NESTLÉ Philippines said the Regional Comprehensive Economic Partnership (RCEP) may not be beneficial to the entire coffee industry, after specialty growers said the trade agreement could be an opportunity for the part of the sector than can successfully market its beans with distinctive geographical indications (GIs).
“We believe that overall, RCEP will boost free trade among its participants, especially those with competitive exports,” Nestlé Philippines said in a statement.
“In the case of the Philippine coffee sector, however, our farmers are supplying only 15% of domestic demand, and the coffee sector as a whole currently cannot export green coffee beans or processed coffee. Alongside opening the market to free trade, it is imperative for government to continue supporting, as we are doing for the long term with our Nescafé Plan, the development of increased efficiencies, productivity, and incomes of Filipino coffee farmers beyond subsistence levels, and to adequately meet local demand.”
Over the weekend, specialty coffee growers told BusinessWorld they see opportunity if the Philippines participates in the trade deal, with their beans likely to gain access to markets like Japan and South Korea, which are not covered by the Philippines’ current free trade agreements.
They said the key to the specialty beans market is whether the Philippines can establish a system of GIs to differentiate their high-end beans from the rest of the market.
Nestlé Philippines, which supports growers that supply it with robusta beans, which are made into Nescafé instant coffee, said in a statement that the state of the industry currently cannot support exports, and that government aid remains necessary if coffee farmers are to be exposed to foreign competition.
“Our farmers are supplying only 15% of domestic demand, and the coffee sector as a whole currently cannot export green coffee beans or processed coffee. Alongside opening the market to free trade, it is imperative for government to continue supporting, as we are doing for the long term with our Nescafé Plan, the development of increased efficiencies, productivity, and incomes of Filipino coffee farmers beyond subsistence levels, and to adequately meet local demand,” it said.
It called on the government and the industry to continue to be “guided by the Philippine Coffee Roadmap, and with sustained interventions by the public and private sectors collaborating to address key challenges.”
Such a development path will help the industry “rise to its full potential, including self-sufficiency and even exportation in the future.”
It said it supports the industry via the Nescafé Plan, which it described as “a multi-year pilot project involving smallholder farmers has significantly increased their yields. Average production rose from 235kg/hectare in 2018 to close to 900kg/hectare in 2022. The project stands as a concrete example of a successful public-private partnership. With government and other coffee stakeholders, we will continue to work towards further increasing farmers’ yields and incomes.”
RCEP is a trade deal involving the 10 ASEAN countries, Australia, China, Japan, South Korea, and New Zealand. It started taking effect in the various member-countries on Jan. 1, 2022.
The Philippines has yet to join the trade deal, with the Senate yet to give its concurrence amid objections from most of the agriculture industry.