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A SMALL FARMER-CENTERED APPROACH TO SUSTAINABLE COCONUT INDUSTRY DEVELOPMENT Inputs for Coco Levy Utilization Drafted by the Coconut

Industry Reform (COIR) Movement, Inc for the Coconut Farmers Conference, 29 October 2012

Laying Down the Ground Rules on the Use of Coco Levies

In anticipation of the dawning of the Supreme Courts Entry of Judgment on the 24% CIIF-SMC preferred shares, the present buzzwords on the coconut front are roadmap and utilization. Most obviously all will claim that any measure proposed or taken by government shall be in the name of the millions of coconut farmers and for their benefit just as it was during the Martial Law regime.

The coconut levies (CCSF, CIDF, CIIF, etc.) were all guided by a clear declaration of policy: so that the coconut farmers become participants in and beneficiaries of the development and growth of the coconut industry. [PDs 232, 276, 414, 582, 755, 961, 1468, 1841] Oscar Santos -- former legislator who for more than three decades now had not halted on efforts to recover the huge coco levies from Marcos cronies -- counted the phrase for the benefit of the coconut farmers to have been repeated at least 82 times in all coco levy issuances. But the glaring fact is that only a few and privileged cronies lavished themselves in the vast wealth of the industry leaving the farmers in stark poverty. Such is a basic understanding that not even seven magistrates in the Supreme Court of 2011 can change with a mere apathetic ruling. [The April 2011 ruling of the Supreme Court on the 20% SMC shares averred that government was not able to prove that Eduardo Cojuangco, Jr. was a crony of former President Marcos the biggest joke to hit the century, according to Associate Justice Conchita Carpio-Morales]

On December 14, 2001, the Supreme Court categorically stated that the coconut levy funds are not only affected with public interest, but are prima facie public funds. The

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Court further added that said funds were for a specific purpose for which they were collected for. Following the determination of ownership by the Sandiganbayan in 2004 and 2007, the Supreme Court, last January 2012, ruled on the cases of the United Coconut Planters Bank, the Coconut Industry Investment Fund Oil Mills, the 14 Holding Companies and the 24% CIIF-San Miguel Corporation shares. The ruling upheld Sandiganbayans earlier resolution that the said assets were public, owned by government in trust for the coconut farmers. In addition, the Court emphasized that the said asset is to be used only for the benefit of all coconut farmers and for the development of the coconut industry. One should take note that such a decision was based on the avowed intents of the coconut levy issuances, especially that it affects the national economy (October 2, 1989 SC decision) with the benefit of all coconut farmers as a primary concern in developing an all-important industry to spur the Philippine economy. Any effort, therefore, to develop the industry but is void of direct benefits to the coconut farmers may be a concern of the government but not of the coco levies. A case in point was last years campaign by the President to attract a USD 14 million foreign investment on the utilization of coconut water for the US market. The move hardly added anything to the coconut farmers as it merely widened the market for whole-nut buying at the farm level. Whole-nut buying did not add any value at all as prices were based on existing copra buying rates and maintained farmers to be plain raw material producers just the same.

This brings to concern, among others, the current trends in the treatment of some Php 71 billion proceeds of the CIIF-SMC preferred shares redeemed by SMC in October 2012.
a new coconut industry significantly contributing to national development powered by organized, emancipated and enlightened small coconut farmers and their communities who have control of significant aspects of the industry from farm production to processing, marketing and technological development; having effective participation in governance and policy-making; adhering to principles of social justice and sustainable development; with respect for basic human rights regardless of gender, ethnicity, religion and age.

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A Presidential Task Force on the Coco Levy, headed by the Presidential Management Staff, was formed by Malacanang in May 2011. The PMS was tasked to coordinate with the Department of Agrarian Reform, the National Anti-Poverty Commission, and the Presidential Commission on Good Government. This Task Force was specifically instructed to: 1. Propose a system that will properly and accurately identify the beneficiaries of the SMC shares; and, 2. Identify possible options on how to utilize the proceeds of the shares for the benefit of the beneficiaries.

This Task Force appears to have started on the wrong foot. The coconut levies were primarily intended to benefit the coconut farmers as a class and not as mere individual beneficiaries. There is nothing wrong with identifying individual farmers. That may be done at the barangay level. It does not mean, however, that the coco levies may not be mobilized until such time that all coconut farmers are identified.

It was Cojuangco et. al who used the farmers identification as a tool to conjure up the biggest scam during Martial Law. Farmers were individually named to be put in stock certificates of companies they acquired with the Coconut Industry Investment Fund, with the exception of the two biggest blocks of shares in San Miguel Corporation the biggest acquisition. This was so designed to justify claims that the companies acquired were owned by coconut farmers. The distribution of stock certificates, however, was later discovered to be a cover up of the real picture cronies owning 77.9% equity of the mother company of the coconut monopoly, the United Coconut Planters Bank (COA Report 1986).

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The Sandiganbayan, as upheld by the Supreme Court, had declared individual ownership to be unconstitutional. Taxes or levies collected by the state constitute a public fund that may not be transferred into the private ownership of any individual or juridical entity. This negates as well the proposal to now simply distribute the proceeds of the 24% SMC shares to the coconut farmers. Besides, the fund would only roughly fetch a one-time Php 20,000 for each farmer. Government holds in trust the public fund (coco levies) to which coconut farmers are beneficial-owners. As such government holds the responsibility of coming up with programs for the farmers and the industry. And it follows that any program spending or related acquisition, therefore, from such coco levies should be geared towards the benefit of the farmers as a class and the development of the industry.

In consideration of the aforementioned, now come various proposals by different government entities:

1. Coconut Industry Poverty Reduction Roadmap of the National Anti-Poverty Commission

This roadmap, a product of the Presidential Task Force, is composed of four (4) program components involving inter-agency coordination: A. Agro-enterprise Development DA/PCA B. Fast-Tracking Agrarian Reform in Coconut Lands - DAR C. Social Protection - DSWD D. Institutional Reforms - NAPC

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Except for some small details left unexplained (i.e. 1.5 hectares qualification for agro-enterprise development program) the plan appears to be quite defined among the Departments targeted for implementation (DA-PCA, DSWD, DAR, NAPC). The proposal carries reasonable programs, supplied with ample analyses, for the sector which government ought to do under General Appropriations BUT NOT WITH THE COCO LEVIES.

For example, fast-tracking agrarian reform in coconut lands is a necessary component of establishing ownership and control of the small farmers for eventual development of the industry. For such a purpose, however, there simply needs to have a clear policy declaration from the President for the program (CARP) has its own allocation under R.A. 9700 of P30 billion per year but not being granted by Congress thru GAA. To fund fast-tracking measures from coco levies now would be tantamount to saying that the coconut lands may not possibly be covered under the current law and program unless farmers monies are contributed to it. It is governments (DAR) responsibility to cover cocolands without any need of funding from the coconut farmers themselves. Creation of local mechanisms and strengthening agrarian justice for the farmers should come with the regular program of the Department of Agrarian Reform if the Administration is serious in completing the program by 2014. On the side, there is still the hanging question of why CARP coverage of coconut lands total to only 800,000 hectares out of the 3.4 million hectares. There is no figure to show, as of yet, that the rest of 2.6 million hectares of cocolands are either considered forestland/timberland, beyond 18% slope, and/or pastureland. A policy for cases of qualified theft being hurled by landowners at coco farmer-leaseholders or

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potential beneficiaries need to be clarified anew with the regular courts so they may be directed to the agrarian court.

