour and even the death of palms. Declined palms would take a longer period to recover, while some may never recover. Therefore, the urgent need is to formulate a program to rehabilitate the coconut cultivation in the country.
Almost all the coconut growing districts in the country are currently experiencing a reduced and unpredictable rainfall in terms of amount and distribution. This leads to an increase in the air temperature, which has unfavourable effects on coconut production.
Therefore, the coconut industry is experiencing a shortage of nuts resulting in increased price in the local market. This severely affects consumers as well as processors. The shortage in nut supply and the resulting high nut price has put heavy pressure on the Government, forcing the Government to explore possibilities of importing coconut on a temporary basis to bridge the gap between demand and supply. By considering the risk factors including pests/diseases and possible disadvantages on the farm-gate prices of coconut, importation of coconut kernel in frozen conditions was permitted. It was only to satisfy the requirement of the industry and strictly for re-export until the coconut production reached the normal level.
Strategies to develop the industry
The coconut industry in Sri Lanka has reached a transitionary stage since a big demand has developed for both processed products and fresh nuts in the international market. According to the existing demand for nuts in the country, the coconut industry in Sri Lanka requires around 3,600 million nuts for smooth operation. The current level of nut production is only between 2,500 and 2,800 million nuts. Therefore, it is necessary to develop a strategic plan to increase the national nut production and on the other hand, reduce wastage in local coconut consumption.
I) Development of improved coconut cultivars and mass propagation of seeds
The development of improved cultivars with high yield and biotic/abiotic resistance is one of the key factors necessary to improve coconut production in the country. The CRI has set breeding objectives to develop such cultivars. The CRI has already released six improved cultivars and many promising cultivars are in the pipeline. To facilitate mass production of seeds/seedlings, the CRI has established four seed gardens. Measures are underway to establish more seed gardens to meet the demand for the hybrid seeds. The CRI currently produces around 1.5 million seed nuts annually and issues them to the Coconut Cultivation Board (CCB) for seedling production.
II) Management of soil fertility in coconut lands
The CRI has classified soils according to their suitability for planting coconut and has also recommended site specific fertilizer recommendations (Differential Fertilizer Recommendation-DFR) to the growers. Based on this, it is expected that farmers would rationally use fertilizer depending on their actual requirements. At present the management of coconut lands has been very poor, particularly, those of the smallholders. These lands are neglected and have led to erosion and severe soil degradation. The CRI is currently trying to encourage growers, including the plantation sector, to improve their management through a series of workshops, mass media and training. The CRI has also taken initiatives to promote the use of organic manures to develop a sustainable soil fertility. Concurrently, two subsidy programs are in operation for the use of both inorganic and organic fertilizers.
III) Management of pest and disease
The CRI has developed integrated pest and disease management (IPM) packages to manage pests and diseases in coconut. These technologies are being disseminated to the growers. Measures are underway to establish more predatory mite breeding laboratories to produce a larger number of predators to be released to growers. There is a high demand for predatory mite. At the same time, new nano-gel based pheromones are being developed for Red Weevil (RW) and Black Beetle (BB) control which are the major threats to the coconut planting programs. Monocrotophos, the most effective insecticide for the control of the Red Weevil, has been banned in Sri Lanka and only restricted quantities can be imported. Hence, there is research to find alternative insecticides.
IV) Coconut replanting program
The most effective means to achieve the targeted production of 3,600 million nuts is to increase the extent of coconut growing lands by promoting the planting of coconut in new areas and replanting the senile plantations, in an accelerated program. It is planned to plant the bare lands in the Southern Province and the non-traditional coconut growing areas in the North and East. A replanting program is also underway to replace the senile coconut plantations in the country through government subsidy programs. The Agriculture Census in 2013/2014 reported that the extent under coconut (443,538 ha), has increased by 11.5% compared to 2002.
In addition, a program has been launched to plant coconut in the urban and semi-urban home gardens, depending on the space available. This is with the objective of meeting the domestic culinary needs of the household. Under this program, two hybrid coconut seedlings are provided by the Government at cost.
V) Establishment of community-basedorganizations
‘Kapruka Purawara’ is a major community based program implemented by the Ministry of Plantation Industries through the Coconut Cultivation Board, to uplift the coconut industry. This is a national program implemented in several Divisional Secretary Divisions (DS) in the country. It has very ambitious objectives and plans are to expand the extents of coconut cultivation, promote coconut based industries, provide employment opportunities and increase rural incomes aiming at poverty reduction.
