News Update Nestle Phils. to buy more coffee from PHL farmers

Davao City — Nestle Phils. intends buy more coffee berries from the Philippines and less from foreign sources, a company official said Monday. The company now buys 75 percent of its coffee from abroad, but it wants to reverse the trend by 2020. "Currently, we're sourcing 25 percent of our raw coffee requirement for soluble coffee manufacturing locally and we're trying to compensate the shortfall by importing coffee beans. We are going to reverse that set-up by 2020," senior vice president for corporate affairs Edith de Leon told reporters in a press briefing at the 2nd Philippine Coffee Investors Forum here. Nestle Phils. will establish more buying stations nationwide with 11 additional sites already identified in Mindanao. The company is the biggest producer of soluble coffee under the Nescafe brand, and biggest buyer of raw coffee beans from at least 30,000 coffee farmers nationwide. As part of its contract growing arrangement, Nestle Phils. buys Robusta cuttings and seedlings for its contract growers. "We're hoping to close to year with as much as 2.1 million seedlings. We are counting on coffee investors to plant more coffee and directly sell their production to us. We buy at a premium price as long the farmer's output meet our standards," said De Leon. Its coffee program is an initiative of the Departments of Agriculture, Environment, and Agrarian Reform. The Environment and Natural Resources Department has identified up to 1.5 million hectares of upland areas for planting Arabica coffee, and the Agrarian Reform Department wants to transform 11,000 hectares of lands handed out to Agrarian reform beneficiaries into coffee farms. Nestle Phils. said it is now open to buy Arabica beans for its Nescafe Gold Label, after the brand was given a new Robusta-Arabica blend. Philippine coffee output slipped 2 percent in 2010, but the year-to-date trend already showed a minus 7-percent shortfall, according to the Agriculture Department. More private sector participation can help raise coffee production by 5 percent next year, said Agriculture Secretary Proceso Alcala. "We have put to motion better intervention measures to increase coffee production. We noticed that there is an increase in the participation of the private sector," he added. The Agriculture Department is allotting up to P163 million for planting materials, post harvest assistance and capacity building programs to help farmers improve their yields starting next year. The Philippines imports 30,000 to 35,000 metric tons (MT) of coffee to fill the gap left by the continuous dip in yearly output. Its coffee requirement is 64,000 MT valued at P5 billion, and Nestle supplies about 80 percent of annual need. — VS