While credit facilities/livelihood assistance (social protection/SEA-K) and technical support (agro-enterprise development) for intercropping and livestock integration are recommendable programs for coconut farmers, it will have to come under special programs of the Departments concerned and not simply become extension of current programs. No less than Secretary Proceso Alcala of the Department of Agriculture had declared that the government can move towards this direction by additional allocations from General Appropriation even without waiting for the coco levies. And, indeed, the budget for the Philippine Coconut Authority had started to increase since year 2012. Programs from coco
levies ought to be special programs with oversight of a special body. Such is the purpose

of pending twin bills in the Senate and House of Representatives. Senate Bill No. 2978 and House Bill No. 5070 both aims to establish the COCONUT FARMERS TRUST FUND TO PROVIDE ADEQUATE FINANCIAL PROTECTION TO THE COCONUT INDUSTRY AND ITS WORKERS, PROVIDING FOR THE MANAGEMENT THEREOF, AND FOR OTHER PURPOSES. But while the Senate version is moving along under its Committee on Agriculture, the House version had not even been scheduled for any hearing at all. Pending legislation, the President may issue an Executive Order to
carry on the same purposes. But to allow adequate protection of the funds for the coconut farmers and the industry, the President can certify the said bill as urgent. It is of utmost

importance to identify and earmark the funds for its specific purpose.

The coconut farmers monies were not meant to simply pad and sustain the governments already existing programs. It would be a double burden on the
a new coconut industry significantly contributing to national development powered by organized, emancipated and enlightened small coconut farmers and their communities who have control of significant aspects of the industry from farm production to processing, marketing and technological development; having effective participation in governance and policy-making; adhering to principles of social justice and sustainable development; with respect for basic human rights regardless of gender, ethnicity, religion and age.

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coconut farmers if the coco levies they contributed to were utilized in place for what government should spend for in the first place. Government, as trustee of the farmers contributions, carries the responsibility to attune coconut farmers benefits to the development of the industry.

As the Sandiganbayan pronounced in its December 2004 resolution:

It is high time that the real beneficiaries of the coconut levy funds, the coconut farmers who contributed to it, and the entire coconut industry be given a chance to reap the benefits that are due them. 2. Additional capital for UCPB by the Department of Finance

The Department of Finance is believed to support the claims of UCPB over indirect equity on the SMC shares amounting to P7.5 billion. UCPB -- a company fully funded by the coco levies in 1975 via PD No. 755 -- now wants to collect from the very same fund that built it for an indirect investment it had made. The reason appears to be purely of financial and banking consideration wanting to keep UCPB afloat with additional capitalization. Apart from the fact that the bank was built by coco levies it is not in any way related to any benefit of the coconut farmers at all not before, not today. Whereas PD 755 mandated the bank to solve the perennial credit problems of the coconut farmers, the banks loan portfolio does not even include anything related to coconuts in its entire existence. At the very least it created the Coco Finance and Development Corporation to answer for microfinancing coconut initiatives. Cocolife and the CIIF Oil Mills Group expect to follow with their own claims thereafter. What can be more discouraging than the very companies used to deprive the farmers of
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their benefits before now want to be first in line? This is the most preposterous yet among the proposals from within the Task Force.

3. Coconut Industry Road Map of the Philippine Coconut Authority

This roadmap had come ahead of the presidential instruction but had taken time to be completed by the PCA. Its drafting was not primarily based on the use of the coco levies. Today it still comes in powerpoint presentation format only. As expected, the traditional objectives of the plan are for improved quality of life of coconut farmers and to build a globally competitive coconut industry. The PCA had this in mind since time immemorial. The so-called roadmap, however, merely reflects the operational plan of the agency no more, no less. Such is the reason why the roadmap sorely lacks in participation of stakeholders, especially the farmers. Like previous plans of the agency the roadmap hardly focuses on any particular direction for the industry much less the farmers.

Claiming to be the sole agency mandated for coconut industry development, the PCA is also eyeing to get hold of the entirety of the coco levies to fund their programs. But apart from the fact that the agency has had little experience in developmental programs over the decades, what is alarming is its current interpretation of the most recent SC decision on the coco levies. PCA has the tendency of interpreting the phrase for the benefit of all coconut farmers in its literal form to serve both small farmers and big landlords. It will be sad to note if the PCA Charter of the 70s had not, until today, taken roots on the agency that once pillared the coconut monopoly for the big landlords. PD 232 (July 1, 1973)
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creating the Philippine Coconut Authority declared that the accelerated growth and development of the industry was specifically so that the benefits of such growth shall accrue to the greatest number.

Indeed the greatest number considers the small coconut farmers and farm workers who serve as the backbone of the industry. 92% of the industrys workforce is composed of the small farmers and farm workers 3.5 million of them who along with their families would easily add up to a fourth (60% women) of the entire Filipino population. It is they who should be the center and focus of development initiatives with the use of the coco levies.

Worrisome is the deafening silence of the Executive Branch on such matters of the coco levies. Without very specific guided instructions coming from the executive leadership, more and more plans, programs and roadmaps may be expected from other government agencies as well. The Department of Trade and Industry had taken up the cudgels for developing markets of the coconut fiber while the Department of Energy looks into increasing utilization of the coconut methyl ester (CME) for biofuel. Soon enough the available coco levies might be too small for the genuine farmers to have a share of the benefits if the available fund is left to government alone to decide and dispose of. Even worse, without clear pronouncements, the various players in the sector itself can even tend to race for access and care less about other non-member coconut farmers bringing about two troublesome scenarios: agawang-buko and kung sinuman ang malapit sa kusina.

So far the roadmaps and proposals for utilization of the coco levies still lack the necessary consultation process with the coconut farmers. It is for this purpose that this
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conference paper is presented, in coordination with the Department of Agriculture, to draw up perspectives from the coconut farming sector and develop initiatives from thereon for inputs to a sustainable roadmap for coconut industry development that is inclusive for all.

In sum, the following guideposts on the utilization of the coco levies: 1. That coconut levy funds and assets are public funds and, therefore, fall under the control and audit of government; 2. That coconut levy funds and assets are special funds which may only be utilized for the purpose for which it was collected for the benefit of the coconut farmers and the industry; 3. That coconut levy funds and assets should benefit the coconut farmers as a class; 4. That coconut levy funds and assets should benefit the coconut farmers and the industry thru programs and services of the government with ample participation and representation by the sector; and, 5. That the coconut levy is not only about recovering huge investments made but also about carrying out the mandate of the coco levy funded / coco-related companies while under governments care.

