Coconut farming: A tough nut to crack

Recently, the Cabinet Committee on Economic Affairs increased the Minimum Support Price (MSP) of coconut for 2024. The MSP for ball copra, or dry coconut, is now Rs 12,000 per quintal, an increase of Rs 250, and for milling copra, it is Rs 11,160, an increase of Rs 300 per quintal. The central government claims that this hike ensures a better remunerative price that will motivate coconut farmers to expand the production of copra.

This response follows protests by coconut farmers in southern states as prices crashed, leading to a severe financial crisis. Will these MSP hikes truly benefit coconut farmers and boost their confidence to expand coconut cultivation? The ground reality of this nut case is not only intriguing but also shows the apathy of the ruling elites in jettisoning the interest of coconut farmers.

The present hike doesn’t even come close to the cost of coconut cultivation at Rs 16,670 per quintal. With such a glaring gap between the cost of cultivation and returns, coconut farmers are facing an existential crisis.

As a coconut farmer, I have faced challenges obtaining fair prices for my product. This year, I had to sell coconuts without removing the outer cover for a mere Rs 10 per nut and Rs 4 for a dried nut, failing to recover input and labour costs. Rising input costs, pest and disease control add to the cultivation cost.

Coconut, scientifically known as Cocosnucifera, is grown extensively in tropical areas. In India, coconut holds religious and cultural significance. The aesthetic appeal of coconut groves reflects spiritual roots, providing nutritional, economic, and ecological security. It is a living heritage of the past, present, and future for humanity, providing selfless service throughout its long life and yielding nuts and timber when it is dead.

Due to the versatile use of each and every part of the tree—leaves, nuts, husks, and the shell—it is called Kalpavruksha, a tree of life. This is the only tree that yields coconut water, coconut milk, cream, and oil. And all this can be produced locally in decentralised units that support the local economy.

India, the Philippines, and Indonesia are major coconut-producing countries, with India contributing to 72% of global production. India is the only country where coconut farmers invest in systematic cultivation with capital costs like irrigation and external inputs. In the Southeast Asian region, it is grown as a wild crop without input costs. With a high cost of cultivation and a low market price, coconut farming is a loss-making venture.

About 15 million people, mostly small farmers, cultivate coconut in the southern states of Kerala, Tamil Nadu, and Karnataka.

The central government has set up the Coconut Development Board under the Ministry of Agriculture and Farmers Welfare with the objective of increasing productivity and product diversification. It is intended to help develop markets for coconut-based products and to recommend measures to regulate the import of coconut products. The technology mission on coconuts announced by the prime minister is another initiative. Without any dynamic outlook, both of these initiatives have failed to protect the interests of coconut farmers.

In order to understand the crisis in coconut farming, we need to see the macro-import policies of the government in the edible oil sector. Over the years, the government has reduced the customs duty on edible oil imports. These are constantly lowered from 17.5% to 12.5% and extended until March 2025 to keep
the spiralling costs of edible oil down.

However, the micro-impact on the local edible oil industry is drastic, with a crash in the price of coconut oil. Though the stated objective of the government to reduce import duty is to rein in edible oil prices and inflation, in reality, it brings huge profits to the refineries that import palm oil.

Reduced import duty is the primary cause of the destruction of the ‘atmanirbhar’ indigenous edible oil sector in the county.

Obviously, the macro-level policies initiated by the central government have had a negative impact on coconut farmers over the years. Instead of addressing the basic issues faced by coconut farmers, just tinkering with MSP is a publicity gimmick.

This is a classic ‘nut case’ of ad hoc policies that demoralise the farmers, whereas in reality, they help the monopoly corporate sector reap windfall profits at the cost of decimating small-scale coconut farmers and destabilising the ecologically friendly, healthy edible oil sector that caters to the needs of common people in southern states.

Do the government and the decision-makers have the sincerity and courage to stand up to the corporate sector to address this case of the nut to bring back the dignity of Kalpavruksha?

(The author has been a small-scale coconut farmer for over three decades)