In the United States and Europe, coconut-based products are booming in popularity. Coconut oil, coconut cream, coconut water, and activated coconut-shell charcoal have all become popular cooking, health, and cosmetic choices, appearing on more and more shelves and ingredient labels across the country.
“Coconut really got on the radar 10 to 15 years ago,” said Winfried Fuchshofen, director of the Fair Trade Sustainability Alliance (Fair TSA), a nonprofit organization working on fair trade and ethical supply chain management. "Now, you have really a range of products, and I see that there is still a big growth opportunity for coconut.”
In theory, then, these should be boom times for coconut farmers in the world’s major coconut-growing countries, the Philippines and Indonesia. Instead, the situation on the ground is far from rosy due to low prices and limited investments. Even more worrying is a looming production crisis that could result in a shortage of coconut in the near future.
“Key challenges facing coconut farmers include insecure farmer income, insufficient supply of productive coconut trees, low coconut yields, and risk of deforestation,” said Christy Owen, chief of party at USAID Green Invest Asia.
The problem began decades ago, long before coconut water and virgin coconut oil showed up on US grocery shelves. Despite coconut farming's status as a heritage industry, government support for farmers in Indonesia and the Philippines was limited, while development agencies focused on large-scale projects like dams and agribusiness plantations. Starting in the 1980s, those plantations were increasingly for palms for oil. Unlike coconuts, palms are an industrial crop, grown mostly in large-scale plantations, processed in factories and large-scale mills, and shipped worldwide by large agribusinesses like Cargill and Wilmar. Unlike coconut oil, palm oil is mostly flavorless and so ideal for usage in processed foods. While palm oil is rarely seen on US grocery labels, it is still one of the most-consumed food oils due to its use in snack foods like Frito Lay chips and Nissin cup noodles.
Palm oil has almost completely replaced coconut oil in Indonesian kitchens, and it's quickly overtaken coconut oil sales in the Philippines too. Without access to government support, and with prices low due to the flood of palm oil, farmers have neglected their coconuts, focusing instead on rice, bananas, or other consumables. Aging trees aren't replanted, and the cycle of replanting that has existed for decades was broken.
“Combined with low prices for coconuts, these risks have caused coconut yields to stagnate and farmer incomes to fall," said Owen. "Incentive is low for producers to invest in cultivating coconuts.”
This is creating an aging crisis. Coconuts reach peak productivity at 15 to 20 years of age, becoming gradually less productive after 30 years. According to the Philippine Coconut Authority, aging is already decreasing productivity, but little replanting is taking place. Some estimate that as many as 90 percent of all coconut trees in Asia are nearing the end of their productive life cycles. That could mean that coconut production has plateaued globally and could begin to fall. Aging trees are putting the entire coconut supply chain–and the products consumers are increasingly demanding–at risk.
This is an environmental concern, because coconut palms have several advantages over palm plantations. Coconut palms produce numerous other useful products besides the lucrative oil, including coconut milk, sugar, activated charcoal, and flour. They don't require huge amounts of pesticides, they grow in mixed-use farms, often together with bananas, and they integrate with the surrounding tropical landscape. This puts them in sharp contrast to the industrial-scale, monoculture palm oil plantations devouring tropical landscapes across Southeast Asia.
“There's been a lot of focus on improving the productivity of the oil palm, and it’s gone up quite significantly over the last 30 years,” said Johnson. “Whereas the bulk of coconut produced in the world today is produced by smallholders, and they don't have the same kind of leverage for research funding.”
Some small-scale efforts to prevent a supply collapse are underway. Fair TSA has been working with hundreds of farmers in the Philippines to set up nurseries and train them on how to care for young coconut trees. Aluan, an Indonesia-based social enterprise, is doing the same in Aceh, the easternmost province on the island of Sumatra.
“Aluan is 100 percent organic certified, sourcing from 500 smallholder farmers, including replanting,” said Jane Dunlop, one of the company's cofounders. Aluan is aiming to replant 15,000 acres of coconut trees, all of which are grown alongside pristine tropical forests.
And USAID Green Invest, a project of the national development agency focused on sustainable agriculture, has launched a Sustainable Coconut Charter, which they hope is the start of a more organized effort “to stave off disruption in global coconut supply chains,” said Owen.
Environment and Climate Change