Preservation of the coco levy funds to ensure continuous support for the poor farmers and the industry should be another concern. The existing coconut levy funds ought to be
treated as a perpetual fund using only annual interest earnings to fund programs for the benefit of the farmers and the industry. Its use, on the other hand, should be made fully transparent to

its publics.

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I.

Socio-Economic Realities in the Coconut Industry

To many urban dwellers the coconut is known only as the young coconut, buko, for fruit drinks and dessert. To the rural communities the coconut is largely known to be merely copra. Coconut farmers rely on copra production alone to meet their families daily needs. This is the way it had stayed for centuries.

The National Anti-Poverty Commission cites

At 60% poverty incidence, coconut farmers are the poorest and most socially insecure sector in the country, with daily income averaging at PHp 40/day. Improving the lives of 4 million coconut farmers and their families should therefore be a strategic focus of the governments anti-poverty programs. (Excerpts from NAPC letter to the leaders of the coconut farmer groups dated May 23, 2011)

An individual-focused anti-poverty program for poor coconut farmers may take forever to achieve a sustainable impact unless such a program is designed to alter economic relationships in the industry and effect structural changes. The Philippine coconut industry is largely founded on copra production a copra-based industry. Any product derived from coconuts is measured in copra terms. Copra is dried coconut meat, sundried or with the use of dryers. 91% of coconut production is processed into copra for oil milling and the rest of the 9% is used as fresh nuts for desiccating, virgin coco oil, coconut cream, etc.

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The concentration on oil milling is a product of the coconut monopoly established by the cronies during the Martial Law era. Three decades thereafter the annual copra production still pales in comparison to the annual oil milling capacity.
Annual Copra Production (ave.) 2,400,000 MT vs. Annual Oil Milling Capacity 4,500,000 MT Copra

Bulk production is exported as crude coconut oil (CNO). Major export destinations are US and Europe jointly at 80%. This makes the Philippines the largest exporter of CNO in

the world market with a share of 45%. In the last five years the industry had raked in close to USD 1B per year (average) on export income making coconut the #1 agri-crop dollar earner for the country. While the figure appears to be outstanding, as far as export performance of Philippine crops are concerned, the CNO is in stiff competition with 16 other vegetable oils in the world market with only a 2% share.

Moreover, the Philippines remain to market the biggest share of CNO in the world market only because 80% of its coconuts are utilized for export purposes and the remaining 20% for domestic use. Indonesia which closely follows the Philippines in the CNO market share applies an opposite strategy 20% for export and 80% for domestic
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use. This had made the Philippine coconut industry totally dependent on the volatile international CNO market, tagging along the price of the farmers copra with it up to the farm level. Such that when the volume of CNO export increases, the world market price decreases and vice versa so do copra prices at the farm level.

In addition to the volatile world market prices, the coconut farmers will have to additionally contend with the long chain of traders who can bring their copra to the faraway oil mills. The oil mills are generally situated in cities far away from the production areas and inaccessible to small coconut farmers. On top of this a tenant-farmer would have to share earnings from the copra-produce to a landowner. And at the other end, the big multi-national companies which used the all-important high-end by-products of coconuts to manufacture consumer products (soap, detergent, shampoo, cosmetic, food, etc.) continually profited immensely.

In view of the situation, Prof. Cielito F. Habito, Ph.D., of the Ateneo Center for Economic Research and Development posed 3 assertions in reference to handling the industry:

Assertion 1: Success in the sector is not measured in terms of production levels, but in farmers incomes and welfare. Government has not been successful in the coconut industry Higher production does not necessarily imply higher farm incomes

a new coconut industry significantly contributing to national development powered by organized, emancipated and enlightened small coconut farmers and their communities who have control of significant aspects of the industry from farm production to processing, marketing and technological development; having effective participation in governance and policy-making; adhering to principles of social justice and sustainable development; with respect for basic human rights regardless of gender, ethnicity, religion and age.

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Jobless growth in agriculture DAs performance has been wrongly judged on the basis of production levels

Assertion 2: Farmers will not invest in improved productivity for as long as they get a meager share of their products value. Farm price-to-retail price ratio lower in RP than in ASEAN neighbors Farmers do not have enough cash or access to formal credit Low rates of technology adoption Challenge is to let farmers get a better price (& understand why they dont)

Assertion 3: Local monopsonies have been a persistent feature of the rural economy for too long. Agri-processing traditionally concentrated in large facilities Credit linked with trading Local trading cartels Poor rural transport infrastructure limits farmers options Clustering (ala Normin Veggies, Malaysian FELDA), an effective counterforce

[Philippine Agriculture and the Coconut Industry: Wanted Fresh Approaches, Sustained Plans, a presentation by Prof. Cielito F. Habito in the 2010 Coconut Summit]

The assertions forwarded by Prof. Habito have been proven through time and practice. Government, for a long-long time, had mastered the art of planting, replanting and fertilization of coconuts. The PCAs researches concentrated on increasing copra quantities and qualities. These researches were done with great pride and achievement for coconut agriculture. It did not, however, address the farmers incomes to a point
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where selling the tree for lumber had become a basic survival instinct. Coupled with landowners trying to evade CARP, coconut tree cutting had remained unabated placing the industry in danger.

With the continuous prodding of farmer-directors in the boards of the UCPB-CIIF Group in 2004, the CIIF Oil Mills launched and supported more than 150 Direct Copra Marketing Stations all over the country with funds coming from redeemable shares of the OMG to UCPB essentially the coco levies. The concept was founded on Direct Farmer (cooperative) to Mill Copra Trading. Under the scheme the CIIF provided cooperatives with a Php 250,000 working capital with transportation and warehouse subsidies. After two years only a handful, literally, survived and the rest fell in deep debts. Even with such support the cooperatives were not able to compete with the big traders who were given premium prices by the mills on account of the volume they can muster. A big trader can easily deliver the volume of, at least, 7 cooperatives in a month.

