Reviving the Integrated Coconut Industry Part 4: Analysis and Projection

Basically the campaign to save the coconut plantation (tree of life) is to revive the integrated coconut industry. Damaged and not maintained of coconut plantations due to lack of funding to maintain and develop it in a sustainable manner.

Bioeconomy is defined as knowledge-based production and uses biological resources or living things to produce products, processes, and services in the economic sector within the framework of a sustainable economic system.

The Monas monument in Jakarta is so monumental and so famous that almost all Indonesians know it, even the Jakarta province uses the monument as its government logo or icon. But very few know that the 32 kg gold which is the top of the Monas monument, 28 kg or 87.5% (say almost 90%) comes from the contribution of coconut entrepreneurs, namely from the copra trade. Coconut has indeed experienced the glory of even having a large role in Indonesia's independence. A number of ammunition of wars to various important events in the framework of Indonesia's independence were financed by the copra trade. Copra is the raw material for coconut oil which later becomes a number of derivative products that are highly needed by humans. The era of the triumph of copra or coconut oil revolves around the transition period of the 19th century to the 20th century or more precisely between the 1870s to the 1950s and its heyday in the 1920s. 

Why now copra and coconut oil are especially sinking and unable to compete with palm oil? The long history of trade competition is the answer. Some parties, especially the American Soybean Association (ASA) accuse coconut oil as an evil oil that contains cholesterol and saturated fat clogging coronary arteries. The accusation has never been proven right, in fact it proved to be the opposite, but it is one of the main reasons for the destruction of the global copra and coconut trade. The campaign and the tropical oil war took about 30 years or in the 1950s to the end of the 1980s in the United States and eventually the Indonesian coconut industry collapsed. 

If we look at palm oil, it turns out the same thing happened. For some time Indonesian palm oil has also received a negative campaign due to environmental destruction so that Europeans do not want to buy palm oil from Indonesia. It could be and it is probable that this is also an effort to weaken and make the palm oil industry will also be dropped later. But because it has only been running for a few years, it seems that the effect is not very visible at this time. And if it is done massively and continuously and there is no significant resistance, then it is not impossible that the fate of the palm oil industry is also similar to the coconut industry. The statement that 'only donkeys fall into the same hole twice' is something that needs to be pondered deeply to analyze this. 

 

Coconut Fruit

As an additional reference, Indonesia, which in the colonial era as one of the main producers and exporters of cane sugar, is currently also having a misfortune because besides being no longer an exporter, it has become one of the largest sugar importers. In 2016 Indonesia became the largest sugar importer in the world with a value of $ 2.1 billion or around Rp.28.4 trillion. The value of Indonesia's imports was greater than the three other importing countries whose populations were actually greater than those of Indonesia, namely America ($ 1.9 billion), China ($ 1.2 billion) and India ($ 922 million). There are quite a lot of sugar factories in Indonesia, namely more than 180 units, but most of them are currently not actively producing and most are on Java. The total national sugar production is 2.2 million tons with a sugar cane plantation area of around 0.5 million hectares and an estimated need of 5.7 million tons so that production still needs to be increased. 

Indonesia, the majority of which still exports raw materials for industries in other countries, also indicates that it is a developing country, so this condition should also be improved. Export of a variety of finished products or a minimum of intermediate products must be sought. Export of whole coconut is one thing that must be avoided and replaced with exports of processed products. When we talk about reviving the integrated coconut industry, but on the other hand, whole coconuts as raw materials are directly exported without processing it is a lie or it's useless. Industries without raw materials will surely die. Exporting whole coconut with an estimated number of four billion items annually is a setback. How not, in the history of the glory of the coconut, Indonesia exports in the form of a minimum of copra, while today it even exports whole coconuts. Industry era 4.0 also has no meaning with conditions like this. 

 

Whole coconut

Of course it needs good regulation and cooperation between various parties to overcome this. Indeed, there are also policies from developed countries to limit the development of developing countries' industries, for example during the heyday of coconut in Philippines many exported copra to the United States and the United States gave some import taxes to the Philippines on condition that the Philippines not develop its coconut industry. And indeed in that era many copra processing industries located in Europe and the United States. 

 

Palm oil fruit

Even in the current era of bioeconomy all commodities of agriculture, forestry, fisheries and animal husbandry should support each other to make a strong economy, for example with agro-forestry will be able to optimize the potential of land and environmental balance. Don't let the dichotomy and contradiction occur so that between bioeconomy-based products weaken each other, for example coconut oil and palm oil should be able to have their own segments or even from the beginning it has been designed that coconut for mainly non-oil food products and palm oil for oil products because the productivity of oil per hectare is the largest of all plants. Coconut oil and palm oil (CPO) have different qualities, because coconut oil has a medium chain bond or MCFA (Medium Chain Fatty Acid) while palm oil (CPO) has a long chain bond or LCFA (Long Chain Fatty Acid). Coconut oil which is rich in lauric acid is similar to palm kernel oil (PKO). Besides being found in coconut oil and palm kernel oil (PKO), lauric acid is also found in mother breast milk. 

 

CPO (Crude Palm Oil)

When the European Union for example with its bioeconomy makes various efforts to obtain various sources of energy, food, chemicals and so on from living things or biomass, then we should realize that Indonesia's position in the tropics is the best position to lead the bioeconomy era on condition that managed properly. Do not let the great potential just be useless and even bring disaster like some time ago, namely natural wealth invites the invaders and the Indonesian people were colonized due to the devide et impera politic. As a result, instead became a slave in their own country. Indonesia should be the largest producer of biomass, the biomass country.


