Philippine Institute for Develogment Studies _hrking Paper 83-08
AN ANALYSIS OF THE _C POLICT_ AFFECXTNG THE PHILIPPINE OOCENUT INDUSTRY by Ramon L. Clarete and James A. iRoumasset
AN ANALYSIS" OF.THE ECONOMIC POLICIES AFFECTING THE PHILIPPINE COCONUT INDUSTRY
Ramon L. Clarete
The coconut agricultural
industry
for k
generally
regarded
exports earners. coconut
as a predictor
products
feration
period
suggestion
importance,
the industry discussion
of low coconut
prices
policies
prolonged
period
for causation.
has intervened
a major
economic
major
of
source been
activity.
foreign
Coconut
exchange
and exporter
of
in the world.
of government
unprecedentedly
for general
has been the top producer
it are the focus of a public current
Being
users
it has, by its performance,
one of the country's
The Philippines
With such
in the Philippines.
rural population,
have also been
A. Roumasset**
has long been one of the largest
land and labor
of income
and James
more heavily
and the government as coconut
since
1980.
in the industry of low prices,
Relative
to earlier
in the industry
policies
farmers weather When there
years,
the
is a proli-
in the context there
in
of an
is the compelling the government
in the last decade
with
Paper presented at the Workshop on The Impact of Economic Policies on Agricultural Development sponsored, jointly by the Philippine Institute of Development Studies (PIDS) andthe Philippine Council for Agriculture and Resources Research and Development (PCARRD) on March 25-26, 1983, Tagaytay City. ** Research Intern, East-West Professor, University of Hawaii.
Resource
Systems
Institute,
and
the
export
tax,
the
Coconut
Oil, Mills
related
programs, One
of
the
CCSF
has
depressed
UN]COM,
issues
the
the
to .lower
the
benefits
offered program
productivity. since
products.
The
Bank,
were
purchased
While
indeed
during
the
impacts.
producer
The
turn
small
a.d
describe
the
of
by
it.
;] (] ram;_ t: i (' .increase
for of
the
C(7SF rev,.,nue
ha_s
the
owu,,r,
CCSF
r_,w.,n,u,.
out
the
of
governme_-)L there
t;ri.s paper's
that
limit
source
benefits
to
widely giving
major
export
purpo:_,
Th-i_ wc'dgt, i_
l)rote(:tion farm,.rs
cite
is
the
used
to
consumer
11_i_ed
to
.tax drive
compet'iri(.,),
of
levy
has
Coconut
Planters
has
increased
:,my au;,ivt ic ,,.:rudyof" it._ economic
prim;irv
the
today,
been
[nit,front i,n_ i,_ {h,- iudu._try
is hardly
the
country's
also
its
the
history,
Foremost _n
wl',ether
whether
CCSF
and
copra.
the
country
itself
of
After
the
UNICOM
prices
not
been
otl,(..rror_muÂŁ-based
and
direct
Proponents funded
has
of
other
been
entire
and
levy
a
Another
its
United
and
has
o_l
CCSF
are
in
mj [li,,g company
progrnms
Some
d:i.scuss_on
industry
1979).
price:_.
the
this
the
scheme
cooking
1970s,
policies
the
replanti.g
of
1973
It- in
The
in
by aiming
subsidize
merit
these
in
on
(UCAP, oil
t.he o_tabl, isbment
coco,Jut
surface tax
largest
helped
coconut
to
prices
also
replanting
the
largest
farm
being
].:_Jes,
(UN]COM),
the
levy,
coconut
from
a wedge
between
border
;_ppnr,,ni!v wi(hq%t.,d by
l.ower for
fi I| ti_._ gap.
It,,,,
ll;ivi._..,
pri_'.es
f_)r
I.'{llI_l_r_/l:
t!*,.
;
CCSF
(,(,pra
('l'l/'(}l}llt
levy
governproducers
Oil,
.'.r_.
and
mills.
relatively
availablv. an
ow-,rv.iew
government
(,1" thp poli.cies
coco,nil nrft.eting
inrlusl the
rv
(.qect'i.on
industry
1). (Section
we 2)
-3-
and present effects
summary
statistics
of these policies.
effective
protection
discussion discuss
(Sections
on the CCSF levy,
ownership
In section production
policy
This
resource
we also attempt
by a
We also program,
cost
and
(Section
5).
(DRC) of copra
in the major
in Section
and
is followed
Bank and the UNICOM
earned
The results
7 _,where
coconut
regions
4, 5, and 6 will be
to provide
directions
for
reforms.
I.
I.I.
trading
The Coconut
the industry
and processing.
are the main products 15.93 billion
over 90 percent while
Small a million quarters
is made
Figure
the three in the marketing
milling,
Industr_
An Overview
Generally,
about
exchange
are nominal
integration
the domestic
per unit of foreign
of the economic
and its benefits.
Planters
6, we measure
summed up in Section
3 and 4).
the vertical
Coconut
- (Section 6),
indicators
its revenue
program,
of the United
are indicative
The primary
rates
the replanting
which
gathered
coconut
make
farms
sector.
reported
Copra
farmers.
and nuts
Out of this,
in cocosut
to produ<:e dessicated sector.
ii_ the 1970 census,
five (5) hectares.
among
In 1980, for example,
by coconut
up the production
had a size under
products.
into co|)r;_,an input
the rest was utilized
production,
the interrelationship
of coconut
in the production
was processed
three sectors:
i il|ustrates
channe]s
nuts were
farmers
up of
Of
oil
coconut.
the rough19
about
The average
half
three farm size was
_4--,
2.4
hectares.
â&#x20AC;˘consumed
About
locally,
United States
'18 percent
Tile
remaining
manufacturer_
products
percent
product:ion was
the coconut
in
exported
t980
was
mainly
meal,
to
the
flow to their
cooking
in miIZing.
copra
A few mills
oi]. and other
consumption.
of coco-chemlca1:;, they make
The
The oii mÂŁ11,ers also produce
a by-product
for domestic
buyers.
the oi'.], millers/exporters,
oil to produce
Together
products
made up of town and barrio
are primarily
and exporters
and coir,
industry,
sector
or copra
the crude coconut
based consumer
carbon
82
and dessicators/exporter._.
copra cake/pellets refine
sector,
the trading
users of these products exporters
t-he rota!
and Europe.
From the production u,qers through
of
Other
charcoal
up the processing
coconut-
users are the
and activated sector
of the
Figure
I.
-6-
in 1980, the industry corn.
Coconut area.
eultlvated percent
farmland
was 3.13
A total
of which were
million
coconuts about
were
_215.2 Next
exchange 1rig
to minsral
in
as copra;
locally
as manufactured
was
and
i,illion nut_,
value
crops
plmnted,
82
was _9.3
equivalent
bill_on.
to the r_tlotsl
export._ were value
the second
was UZ$820.5
of total merchandi._e exports
percent
is
described
was exported
to
Thus,
income
of
(12.2
lr_ Figure
as coconut
yercent),
homemade
blggest
foreign
uLi]llon, representIn 1980. 2.
Of
the
oli and copra
as dee:_icated cocoz_t.
area
total meal;
6
The rest wa_ consumed
oll
than
was 46 plants
(1.5
percent),
in 1980.
of
the industry.
42 percent
of the total
The tr_e density
in the rest of the country.
nuts was
dlstrltution
and approximately
in Mlndanao
hlgher
average
the geo_aphlcal
farm
trees were
deesloatlng
Tagalog.
all
Their
coconuts
oll
I presents
relatively
national
of
Their
among
coconut
and 6.7 percent
of the total
coconut
tr'ee. _. had been
and
(2.5 percent).
Table half
value
1980, 71.1
percent
foodnuts
cocor_t
p_r'cent of the entire
prices).
the country.
utllizatlon
produotlon
of land next to rice and
or 25
farad) wa,_ 15.93
of copra.
products,
of the
14.2 percent The
tons
(1980
of
hectares
u_lllon
of these
top contrlbut(_,
bllllon
earners
user
bearing,
metric
the
mill_on
of 420
The total production about 3.9
was the third largest
_r
bearlng
In Luzon,
tree.
especially
The
in Central
About stock
Vlsayas
In terms of y_el_,
bulk of coconut
in Metro
M_nila
of
the
oli mills
and Southern
Utilization
Figure 2. of Coconut Production:
Coconut Oa
0
C_:a_
0
Coconut
1980
_,4_,0.803 _,_38
TOTAL PRODUCTION 2,0_9,T40
"4
2So/.
I_r_aCtured
Ot
_:) w
Z49,841
IAE¢a,,q
t,c.,._ Infc,-_._ticn ;dx_t the C_o_mt Industry, _.'i P,e._ial, Piilit%,i_w_s: 19;0
_Kli
i__..
i_<.-, i: !]_=,........... • _ • "" _,"-, i.=-z, -. -_... - -
................. •C,'.:,_a i :',_ _.";.Z ....... _._,'..._;_ :_,_,o , ' -.
Tru_ P,._r llc_tare
Yiel_ (_mts put bearir_]tree)
Z_,ual P_ted Pilling Ca[_city (IZ cop/a)
llilling Units
Dc_aicati,_i l'lalt_
3,126
417,362
133
46
3,324,600
55
Ii
133,': 51 2,314 _._._ Cn8 "" "_" _ ,L].2
144 176 133 14o 171 .:,,
,15 49 45 _63 3.1
I,446,000 _-
38 _
_
1,2_6,00B 1CO,oOC
35 3
_
if0,7!u i4,73_, 3,:,<,,'_-_ >..,_,.,7
177 ±_u :L"<; ".;53
._ 40 31 27
!7._ _,.._ ...._.,_ '-""-_
_,_.r.,. :_":'.
,:5 lr
]_.
")<
1,W.
=.".
:',_:-3 13 ._ :_"' _<._ ,"'
_
::_
A_'eaPI._,u¢,_ '_,or61 C6corat to Cccu,_t Tr¢:_ (I,C00 }_u.) (l,O.qOtrees)
"
_ .
"" • _
,.,..J," _-_ IL "_ .:,,,_' 1,":,' ,_ _ _7 _
.......
'0
":"
"r'".
L?
--
"1"9
36.9,l_C' 45,_..;0 306,650 37,500 1,,_,u ,500
8
7 4 1 20
--
_ _"
'_I
-9-
1.3.
Patterns
Increasing observed output to
from was
coconuts
of
growth
area
down rate
was
in
the
the
1950s,
steady
capability
to
1970s
when
the
growth
Copra
and
coconut
generate
products.
mix
from
of
coconut
oil
of
coconut
processing
last
leadership
of the in
trees
gestation area
were
coconut
2.1 percent
in
1960s
period
planted
for
and
was
two per
year
value the
last
the
decade.
country
impressive
trees
the
same
main
This
to
foreign
shift 1950s
to have
and
in
the
an
period.
growth
The
growth
negative
rate
decline
period. been
in
rate
exports,
rate. of
the
of
25.5
the
rate
But eroded
their in
the
percent.
exchange
1960s
implies same
0.3
the
increasing
annual
copra
dropped
in the
their
For
appeared
a significant in
most
an average
for
the
at an
from
decades.
by
of productivity.
growing
the
at
more
(discounting
Recovering
been
copra
explained
that
recorded
their
have
the
of
of
a result,
the
2.7 percent
exchange
of
was
fr_
than
increased
foreign
oil
rate
growth
production
5 percent
There
during
about
they
rate
As
apparently
rather
value.
the
at
the
is
exports
and
2).
stock
1970s.
trees
oil
and
Normally,
However,
in
during
(Table
decade.
while
was
the
last
planted
accelerating
1960s)
growth
coconut
an
industry
area
1960s
at
the
year
at
in
constant
in volume
per
the
and
both of
to
the
of production
coconut
half
in
growth
7 years.
trade,
increase
percent
the
planted
yield
In
of
during
rate
second
growing
growth
of
of
1950s
slowed
The
rate
the
is about
apparently
rates
rates
also
7 percent
of.Changes
earners
export-product to
the
dominance
intensification
among
-1C,_
Table 2. .'Growth tlates and Some CtmnBes In The Coconut Industry: 1955 - 1980 (In percent)
......................................... 1955-1960 Growth
Rates = Area PZanted Total Trees Coconut Produotion Yield
0.8 2.0 2.8 2.6
Value
Share
m
;;;-;;;
I
6LO 5.0 2.1 2,0
5.0 _,0 7.0 2,8
-0._ 2.0 8.0 2.0
25.0 5,0 8.0 3,0
2_,0 5•0 5.0 10.0
of Exports: Coconut Oil Copra Dessleated Coconut Copra Meal
3.0 3.0 10.0 3.0
27.0 _.0 J_.0 20.0
30.0 0.3 31.0 20.0
in Total Export Values: Coconut Oil Copra Dessicat.ed Coconut Copra Meal
11.0 77.0 9.0 3.0
24.0 6 1.0 9.0 6.0
5_.0 29.0 9.0 8:0
Un_te_ Europe Others
ITS.0 ,4.0 8.0
51.0 43.0 6.0
_I .0 43.0 16.0
Volume of Exports: Coconut Oil Copra Dessioated Coconut Copra Heal
AveraKe
Source:
of
States
ten
years
m = m m
1961-1970
-
(1951-1960).