The society will be empowered to initiate various activities such as, promotion of planting, replanting, vacancy filling and establishing coconut nurseries using selected mother palms to meet their seedling requirements. These societies once established will commence small/medium scale industries to manufacture various products such as, coir rope, brooms, charcoal, ornamentals etc. and develop a coconut value chain for local and export markets. Under this program financial support, subsidies and credit facilities will be given to purchase implements and machinery and an insurance scheme will be introduced to the growers and small industrialists. Advisory and information services will be provided by the Ministry through the CRI, CCB and the CDA. In the long term these will operate as self-sustaining units.
VI) Diversification of coconut lands and productivity improvement
The productivity of coconut as a monoculture is generally low, and hence the productivity of the land could be increased by the inclusion of other enterprises such as, intercropping and integration of livestock. The CRI has conducted extensive research on coconut based agroforestry systems using fruits and spices; rambuttan, mango, papaya, pineapple, spices such as, pepper, coffee, cinnamon and cocoa, different vegetables, and livestock such as cattle, goats, sheep and poultry.
Agroforestry systems using Gliricidia, Calliandra, wild sunflower and other nitrogen fixing trees have been proved as potential systems to improve degraded coconut soil.
VII) Changing the utilization pattern of coconuts
At present, there is a huge and growing international market for both kernel and non-kernel based coconut products which were listed previously. However, this demand cannot be met due to the shortage of nuts in the local market.
Therefore, programs are under way to promote/popularize the public to use processed coconut milk, coconut paste and coconut milk powder at household level. The objective of this program is to reduce the estimated 30-40% high wastage of coconut kernel in households when hand squeezing the fresh coconuts for milk and to collect all the byproducts such as husk, shell and coconut water in one place to make them easily available for other none-kernel based coconut industries. Currently, there is no proper collection mechanism for those byproducts which are totally wasted in the backyards of houses.Since Sri Lanka locally consumes about 1,750- 2,000 million fresh nuts, it is estimated that 300 to 400 million nuts can be saved this way and made available to the industry while an enormous amount of husk, shell and coconut water will be available for other industries.
VIII) Improve and promote technology dissemination methodology
There is a significant gap between technology development and technology dissemination in the country. The transfer of technologies generated by research to the stakeholders is the final component of the technology generation process. The CRI is responsible for technology development while the CCB and the CDA are responsible for the dissemination of technology. However, it transpired that the technology generated by the CRI is not properly and effectively disseminated to the grassroots level through the CCB extension network, which is through their Coconut Development Officers assigned to work in designated regions, covering the entire coconut growing area. Therefore, programs are underway to use mass media and text messages in addition to the conventional programs to take technology to the grower’s doorstep. It is noted that only about 30% of the growers practice fertilizer application while moisture conservation measures adaptation is far below the expectations. During the prevailing drought it was found that estates and home gardens which practised moisture conservation methods had low yield reduction.
Policies on coconut sector
Coconut cultivation in Sri Lanka are owned mainly by the private sector (around 95%), but they operate under the regulations of the Government. This is because coconut is considered an essential and a major food ingredient in Sri Lankan diets. It is also a major plantation crop that contributes to foreign exchange earnings. Therefore, it is necessary that the country adopts quarantine regulations and land use regulations to assure food security, employment and the earnings of the people.
The Coconut Development Act, provides for action on the distribution of coconut land and land use policy, coconut land management and subsidy policy, coconut plant quarantine policy and coconut pricing policy and market mechanism which are the policies in operation in the coconut sector of the country. According to the Plant Protection Ordinance No. 165/2, November 1981, no plant shall be imported into Sri Lanka, except under the authority and in accordance with the conditions of a Plant Importation Permits issued by the Director General, Department of Agriculture. This Ordinance covers Cocos the Coconut and related plants also.
Government policy is to stimulate coconut cultivation and the proper management of the industry through maintaining appropriate breakeven farm-gate prices for the growers and affordable market price for the manufactures. At present the main contributing factor for farm-gate nut price is the prices of kernel-based products such as coconut oil, desiccated coconut and the substitute oil prices.
Research evidence has proved that the price of substitute oils has a direct influence on the prices of the nuts and other coconut kernel-based products. Hence, the Government has implemented a tariff policy on substitute oil to control competition with coconut oil prices since the price of coconut oil will decide the prices of nuts and the other products of coconut.
( Dr. Lalith Perera, Deputy Director (Research), and Dr I M S K Idirisinghe, Head, Agriculture Economic & Agribusiness Management Division, both of the Coconut Research Institute, Sri Lanka helped in the preparation of this article).