So dire is the existing poverty among coconut farmers within the copra industry that even personal or peer loans encountered great difficulty in addressing the need. Oscar Santos was appointed to the Board of the UCPB-CIIF Finance and Development Corporation (Cocofinance) in 2002, a subsidiary of the UCPB-CIIF Group of Companies. After almost two years he decided to resign as he felt the companys microlending programs were not enough to concretely help the coconut farmers. Ka Oca cited the following in his letter of resignation:

From a laymans point of view, these figures could only mean that: For the year which ended April 30, 2004, Cocofinance has loaned out only P181 M out of its P871 M loanable funds (P52 M bank deposits plus P819 M IMA). The figures indicate that availment is too slow either because of any or all of the following:
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Many coco farmers cannot accept why they have to pay interest on loans from the funds they painfully to. painfully contributed to They do not find our loan programs attractive, despite our roadshows and publicity. They find difficulty complying with our requirements. They find our interest rates high. They may be willing to pay interest but not at present rates and terms. They shy away from loans, scared of their inability to repay. xxx poor. Loan not suited for the really poor Grant of loans will not necessarily benefit the farmer. It could even prove to be a burden as may be indicated in the increase in our volume of past due loans. (p. 2, BSP Report of Examination as of May 31, 2003). Thus, we found it necessary to engage the services of collection lawyers to recover unpaid loans. xxx Perhaps the following basic points would be of some help if and when our existing programs are reviewed: The coconut farmers themselves should be allowed to determine how best the levy funds taken from them should be utilized. They would surely know what they need better than we do. The coco producing provinces are not similarly situated. That being so, each province would vary in how best to utilize its share of the levy funds for its constituents.

look. Second look Review of our programs has become even more necessary especially since some P2B SMC dividends may soon be made available. Our programs to help uplift the coco farmers, were not intended to be inflexible. Adjustments or even changes may be made if they do not serve the purpose for which they were conceived, namely, to assist and benefit meaningfully as many coco farmers as possible with the least possible expense. expense The key word is meaningfully.
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So Ka Oca goes on to proposing alternative programs that may impact on the lives of the coconut farmers at the time:

Part of the funds may perhaps be allotted to any, some, or all of the following as our resources would allow:
seriously pursue the MOU with China where the latter proposes to extend a loan of US100M worth of machineries and equipment to process coco husks rotting in the countryside, payable by export value of geotextile and other processed coco products. This is significant since coco farmers nationwide stand to benefit. initiate and pursue similar arrangements. consider funding Philhealth programs for the coco farmers. fund more scholarship arrangements similar to that arranged by Director Lim. promote production and marketing of such coco products as biodeisel, virgin oil, coco husks, coir etc. support continuing research on the curative qualities of monolaurin.

The copra-based industry, in its centuries of existence, has reached its peak. It has nowhere else to go but feed the worlds various industries with the wonder coconut oil or at its best, its oleochemicals. Today more and more uses for the wonder nut had been discovered paving the way for new developing markets (neutraceuticals, cosmeceuticals, pharmaceuticals, renewable / biodegradable resource-based materials and fuels, etc.) that cater to more basic and current worldwide necessities food, health and environment. Unlike the well-entrenched traditional and poverty-ridden copra industry, the emerging new industries in the coconut sector offer a greater variety of products, choices and, most importantly, more efficient utilization of the countrys rich coconut resources true enough a golden opportunity. Moreover, on its building stage the lessons from the age-old copra-based industry may be applied so as not to
a new coconut industry significantly contributing to national development powered by organized, emancipated and enlightened small coconut farmers and their communities who have control of significant aspects of the industry from farm production to processing, marketing and technological development; having effective participation in governance and policy-making; adhering to principles of social justice and sustainable development; with respect for basic human rights regardless of gender, ethnicity, religion and age.

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leave behind the lot of small coconut farmers and farm workers instead making them the center of development. This ought to be a primary direction for the utilization of the coco levies at hand FRESH APPROACHES, SUSTAINED PLANS for the benefit of the coconut farmers, the industry and the national economy.

It will definitely take much effort to build through new directions for the poor coconut farmers and the industry. The farmers themselves would have to participate in the whole process along with their communities. Public information beyond copra and coconut oil is greatly limited as of yet such that full potentials of coconuts are often overlooked. So few know how coconut products and by-products affect our everyday lives. Very few of the farmers know what coconuts can really do. Faced with various problems within the copra-based industry, most have yet to comprehend how one problem leads to another. There ought to be massive information dissemination on the true state
of the coconut industry and promotion of the various potentials of the coconut thru tri-media, especially for the farmer-producers.

II.

Filling in the Gap: A BUKOD-KOPRA Approach

While in the state of the copra-based industry there are still several options that can be taken to somehow effect increased incomes or improve lives of the poor coconut farmers, farm workers and their communities particularly the optimization of the use of the coconuts and the cocolands, whichever is applicable. These options may do well to serve during a transition stage from the copra-based industry to the new fresh (fresco) coconut industry.

a new coconut industry significantly contributing to national development powered by organized, emancipated and enlightened small coconut farmers and their communities who have control of significant aspects of the industry from farm production to processing, marketing and technological development; having effective participation in governance and policy-making; adhering to principles of social justice and sustainable development; with respect for basic human rights regardless of gender, ethnicity, religion and age.

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Mature coconut water, the newest in-thing in the markets today, is a great resource to muster. There is 1/3 of a liter of water in every nut. At current production rate there is some 15 billion nuts harvested per year. The President, during his 2012 State of the Nation Address, shared the good news of how exports of coconut water has grown to 16 million liters. Little was known that our farmers have been wasting 5 billion liters every year.

Conchita Masin, leader of the Agraryong Repormang Samahan ng mga Kababaihan (ARSK) in Barangay Nangan, Governor Generoso, Davao Oriental, had in her associations command some 65 hectares of cocolands awarded thru CARP. With a good yield of 60 nuts per tree per year (120 trees per hectare), the association can collect 156,000 liters of mature coconut water per year. Seeing the potential of producing the coconut water concentrate -- a thick gourmet sauce likened to soy sauce / oyster sauce produced from continuous boiling of mature coconut water -- the association had started selling the product in their own and neighboring communities. With continued patrons the association is looking forward to sell some 7,800 liters of the concentrate at Php 100 per liter, earning them an additional Php 780,000 (gross) or Php 12,000 per hectare per year.

The mature coconut fiber, coconut peat, coconut shell with the liquid smoke (cooled smoke from charcoal production), if harnessed into use for the communities themselves can add more to the communities incomes.

Eric Rabat, a Board Member of the Province of Davao Oriental, runs a decorticating plant in Mati. Eric stumbled into a buyer of coconut fiber hanks. He then contracted 40 households in a fishing village, Camansi, to twine the coconut fiber and weave them into
a new coconut industry significantly contributing to national development powered by organized, emancipated and enlightened small coconut farmers and their communities who have control of significant aspects of the industry from farm production to processing, marketing and technological development; having effective participation in governance and policy-making; adhering to principles of social justice and sustainable development; with respect for basic human rights regardless of gender, ethnicity, religion and age.

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hanks. The women and the children in the village participated in the undertaking. The effort had since added Php 300 daily income to each of the households. The effort allowed the men as well to skip from daily fishing allowing more time for the fishes to grow and reproduce. Eric had since combined his coco peat with chicken dung, sacked and given to farmers to fertilize the farms. His latest endeavor is to provide women in a barangay with the short coco fiber that hardly passes export standards. The short coco fiber is processed by the women into pots for seedlings to replace non-biodegradable plastics and earns additional income for their families.

Then somehow there can still be value-addition to copra itself.

In Masbate Island the Paris Manila Technology Corporation (PAMATEC) intends to provide electricity to 80-100 rural households per barangay thru a mini-grid by extracting coconut methyl ester from a feedstock of 30 kilos of copra per day.