Basic data drawn t'rom Phillppln_, Coconut Authority and BAECON, Ministry of AEriculture (fur Area Flanted and Trees). The United States and Europe have been the =aJur t_yers o£ the country's coconut products. The country had apparently d_verslfied its markets durin8 the last decade, as shown by the increase in the share of the rest o£ the wurld to total export value from 6 to 16 percent. The new markets fur cocom_t products included the Soviet Union and Chtrm.
-11-
l._
Prices
Fluctuating
incomes
Thls Is illustrated domestic part
prices
of
in Figure
ton,
Ooeo_t
ton).
palm
oil,
It is
another.
This
- a finding
entire
w_Id
to 1980.
and coconut
oli,
In the lower
given
shows
the plot of world
prices
in pesos
of soybean
and palm
kernel
(in US dollars
to note
how these
prlees
moved
how
that
pr_duoKion
from 1955
of copra
these oils are close
fur the elasticity
of this and the fact
and
copra
illustrates
relevant
world
of the industry.
considerably.
oil,
interesting
oilseeds
prices
The upper part of the figure oil,
are characteristic
illustrates
oils and
domestic
fluctuated
fePmers
3 which
of vegetable
the figure,
pep metric
of coconut
coconut
of food
issue
oils and fats
so closely
substltutes
discus_ed
oil oonstltutes
only
per metric with
_one
in Section
one
another
3.
Because
about 5.8
percent
in the last decade
[UCAP,
of the 1981],
%
the world The
d_and price
periods t acute
for Philippine peaks
in
shortages
1974 of
coconut and
ell is likely
1979 were
the _aj_
rather
to be hlghly unusual.
elastic.
During
food oils and fats in the world
both followed
&
weather-induced during are
shortfall
these years
substitutes
aUJ-ava%ed
fc_ mineral
chemicals.
Accordingly,
been
by
caused It was
the
government
intervened
the poliCy
responses
elaborate
have
affected
on
supply.
The
the situation. oil
sOme
the high
during
will
their
in
in their swltching
non-food to
these
thereby
first
price
peak
the CCSF
levy
the industry.
oils,
uses, from
further
(which
section
where
like coconut produotlon
mineral
ell must
increasing
started
of edible
in OPEC ell
e.g.,
and the subsidy
to the dlsappearanoe
this in the next
Increases
Vegetable
OPEC prices,
with
price
in
their
1973)
we discuss
of have
prloes.
that
progrem..Ttmae
ell from
oil,
the were
the market.
We
the policies
that
Z 0
:e rq
_, ,_'_"_ _,_ "_ I_ "_¢'_
I:OZ i r_¢'*
Z
_J_
_.,_
(I_. _
!
(
1
-13-
Before general An
the
1970s,
scope.
the
economic
policies
affecting
the
Industry
were
The import controls in Lhe 1950s and the decontrol progrnm
and the consequent retention scheme in the 1960s were overall economic policies for these years. Except for two insignificant industry tazes,i hardly any Induatry-speclflc policies. decreed during
In contrast,
there were
more of the latter were
the 1970s.
Another diÂŁterenoe in the policy pattern during these periods was in the eztent of taxation.
Relative to earlier years, there were a_cre and heavier
explicit taxes on the industry in the last decade. we present chronologlcally
With this as an overview,
the Important policies which have affected the
industry.
2.1. sefore the 70s The system oi*import controls in the 1950s_ which in effect undervalued foralgn exchange, Implicitly taxed exports in general. The exporters lost by the dit/erenoe between t_e free market and offlcal values of their foreign exchange earnXngs. export
volume
in
order
Thus, exporters had to avoid
this
ant incentive to understate their
implicit
export
tax.2
A better picture emerged in the 1960s wlth the decontrol program and the gradual devaluation of the peso.
However, implicit taxation on export8 in
1
These taxes were authorized to be collected in 195q and 1955, respectively, in order to finance the PhÂŁ11pplne Coconut Administration. Together, their' rate was eI.50 per m.t. copra.
2
Some evidence supporting this can be fc_nd in Darrah and Tion_on
[1969],
se_mrel this
eontlm_ed
scheme,
with
the
exporter=
.-ete=_tlon
were
allowed
scheme policy to retain
of the Central
a portion
of
exchange revenue that they could sell at free market rates.
their
Bank.
Under
fceelgn
The rest, however,
were to be exchanged at the lower offlclal rates, constituting a tax on their exports.
Thls scheme was lifted An 1965 [Power and Slcat].3
2'2
the
The floating rate policy in 1970 ushered in explicit taxation on exports in pnoral.
Largely in order to siphon off the windfall profits gained by
exporters with the devaluation of the peso, the government through Republic Act r
(RA) 6165 explloit1_ taxa(__aJor exports in general.
The tax was assessed on
the f.o.b, value of exports. The Or_ÂŁ_l
plan in 1970 was to lower its rate every year until It would
have been phased out in 197_.
Bowever, Presidential Decree (PD) 230 made
export taxatlon a Permanent policy of the government in 1973 [Yoln_o Qulntos]. percent
3
and
The decree aAao fixed the rate of the tax at 6 percent fer copr_ _ far
processed
coconut
products,
as shown in
Table
3.
Another general polloy to note was embodied in the bilateral Laurel-Langley agreement between the Philippines and the United States. _tartlng 19_t oooozpat ell and copra meal exports to the US, provided they were within qUota IAmlta, were exempted from US duties. The agreement explred in 197_.
- 15 Table
3
The CCSF Levy and Export Tax Rates on Coconut (pesos/mr copra)
Products:
1970-1981
Copra Exports
Proceed Coconut
CCSF Levy Period Covered Year
Actual Rate
Average* Rate
Levy
Percent of Export Price
Exports
1970
....
I0
8
1971
....
8
6
1972
....
6
4
1973
8/10 - 12/14 12/15 - 12/31
150 250
60
4
6
4
1974
I/i - i/i0 I/II - 5/23 5/24--11/5
250 550 1000
770
21
6
4
1975
i/I - I/I0 1/11 - 5118 5119 -12/31
700 400 300
350
21
6
4
1976
i/I - 12/31
300
300
20
6
4
1977
1/1
300
530
21
6
4
1978
3/16 -12/31
600
1979
1/I
600
600
13
7.5
4
1980
i/i - 5/27 5/28 - 7/12 7/13 -12/_I
600 700 suspended I000"*
24
3*
2*
i000"* lifted 500
31
lifted
lifted
1981
-
3/15
-12/31
i/I9/9 9/10-10/2 10/3 -12/31
* weighted average.. ** on exported copra only. Source:
Philippine
Coconut
Authority
800
-16Another proces_d
Th_p
exports.
purpose of the export exports were taxed
Xn
1979,
increasing
thla
due to low
coconut
the rate
differential.
was
producers
this
to
company the
and
oompany,
the
converted
to
Its
because
of
business
of
receipts.
It
industry
its
Z.2.3. _
exports
thereby was llfted
and
its
the
the
vertical
processing
shape entire
the
producers
To establish to
cocotmt These
COCOFUND levy integration,
of nature
hiatopy,
Company._
This
could the
and
invest
ownership
farmers
upon
receipts
were
in of
payment to
of
be
company,
magnitude, of
coconut
from
the COCO_ND
ton (st) of copra
Investment
products.
their of
Cocormt
issued
'1972. Called
per metric
products.
were
of
stock
\
idea
helped in
percent
levy was to be collected
starting
whereby
their
receipts
small
trading
of
sale
of
the
instrument
trading
shares
a fixed
at the rate of _5.50
the
the
Despite
to 7.5
the tax on coconut
o_ ten years
underwrite
COCO_ND
during
levy
1970s
to
become
processing
this
the
to
increased
was passed whereby
fixed
utilized
was
In 1980,
for a period
tax was
be
was
Levy
In 1971, RA 6260
levy,
copra
prices.
2.2.2._e _
coconut
f_
tax was to promote forward integration. two-percentage points lower than other
their of
the
the
was
_.e.
products, most
significant
farmers and
important
due
An the
going to
the
into
the
COCOFUND
production
levy
on
CCSF levy.
CCSF_.V.y5
The government collects the tax directly from copra uaere, who in turn deduct the tax ÂŁrom their buying prices far oopra. In ot_ler words, the price received by the farmers is the market price of copra at the farm _ess the COCOFUND levT. This same collection procedure is followed far the CCSF levy.
5
For
a more
levies,
detailed
see David,
disousalon
1977;
UCAP,
on
the history
1979; Clar_te,
of 1980.
the COCOFUND
and
CCSF
-17As stated imposition prices ment
above,
of the CCSF ].evy.
of basic then
day m.
coco-based
Imposed
dlsappearanoe products
st To
4)
ceilings
cooking
was oll
to
about
90
Phlllppli_
Cooomtt The
capture
premium
valuation National
The of all
Economic
for copra
and 20
In a end of
1974
bid
the subsidy
after
premium (PCA)
was
exports
and
subsidized
supplying
the
"by
the
the producers
fc_
Thus,
this purpose.
to change
It further
or after
their
productlon.
subject
to continue
duty
in
_e
PD It
depending
decreed
duration
time that
their
of
that the
voldinE
two new u.-_s of the levy:
to pay
by
Executive
exporters
res_ectlve (NEDA). coconut
the export
the national
thereby
some
funds
Order
No.
l'or the
b_se
425
from any favorable
the dlfferem-e
Authority
coconut
the levy
and to allocate
197_
on
for processed
to increase
to
to soar
I0, 1973 for
one year
by coconut
assessed
Development percent
continued
program.
T_iegovern-
led
in
up, the
to invest.
imposed
i_Lins m_de
to launch
on August
The farmero added
was
which
heavily
prices
PD 41_ was issued
duty
in 1980, at the same
input
had gor_
was earlier.
Authority
duty
lost
inputs
slgnlflcantly,
products
per mt of copra,
of
of the
the windfall
situatlons.
levy
whÂŁohever
percent
prices in 1973 led to the
from a new levy on coconut
at D150
ot PD 27_.
rose
the government
the _SF
In 1974, however,
fOr
while
be rescinded
oriels;
the provlaloDj
Producers
the situation,
iDÂŁtlal_
products fee- these
market.
funds coming
of coconut
the cost of cocom_t
consumer
the fundlr4_ requlr_ent
the levy
increase
Since
prices
imposed
the rate
upon
the
controlled
remedy
276 (Table
prloe
_om
thelr losses with
set
the abrupt
between prices,
products.
market
the customs
as
The tax rates
to
set were
by
the
30 percent
This duty was lifted
tax was rescinded.
productivity, program
PD 582 w_
to replant
issued
towards
the country's
the
coconut
,t
farms with
a oooomat
hybrid.
It crested
the Coconut
industry
Development
Fund
-13(CIDF) for the Purpose.
The CCSF levy way the instrument to raise revenue for
this fund. In 1975, the PhilipplrwsCoconut Authcrlty (PCA) was allowed under PD 755, glven out
that year, to purchase, in behalf bf the _ocor_t farmers, the First
Unlteo Bank.
The oapltal it used in this venture wa_ part of the funds alloted
to it for investments under PD 41q. Coconut Planters Bank (UCPB).
TI_
bank bec_me known aS the United
The |ercent o£ equity held by the PCA in UCFB
fop the coconut farmers in general was 70 percent.
To glve this Percent to the
farmersp the PCA ruled that only those who owned COCOPdND recolpts would be eligible to own shapes of stock in the bank.
Ac_ordlngly, for each peso o£
COCOFUND reoeipts, the PCA gave to the owner
three sharee_"with a par value
of it.e0 each. The UCFB beome could invest
now the principal instrument by which
in pr_cesslng and
accordance with the vertlcal
trading of thelr',products.
coconut farmers This was in
integration progPsm of the government for the
£ndtlstry_ as spelled out in the COCOFUND law, RA 6260, and in PD 232 in 197]. But the most expllelt statement for this pr_gr_ Coconut Industry Code, PD I_68, in 1978.
was given by the Revised
To give the program more funds, PD
Iq68 created the Coconut Industry Investment Fund (CIIF) again through the instrumentality of the CCSF levy.
The CIIF has been _._nagedby the UCFB.
By 1979, 0CPB had bought out, with the CIIF, almo._ttwo-thlrd_ of the country's
total rated milling
oepaolty.
The newly aoqulrcd m£11s were
consolidated under ore company, the UNICOf4,with government authorization and full support, history
This veorganlzatlon contrasts dr_atloally
of the country,s milling
development can
business.
w_th the.eompet_tlve
The .events leading to this
be partially attPibuted to some faulty plannlng on the part o£
the Board o£ Investments (BOI).
