Coconut sugar pricing, infra targeted for reform

INFRASTRUCTURE and pricing reforms are needed to increase coconut sugar output and raise farmer incomes in Misamis Oriental, according to the Philippine Institute for Development Studies (PIDS).

In a policy note, the government think tank said the current “recovery-rate” scheme, under which farmers are paid based on the volume of sap delivered, limits earnings and discourages participation in higher-value activities such as processing and packaging.

Misamis Oriental is a key coconut-producing province, with output topping 520,000 metric tons in 2025, or almost 30% of total production in Northern Mindanao, according to the Philippine Statistics Authority.

The study found farmers to be concentrated in upstream activities, particularly sap tapping and initial boiling, while cooperatives handle processing, packaging, and marketing.

According to PIDS, this structure limits farmers’ participation in higher-value segments of the supply chain and constrains income growth.

The report said that while coconut sugar has emerged as a high-value sweetener with strong growth in domestic and international markets, farmers have yet to benefit from this growth.

“Macro-level success has not translated into micro-level prosperity. Over 90% of coconut farmers remain below the national poverty threshold,” it read.

PIDS said the payment system reinforces this outcome, with compensation based on volume rather than on quality or the level of processing. This reduces incentives for farmers to improve product quality or engage in downstream activities.

The study recommended shifting to a stage-based pricing model that would account for both quality and processing activities to encourage greater participation in value addition.

It also called for the establishment of barangay-level shared facilities for drying, granulation, and packaging to address equipment and capital constraints faced by small producers.

“Improving access to shared village-level facilities for drying, granulation, and packaging enables farmers to transition from raw sap selling to higher-value coconut sugar products,” the report concluded.

The think tank also cited the need for regulatory support to improve market access.

“Government agencies should provide faster assistance for food safety certification and compliance with market standards,” it said. 

It added that access to concessional loans and small-scale financing should be expanded to support investment in processing technology.

PIDS said market conditions remain favorable, noting that “growing domestic and global demand for natural sugar alternatives positions coconut sugar as a high-potential product, provided supply chains stabilize and participation deepens.”

The report concluded that coordinated interventions in infrastructure, pricing, financing, and regulation are needed to improve farmer participation and support more inclusive growth. — Vonn Andrei E. Villamiel