The Coconut Industry Reform Movement in 2009 had tried facilitating copra consolidation of 500 tons with coconut farmer groups in Region XI and tied the effort to a Toll-Crushing Agreement with the Legaspi Oil Mills in Davao City. The agreement allowed the farmer groups to deliver copra to the mill via express lane with an assurance of a fair weighing / volume computation. This is due to the fact that the mill shall be paid a processing fee for every kilo of copra. The resulting value-added crude oil or refined oil and copra pellets may be sold by the group to any existing client fetching a higher peso value for the copra actually delivered. This scheme, however, is still subject to risks due to the volatility of CNO-copra prices and needs swift copra consolidation capacities.

a new coconut industry significantly contributing to national development powered by organized, emancipated and enlightened small coconut farmers and their communities who have control of significant aspects of the industry from farm production to processing, marketing and technological development; having effective participation in governance and policy-making; adhering to principles of social justice and sustainable development; with respect for basic human rights regardless of gender, ethnicity, religion and age.

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With coconuts optimized there is still the land underneath the coconut trees to deal with. With 100-120 coconut trees planted to a hectare, total land area utilized should be at 20%. A good 80% of the hectare will be open for either multi-cropping or livestock raising.

Marcus Dumandan, a 3-time PCARRD Awardee as farmer-scientist, won the title for earning Php 700,000 gross per year with of a hectare of cocoland in Davao City. Marc optimized his use of the land by planting 6 crops (banana, cacao, durian, coffee, lanzones, and ginger) underneath his coconut trees. Lately he has added livestock (chickens) in the farm. Using organic fertilizers for the intercrop had made his coconuts (cat-lag) more productive as well allowing him to sell his produce as seednuts that again fetch a higher value than copra.

As many as 1.4 million Filipino adults (aged 20 and above) acquired diabetes in the last five years mainly because of unhealthy diets and sedentary lifestyles, according to data compiled by anti-diabetes advocates. [Diabetes Philippines 2009] The increasing number of cases of diabetes in the country and in the world depict a huge health need for low glycemic index sugar the coconut sugar. Coconut sugar is derived from the fresh coconut sap (fresh tuba). In fact, the fresh coconut sap is a healthy drink by itself. A coconut tree can produce 2-4 liters of this sap per day. Given a fair value in an increasing market the sap can command Php 8-10 per liter at farmgate or at least a gross of Php 1,600 per hectare per day definitely an amount that copra-making cannot match. What more if processing is taken all the way to coconut sugar production?

Similar approaches with necessary variations may be made to fit different particular situations of coconut communities especially with the use of the coco levies. It is
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imperative to undergo a consultative and participative process involving the farmers, their communities, other stakeholders, and local government to achieve a consolidation of economic scalesto assure that benefits can accrue to the greatest number.

III.

Introduction to the New Fresh Coconut (fresco) Industry

Picking up from the pitfalls of the traditional copra-based industry, the road to the new coconut industry, with the use of the coco levies, should be anchored on certain Guiding Principles for Cooperation so that the coconut farmers become participants in and beneficiaries of the development and growth of the coconut industry.

Guiding Principles for Cooperation:

1. Programs and projects should entail direct community (farmers), other stakeholders and local government participation in the production and consolidation of farm produce; 2. Programs and projects should entail value-addition to coconuts thru carefully planned integrated processing / semi-processing with technological transfer right in the areas of production; and, 3. Programs and projects should entail joint ventures, business cooperation and the like for equity sharing with the target coconut farming communities.

The new fresh coconut (fresco) industry is essentially non-copra-based. The movers of the fresco industry had proven that copra production utilizes only 25% of the real value of coconuts. Fresco is a method where fresh mature coconut serves as raw material for a long chain of interlinked (integrated) processing resulting to various stage-by-stage
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products and by-products capable of being economically feasible in smaller village-level scales. The products are food-grade and clean as differentiated from the traditional copra-making. These products, mostly food and oil, would not have to depend on the international oil market prices for farm-level value. In fact, even the local communities where processing or semi-processing facilities are positioned can partake of benefits and consume the healthy food products themselves. Most importantly, the new coconut industry must be made reachable to the farming communities which they can call their own. The fresco method integrating uses of the coconuts includes mature coconut water, fresh meat / coconut milk, coconut shell, husk, and their downstream products which go a long-long way to flour, non-dairy/non-lactose cream, and virgin coconut oilbased products (neutraceutical, cosmeceutical, pharmaceutical, and oleochem products). It can also easily combine with other agri-crops from production to processing.

IV.

Allied Agro-Industries for Coconut Agriculture

Similarly situated with the coconut industry are the coffee and cocoa (cacao) industries where 90% of the farmers raw material is absorbed by big business allowing them to dictate prices at the farm gates. In the same light, there is great local and international demand for coffee and cocoa products. As crops, coffee and cocoa thrive well underneath the coconuts. As processed / finished consumer products, coffee and cacao can do wonders when combined with fresco products especially on health and wellness product lines.

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This perception had led similar-minded industry players to band together under the Cocoa-Coconut-Coffee Coalition, otherwise known as CO3. CO3 goes by the principles of shared areas of supply, shared markets, and shared equity where:

Shared areas of supply means coffee and cacao seedlings can easily be grown by the farmers underneath coconuts allowing focused areas for consolidation;

Shared markets means each outlet can serve as satellite of the other, multiplying market access, without having to set up expansion outlets individually;

Shared Equity grown underneath coconuts and following the fresco approach, processing / semi-processing can be brought to the production areas for all crops.

The concept is workable on both the BUKOD-KOPRA (multi-cropping) stage or the fresco stage (integrated processing / semi-processing). But again, the most important factor for success is the participation of organized coconut communities moving in the direction of the new fresh coconut industry.

V.

Programs with Delivery Mechanisms

A revolting trend in most coco levy-related discussions is the focus on how much is available and how the funds can be accessed. So far there had been little discussion on which programs can best serve the situation of the poor coconut farmers; and how such programs would reach more than 20,000 coconut-producing barangays.

a new coconut industry significantly contributing to national development powered by organized, emancipated and enlightened small coconut farmers and their communities who have control of significant aspects of the industry from farm production to processing, marketing and technological development; having effective participation in governance and policy-making; adhering to principles of social justice and sustainable development; with respect for basic human rights regardless of gender, ethnicity, religion and age.

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The fresco method opens up various choices (stages) and opportunities for the poor coconut famers and farmworkers. Variations to the scheme, however, should be made to fit particular situations in each setting. While government maintains a steady bureaucracy, its reach would not go as far as all the 20,000 coconut-producing barangays in 1,695 municipalities of the 68/79 provinces in the country. As such local mechanisms will be vital to the success of any project undertaken.