Based on misplaced optim£_
abou_ future copra
"1gsupply,
the
BOI continued
in
the
second
hal# of
the last decade
to grant
incentives to investors in coconut ell mill_ng until the milling business was overQrowded. Qopra
The rated
supply.
This,
closed
down.
InstrUction
The
turn,
led
suspended Upon Lts
the
a sharp
on May 27p
to
by over
a tight
levy
domestic
sale,
the user
had to
content
a million
competition
tons for
the
copra
equivalent
to
tar
an expOrt the
relnt_odunedt
its
StabAlizatlon
Fund
depending thust
thereafter,
available mong
Xt_
is
destlned #400
clearance.
1980,
Letter
the
CC3F levy
Project
during
copra'
the
was
in PD 1699.
Development
_'_-domestic
of
shortly.
as provided
ton wa_ collected
An addlttoral
Fund. s first
consumptlon
(which
was to be paid by the exporters
Thus,
the
new levy
was rouEhly
tax oi" _I000.
CCSF levy name was
was lifted
changed
(CZSF).
In
upOn the
level
the
in
a new frame, Coconut
product
with
be discussed
prices
_5 days
per metric
export
_ereafter
will
_n cocor_t
reoeAved
the
shortly
of which
to resume
declare).
applied
sohedttle;
_600
unless
when they
1981,
_t
of
intervened
decline
1980
resumption,
An inAtlal
In
sovernment
(LOI) 926,
Follovtng
6
in
exceeded
The problem was highlighted in 1979 when some o£ the new ell aLlls
users.
variable
capacity
name
£cr
the of
f_ the
first
second
a month.
tlme to
quarter
coconut
"sliding
about
prices,
of
1982,
When it
the its
according
Coconut rate
was Industry became
to a specified
Ievy".6
The sliding levy rates can be Econd in Far Eastern Economic Review, February 12, 1982 issue. It also cme to our knowledge that the export tax was reintroduced in 1982. Other uses of the CC_F levy not covered In this sootier 8_el 1)The Coconut Farmers Refund, f_r the 1LEe Lnsuranoe progPms £or the OooOrn't £al_erej 2)The Scholarship Fund t whloh the chAldren oF the faa38er8 carl warm on competitive basis; and 3)The Copra Price Stabilization Fund, r_r Anventments An copra trading, also in accordance with the vertical lnteKratAon proarl as the CXIF.
Table THE LEC_AL BACKGROUMO OF THE (CST LEVY
Oecree/LOi/ lmplementimj Orders P.D. Z76
P.O. 414
i
Date Issued Aug. 20, 1973
Title
............
Important Provisions
Establishing Stabilization
the Coconut Consumer Fund
It started the CCSF levy to effecL a price for coconut consumer products. Supervised COCOnUtConsumer Stabilization Committee.
stabilization scheme by the Philippine
18, 1974
Further
Amen_in9 P.D. 232 As &_ended
PCCSCabolist_d and function given to PCA. CCSF levy collections were partly used for the vertical integration program and to absorb the pr_eiu_ duty. o
P.D. 582
Nov. 14, 1974
Further
Amendin9 P.D. 23Z As Amended
Established the CIDF for the replantin_ program. A perm4_;ent lvvy of PO.20/kilo from CCSI r levy rate plus initial CCSIr contril:ut!t:_.' nf PlO0 _il lion.
P.D.
755
July 29, |975
Approvin? the Credit Policy ef the Coconut iflduStry as ReCome_.ndedby PCAand Providing Therefore
Approved the purchase of the First United Coconut Plan_ers i_ank out of CCSF.
r'.D.
iC'33
N:r_. 8, !_77
Institu_.ing a Procedure f_r tr,e _anagement of Special arid Fiduciary Funds
I.-_p_i._itlv
P.D.
]46R
PCA Ad::_r;ist,-aL,;ve Order NC. I Series of 1979
April
t
I
June tl,
April
197El
May 4,,. 1979
LOT No. 9Z6
Sept. 3, ]g/g May
_,:__r_'
_/,
i9_O
Sept. 9, 19P,1
t_at
t_.e CCSr _s a s_eci_.,i _n_j :_d,Jc:,_r:. %,r._
r-, _.,,_ _e;,_, -'.._ed for '',_,0, -_,._C'n_ng_ '_ " v_rt'_Ca _, ._te_r_le_t _; .' "% "._c;_r_,l price $.e4h,:_ZaLfOn .'.c._eme C_SF aS _riva:... ;sta_,-_,::i C[!F, C,_conut F_r-_ers Pefuncl_ r'ror_:nted COCe,_[D Devei ,,':r:;.*_'_ ,t,_
]9, _;9
LO| No. 85;
P.O. 1699
Revisecl C_conut Industry
_e_la_ed
Bank (o b,.tu_,_ _ht, _:;_,!
i_l_eae_lT_. _.0.
,',_R.
_,t-.*_Ii_he,_ ;'_e_ e_t_L.s_d_ SC._:e_?.
Established the CPSF. Ai_,o.cates the Sur._;_ of the.7;u,"Sidy Fund t_-CllF. Sociai Arreliorat;onFund. an,,_ CPSF at 24, 4,3,and 35 percent, resl)ectively. Rationalizationof the Coconut O:,l Milling lfldus try
Established an_ gave._ul; ._,overn:_ent _upj.,nrt tn _)fllC:i._..
_rlACt Suspend|ng the Collect. ion of the CCSF Levy and Sir,:ilar Levies and Providing in Connection Therewith Appropriate Mea_u,"estO CuShion the Adverse Effects Thereof on the Coconut Farmers
S,_;,en/.c-,;
t_.._ ievy
|or"
.i_
.._.I.'_.
_.___i,!TS:'!Pd
thp
C_i'_.
The CESF le,-vw_s }ifte:l.*_-,, ;",-;,si_tl._al,:C_s, onl)-to be re;,_po',e_ a ,,,._n_.n?,_,ter'. Nn fO,"'_,'-.aiPre_._,te,'l,.'._:;i i_ec,--ee ha,F;FeL ;,e_n ;sxue,I.
l H o I
-21 -
As stated 1979 It
crisis
Of
PCA.
all
to the
oil mills
This
refer
policy
largest
has
only
Thus,
restricts
their
the UNICOM
of new
the approval
as the UNICOM of
is the restriction
competition
full
of the
policy.
coconut
oil
of the freedom
has not only become
copra
buyer
in both
the
in the country.
copra
and
___
of the various
in Figure
_.
to the exporter
relevant
we further pOlIQiSS.
copra, world Dd
equilibrium
For
for Philippine
of which
Finally,
discussion
but also the biggest
_
demand
the
ones wltbout
the second
of UNICON_
the establishment
One is the eoncentratlon
business. oil,
to give
to the
markets.
marketi_ is
it problbited
response
the creation
government
of existing
company;
polic,/, therefore,
illustrated
levy,
private
of coeo_t
The effects
dlreotly
the
of
two features.
seller
3.1. _
world
It authorized
to this in the succeeding
the milllnE
oll
oooonut
agencies
Furthermore,
into
The overall
the goverrnnent's policy
oil mills.
as the expansion
mills in a single of entry
relevant
company.
as well
We will
_O1 926 outlined
the country's
instructed
support
above,
while
d_and is
the
assume
user;
D_
demand
elastic;
reflects schedule
for
I) the
in
of D_ and $2.
are
produoinK
the and
to this schedule.
valor_
copra.
zell
tax and the CCSF
and evasions,
schedule
the ad
that:
(2) the producers
no ex_mptlons cost
be eoneeptuall_"
assume
the per unit levy
at the intersection
can
and (3) the export
is the margl_ml
while
above
of illustration,
to have
incorporates
domestic
discussed
is perfectly
or domestic
serve,
is defined
purposes
copra
S| S2
policies
The
export
Dw
tax.
distorted
The vertical
dlstanee
-22-
between
Pw and P
from Pw to Pu
[user's price),
2) the distance Nominal
is made up of two components:
border
the case of copra, (t) and the CCSF portionate
rates
prices
levy
(f).7
is primarily
Thus,
between
is the export
ban.
equal to the difference at which domestic trated
in Figure
to an export
supply 5.
case of export
tax plus
In
due to the export
tax
NPR as the pro-
- (t + f).
received
ban is equivalent
between equals
Thus,
(Pr) .
Pr and Pw-
The export
ban is b.
levy.
prices
if we define
that rm_y reduce prices An export
tax; and
the policy-induced
[Pw) and producer
N_R=
policy
the CCSF
(NPR) measure
this margin
difference
Another
the export
from Pu to Pr, representing
protection
wedge between
representing
i) the distance
actual
border
domestic tax which
to an export price
demand. would
our corresponding
by producers tax
and the price
This
is illus-
be just equivalent formula
for the
export ban is
NPR-- -(t + b) 7 Note _hat the levy, f, is here expressed as a percentage of the fob world prioe: _ taxes omitted are the COCOFUND levy and the premium duty. The former is roughly one percent of the border price of copra. Although thslatter could be substantial, the exporters, nevertheless, paid only 10 percent of it. The rest was paid out of the CCSF levy, as provided in PD 414.
-23-
Since
b is not r.Jadily observable,
by dlrect_
oomparlng
however,
to
Power].
Direct
which
are
competltive example, however,
it
are
induced raises If
is able
curve
producers,
intersection
to collect
and
such
as
The
and S3.
to government
tax
marketlr4
(represented
profits
be taken,
[Hedalla
of other
the
effect
the
controls,
and
policies, of
the
agency,
|,rices ree_:ived by
producers
from
is a
aono_s_ist,
marketing
for
profits.
how marketing
proflts
The
the distorted
distorted
(P R). U
Potential
help
to lower
marginal
between
profits,
in ma_'ketlng.
equilibrium
difference
by the distance
NPH will
marketing
inefficiencies
new
then
as the government's
is
P W
export
_hould
time
the effects
by government
Is introduced,
33 .
of D_
lowers
the agency
6 illustrates
An additlorml
subject
by taxation
or
can be dissipated
Figure
formally,
Care
_P_
polio),.
levels.
then
prices.
looatlon
also capture
incorporate
prices
equivalent,
and border
of quality,
comparisons to
from the were
Its
copra
price
producer
domestic
far effects
s marketJ.ng
If
or
control
difficult
government'
differ
actual
it may be p_-oferable to estimate
producer
outlay deflned
and P
prices.
schedule at
of
the
Is due to the r
PwPu ), the CCSF levy
(RPr),
and the
The Copra ,Export Tax
Figure 4. Market With 'The and The CCSF Levy
Price
P p
S2
S1 w
D
u
w D'
I I
w
P r
i
I I i
1
I I
Dd
! 0
Copra Qd
••
q]]e Copra Export
Qp
Figure Market
Tax
and
S. With
The
Export
Ban
Price
I Dw
PU =
P
Dw
Dd
0
Qd
= Qp
"
Copra
3.3. _-___ the
If finite,
ion_-r,_n e]astxoi_y
then
of worla
Another
country's
copra
nopra,
increase
(Ed)
its monopoly way
by which
importers
instructing
efficiency
is by
it
w_'i,_ demano
tax, eq_al
fc_ Philippine
exploits
receipts.
of
im_os!t.g an expor_
d_and
the country
for
_,'. _.c___.+ _,-:. :._,,,i.,.,5._. " - ,-:, :
Lo the reciprocal
position
thereby
to capture
these
establishing
on
Philippine
coi_rar will increase
to maximize
depends
for
the
wurld
That is,
taking in addltlot_l _onopoly
profits.
demand
profits
export
from
marketing
Whether
for
is
of the elasticity
efficiency.
a government
export
copra
monopoly
such
Philippine
the
actions
c_covmt
products. Econometric underestimate due
to
for
in
could
Some
not activity
to trade
factors
and
in
other
change
in
to u_
ava11_b.le data
to
are larger
coconut
oil
the execution
Furthermore,
or" to. pol._tical res_)nse
tend
_.a not appropriate
re oresen_s
markets.
