Coconut industry structural reforms get underway

Sri Lanka’s coconut industry is to undergo structural reforms harnessing the economic potential with incentives provided in the Budget 2021, industry sources said.

The four existing institutions related to the coconut industry will be amalgamated to form a single entity as the “Coconut Cultivation and Allied Industries Development Authority” under an integrated institutional structure.

This will be a key reform in the industry with the merging of Coconut Development Authority (CDA), Coconut Research Institute (CRI), Coconut Cultivation Board (CCB) and Kapruka Trust fund, official sources disclosed.

Industry stakeholders believe that this is an important step towards aligning the state agencies for the purpose of achieving the national vision for the industry.

This will facilitate a coordinated approach to the development of the industry from growing, technical, product development and marketing angles, several coconut-based export product industry leaders told the Business Times.

They welcomed the guaranteed price offered by the government to encourage farmers to cultivate rice, maize, kurakkan, sesame and black Gram, vegetables, fruits and other plantation crops on coconut plantations as a side crop.

It is proposed to provide capital grants of Rs. 150,000 to 10,000 small and medium scale commercial agro entrepreneurs, with agricultural wells to install solar power operated water pumps in order to increase production capacities by harnessing new technology including drip irrigation, they said.

Three major product sectors contributed immensely in achieving good export revenue, they said adding that kernel products – milk, cream, and milk powder and virgin coconut oil, non-kernel coconut husk- based substrates for horticultural applications and coconut shell activated carbon were among them.

While encouraging the growth sectors the country must also have measures in place to retain the country’s market share in the traditional sectors such as desiccated coconut which enjoys a global reputation for high quality and unique Sri Lankan flavour, they pointed out.

Sri Lanka is likely to lose its grip on these markets as at current nut prices, these industries are not competitive with other origins such as Indonesia and Philippines, they warned.

All this success in exports is achieved using only 30% of the country’s total nut production, they added. 70% is consumed locally out of which 30-35 % is wasted in households due to traditional methods of extraction of milk for cooking purposes.

If this waste of the value chain could be addressed through consumer education, and making reliable, convenient and healthy alternatives available to the local consumer the industry stands to benefit immensely increasing the potential of earning foreign exchange for the country, they said