At present there exists a number of Local Coconut Industry Development Councils (Barangay-Municipal-Provincial) in Quezon, Camarines Norte, Camarines Sur, Marinduque, Western Samar, Compostela Valley, and Davao Oriental. The LCIDCs are basically local mechanisms that ensure participation of coconut farmers / farmworkers and other stakeholders with local governments in planning initiatives to improve the lives of the sector and the industry in general. By practice the LCIDC is composed of 60% coconut farmer representation, 20% for other stakeholders and 20% for local government. The mechanism carries certain inherent advantages: Inclusivity (entire local geographic community) vs. exclusivity (members only); Industry perspective vs. crop specific; Decentralized / democratized (simultaneous) development initiatives vs. centralized but limited reach; and, Farmers (men & women) participation in development vs. farmers limited to being raw material producers.

The LCIDCs innate relation to the local government places it in a strategic position to aid in local legislation for the benefit of the sector and the community. The barangay-level LCIDC, most especially, maintains direct access to the producer, the farm and the produce for consolidation.
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All problems besetting the coconut industry impacts on the farms and the farmers. It follows, therefore, that solutions to the industrys problems should be centered on the farms and the farmers in the barangays a small farmer centered approach to sustainable coconut industry development.

The Local Coconut Industry Development Council Concept was adopted by the Department of Agriculture - Philippine Coconut Authority and the National Anti-Poverty Commission as part of the institutional reform program. The Department of Interior and Local Government, thru the late Sec. Jesse Robredo, issued a memorandum to local governments encouraging them to establish the LCIDCs in all coconut-producing areas.

a new coconut industry significantly contributing to national development powered by organized, emancipated and enlightened small coconut farmers and their communities who have control of significant aspects of the industry from farm production to processing, marketing and technological development; having effective participation in governance and policy-making; adhering to principles of social justice and sustainable development; with respect for basic human rights regardless of gender, ethnicity, religion and age.

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Mechanisms like the LCIDCs can play a major role in planning, implementation and monitoring of initiatives, projects and programs funded by local/ national government. Protection of the coconut farms and farmers

P
VI.

Preservation of the coconut trees Propagation of coconuts and intercrops Participation of farmer men and women in policy formulation Planning development for value addition Putting policy into action Putting transparency ahead for genuine development

Legal Due Diligence and Third-Party Monitoring for Programs / Projects

Programs and projects to be undertaken, especially with the use of special public funds, shall necessitate pre and post study / review. Legal due diligence must be performed so as to aid the coconut farmers in their plight to the new fresh coconut industry lessening risks of misuse of the funds and/or the actual projects. Local licenses and permits to operate, regulatory fees by the PCA, and the like must be considered ahead of the projects to hasten the process.

Among the business models close to the community-level at present are the Barangay Micro Business Enterprises and the Cooperatives.

a new coconut industry significantly contributing to national development powered by organized, emancipated and enlightened small coconut farmers and their communities who have control of significant aspects of the industry from farm production to processing, marketing and technological development; having effective participation in governance and policy-making; adhering to principles of social justice and sustainable development; with respect for basic human rights regardless of gender, ethnicity, religion and age.

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AN ACT TO PROMOTE THE ESTABLISHMENT OF BARANGAY MICRO BUSINESS ENTERPRISES (BMBEs), PROVIDING INCENTIVES AND BENEFITS THEREFOR, AND FOR OTHER PURPOSES. Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled. PRELIMINARY PROVISIONS Section 1. Short Title This Act shall be known as the "Barangay Micro Business Enterprises (BMBE's) Act of 2002." Section 2. Declaration of Policy It is hereby declared to be the policy of the State to hasten the country's economic development by encouraging the formation and growth of barangay micro business enterprises which effectively serve as seedbeds of Filipino entrepreneurial talents, and intergranting those in the informal sector with the mainstream economy, through the rationalization of bureaucratic restrictions, the active granting of incentives and benefits to generate much-needed employment and alleviate poverty. Section 3. Definition of Terms As used in this Act, the following terms shall mean: (a) "Barangay Micro Business Enterprise," hereinafter referred to as BMBE, refers to any business entity or enterprise engaged in the production, processing or manufacturing of products or commodities, including agro-processing, trading and services, whose total assets including those arising from loans but exclusive of the land on which the particular business entity's office, plant and equipment are situated, shall not be more than Three Million Pesos (P3,000,000.00) The Above definition shall be subjected to review and upward adjustment by the SMED Council, as mandated under Republic Act No. 6977, as amended by Republic Act No. 8289. For the purpose of this Act, "service" shall exclude those rendered by any one, who is duly licensed government after having passed a government licensure examination, in connection with the exercise of one's profession. (b) "Certificate of Authority" is the certificate issued granting the authority to the registered BMBE to operate and be entitled to the benefits and privileges accorded thereto. (c) "Assets" refers to all kinds of properties, real or personal, owned by the BMBE and used for the conduct of its business as defined by the SMED Council: Provided, That for the purpose of exemption from taxes and fees under this Act, this term shall mean all

a new coconut industry significantly contributing to national development powered by organized, emancipated and enlightened small coconut farmers and their communities who have control of significant aspects of the industry from farm production to processing, marketing and technological development; having effective participation in governance and policy-making; adhering to principles of social justice and sustainable development; with respect for basic human rights regardless of gender, ethnicity, religion and age.

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Republic Act No. 9520 February 17, 2009 AN ACT AMENDING THE COOPERATIVE CODE OF THE PHILIPPINES TO BE KNOWN AS THE "PHILIPPINE COOPERATIVE CODE OF 2008" Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: Section 1. Articles 1, 2, 3, 4 and 5 of Chapter 1 on General Concepts and Principles of Republic Act No. 6938, otherwise known as the "Cooperative Code of the Philippines," are hereby amended to read as follows: CHAPTER I GENERAL CONCEPTS AND PRINCIPLES "ARTICLE 1. Title. - This Act shall be known as the "Philippine Cooperative Code of 2008".cralaw "ART. 2. Declaration of Policy.- It is the declared policy of the State to foster the creation and growth of cooperatives as a practical vehicle for promoting self-reliance and harnessing people power towards the attainment of economic development and social justice. The State shall encourage the private sector to undertake the actual formation and organization of cooperatives and shall create an atmosphere that is conducive to the growth and development of these cooperatives. "Toward this end, the Government and all its branches, subdivisions, instrumentalities and agencies shall ensure the provision of technical guidance, financial assistance and other services to enable said cooperatives to develop into viable and responsive economic enterprises and thereby bring about a strong cooperative movement that is free from any conditions that might infringe upon the autonomy or organizational integrity of cooperatives. "Further, the State recognizes the principle of subsidiarity under which the cooperative sector will initiate and regulate within its own ranks the promotion and organization, training and reserach, audit and support services relative to cooperatives with government assistance where necessary. "ART. 3. General Concepts. - A cooperative is an autonomous and duly registered association of persons, with a common bond of interest, who have voluntarily joined together to achieve their social, economic, and cultural needs and aspirations by making equitable contributions to the capital required, patronizing
a new coconut industry significantly contributing to national development powered by organized, emancipated and enlightened small coconut farmers and their communities who have control of significant aspects of the industry from farm production to processing, marketing and technological development; having effective participation in governance and policy-making; adhering to principles of social justice and sustainable development; with respect for basic human rights regardless of gender, ethnicity, religion and age.