1971)8
elasticities
required
part o.f trade in _ree
Librero,
long-term
i_vestment
commodities
potentlall.v
1975;
First,
In addition,
elasticities.
contracts,
E d (Yelasco,
habits
in manufacturing.
be tied
these
of
elasticities.
changing
estimating
bilateral may
long-term
lags
substitutes
estimmte_
the contracts
factors.
to attempts
of
Some
of
to change
prices. The products
greater and
the higher copra
8
the less
substitutability immutable
the el_stlolty,
are perfect
is equal
the
substitutes,
to the wc_id
For example, 0.52 - 2._10.
in
demand
Velasco's
between
are the l_litlcal the limit,
estimates
factors
imp_,g_Lng on trade,
elasticity
f¢_ copra
range
col;ra and other
if Phi_ipplne
then the demand
elastlelty
Pt_i_ppJ.ne
from:
divided
copra
and other
types
for Philippine
of copra
by the P_ilipplnes'
0.93 - 2.73;
Coconut
ell
-26market and
share.9
other
Given
vegetable
dem_;_d elasticity
3._. _ The oooki_ Of
for
through
the
subsidy
program
normal
use
to
of
products
standard
in terms of
above,
while
coconut-based
consumer
low prices.
into
their
conversion
ca_ be seen
long-run
oi]_
world
products
By converting
respective
factors,
we
such
as
the volume
copra, equivalents,
can analyze
the entire
copra. 10
complying
with
If the actual wholesale ÂŁndlcated
the
coconut
large.
at artificially
these
3
between
o22eam_
provide
the progr_.
price,
by the area
thla out of the levy revenue,
Thls
in Figure
illustrates this particular approach, i then P allows the producers of the controlled u
the amount
9
saw
7
returns,
at Q . o
aims
to consumers
Figure
as we
r_e_mi_ _U_x
consumption
ceilÂŁng,
o$1s,
high substltutabillty
is likely to be quite
program
oll
the relatively
P IAP . U r
Domestic
P , exceeds u
P EDP m. u u
They
Hence,
if Pe is the price u consumer products t_ _arn
will
pt u
consumption
then producers
be compensated
the subsidy
wlll lose
exactly
be by for
(S) is: S:(P -P_)Q . u U 0
by the followlng:
dOW Pw
dO
Pw
Op
dQ
Pw
Oo
dp w Qw
dP w
w Op
ow
dp w
OWo
Qw
where P_ is the world copra price, and ow Q_, and Qw are respectively the total w_rld demand for copra, tTJe world demand for _hillpplr_ and ot_;er countries' copra.
10 Convertlng different units of different coco_t products in copra terms h_ been s common practice in the coconut industry. In fact, subsidy payments are based upon the volume of domestic consumption _ copra ter_s of cookln_ oil, soap, and other coconut consumer product_ whose prices are subsidized. The United Coconut Association of the Philippines (UCAP) provides an_ ocntlnuously updates a conversion factor m_trix for this purpose. See for instance UCAP, 198'[. -_
-27 "
Fi_ure The Expor_
Tax,
Copra
The
(:.
Market
CCSF
Levy
With and
The
Marketing
(,_Jntr)l
Price
s^ z SI
w
w
- \i///
w
Dd
0
Qd
Qm
Qp
Figure The EMport
Tax,
Copra
The
CCSF
copra
7.
Market Levy
with and
The
Price
Control
Price
p
S2
B
\
p
_E
I
/
o
D
Pr
_
iA
Qc
Qp
p* u
0
Qd
//
-/
/
D ,,
w
D'
w
copra
-28-
Table 5 gives our estimates of NP_ for coconut products from 1955 to i981.
The nature of the policies affecting copra producers prompted us to
present two estimates for copra. structure
(NPRF) and
The first was calculated u_ing the formal tax
the second was
computed by direct
price comparison
(NPRPC), the difference oÂŁ the two we bad discussed In se0tion 3.1.
We lumped
all processed products together under one estimate because they are affected by similar policies. _.I .I. The Second col_tmn of Table 5 presents our NPRF estimates fcc copra.
We
do not have entries from 1955 to 1969 since the export tax and the CCSF levy, the policies considered in our NPRF formula, were introduced only in the last decade.
The NFRFs are all negative implying that copra producers have been
recelvlng negative protection from the two policies. Looking at their period averages, the NPR_prlor to the imposition of the CCSF levy in
1973 was - 8 percent.
This became more negative, - 2_ percent,
from 1973 to 1979 reflecting the introduction of the levy.
From 1980 to 1981
the NPP_fell further to - 29 percent, representing increases of the levy's rate during these years. For the 1970e, the average NPR_was - 2_ percent. that on account of the export
This led us to conclude
tax and the CCSF levy, copra producers and
mld_lemen have been receiving, on the average, only 80 percent of.the border prlca of copra. We roughly by column 3.
verified this finding with our NPRPC estimates for copra sho_
With the exception of the first, all entries
are negative, again
-29implying
negative
protection.
Nomlrml Protection
Table 5. Rates For Coconut Products: 1955-19811 (in percent)
Copra Formal Tax Structure (N_F)
Year
Processed Pr_duct_ Direct Price Comparisons (NP_PC)
1955- 1961
Formal Tax Siructure (NPRF)
8
1962 - 1965
- 17
1966-
-
1969
5
1970 w 1972
-
8
__13
__6
1973 -
1979
- 2tl
- 18
m =1
1980 " 1981
- 29
- 422
-
1955-
1969
1970 - 1981
l
- 21
1
5
- 22
-
NPRs using the formal tax structure are reported in columns 2 and _. For processed products, the relevant f_mal policy i8 the export tax. For copra, the CCSF levy is considered in addition to its export tax. Since the other processed coconut exports have the same export tax rate as coconut oil, the N_Fe for the latter can be applied also for the former. 2 The rate reflects the UNICOH policy. Source: Basic data drawn from the Central Bank, the Philipplne Coconut Authority, the Bureau of Domestic Trade, and the United Coconut A_ocÂŁation of the Philippines,
-30-The system of
average
NPRPC
(via tariffs)
the retention
from
wh$ch
scheme
(I) The
dlst_rted
exchange
this
rate
apparently
was
passed
between
domestic
With
From reÂŁlectlng 1979, -18 very
1970
percent,
- q2 percent. Before
Despite
the
differences
the average
taillss
similarity between
the
This
is suggested were
and
creating
by the
_mnallzed
twice:
(2) The exporters
implicit the
export
17 percent
from - 17 percent
got
tax wedge
t, ax,
Then,
imposition
the average
with
NP_PC
two estimates.
the NPRF
and NPRF, First_
5 percent. 12
13 percent
it got worse
from
of the CCSF levy.
to the UNICOH
thi_,
half of the 1960s,
to-
to-
fall of the NPR average
closely
between
in the second
NPR deteriorated
the added
to answer very
scheme
of the export
Can this be attributed
This
Exporters
scheme.
improved
the dramatic
we attempt
pr_tectlon
prices.
this perlod
was
The
the peso and the introduction
the peso;
producers
of the retention
suuestlng
_ercent. 11
of the 1960s
to 1965.
overvalued
to copra
the introduction
interestlng
percent.
ca
to 1972,
half
the retention
and border
NPR ÂŁ_
1962
rate
with
the liftlr_
the average
from
18 8
to overvalue
in the the first
NPR of - 17 percent
than
_,e 196!
contlnued
average
lees
1955
from
clearly 1973 to What is
1980 to 1981,
policy? NPRPC
in the 1970s was - 22
average
there our
are
NPRPC
oftwo
21 percent. interesting
average
is less
11
The use of the offlcal exchange rate that artiflcaily overvalues the peso in convertlng the border price From units of foreign exchange to domestic currency for pur_ses of price comparlson resulted in positive NPRPCs for the second half of the 1950s.,
12
Thle margin is interesting because it should give us a rough estimate of the marketi_ cost from the wholesalers' warehouses to the boats. To illustrate, suppose we Just consider the average from 1967 to Ig69 alone (assuming that the retention scheme w_s still reflected in 1966 prices), the averse NPR was - _ percent (not shown in the table). Thus, marketing costs were rou_y _ percent of the border price of copra.
-31negative
_han that
as a surprise marketlnE
of the NPRF
si_ce we expected
expla_atlon
requirements
during
of
two
_hat all mills
products
were
the
of
f_oed
years were The
the
that ONICOM
conclude
a glut
la taken
apprOaCh
depressed
less
came
polieie_
of
was short
to 1974
since
than
and
1973.
a_d
provided
them
bid up copra profits.
of milling
1976
to 1979.
Our hypothesis
their respective
the subsidized
is
coconut
prices Thus,
consumer program
to increase
the NPRPCs
la
capacities
by the subsidy
than
the world
period,
this
copra
f_
these
to that
suggests
producers.
However,
by Table 5). In both periods, Thus,
it
of this finding
before
1980
Considering
is difficult alone.
ths eft'eat of marketing
But
from
dlfferontlal
by copra
market.
on the basis
to measure
average
that of the NPRFs.
in this
subsection.
this,
to
In fact,
controls.
let us now turn
to the
22_9___
have
surv_ved
by
helng
more
speculative
in
a
This
products.
Cgconut
mlght
the NP_PC
_n 1975 (not shown
profits
coconut
that
the price receive_
in
is needed
mills
noted
picture
of _pra
.I.2. Processed
The ot_er trading.
we
operatio_l
up in the next
NPRs for processed
producers
points
for marketing
different
of the other
This
than the _JPRF.13
alread7
the same
at less
and increase
dlffereDce
further
we had almost w_
1973 to 1979.
supply
1973
was operational
The producers
13 percentage was
copra
subperlods,
advantage
at capacity,
second
the UNICOM
13
The
_adlng
lees negative
1981 was
there
from
on account
finding,
to operate
the other millers. operate
this
program
ehortaKe.
utilized
supply,
otherwise
separate
Further_more, the subsidy
over
the period
margins.
As an
because
during
their
-32-
Like
copra
producers
of
negative
the
decade
relative ence
other
to
to
the
average
a strong
4.2.
Estimating
as
above
confirms their
York.
buying
price
following
relationship
between
of crude
for
of
coconut
oil
of
on
the
in New
York
procedure,
industry,
It
for
is
the
small
This
differ-
products.
production copra
in New
York.
coconut oil of
follow
Figure oil
price the
is
3
exporters in New
theoretical
($/ib)
(S/mr FOB) on Coconut
"ten
milling,
- 4 percent
prices:
Based oil
tax
of
presentation
(P/mt Costs
above
formal
prices
coconut
Multiply: Official Exchange Rate Less: Crushing and Administrative Add= Value of Copra Meal Credit Equals: Breakeven Price of Copra Less â&#x20AC;˘ CCSF Levy Equals: Domestic Price of Copra
the
the
received
figure
coconut
oil
the
Multiply: 2,240 Ib/mt ($/mt) Less: Freight and Insurance Costs Less: Export Tax a/%d Premium Duty tax
on
the
coconut
in practice,
copra
two
the
processed
coconut
a schematic
these
was
wholesale
observation,
is
on
- 21 percent.
50 percent
crude
of
also
and
Profits
domestic
prices
The
Price
about
oil,
this
bias
Based
However,
copra,
dessicators
have
products
tax. for
the
products
th_se
Marketing
that
the
export NPR
millers,
government.
for
policy
coconut
closely
base
the
oil
coconut
the
NPR
due
shows
exported very
from
average
Considering
the
processed
protection
str_cture, last
producers,
the
states
that
0il
(S/my
FOB
after
tax)
peso
rule"
has
each. US
cent
.FOB
come
per p_und
after
to be af
used coconut
in oi
-33in New York We
is equivalent
estimated
coconut
Appendl.x
oll in New York
time serles actual
in
of
to ten pesos
per hundred
I the average
relationship
and the "border
the latter,
we added
price of copra in Manila.
price"
of
the export
Thls
kilos
of copra
between
copra
the
price
in Manila.
tax and the CCSF
procedure
in HanLla.
provided
rough
of
To get the
levy
to the
verification
of
the ten peso rule. To
determine
producers, Elven
we
the
compared
measure market
used
price this
wholesale
whether the rule
of coconut
predicted
price.
conditions
1980,
the
predicted
price
predicted
border
9 percent
also ef the predlcted
This
we_ _45._2/100
result
suggests
levels
not known,
however,
profits
marketlnE
apparently the copra
durlnE
to lower
even more.
of
This
assumes
copra
then
the actual taken
to be e
that competitive
are shown
price
was about
the premium
prices
two years
the premiums
_nefÂŁ1clencles.
with
We
in Table
in Hanl/a
and the
15 percent
was @23.00/I00
6
of
the
k_s.,
oF
price.
copra
the first
is whether
contributed producers
For 1981,
that
in Hanila,
years.
the latter was
the actual
copra.
border
taxes)
copra
period.
price
between
kgs.
price of copra.
competitive
or
predicted
the difference
over
from
of copra
in the UNIC_M
T_i_ approach
the UNICON
profits
price
the relevant
profits.
before
of
York
of the fcrmer
marketing
The calculations For
(m_nus
marketing
the border
oil in New
price
existed
extracted
to predict
The premium
of Potential
below.
UNICOM
In
domestlc
were
depressed
of UNICOH's
we
either prices
estimated case,
below
their
operation.
What
constitute
the UNICOH
of copra,
thereby
is
marketinE
pollcy
has
penallzln_
-3_Table Predicted
I.
2.
NY price of coconut (US oents/ib)
Export
4.
CC3F Levy _ (_/100 kss.
6.
1981
30.00
25.00
300.00
70.00
price of and levy
price
1980 and 1981
1980
3.00"
copra)
Manila
6.
Prices in Manila:
of
Tax ($)
Predicted Manila copra, after tax Actual copra
Copra
oil
Predloted border price copra in Manila (_/100 kEs. copra)
3.