As palmae plant groups there are many similarities between palm oil and coconut. And specifically the case in Indonesia, for example the productivity of coconut and palm oil is also still less than other countries like Malaysia, so this needs to be improved. But the number of palm oil processing industries starting from the production of CPO and its derivatives is currently more than coconut, which is estimated to be around 1000 pieces while the area of palm oil plantations is also almost 4 times that of coconut plantations. Palm oil production is currently reaching 38.17 million tons for CPO or 41.98 tons in total with palm kernel oil (PKO) in 2017 or the largest in the world. With CPO production of 38.17 million tons, the use in the food sector, especially cooking oil, is 3-5% (equivalent to approximately 2 million tons). In other sectors, CPO derivative products such as oleochemical 3.8 million tons / year ago, the energy sector, biodiesel 2 , 5 million tons, and the rest export around 70%.

There is an analysis that indicates that the coconut industry will rise with a number of products starting to demand the market, including the most striking coconut water, followed by coconut milk, dessicated coconut and VCO. But unfortunately most of the success is not in Indonesia but in other countries such as the Philippines, Sri Lanka and India. In fact, there are even products whose raw materials from Indonesia after being ready to sell products are sold back to Indonesia, namely coconut milk which is the source of coconut from Indonesia. Thus the actual analysis that the coconut industry began to stretch has a point especially at the global level, while for the domestic indicators there are almost no indications, only small spots are still too early to be said to rise. With an estimated 14 billion nuts produced annually in Indonesia, there are around 3 billion liters of coconut water, or when converted to VCO to 1.4 million tons, dessicated coconut to 1.7 million tons while coconut shells are 2.5 million tons and coir/fiber of 5.6 million tons.

Indeed, in the current era of bioeconomy, it is a natural thing that in the past it became trash and discarded, and now it is a commodity that is sought and even competed, for example coconut water that was once thrown away, is now accommodated as raw material for nata de coco and bottled coconut water, coconut shells and coconut husks, then palm kernel shells which were originally only thrown away as a road hardener/ improvement are now widely sought after and used as fuel for power plants with very large demand, more details can be read here. Some coconut products that are starting to be in demand, there is already demand and it is projected to continue to increase is coconut water. The Philippines exported 484 thousand liters of coconut water in 2009 to 17.9 million liters in 2012 and in 71.7 million liters in 2015 or there was a 141-fold increase in 8 years. To produce 71.7 million liters of coconut water, 261 million coconuts are needed per year. And it is estimated that the bottled coconut water market currently reaches 13 trillion rupiah. Unfortunately there is no information for Indonesia. Almost all of the coconut water products are exported to the United States and usually a close relationship with the buyer's country which is closely related to historical factors will facilitate business transactions. Maybe that's why the no. 2 coconut producing country in the world can export more their coconut products to the United States.

Coconut milk packaging is used not only for cooking but also for vegetable milk, such as soy milk. China is a country that consumes a lot of coconut milk to replace animal milk, with China as its biggest consumer. Whereas dessicated coconut, there are currently 3 main producers namely the Philippines, Indonesia and Sri Lanka. At present it is estimated that more than 20 dessicated coconut plants in Indonesia. The demand for dessicated coconut was quite large at 151 thousand tons in 1990 to 248 thousand tons in 2008.

Will the Indonesian coconut industry be able to rise? Of course it can, but there are a number of conditions that must be met. The rise of the coconut industry must be led by people who have adequate capability so as to understand the core problems and be able to map problems accurately in this sector and provide solutions. A leader is a person who has a vision and lives or implements his vision until the goal is reached. Leaders who do not have the strong driving force to implement their vision will not have the drive to be moved to create the solutions needed. With the efforts of various parties and always praying to Allah SWT, God willing, will be realized.

 Coconut is very close to people's lives, so the community can actively participate in advancing the integrated coconut industry. Integrated coconut industries can be made in centers of coconut plantations, even in remote locations as long as there is access to market their products. Market access and control are important. When the market has been acquired and controlled, production activities can be easily carried out. It's useless to build a factory or industry if you don't have a market. The pattern of mutually beneficial cooperation (non-usury) such as syirkah with profit sharing will make the industry stronger. Insha Allah. That is because from coconut can produce a lot of products that can be commercialized and will bring blessings. Large companies have also been prepared to take this opportunity, so do not miss it. Things that need to be pursued so that assets do not only revolve in certain circles as is currently the case with the application of capitalist economy. With the current economic model it takes 800 years for the bottom billion people to reach 10% of global income. As a result of the current liberalism and capitalism, the richest 10% control 85% of global wealth. The three richest people in the world have assets of more than 47 countries GDP, the lowest gross GDP. 1% of the richest people own more than 50% of the world's wealth. This huge inequality should be overcome immediately with a fair and prosperous economy.

Will coconut be back victorious and become a locomotive in the current bioeconomy era? Can coconut be able to move the economic sector back heroically as an important commodity that has a role in Indonesia's independence? Or is it even in the 'lullabies' with the many potentials of this country but is unable to exploit it and instead invites new 'invaders'? Wallahu 'alam