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While the coconut communities are mainly targeted for programs from the coco levy funds, business models are not limited to the abovementioned. Business models, such as corporations / corporatives, should evolve as consolidation for greater volume may be required by changing markets. All the more shall there be greater need for thirdparty monitoring to ensure continuing meaningful impacts of the projects / programs launched by government with use of the coconut levies. Third-Party Monitoring may be made with the cooperation of civil society groups (POsNGOs, Church, local associations, etc.) fully oriented with the direction of building the new fresh coconut industry for the small coconut farmers.

VII.

Pursuing Further Coco Levy Recovery

The Supreme Court, last January 24, 2012, decided in favor of government and the coconut farmers when it declared as public funds the investments in the UCPB, CIIF, 14 Holding Companies and the 24% CIIF-SMC shares. The Supreme Court was emphatic on the specific purpose of said public funds for the use and benefit of the coconut farmers and the industry -- not for any other purpose! If it had come earlier than the decision on the 20% SMC shares it would have made it all the more "the biggest joke to hit the century".

Recently the SC denied the Motion for Reconsideration of Cocofed as regards the 24% CIIF-SMC shares. With this, entry of judgment is expected to come soon and the decision shall be cloaked with finality.

To whose favor and benefit? In part, the government and, supposedly, the coconut farmers IF the recovered amounts are handled with a high degree of transparency
a new coconut industry significantly contributing to national development powered by organized, emancipated and enlightened small coconut farmers and their communities who have control of significant aspects of the industry from farm production to processing, marketing and technological development; having effective participation in governance and policy-making; adhering to principles of social justice and sustainable development; with respect for basic human rights regardless of gender, ethnicity, religion and age.

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and accountability in accordance with the SC ruling -- only for the benefit of all the coconut farmers and the development of the coconut industry. Unfortunately, however, the recent decisions of the Court are still largely for the benefit of SMC and Danding Cojuangco.

A close look at the history of the SMC acquisitions will show that both blocks were acquired in 1983 through a mesh of layered transactions specifically designed for cover up. The 24% CIIF block was purchased by 14 Holding Companies that were set up by the CIIF Oil Mills, of the UCPB-CIIF Group of Companies, from direct and indirect loans (not a single loan) from "mother company" UCPB which holds the Coconut Industry Investment Funds. The 20% block, on the other hand, was purchased by 44 dummy companies using loans and cash advances from UCPB and the CIIF Oil Mills. The 44 companies then assigned the shares to Eduardo Cojuangco Jr. Having control of the two biggest blocks of shares in SMC Cojuangco effortlessly took the helm of the corporation in 1983.

The use of the coco levies for such purpose was then "legally" backed up by a Presidential Decree issued by President Marcos creating the Coconut Industry Investment Fund -- every inch of use of the coco levies granting privileges to Cojuangco and cohorts were supplied with issuances by Marcos who had sole legislative powers under martial rule. Cojuangco was indeed a favorite among the cronies such that when Marcos fled to the US, Cojuangco was by his side. But wonder of wonders, 7 of the Justices of the Supreme Court needed to be convinced about Cojuangco being a crony. Claiming to be unconvinced, they granted 20% of the SMC shares to Cojuangco without blinking an eye, entertaining no motions for

a new coconut industry significantly contributing to national development powered by organized, emancipated and enlightened small coconut farmers and their communities who have control of significant aspects of the industry from farm production to processing, marketing and technological development; having effective participation in governance and policy-making; adhering to principles of social justice and sustainable development; with respect for basic human rights regardless of gender, ethnicity, religion and age.

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reconsideration that would prove otherwise, to the extent of deleting them from the Court's records.

These decisions and the political environment now push the coconut farmers and its networks into a three-pronged battle for recovery:

Management and utilization of proceeds from the CIIF-SMC preferred shares

Cocofed, the coconut landowners association, attempted to block the SC decision on the 24% CIIF-SMC shares using the premise that the coco levy funds are owned in their private capacities and not public funds. After losing the case and with the funds declared public, Cocofed with its allied organizations the Pambansang Koalisyon ng mga Magsasaka at Manggagawa sa Niyugan and the Philippine Association of Small Coconut Farmers Organization then conducted a conference (Sulo Hotel) to demand from government that they be the selected representatives of the coconut farmers in managing the now-public coco levy funds.

The Php71 billion cash proceeds, including dividends, are more than enough to create a chaotic dash of claims and counterclaims even among government agencies. To add to this is the fact that Malacanang had appointed people close to Cojuangco in the management and boards of the entire UCPB-CIIF Group of Companies (Tanada-Magsaysay excluded). This had led to UCPB, Cocolife and the CIIF Oil Mills signifying to collect "indirect equity" from the said CIIF-SMC shares.

The entire UCPB-CIIF Group of Companies was established using CIIF for capital. This makes the attempt to collect for "indirect equity" totally absurd. It is merely an
a new coconut industry significantly contributing to national development powered by organized, emancipated and enlightened small coconut farmers and their communities who have control of significant aspects of the industry from farm production to processing, marketing and technological development; having effective participation in governance and policy-making; adhering to principles of social justice and sustainable development; with respect for basic human rights regardless of gender, ethnicity, religion and age.

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attempt by the Group of Companies, once more in the control of Cojuangco lackeys, to shave off as much portion of funds recovered for their own benefit.

Genuine coconut farmer groups have supported bills (HB 5070 / SB 2978) establishing the COCONUT FARMERS TRUST FUND to protect the funds and ensure that benefits accrue to the coconut farmers and the industry.

Under such circumstances the Executive Branch should be made to take a position and make it public.

Recovering losses from the 2009 conversion of the 24% CIIF-SMC shares

The January 24 decision should have really come ahead of the "incredulous" decision to convert (2009). "Incredulous" was how then Associate Justice Conchita Carpio-Morales termed the conversion in her dissenting opinion. With a vote of 8, the Supreme Court did not only permit the PCGG to convert. It practically instructed PCGG to convert the shares "to preserve the asset", shielding any government official from any accountability. Right after conversion, value of the SMC common shares increased to P120 from P56 per share. Apart from surrendering board seats in SMC, the government lost billions in the process. On the day of redemption by SMC the common shares ended at Php 109.90 per share. Who then should be made accountable for such huge losses and how can government minimize such effect? While the Aquino-PCGG had earlier aired its position taking the Courts to be mistaken on the conversion, it had kept mum soon after. This pushed the coconut farmer organizations to file for investigation with the Ombudsman.

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With a very silent national leadership on the issue of the coco levies, the private intervenors and the coconut farmer groups, while embracing the decision declaring the nature of the shares to be public, are now left to their own efforts in filing appropriate cases to recover the huge losses.