5.
and Actual
250.00 0.00
80.00
221.00
170.00
17 5.58
147,00
of
7.
Difference
_5._2
23.00
8.
Percentage of difference to predicted border price of copra in Manila
15.00
9.00
weighted
average
-35Copra
is the ma:.n input
to its producers the last decade
â&#x20AC;˘ 3.
estimated
our
oll
(CNO)
into
Effective [1979].
and
above,
for DCN.
of
on
rates
are
The penalty
to coconut
29_ fmco_u_ the EPRs
for
coconut
the
basis
using
is the major
The following
protection
_
coefficients copra
protection
dessicated
t/tree eubperiods
the input-output
meat
estimates
oil.
the CCSF levy and the UNICOM
Rates
_tves
As mentioned
coconut
14
7
tax,
of effective
_
coconut
subdÂŁvlded
2.
is a source
_
Table copra,
by the export
in prod_.cing coconut
of
input
during
oll millers.
coconut
from
policy
the method
policy
_ro_u0t8
three
(DCN)
provided
1970
products, to
1981,
reglmes. 14
We
described
for CNO, while
in Appendix it is fresh
are our findings.
discussed
in
this
volume.
Se_also
Tan
-3OT
_ffectlve
Pro_eetion
Table 7. _._[te_for Coconut (in percent)
Products:
1970-1981
Outline of Policies
Effective Copra
Protection Ratesl Coconut Oil
1970 - 1972
Export
Tax
- 8
+ +2.3
- 7.0
1973-
Export Levy
Tax,
- 24
-
-
Per led
1980
* 'I
1979
- 198i
1980
Des sicated Coco nut
CCSF
Export Tax, CCSF Levy, UNICOM
- 29
2.0
42.0
4.3
18,4 O
only
The maln inputs in the production Of coconut ell (CNO) and dessleated coconut (DCN) are respectively copra and coconut meat. The corresponding Input-output coefficients fur these were estimated using the method â&#x20AC;˘described In Appendix 2. For the other inputs, It was a_sumed that their coefficients are fixed at: 7% for .CNO and 10% for DCN. The applicable tariff far these was 10%. In the case .of copra, however, the tradab/e inputs were negligible and were thus assumed to be zero. The ErRs reported here are averages of estimated annual EPRs.
Source;
Basic
data
Philippines
â&#x20AC;˘drawn from
the
and the Philippine
United
Coconut
Coconut
Association
Authority,
of
the
-37-
oopra
-In
produQtlon,
the total unit Aooordlngly,
value
tradable, inputs
of copra
its EPR la equal
are
neglIEible.
to be the unit value-added needs
to its NPR which
we t_,'eated
Thus,
in copra
no addltlorml
production. discussion.
_.3.z. Y_mm_ o_z Except effective beom=e the
fur
protection.
slightly
CCSF levy
the marketed same
poli_
BeeallÂŁn_ was
two
negative
points
lower
in Table
CNO production.
7).
Thls
subperlod Thls the
by widening
2.0
to-
turnaround UNICOH
in
years.
differential the differential
In this year,
explains
partly
The
copra.
from
Since
in 1979,
the penalty
penalty EPR
completely
offset
the government
th*
started
(not reported - 2.3
in the
1979.
to promotion soared
a/ready
4 percent. 15
of the EPR from
including
products
the copra/CNO
the EPR was 0.9 percent
period
average
to
the
the differential.
had mitigated
failed
Since
a tax on all
on processed
tax of about
but
had essentially
for
tax rate
the increase
in the second policy
except
on
from an export
percent.
for CNO, it being
tax-
that
- 2.0
in the Table
the differential
two-percentage-polnt
to promote
the market
negative
EPR was - 2.3 percent
subperiod,
second
the export than
had been receiving
their
two subperlods
discussion,
by the oll exporters
But
the
fur
the export
was 68 percent,
tax.
aubperlod,
to do with
t_e first
previous
percentage
The
during
copra,
CNO miller_
In the first
had nothing
the
reoelved
first
lass
subperiod,
oonflguratlon-
coefficient
export
the last
to
.was even a
high
of
more dra_:......... _2
15
In a. previous work, the EPR for CNO was estimated to be - 5 peFcent fo_ 1974 [Tan]. Tan used the NCSO estimate of the input-output coefficient of copra in CNO, which was 33 percent.
16
This copra
is assuming that UNICOM did indeed collect marketing producers, However, if the premiums that we estimated (Footnote continued)
proflts from id the previo_
-38Percent. 16
Marketing
protection
profits
As An
the
case
with
percent.
It became
Coconut
less
that meat
of DCN).
shares
of coconut
the e_,_rt
also observed
value
trading
are
additional
sources
of
oc_
penalized
years.
copra
for ell mill_s.
4.3.3. _
we
in
tax.
from
became
is the main
millers,
1973
the desslcators
to 1979,
positive,
input
it is mainly
protection
(CNO)
The EPR for DCN in the first
negative
the EPR
Since
the negative
oll
used to produce
that
copra
subperlod
- 4.5 percent.
11 percent t during
in DCI4 (about
45
percent
copra
suffered
had
wlth
rather
been
was - 7 Final&y,
the UNICOH
of
the total
than DCN,
the export
it
tax and the
UNICOM, policy. In this and
ErR
for
affecting the
section, oooonut
the CCSF coconut
produots.
the coconut
production levy
of has
industry.
pertinent
we present
industry
the major
the
These have
coconut
been shown In
and interpret indicators
provided
describe
incentives
products.
to be the most
following
our empirical
estimates
how
â&#x20AC;˘section,
we
will
polloles
and disincentives
Of the policies important
the
of NPR
single discuss
far
we mentioned, policy the
in the issues
to it.
5. _
5.1. Revenue
ÂŁ_g Levy
and sbu__tt
16(continued) subsection were marketing inefficiencies passed average ErR would still be - 2.3 percent.
on to copra
producers,
the
-39The size of the revenue from the CCSF levy has been of central importance in levy-related discussions.
Because it is legally defined as private, the
government which collects it is not constrained to make this infcrmatlon public.
However, official figures about it get published occasionally [David,
1977; Busl_ss
Day, 1980]o
Based on the latest infarmatlon, the total levy
collected until the third quarter of 1980 is _5.815 billion [Business Day]. Ur_ertunately, the figures that were reported are cumulative revenues fur perlods spanning several years.
It may be mere instructive to have a picture
about the size of Its annual collectlo_. estimates for the period _"om
Table 8 attempts to provide It.
The
1973 tlll 1976 were estimated in Clarete [1980],
based on David's report about the total colleetlon until the first quarter of 19_'7 [David].
Btartlng with
1977, the revenue was calculated as the product of
the applicable levy rate and the volume of production, assuming no evasion by _opra users. Thus, the total _
revenue until 1980 was about _7.316 billion
wlth the avera4_e annual collection o£ about _1 billlon. eI°5 blllAon than the mount • cr
reported in Buslr_ss Day.
the discrepancy As levy evasions.
This is greater by A possible explanation
Table 8. The CCSF Levy Revenue Estimate_: 1973-19801
Year
Copra Produotion Subjeot to Levy (million HT)2
Applicable Rate (_/HT)
Revenue (m111ion peso.q)
1973 197_ 1975 1976 1977 1978 1979 1980
-, 2.3 2.4 1.8 1.q
530 600 600 700
113 1,024 695 765 1,219 1,400 1,080 980
I
.2
Estimates fo_ 1973 up to 1976 are from Ciarete (1980). Starting with 1977, the estlmatoP ls: RevenueffiCopra x Levy ,rate (rounded to the nearest m:LZlion pesoa), Three peroent of total produotion does not enter the market (Pounded to the nearest hundred thousand. For 1980, the ÂŁiguPe is total cooonut exports in eoprs terls. Adjustment wcs made to aco0unt for the _5 days in 1980 when the levy was suspended,
-41Table 9 shows how the lewj was allocated to its different uses since its inception
in
subsidy
1973
till
program;
program;
(5)
1981,
(2)
We distlnsuish
premium
du_y;
COCOFEDdevelopment
(3)
eleven
because
it
:
times.
had the
BUs£_s8
Fr_
1973
about
UCPB f_ 25.8
the
percent the
Coconut
levy:
(1)
PCA development
progr_;
and
(7)
Coconut
apportlor_ent
may
be regarded
as
typical
duration_
third of
of
total
amount
progr-_.
Refunds Fa_ers)
quarter
the
replsnt£ng
percent.
for
welfare
(4)
the
Day [1980] reported total dlebursements made oF the levy revenue
till
37.8
(6)
program;
of
The dlstrlbutlon of the levy rate bad been
The last
longest
maj.o_ uses
replanting
program;
Industry Investment Fund (CIIF). changed
seven
to
1980 (Table of
the
Subsidy
10).
About
revenue,
payments
billion
were deposited
amounted
coconut
fan_ers
(or
funds
for the
_563
m/lllon,
or
about
9.7
totaled
_2.2
with
to _1.5
the
billion,
insurance
percent
or
of
or
progr_ the
total.
The PCA rmoeived _567 m_lllon which it spent for its operatlons t research and other Investments For the Industry,s for
its
operations,
The CIIF,
which
Payments Ltll£on short
For were
1_,
up
to the
to
note
Based
the
is
managed
premium
expended
8 describes
program,
by the duty
amounted
to
flow
_5
costs,
H [Business
the
and its
The COCOFED got _309 m_llion other
UCPB, accumulated
on "operational
and bank charges
Figure
only
the
scholarship
development.
of
development
assets
._llior_ refunds
to _389
the
direct
insurance
on the
Busl_ss
benefits
program,
the
Day data
from
of withholding
_22
subsidy
and
Day].
the
this
scholarship (Table
_tll£on.
The remaining
levy revenue
from
the
different agencies supervising its various uses,
that
projects.
10),
levy
to
program the
the
disbursements
fanmers
It is interesting
coconut
and the
coconut
far_ers subsidy
made £_
include program. the
Table 8RF.AKD0YM OF LEVY RATESAND PERCT.NTAGE SHAR[ (in Plc.k.)
J i
Replanting Program
Subsidy
f ,
Premium Refund
PC/_ j COCOFED Oev.eloJ:_nL ;, _velo_raent
WeTfare Proclram
t _
; 1
CI |F
DuraLion
,",,ug. Io-oec.
14, 1973
15
I00
-
?
_c.
15-Jan.
10. t974
25
100
.....
:3
Jan.
[i-r:a'./ Z1,, 1974
55
i00
-
4
,".ay 22-i_0V. 5, 1974
55
55
-
30
30
13
13
Z
2
5
Nov. 6-Jan.
1q75
40
57
-
!5
2?
13
19
2
Z
,"0
6
Jan. II-.Uay19, )975
5
12.5
20
50
)]:
_'._
2
5
4()
4
/
May 20-Sept. 19, I975
-
20
67
R
27
?
6
3"._
4
8
Sept. 20-Oct..3t,
-
20
67
;
7l.
2
3o
1
9
Nov. 1-Warc.h1'3,1977
Z
_
20
67
5 .
},'
7
t._
}9-A,m. l/.
._2
53
20
3)
C,
,_
12
;C_
2L3
33
:
._._
1975
I._
;!_rch
;i
A_fn.18-Sept. 9, 1981
SourcP: rCSF.
l_.77
-
....... {.....
1
If),
-
(
-
15
4
25
2
-",
-
tOO
-
5
I
¢
6
!
,:
_d
_
6
I
/
6.,:
"
2
3.5
1'_
;,'_
._)
6
_7
-:
4
_:
13
i I,
_,_._ Table I0 DISBURSE_IENTS (I_F [HE ,.(.-F
g, al o_,nt (bil]i_n l_cJs)
Item I.
._..a
Replanting
Program (CIDF)
Percent
2.2
37.8
2. Subsidy Program
I .5
25,8
3. Coconut Farmer Refund
0,563
9.7
4. PCA
0,567
9,8
5. COCOFED
0,309
5,3
0,389
6,7
7. Premium Duty
().265
4,6
8
0,_22
0 _
6. Coconut Industry
Investment
Fund
Miscellaneous
TOTAL
Source:
5. _I 5
Business
T9
Da_, "Coconut Fund Nearing
P5 Billion,"
_00.0
September 1
Figure The Coconut
Cons,.m.,,er Stabilization
Fund
(CCSF)
Flo'+_
] 40Z
CFP.
¢, 0 N S U H E R S
25 % _T _IF
^
35 % CPSF r [ [
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invested i )
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wi:h
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t
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insurances
i
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_i, g_ves !ire
'
i
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Other i Re.fir_e_°.-:" _J
I _,L,J'o ,..<_J_
! J '" ,i" :'> b , { ................... _ ' i
'
s-:rp ius _,
_,,%o
<£eednuts From
t
_<.,
_2
Subsidized 1 Refiners ....
