Rolando T. Dy, Ph. D.
Executive Director
Center for Food and Agri Business
University of Asia and the Pacific
Tree-crops have played a key role in agriculture development and poverty reduction in many Asean countries. (I can attest to this as an agricultural project economist in Malaysia in the late 1970s and early 1980s).
Let’s compare the achievements of these countries in the past three decades in tree crop development. Specifically, this involves areas harvested, production and export. Let’s also discuss the possible impact on poverty reduction and the key success factors.
The Asean countries (singly or more) are key players in global tree-crops: palm oil, rubber, coffee, cacao, coconut, and cashew.
Indonesia, Malaysia and Thailand in that order are the world’s largest producers of palm oil; the first two control some 90 percent of the world’s exports.
Thailand, Indonesia, Malaysia and Vietnam control most of the rubber exports.
Vietnam ranks second in the world in coffee production and exports. Indonesia is fourth.
Indonesia is among the top cocoa exporters.
Indonesia and the Philippines are the top producers of coconuts while the latter is the top exporter of coconut oil.
Vietnam is the world’s leading cashew exporter.
Area Expansion. Tree-crops harvested areas in Indonesia expanded 3.1-fold to 13.1 million hectares during 1980-2008, Malaysia 1.9 times, Thailand 1.7 times, and Vietnam 9.7 times. By contrast, the Philippines had its areas expanded less than 1.1 times.
Production expanded faster because of an increase in productivity, particularly oil palm in Indonesia, rubber in Thailand, and coffee and cashew in Vietnam. The Philippines was heavily dragged down by lack of progress in coconut replanting and fertilization.
Exports. Total exports expanded 13-fold in Indonesia to $22.8 billion in 2008, 5-fold in Malaysia to $17.2 billion, 12-fold in Thailand to $7.3 billion, and 74-fold in Vietnam to $2.4 billion from 1980. Meanwhile, Philippine exports moved up only 1.6-fold to $1.1 billion.
During the past three decades from 1980, the Asean countries – particularly Indonesia, Malaysia, Thailand and Vietnam – were game changers in the world of tree-crops. They collectively captured market shares from the rest of the world to Asean. In 1980, Asean controlled 63 percent of the world exports of palm oil and this jumped to 87 percent in 2008. For coffee, market shares rose from seven percent to 24 percent while cacao beans from three percent to 14 percent. Cashews dramatically expanded from two percent to 20 percent.
These successes can be attributed to four countries: Indonesia, Malaysia, Thailand and Vietnam.
Country Analysis
Indonesia. The tree-crop drivers were: palm oil, rubber, and cocoa. It is now the world’s leading palm oil producer/exporter, and the world’s second largest rubber producer after Thailand. The main achievements were:
Oil palm harvested areas skyrocketed to five million hectares in 2008 from only 204,000 hectares in 1980. In fact, if immature areas were counted, there were seven million hectares planted in 2008.
Rubber areas rose to 2.9 million hectares from 1.6 million hectares in the same period.
Cocoa areas shot up to 990,000 hectares from 19,000 hectares.
Coffee areas increased to 977,000 hectares from 498,000 hectares.
Malaysia has been a tree-crops country for many years. It was the world’s largest palm oil producer until it was surpassed by Indonesia in 2005. In a similar vein, it was also the world’s largest natural rubber producer until overtaken by Thailand in 1985. The shift form rubber to oil palm was due to higher labor costs and better farm profits while the slowdown in oil palm expansion was limited by land. Thus, Malaysian firms, like Sime Darby, expanded into Indonesia.
Harvested areas of oil palm grew to 3.9 million hectares in 2008 from 777,000 hectares in 1980. A large part of these are in Sabah and Sarawak.
By contrast, rubber areas declined to 1.2 million hectares from 1.6 million hectares in the same period. (To be continued)