Reopening and reviving chances of intervention to recover the 20% SMC erroneously awarded to ECJ

The Supreme Court may have issued the decision to grant Cojuangco the 20% SMC shares with finality. But as far as the coconut farmers and the public are concerned, no null and void decision can ever be declared final. The said decision rested on a false notion, wittingly or unwittingly, that there exists no legal definition of illgotten wealth and had to redefine it themselves to weave the decision into granting the privilege to Cojuangco. This despite clear definitions existing by law (EO Nos. 1,2,14 of Pres. Corazon Aquino) and its use in previous court rulings. In fact, the definition by law again saw its way into the decision of January 24, 2012 declaring the 24% CIIF-SMC shares to be public. Two blocks of SMC shares which were both part and parcel of a single case (CC No. 33-F), with monies having both originated from the CIIF, were treated with two separate applications by 7 of the Magistrates of the Supreme Court. Worse, the decision even tried to alter history by claiming that it is of no proven fact that Cojuango was indeed a crony of Mr. Marcos. The net effect of such an incredible decision was to grant billions of pesos worth of shares to one individual to the detriment of the millions of impoverished coconut farmers.

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Last September 19, 2012 the coconut farmer groups with the Catholic Bishops Conference of the Philippines (CBCP) filed a complaint against the said (20% SMC shares) decision's ponente, AJ Bersamin, in the Court's Ethics Committee for discounting the existing legal definition of ill-gotten wealth. Appropriate cases to reopen the case will have to follow from the private intervenors. Government effort is yet to be found on this case. Meanwhile more evidences are finding its way to the public.

Conclusion: The Greater Need for Political Will Now More Than Ever

The fight to recover the coco levies have gone on for more than two decades now. Every change in the political environment tended to either widen or narrow down
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the opportunities for recovery. Such is the set up wherein Cojuangco is most comfortable with. Then President Estrada, a patron of Cojuangco, caused PCGG to withdraw the case on the 24% CIIF-SMC shares which would have set a precedent for the other cases. Haydee Yorac managed to take the case back in Court when she took over PCGG thru the appointment of PGMA. But later PGMA herself succumbed into a political compromise with Cojuangco's Nationalist Peoples Coalition (NPC) Party to stay in power and evade impeachment. She then appointed Camilo Sabio to the PCGG to lead an out-of-court settlement with Cojuangco even as government was winning the cases in the Sandiganbayan. The conversion of the shares in 2009 was part of this compromise.

Today we face the administration of PNoy whose coming into power was supported by his Uncle Danding Cojuangco. Last September 23, 2010 Cojuangco and the NPC publicly vowed to support the administration until 2016. In preparation for the next elections the Liberal Party had coalesced with the Nationalista Party and the NPC. PNoy, himself, had been very vocal and firm in combating corruption in government but would always have nothing to say on the coco levy issue with its huge social justice implication. So far the only effort the President had made was to create a Task Force on the Coco Levy. Apparently any committee handling the coco levy funds would have to deal with management, utilization, (transparent) monitoring and feedback, and still move to recover the other portions of the coco levy funds.
Presidential Coco Levy Committee

a new coconut industry significantly contributing to national development powered by organized, emancipated and enlightened small coconut farmers and their communities who have control of significant aspects of the industry from farm production to processing, marketing and technological development; having effective participation in governance and policy-making; adhering to principles of social justice and sustainable development; with respect for basic human rights regardless of gender, ethnicity, religion and age.

Inputs for a Coconut Industry Development Roadmap In cooperation with the Department of Agriculture Page 37 of 38

Like it or not, government shall be, and should be, key in seeing through the mandate of the coconut levies: so that coconut farmers shall become beneficiaries of and participants in the growth and development of the coconut industry. Because the levies are now declared public funds government is entrusted with it -for all the coconut farmers. As such it is the responsibility of government to undertake programs of meaningful benefit, firstly, to the impoverished coconut farmers and, secondly, to the coconut industry. But considering the current political environment, the organized coconut farmer groups and its networks cannot let down on the battle to see the levies work for the lot of the coconut farmers. Recovery is one thing but it would now need a strong political will and civil society component to make the levies finally serve its purpose and intent.

VIII.

Summary of Recommendations for the Management and Use of the Coco Levies

Protection of the coconut levy funds shall be ensured by declaring it a COCONUT FARMERS TRUST FUND. Pending legislation, the President may issue an Executive Order to carry on the same purposes. But to allow adequate protection of the funds for the coconut farmers and the industry, the President can certify HB No. 5070 / SB No. 2978 as urgent. Preservation of the coconut levy funds for continuing support to poor coconut farmers programs and development of the industry shall be made by managing them as perpetual funds, utilizing only annual interests / dividends for the programs and related spending. Programs funded by coco levies shall be special programs (not mere extension programs of government) with oversight of a special body specifically tasked for the various purposes covered (management, utilization, monitoring and feedback, recovery of other coco levy assets) with adequate representation by the sector. Massive information dissemination on the true state of the coconut industry and promotion of the various potentials of the coconut fresco products thru tri-media shall be
a new coconut industry significantly contributing to national development powered by organized, emancipated and enlightened small coconut farmers and their communities who have control of significant aspects of the industry from farm production to processing, marketing and technological development; having effective participation in governance and policy-making; adhering to principles of social justice and sustainable development; with respect for basic human rights regardless of gender, ethnicity, religion and age.

Inputs for a Coconut Industry Development Roadmap In cooperation with the Department of Agriculture Page 38 of 38

launched by government in partnership with civil society organizations, especially for the understanding of the farmer-producers and their communities. Programs funded by coconut levies shall be a product of continuing consultations with the coconut farming sector and the participating local communities thru local mechanisms such as the Local Coconut Industry Development Councils and the like. Village-level integration of production thru processing of the coconut products shall be a primary agenda with the use of coco levy funds, to include optimization of the farms thru multi-cropping and /or livestock raising. Transparency on utilization of the coconut levies shall be ensured and reported to the publics thru tri-media and the internet together with offsite-onsite third-party monitoring and feedback mechanisms from the beneficiaries. Continuing research and market studies for products of the new fresco coconut industry shall be conducted for dissemination to the participating communities. Recovery of other portions of the coco levies shall be vigorously pursued on behalf of the farmers and the industry. Adequate coconut farmers representation in the coconut levy funded companies shall be made to drive the companies into fulfilling its original mandate while under governments care and control. A declaration of policy made on the need to fast-track agrarian reform in coconut lands in line with the development of the coconut industry.

A New Beginning

a new coconut industry significantly contributing to national development powered by organized, emancipated and enlightened small coconut farmers and their communities who have control of significant aspects of the industry from farm production to processing, marketing and technological development; having effective participation in governance and policy-making; adhering to principles of social justice and sustainable development; with respect for basic human rights regardless of gender, ethnicity, religion and age.