"!" "_"_
i at ceiling prices . sell consumer products_---
I
J t
| 3
.-,1%insurance total
program
levy
revenue.
allooatlon revenue.
8,ive_ 17
The
A closer The
benefit
a
consumers
they
can
coconut-based
a_ms
with
predominant
the
Investment
Inc.
Palawano
by
sale_
progrem
wa_ Up
accepted
The
AII are
to _7,00
by
coconut
to
present,
had
nuts
per
All
been
_nd
per
and
aud
the
nuts
taxation
by
virtue
t/_.e_[r
program
if
they
coconut tall
is ai_lege4
_
CCSF
th_{n
_.,'_
A_rieultural Island
near
all
the
free
to
the
In
1980,
I'D 582.
have
levy.
the p_og_ to
an.r{
to
period
Bugsoc
buy them
of
contJ.__geut
of
_'rom the
he_.'t_re_ in
distribute
levy.
belief its.
African
Corporation
will
the
are
_ies_;ation
[.equiy'ed
governmenl_ will
of
country's
w_rlety
Dev-:iopment
t_;e
e;nt;i_"e
contingent
West
a shorter,
the
oil.
the
fc;,,-thi_. co_es
1,500
the
nut
from be
between
of
U_e
subsJ.dy
cookln_
cross
deVEloped
contract,
as
{:_;:-eent of
_eed
of
of
{_reen_
are
the
60
tree
t_hird
qualiflcat.ions
Thj.s hybrid
the
Investment
25.8
[,ercel-_tof
scbo].ar'?.hip prog_,_ms
such
F_mding all
._eed nuts far,nero° the
operatio_l. ther_
farmers.
alloted
(a
a
they
aeud_nic
2.020.
year
supply
exempted
the
was
the
about
ber_el':[tfrom
replant
variety.
(AII).
at
only
onl?/ 9
2. [_ree_t
that
the
the
hybri_I
of
Nat_o_Bl
supposed
COCOFED
te,_s
to
to
this
by
native
According
produced These
in
contract
by
coconut
dwarf)
yield
awarded
a
to
about
for
l)roduets,
The
government
is
and
_d
death
ccnatitutea
re%'eals
insurance
their
of
Malaysian
of
life
returns
22egr2a
The
17
these
which
accounted
5.3._
higher
the
ioo_. 8& the
COCOF£.5, progI_m
Furthermore,
plantations • the
the
subsidy
upon
children.
C_::c:_:::._._ar_::r. }I+:fund) _as
'ine 3chci_c'shlp...:_d
_o
from
respeetlvely
were
<.at %i_e It_
is
Serious
given for
no
the
_3
out
evJdenc_
that
proDle_s
may
of
scholarship
every
_60
prog_'_
the have
of
the
technology prevented
levy
is
widely
the
progr_
revenue.
_!
out
-46-
from to
taking
adopt
off.
the
One
new
of
these
technology..
is
the
The
apparent
following
reluctance
might
be
of
an
coconut
explanation
farme_:_ of
_is
problem. The
hypothesis
inconsistent of
so
farmers of
with
situations
to do
hybrid
have
be
been
may
have
to
less
adopt
The alleged is measured nuts are at
new
!976;
the for
net
is profitable
private benefits
have been of yield
not
as
for
this
overestimated. in terms copra/
hybrid
high
benef!cs
yield. Yield the hybrid the native
has not been tested on a long-term basis for to local diseases and pests. Expected yield as
The
reasons.
The hybrid resistance
be
variety
1981).
benefit of this technology is its high in terms of nuts/trees. Unfortunately, most two-thirds of the average size of
may
be
estimated
from
its of this
experimental
As stated above, the hybrid there are additional husking copra from these nuts.
4.
Finally, a peculiar characteristic of this hybrid is that its trees are shorter. _lis_n advantage as well as a disadvantage째 The advantage is that the costs of gathering the nuts from the tree can be substantially reduced. On the other hand_ there may be additional costs associated with preventing these nuts from being stolen.
The
rationale to
technology it
bette_ adoption
make is
for
them
likely
to prove information of new
this
its
be
worth. might
rice
particular
replant to
a new adopted A
be
nuts are smaller_ costs in getting
growth.
3.
farmers
for
because
to
a wide
it
Mandac,
The
several
in
when
and
costs.
appears
farmers
hybrid
nuts. Thusu the yield advantage may For purposes of comparison, a measure t_ee should be used. 2.
change
technDlogy Herdt
this
than
overestimated
to
Low-income
in adopting
are
been
resistant
Ro_umasset,
reluctant
technology
are
evidence.
shown
1964;
new
1.
farmers
available
(Schultz, may
the
that
varieties.
variety
are
eventually
voluntar_
the
intervention
right
approach
in
not
the
form
clear.
by
program,
This implies that the same amount of
here,
farmers
modest just
taxing
A superior
ooconut with
of
as
coconut given
incentives in
the
case
ti_e and _f
-47-
5.4. The to
go
The
vertical
beyond
at
sent own
least
the the
and
An UCPB.
We
shares
were
According al.),
customary
functions
at
in
issue that
in
this
59 per
receipts,
only
49 per
cent
which
cent
these
by
a nationwide
FOND
well.
The
the
country's
of
of
turns
distributed
to
as
embodiment
which
recall
about
owned
seeks
75 percent
important
Progr _
program
bankers,
concrete UCPB
Integration
integration
their
processors, trols
Vertical
of
this
owns
the
PCA
the
sample
the
registered
receipts
was
about
of
those
who
had
s
icient
_%e
rated
the
coconut
become
U_[COM,
milling
farmers
traders, which
con--
capacity,
Xn principle,
repre-
the
the
with
the
farmers
levy
ownership
revenue
of
COCOFUND
Ministry
of
Agriculture
of
coconut
farmers
in owning
per
is
owners
Thus,
29
and
discussions
basis
them.
and
the
UNiCOM.
to
by
became
fan
Purchased
survey
enable
pzDgram.
the
was
the
UCPB
levy-related bank
to
the
cent
shares
sample at
and
the
time
of
It_
in
_975_
(Valiente the
UCPB.
proportion,
the
the
that
receipts
received of
of
of
_e
et
COCOOf
these,
farmers
survey.
who About
18 35 per
there
cent
was
register, cent.
a
the
Hence,
campaign
sample these
the by
proportion statistics
PCA
receipt
suggests
equity
only
of
Even
those
farmers
would
only
be
about
about
half
of
the
50 per
country's
other
18
Registering the COCOFUND receipts with the C_OFED to_% chapter preside_t or with the municipal treasurer establishes ownership of the receipts_ According to the survey, the remaining recipients gave the receipts to their landlords or to the PCA.
to
the
they
to
some
belonged
Furthez_oze,
if
the
have
UCPB_
all
them.
of
should
the
encourage
owners
that
register
part
that
in
to
to
farmers
equity
have
of
the
failed
coconut
UCPB
could
receipts
farmers
imply is owned
that by
individuals.
-48-
AS
a group,
farmers
remainder
is held
aggregate
resources
How 1970
much
census
1980),
per
year.
imposed these
year
1975
export
copra
to
at
some
to
depend
developments
monopolist. to
act
might in the
in
income
then The OPEC.
damage
the run
is
UCPB
below
economy,
country's undermine
of
than
of
bank's
s_e UNICOM
the
share
as
a
in the
P17 have
UNICOM
as
the
with
to
regards
to
UNICOM. oil.
foreign skill
in For
monopoly
oils to
In the
Considering exchange reading example,
to act
can
frustrate
the
economy,
supplier
market.
equity,
profits
attempting
revenue
oils
converted
bank.
stands
markets.
reliable
was
if UNICOM
its
in
levy
inefficiency
where
by
accumulated
and
the
copra
of COCOFUND
COCOFUND
coconut
economy
extra
of
the
long-run
substitutability bringing
tons
farmers
world
extract
3.04
in
and
for
productivity
about_04
risk
farm
1980
registerd
of
on
Using
If he
copra,
Based
a coconut
could
levels,
oils
to
reputation its
when
coconut
is
it can
He
exporter
and
damage
degree
Rather
goals fats
do
The
UCPB.
about
in economic
from
there
the
of
competitive
sole
of
pays
1972
invested
result
the
about
a receipt.
trading
the
it can
the
hectares.
purchased.
could
that
1975,
size
farmer
from
have
domestic
thinks
equity.
in
produces
average
was
invest
2.4
farm
transfers
on
total
In
average
was
given
could
volatile
high
1971
the
becomes
the
the
like
long
prices
the
receipts
This
solely
UNICOMmistakenly trade,
the
UNICOM
importance
world
he
buyer.
trade,
earnings
the
shares,
single
implies
he
UCPB's
owners.
fam_er
average
that
which
when
in
the
of COCOFUND
respect
purchases
its
for
to UCPB
largest
farms
implies
worth
to
all
figures,
This
with
this
of
of
million.
(PCARR,
conversion
P68
_706.5
figures 2/3
cent
former
coconut
and
about
was
bank's
a small
bottom
each
the
70 per
could
the
levy
by
own
of
coconut
the if in as
a
attempts UNICOM oil
and
-49-
One through
arglm_ent the
UNICOMa
shortage
of
selves.
This
acquired
copra
Luzon.
copra
had
supply
led
come
so%md
coconut
forced
Mindanao, the
issue
if
since
the
program
farmers.
distribution
policy,
as
a solution
claim
that
owned
the by
it
is
other
the
program
raises
general
relative
to
the
rest
the
at
most
do
indeed
income
could
have
control
position
possible
that
being
three
in
milling
above equity
the than
they
that
bank,
would
sectors
of
UCPB
be
They worse
the
- simultaneously.
the
the
in Luzon
purchased
copra
the
in
problem
practices
policy
promotes
farmers.
more
to
at
in
what
better
in-
overall
incomes
This
small
neutral
to
than
the
income
of
cannot
coconut
50 percent
and
n_t
off
Perhaps
least
about
it does
before.
at
them-
business.
coconut
gains
acute
among
as millers
to
avoid
arg_nent to
large
intraindustry distribution
coconut
farmers
in
population.
only
in the
UNICOM
hand,
if
of
milling
the
its
wizen an
monopolistic
oil
could
tightly
Mindanao
improves
out
compete
in
coconut
the
1979
those
-introducing
is
in
while
picture
we pointed
to
industry
copra
In principle, On
happened
millers
distributes
picture.
_illing
of
UNICOM
it
what
oil
procurement
effect
is the
the
the
a competitive
distribution
that of
to wasteful
from
essentially
i_
r_petition
an unintended
Another
is
UNICOM
Unfortunately,
hand, was
for
as
thus
follow
industry
this
raises
the
the
UNICOM.
that
they
exploit they
of
pay
coconut
farriers
Even
the
can
be
themselves. for
costs
in It
is even
trading about
the
with and entire
19 idea
of vertical
19
While economies likely, however,
integration.
of scale may be gained in integrating, it is more that the transaction costs to do it outweigh the
benefits, at least for the sector is made up primarily
coconut industry, of small coconut
wherein farmers.
the
farmers
a better
associated
- production, a question
if
production
-50-
6.
6.1. The
social
DRC
is
the
relative
More
an
all
of
units
the
foreign
1972) 20
markets,
face
the
This is markets prices
this
policy.
same
comparative
20
forCo_a
policy
advantage
changes
of
should across
margin,
various
it
is
less
than
unity
the
marginal
are
all
resources
DRC
for
is the
each
only
in
just
the
DRC
If,
DRC3
of
a given
products
only
DRC
also
DRC
and
EPE
rate
thus
partly
not
the
differences
one
level in
hold.
a reflection
in different
reflects
of
in
plus
distortions does
regions
that
in marginal
differential
incentives.
only approximately correct since distortions in the product can induce deviations in shadow prices of factors from market (Sieper,
1981).
_
equilibrium
expressed
indicator
are
Moreover,
the
protection
there
product
et.al.).
In the
markets_
another
indicates
zero.
product
is
(SER)
profitabi
equal
effective
indicates
social
will
advantage
equalize.
net
_e
activities.
(Pearson,
product
between
it
rate
to
however,
relation
i.e.,
exchange
total
earnings.
equal
is merely
the
production
shadow
comparative The
in
is
exchange
the
distortions
simple
foreign at _e
equilibrium,
the
1972).
net
exportable
to
if
is,
its
a given
DRC
domestic
That
m_asure
government
of
of
advantage
of
currency
(Bruno,
_"_neDRC of
of
With
of protection factor
Costs
(DRC)
small
only
distortions,
rate.
(Krueger,
of
competitive uses
exchange
a unit
ratio
advantage
of
cost
comparative
the
In general
of
of
of
efficiency
comparative
absence
resource cost
index
precisely,
lities
Resource
Definition domestic
domestic
Domestic
-51-
Thus,
we
(see
e.g_,
not
expect
imply
a cot/elation
Bautista
and
that
government
industries.
the
Rather
equilibrium
the
protected
sectors
this
ion
margin.
DRC
1979).
to
of
the
government
any
empirical
at
the
work
correlation
inherently that
society to
in
this
to protect
relative the
EPR
illustrates
cost
words,
and
However,
tends
relation
increases
In other
the
Power,
opportunity
dustries. at
between
inefficient
the
distorted
resources
resource
cost
is protecting
does
drawn
into
the
in unprotected
inefficient
in-.
product-
21 In this
section,
we
coconut
regions
of the
Western
Visayas,
Samar
above,
we
compare
First,
we
our
go
calculate
country; and DRC
over
the
Southern
Northern estimates
our
DRC
of
copra
Luzon,
_n
Mindoro,
Mindanao.
Following
first
the
input-output
with
data
and
OER
our
1976
of
Central our then
main
Visayas_
discussion with
shadow
the
the
pricing
SER. proce-
dure. 6.2. The
Data data
marketing Division
base
survey of
the
covered
a sample
accross
ten
complete
21
mainly
coconut
Ministry of
regions
the
Table
of
comes
th_
farmers,
farms
the
and
country.
nationwide
conducted
of Agriculture
2,850 in
from
by
(Valien_e,
about
550
_t teok
socio-economic the
et.al.)
coconut three
Special
years
Studies This
traders
and
study
distributed
(1975-1978)
to
survey.
ii gives
some
relevant
economic
info_aation
from
The DRC of processed coconut products _ere estimated on the 1974 input-output table (_utista and Tecson). in pesos, are: Coconut oil 3.48 Dessicated Coconut 4.96
the
survey.
for 1974 based The estimates,
From
-52the survey
the table,
standa_dlzlng converted
using
PCARR,
1980].
tbe regions.
More
defining
in calculating
them
the
growth
difficult
We replaced
to 1976 aversge
of
at different information
of land and capital
the impllolt
A different than
tlmlng
the values
values
1971
the
w_-q conducted
of BAECON
problem
averages.
invested
to standardize
yield
concerned
to be zeros
from
rate of credit
the yield
I_rlods, each
giving
the problem
region.
Thu'_, we
in cocormt
farmin_
to the cocormt
was the coconut
inf_mmatlorl from
to 1976
industry
yield
the survey
of
[see
for each of
with
the the
data for each of the regions. the
as what
treatment
of missing
the sur%'ey report
values.
Rather
dld, we ign_ed
them
-53Table 11. Econom:[c Information
Some
CQconut Farms, By _egion: (pez- hectare)
SSD Conducted
In:
Southern Lumen
1976
On 1976
MLindoro
Centrad _isayaa
Wee tern Visayas
S_ar
Nor thorn Ft[ndanao
1975
1977
1976
1975
1976
La bet U t!1 Iz ati on (Mandays) I : Planting 3.3 Fertilizing O. 9 Weeding 5.8 •Hayvest_ng 12.0 Copra Making 7.3
2.a 0.3 4.0 11.6 9.5
4.0 I.7 4.2 1_,2 13.5
5.2 0.9 3.9 1_.2 7,3
3.4 3- I 4.8 11.0 " 8.7
4.2 3. I 6.3 10.8 11.3
Value of Land and Invested Capttai2
...
(pesos) : Coconut Land Buildings Tools Work Animals
Average Yield3 (1000 nuts) Landlord share
1
2 3
3,316.47 109.54 41.75 '220.09
3,316.47 109.54 41.75 220.09
3.0_4 0.60
3.014 0.50
5,093.82 8_ .41 10.88 • I09.12
a.48a 0.70
5,708.28 2,681.26 80 .i8 62.33 14.20 71.52 202.37 266.23
5.0_17 0.77
4.875 0.7.5
3,B21.90 i25.07 30.61 226.65
5.3J_I 0.80
in the SSD/MA cocoaut survey, missing values were implicitly defined as zeros. In this table, they do not enter into the eal_ulation of average mandays. When contract and non-contract mandays are reported f_ an oporation_ total fc_- it is the wcJdghted average. Non-1976 values were converted to 1976 figures using the Implloit growth rate of oredlts to _ho eoco_mt industry. The average yield from 1971 to 1976 in nuts per bearing tree was taken for each region. This average was multiplied by the average number of be-_rlng trees per •hectare (147) to get the average yield in nuts per hectare.
Source: Basle Data A_Ioul ture.
drawn
from
Special
Studies
Division
and BAECON,
Ministry
of
-54'
6.3.
Shadow
Social For 1975), (MSC) If
the uses
needed
MSC
is
in
copra MSC
assumed
to was
that
market
taken
rural
to
The
just
assumed
hired
hold on
of
of
by
to
the
then
an
one.
method
marginal
labor
elastic,
close
Harberger
average
is met
be. the
equal
d to total labor
where
in
social
copra
most
of
(B_way, cost
production.
the
additional
increase
in
supply.
The
rest
will
come
and
that
its
Thus, from
existing
labor's
wages
Social The depreciation
Cost
shadow was
asstL_ption
distort
NPR
is
= MSC
the
MSB
of
the
Formally,
cost
upwards
operator's
latter
homogeneous,
implies
rural
labor.
nominal
the
market.
Thus,
the
protection
in
coconut
distortions
labor
Harberger
(d)
that
use
The
operating market
undistorted rate
shadowwage
for rate
MSB
copra.
wage was The
is
(l-d),
80 percent.
social
and
was
distorted
to W.
be
labor
indirectly
(W/(I+NPR))_
The of
be
the
(MSB)
relatively
(d) will
SWR
We
employed
benefit
production
substantial.
copra
(W} was equal
of
labor
we
a weighted
social
for
was
in the
rate,
labor.
We farms
wage
marginal
supply
of
Labor
is essentially
the
weight
of
shadow
which
the
labor
Cost
the
and
Pricing
by
labor
of
labor
54 per used
was
cent
up
determined
to
account
in production
by
adjusting
for' the (50%)
and
the
following: (b) the
cost (a) house-
interest
(4%).
of
Capital
interest calculated
rate as
used the
was sum
15 percent. of
one
percent
The of
annual the
rate
value
of
of land
and
-55trees and ten _reent
of the valse
of inve_ted
capital
in coconut
farms.
_le_1 The marginal the product
value
of its marginal
is approxi_mted the
aoelal
product
product
bY the landlecd's
of the land
and the world
share
used in copra price
production
of copra.
(s) multlplied
is
The former
by the average
yield
of
land. Roumaseet
land
and james
produot_vlty.
approximation
[1979]
In eases
has
where
_hown
s was
that s is an InereaslnE not directly
observed
of
function
the followlnE
was used:
(Yj- y') ............ ] (s*'- s')
_j = s'
(Y*'- X"} where
Oj
is
produotlvlty
the
landl_d's
of region
share
J, and
the mi_Limt_m a_d max/mu_
values
maximum
and
shares
dOWtT_ard
to
marketing Table
are
._0
oost
.55
the
in
in
region
j,
the superscripts
is
the
average
* and ,e indicate
of the superscri|.,ted variable.
.80 respectively
landlord
Yj
share
th_Is province.
in
respectively
Our mirdmum
[_oumas-_et, 1979].
Mindoro
The adjusted
to account l_,downer
land
We
for
and
adjusted
the higher
shares
are
shown
in
11.
O_ver.atgr's _ The
total
incorporate
_os_!
social
factor"
cost
wa_
adJusted.upwards
by
5
the.operator's
opportunity
cost _n
copra
production.
12 summarizes
the domestic
social
costs
in copra
percent
to
6.4. Table eoolal
rent
of land
wa_
approx_t_ly
soolal
cost of producit',_ copra.
50_,
the highest
The _;badow wake
share
production. of
The
the entire
bill was 25% of total
Sooial
-56-
cost.
The
combined
cost
farmers et.
opportunity
and
al.
and
cost
of
variation The
was of
the
average
of B0.14.
â&#x20AC;˘ 7.44
1976,
average
zoughly over
theOER
ratlve the
the
SER
regions
protection in
(0.55)
than
5%.
ton
of
Dividing
Thus,
suggests with
the
a
for
the
As
across in
1976
average DRC
copra the
copra.
in
share
comparative
made
by
in Valiente of
the
operator's
together
expected,
constituted
there
was
regions.
was
$258.97.
It
DRC
was
with
the
_6.05
OER
advantage 1976.
conventional That
The
the
with
for
12%.
outlay
costs
cost.
comparative
stronger OER
The
labor
about
reported
The
for
following
0.55
and
copra
1976.
as
total.
costs
at
marketing
both
social
social
third,
total
Land
measure
averaged
apparently
8% of
coefficient
1976.
advantage
about
at
deviation the
inputs,
per
standard in
other
entize
centered
came
the
total
return
capital
i.e.,
about
in the
average
t_hree-year
of
constituted
three-quarters
little
of
marketing,
traders,
(1979),
opportunity about
of
cost
is,
The
is
a a
which
was
was
0.81,
SER
was
practice,
32% compa-
dividing
the
DRC
with
advantage
for
all
the
-5?Table 12. Domestic Re._ource Cost.q in Copra Production, By Region: 1976 (per metric ton)
Southern Luzon
Costs (pe)os) Labor Rent Interest â&#x20AC;˘ Depreciation Others Marketing
513.57 726,30
75.68 94.43 6.19 1I0.00
Western Visayas
416.69 847.97 27,35 63.68 90.00
110.00
360.07 908.29 49.23 54.82 7.33 130.00
7.15
293,55 932.52 35.27 68.75
Northern Samar
3.98
Mindanao
332.32 969,22 _2.96 41.2_ 6.21 120.00
1526.17
1491.19
1452,84
1444.07
1509.7_
1511,95
76.31
74.56
72.64
72.20
75,_9
75,60
Total
1602.48
1565.75
1525.48
1516,27
1585.23
1587,55
258.97
258.97
258.97
258.97
258.97
258.97
(US $)3
DRC (pesos/US
$)
Comparative Advantage_ DRCIOER DRCJ SER
2 3
505.37 653.67 75.68 94 ._3 2.04 160.00
Centr _I Visay_s
Subtotal Operator 's Opportunity. Cost 2
Returns
1
Mindoro
6.19
6.05
5.89
5.86
0.83 0.57
0.81 0.55
0.79 0.54
0.79 â&#x20AC;˘ 0.54
6.12
0.82 0.56
6.13
0.82 0.56
The Harberger shadow wage rate is used. The figures reported here are corrected for household and operator's labor and for interest of the wages to labor (54 percent of hired labor costs). It Is estimmted at 5% of subtotal cost, Three-yeay average of f.o.b, copra prices centered at 1976. Assuming a shadow exchange rate of @!0.94 or 32 percent over the official exchange rate (= _7.44).
Source: Baslo data drawn from the Special Studies Division, Ministry Agrlcalture and United Coconut Association of the Philippines.
of
-58-
7. Con_cludln_ A___\k_s
The
coconut
producer
and
This
wedge
prices.
¢ompetitlon oopra,
levy
with
UNICOM.
it Is able
the expOrt
tax d_kive a wedge
is apparently
To the extent
to _y
lower
prices
widened
that UNICOH
to traders
between
border
by pollcles has market
which
and
limit
i_wer in buying
who in turn pay lower
price_
to produoers. The
unified
exports.
To
increased, without demand equal
the extent
thls may
for coconut
copra
goes
partly
hand
exchange
be justified.
But
in
hand
earnings these
If we have some evidence
ell is finite,
the country
wlth
control
earnings
can
can impose, an export
elasticity.
It is interesting
to note
the govern;,_ent intervention
the intervention were
undervalued
designed
foreign
tariffs.
The
Justified
by
incentives
were
domestic
edible
the
controls
nOt tied
believed
that
linkages
As
which
oil.
was
part
a subsidy
price
distortions
t_e
Jn marketing
(_(.om_t industry.
to an
of protective w;_s further But
of millin_
the
capacity.
led to monopoly. the price
cow,trois
the res_latlon
calculated
and the price Without
of
tax on oil
largely
subsidy
s_eciflc_tlon
of world
the BOI investment
due
the investment
with
of unification
given
First,
that was in turn c_nlsed by a system
led to subsidies,
on edible
existing
to any reasonable
eonsumptlon.
copra
offset
exchange,
backward
_use
ell were
the _c_ual
to
government
protection Another
,In investmentâ&#x20AC;˘ _nd pricing.
are
be obtained
that the elasticity
of the demand that
of c_!
to the Phiilppln_
tO the reciprocal
incentives
for
of
that foreign
monopolization.
followed
Thus,
control
to make
necessary
on edible
program,
refiners
up the difference
to "break
the s,.,bsidy, refiners
even" would
oils
given reduce
sold of
between the price capacity
-59utilization
during
beo_,-e profitable became
scarce.
policy. lead
to
mills
closed this
a spiral
The UNICOM grant
exclusive
companies that
functions
greater
in 1979,
illustrates
of"offsetting and
here
increases
capacity
in wholesale
of ell milling.
the _overnment
examples
to a particular in their
the
however,
even copra
when prlees
Thus,
when
Ib
copra and
some of
intervened
with
government
intervention
tendency The
company.
the UNICOM can
(1981)
of government
government
enterprl_s.
enterprises
in the
Baumoi's
of
respective
are quasl-public
to quote
the subsidy,
regulations..
the AII are
compatltlon
companies
at opti_al
bow a well meaning
for government, programs
appropriate a public
to
production
the profitability
down
rights
from
these
led
lowered
Again
of tight .copra supI_)ly. With
to malmt_in Thla
eorreapondlnE/y the o11
tlmea
Even
in 'that they
industry
is
protects
both
the argument
serve
special
not sufflclent.
third p_inclple
to
It maybe
for the operation
of
enterprise :
Unless an overwhelming ease in terms (,'fbenefits ear: be. made for the contral,y [_sltlon !n a particular case, a public enterprise _hould not be •protected from the entry of competitors. Any firm which wlshea to enter into eomp_tltlon with a public f_rm should normally be permltted to do so without any s_eclal costs.or obllgationa beyond those im[_t-ed on incumbents. Moreover, freedom of exit should be the rule, not the exception. In any •event, there should always be a presumption that favors uuch freedom of entry and exit, wltb the burden •of p1,oof to be borne by those who wlsh to abrogate it _.n•any particular ca_e (p. 11).
It appears and
the
trade
producers wlth
while
which
research
that retaJ.nlng modest
restrictions
would
export
taxes
substantlal.ly
but r_oving
increase
still
providing
a _.ubsldy to domestic
to finance
important
development
and development.
For example,
programs
a, 12 percent
returns
consumers
the CCSF levy _
coconut
arid revenue:
in the industry, export
e.g.._
tax on both copra
-60-
and
coconut
oil
substantially the
lower
subsidy If
vary
with
the the
to
automatically than
their
price
world
would
lower
imply
a subsidy
the
For
taxes producer's
mean of
prices
consumers
by
levy
agricultural
exports
since
stimulate
pay
policy farm has
cultivated
area
land
resources
than
farms.
coconut
plantations better
the
trees
In summal-f, have
all
combined
have
not
been
scholarship
use
the
that
need
is
for
and
tend
under
higher to
major
would
the
real
of
Already not
have
be
a better
the
A
overall
tax
taxes
and
incomes. would
growth
in
in
25 percent evidence use
tax
would
system.
prices
source
also
average
business
their
do
would
it
the
to
for
that
i.e.,
hand,
producers'
we
note
balance
planted.
and
levy
present
to pay
the
area
export to
should
today,
the
relative
plahtations
the
option
of
be
more
of
turn
coconut of
the
that the
country's
though
this
and
increase
to
production
price
compensated no_
does
the not
present
technology
necessarily
cannot
be
imply
ruled
out.
cultivation
at our replanting
A policy
by intercropping
efficient.
tax, the
improving
yields
a hybrid
lower
insurance
prevailing
other
more
tax
crops.
export
adequately
provide
coconuts,
management
might
to
of
export
consumers,
the
stabilizing
increasing
with
the
to
and
than
taxes
the
interesting
On
Historically,
other
farm
also
and
coconut
However,
is
higher
expansion
us with
It
then
A variable
producers
indirect
devoted of
coconut
beneath
the
is
leaves
to promote
much
increasing
been
expansion
This
domestic
eliminating
prices
removed.
producers
higher
of
desired,
producers.
may
production.
production
further
be
non-agricultural
consumers
be
to both
would
This
for
thus
low world
incomes.
to prod_cers
urban
a price
prices,
is
the
could
z_turns
system
border
stabilization
price.
export
stabilize
on
produce
program.
domestic
example, tend
would
by
the
le%_], and
received by
the
by small
replanting
marketing
coconut and scheme.
regulations
producers.
sBiective The
Producers
programs
consumer
of
subsidy
-61of
cooking
compared
oll
to
regulated
the
The without
some
not
and
real
to
benefits
stabilization
be i_oreased_
consumers
which continue
needed
"and consumer
however,
a very
small
_ansfer
of
government
profits
temporarily
of an export
suapended, ban on. copra
this ha_ again
protection.
coconut
revenue
also
marketing
imposition
the CCSF levy o_ the export
for the modest
le
potential
by the recent negative
import tariffs
products
CCSF levy has been
in substantial
degree of
should
coconut
While'the
offset
either
sufficient
other
tax revenue
trade.
been larsely resulting
and
without
to impose
ban. for
A variable
these
protection
pro_a_s
taxes
could
be financed
export
tax would
and would
as well.
corresponding
hidden
f|QO_Q
and producers
on exports.
provide
The export
reductions
in
be
tax
industrial
-62Appendix ,I. The RelationshAp Between The Prices oi"Crude Coconut Oil In New York And Copra In Manila, 1970-1979: The "Ten Peso Rule"
Price of Coconut Oil " in New York (US oent_/Ib) (2)
Price of Copra in .Ratio of Manila Manila, Gross of Copra Price to NY Export lax and Levy Price of Coconut O£L (9/100 k_:s.)1 (ool.3/ool.2) (3) (4)
1970
14.40
105.60
7.3
1971
12.50
97.60
7.8
1972
9.05
72.80
8.0
1973
21.30
194.40
9.1
1974
45.03
386.70
8.6
1975
17._5
156.30
9.0
1976
18.57
179.00
9.6
1977
25.92
272.20
10.52
1978
30.66
323.50
10•52
1979
43.85
"438.50
10.02
Year (I)
1
The expor_ tax alldthe CCSF levy are added to actual copra price An Manila. This series may be •regarded as the copra price in the absence of the export tax and the CCSF levy or the "•borderprice" of copra.
2
The "ten pesO rule" ia evident starting 1977-
Souroe: Baslo data drawn from Philippines.
the Un/ted Coconut
AssocAation of
the
-63Appendix
2.
)
E_imatlng
The Input-Output In _oconut
i.
Copra-Coconut
Conversion
i)
0.63
m.t. coconut
il)
0.31
m.t. copra
b.
Copra-Coconut
oil per m.t.
meal
m.t.
coconut
coconut
Copra-Coconut
l)
0.222
m.t,
copra
ll)
0.162
m.t. desslcated
b.
Coconut
i)
Price of m.t,
0.222
iV)
V)
coconut
Cost
meal
of Copra
x Price that went
of into
Qopra meal
= (Vc _ Vcm)/Prlce
of
Coefficient
coconut
per 1000
coconut meat
of m,t.
nuts
coefficient
- Price
of m.t. copra
- Processing
copra = 0.1554
m.t,
copra = Price
m.t.
dessloated
1000
nuts = Vdc n
- 0.30 x Price
coconut
of _.t,
deaeicated
m.t.
copra
of m.t.
copra _
per 1000 nuts x 0,70 x Price of
m.t.
Thus, coconut
per
copra
m.t. copra
0._62 m,t.
copra
per 1000 nuts
meat-Desslcated
Ill)
of gross
oil = Vcm
Coconut
Factors
Processing
copra = Value
oil.
Conversion
ll)
copra
Oil Coefficient
a.
of m.t.
of m.t.
meal = Value
Meat-Dessloated
Cost
per m.t.
oll = Vc
m.t. coconut
Coconut
in milling)
x 0.31 m.t. copra
copra
per m.t.
2.
Ccconut
copra
(a by-product
x Price
1.587 m.t. copra
Thus,
Meat
Oil Coefficient
copra
m.t.
ill)
Oil and Dessicated
and Coconut
Factc_ s
â&#x20AC;˘1.587 m.t.
ii)
of Copra
Oil Coefficient
a.
i)
Coefficient
coconut
coconut
coconut
= Value
meat-dessicated
0.96 x (Price of m.t.
copra
meat
per 1000 nuts x Price
meat
[_r 1000
per 1000 nuts = Vm nuts x Price
of desslcated
coconut / Price
of
coconut
coefficient
of m.t.
of
" per
= Vm/Vdc n =
desslcated
coconut).
,@_-
â&#x20AC;˘Appendlx 2 Continued
3,
Estimates:
Tear
CopPa-Coconut 0ÂŁI Coefficient
Coconut Meat-Dezslcat_d Coconut Coefficient
1970
0.78
0._7
1971
0.78
0._14
1972
0.70
0,36
197_
0.72
0.56
1974
0.65
o.sg
1975
0.52
0.38
1976
o.61
0.43
1977
0.69
O,43
1978
0.70
0.42
1979
0.76
0,45
1980
0.63
0.31
1981
0.65
, _
,
by assu,._lon. no data.
-_ouroe: Converstlon Phtlippi_ea.
factors
drawn
from
the
United
Coconut
Association
of
the,
Balanss _.
B.
and
Associates (1971), _ 9_f _ct_ Baltimore: jc_n Hopkins Unlverslty Press.
in
Baumol, N.J. (1981), "Some Principles for the Operation of Public Enterprises," Chunl _ua _ of _ By _ F_nent _ (No. 2). Talpei: The Institute Of Eoonomlo8, Academia Sinloa. Bautlsta, R. and G.R. Tecson (1979), "Domestic Resource Costs in Phillpplne Manufacturing: 1969 and 197_", in R°M. Bautlsta and J.H. Power and Associates (1979), _ _ _ in _he _jzLLIp.PI_ Makati: Philipplre Institute o_ Development Studles. BoaOwey, R. House.
(1975),
_
Sector
Economlcs,
Bruno, M. (1972)t "Domestic Resource Clarlfloat_on and Synthesls," _
Masuchusets:
Costs and .q__
WithPop
Effective _,
Publishing
Protection: 80.
Business Day (1980), "Coconut Fund Hearing P6 Bi_llon," September I, 1980 _ssNe. Manila: Author. Clarete, R.L. (1980), "The Coconut Consumer Stabilizatlon Incidence and Equity ZmplÂŁoatlons, unpubl_shed paper.
Fund Levy: Its
COCOFPD (1973), "Story of the Coconut Consumer Stabilization Fund", The _E_ _, 2 (8). Manila: Author. Darrah L. and F. Tior_son (1969), Aarlcultural N_rketln_ in the _. Los Banos: University of the Philippines College of Agriculture. David, V. _.
(1977), _ _ in the Development _If the P_h__ Quezon City: Unpublished MBA Thesis, Ateneo de Manila University.
Berdt, R. and A. Mandac (1981), "Modern Technology and Economic Efficiency of Phillpplne rice Farmers", _ _ent _ _ E_La/_, 29. Erueger, A.O. (1972), "Evaluating Hestrlctlon_st Trade Measurement,, _ of _ o_, 80. Librero, A.R. (1971), "The International Demand Products: An AgEresale Analysis,, The _
Regimes: Theory and
far Philippine Coconut _ __9._, 10.
Medalla, E.M. and J.H. Power (1979), Estimating Implicit Tariffs and Nominal Rates of Protection" in R.M. Bautlsta, J.H. Power end Associates (1979), 229_ _ /_n _ Phillp_.Bg__. Makati: Philippine _nstitute of Development Studies. Pearson, S., N. Akrsmanel, and G. }]elson(1976), "ComParative Advantage in Eice
-66Produotlon: A Metbodologloal Studies, XV, 2. Power,, _.
J.H.
In_roductlon", o_
and Q.P. Slca_ (!971), The 2J_ London: Oxford University Press.
_
Industrlalizatlon AP_
SoumaAset, J.A. (1976), EL_ and I_,_,_k_ _ _ Farln_. Amsterdam: Nc_th-Holland Publlshlng Co. .....
Amg_z
, (1979), "Explalnlr_ Patterns in Landowner Shapes: Rice, Cern, Coconut and Abaca in the Philippines" (mimeographed).
Quality,
and W. James (1979), "Explalnlng Varlatlorm in Share Contraots: Land PopulAtion Pressure, and Tec_molosical Change," _
• S£eper0 E. (1981), "The Structure of General Equilibrium ShAdow pricing Rules For A Tax-Dist_ted Economy", Department of Eoonomles, Australian Natiomal Un_erslty and Centre of Policy Studies, Monash University, (mlmeogr_pbed). •Valienta, A.M., Jr., et el. (1979), _ 3o_lo-Eoonomlo_and _ _L_. Quezon City: SpeciAl Studies Division, MinlstPy A_v£oulture, Republic of the P_lipplnes. ¥eluoo,
E.T.
Philippi_e U-4ted
(1975), _X _ Press.
_
_ _
Coconut
Manile:
A_oeiation of Stabilizatlo_ _ Author.
__._.___, Coconut
_
the
_
_ _.
P_lippi,_es On The _
J._l.
_ Quezon
(1979), Qf _
City:
of
A _ On The University of the
The _
of _
The _.
Manila: Author.
_[ot_o, A.Q. and V.O. Qulntos (1979), _ S_ietv. Manila: GIC Enterprises Co. Inc.
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