In the marble and coconut-rich island province of Romblon, PEF is partnering with a local-based St. Vincent Ferrer Parish Multi-purpose Cooperative (SVFPMPC) in a trailblazing development project aimed at increasing the level of biodiesel production for the country, while enabling farmers to become its prime movers through unprecedented farming incentives.

“While there are a number of industry players towards this end, one angle we want to look at is how we can empower coconut farmers to become active players in the energy production process, and save them from the insensitivity of most commercial copra buyers in mainland Luzon,” says Jenebeth Conanan, SVFPMPC general manager.

Conanan is referring to the absence of coconut processing plants based in the province, and the underdog treatment that coconut farmers get when selling off-island as reasons for their demoralization to continuefarming. Romblon has 17 municipalities and 219 barangays whose major economic activities are farming and cottage industries. Although it produces 700,000 coconuts per day, the only major manufacturing facilities in the province are for the marbles, and nothing for the coconut.

“There were days when we just saw coconuts along the roads, with almost no one minding them,” Conanan says, describing the hopelessness of local farmers in investing in coconuts.

In 2005, these problems called the attention of various government agencies that made them come together to launch the Romtron Biodiesel (CME) Plant in 2005.

A Multi-Sectoral Feat
Romblon gets its fuel needs from the mainland. Based on Department of Science and Technology (DOST) estimates, Odiongan, the biggest town where SVFPMPC is based, needs about 3,000 liters of diesel daily. The National Power Corporation’s diesel power plant in Odiongan consumes about 12,000 liters of industrial grade diesel daily.

With CME production and utilization, fossil fuel coming into the province could be reduced.

Coco Methyl Ester (CME) is an ester fuel derived from coconut. An ester is an organic, often fragrant compound formed in a reaction between an acid and an alcohol. CME is made by mixing coconut oil with methanol under heat and in the presence of a catalyst in a process known as transesterification. It has comparable properties with diesel fuel and may be used as a substitute or an additive to diesel. Aside from increasing the performance efficiencies of engines, CME has a desirable property in that it reduces the emission particulates of diesel engines if mixed with diesel fuel even at 1% ratio.

DOST’s Industrial Technology Development Institute developed the technology for CME production, with the help of key players from the local government, private sector, and the Philippine Council for Industry and Energy Research and Development (PCIERD). Specifically, the then congressman Perpetuo B. Ylagan put in P1 million from his PDAF; while SVFPMPC, then led by chairman Nelson Fedelin, facilitated the business side of the production, even before its partnership with PEF; and while the DOST Regional Office IV guided the project until it was ready for commercial production.

PEF-SVFPMPC Partnership
Premised on the very low farmers’ income level in the province (average of P30,153.34 per year based on a SVFPMPC report), the livelihood/microenterprise project for CME production is the PEF’s and SVFPMPCs share in the overall CME production objective of the province. In January 2006, PEF approved a total amount of P2,070,000 in total financial assistance for the SVFPMPC, P1,750,000 of which was a loan grant payable in 36 months at 12% interest. The remaining P320,000 was released as institutional support grant for the construction of copra warehouses (buying stations), and for the purchase of weighing scales for the two stations.

The project is set to end in 2009.

The PEF assistance primarily aims to train coconut farmers on proper copra production techniques, and buy from them a total of 633.6 metric tons of quality copra with a price a peso higher than the market price. The project seeks to sustain the production of CME in Romtron Plant by providing employment to plant workers. Its buying stations are targeted to stabilize copra price in the province.

On an eight-hour workday schedule for milling and a 16-hour workday schedule for esterification, the plant could produce one ton of CME daily. However, and unfortunately, the plant has intermittently stopped operating, either due to machine failures or lack of potential clients with reasonably high buying price. It is, nonetheless, currently negotiating with the National Power Corporation (NAPOCOR) in Romblon, which has been their major client in 2007, to adjust their original buying price agreement of P14 per kilo, especially since copra price has more than doubled. Temporarily, soap making has been the alternative activity.

From the loan amount released, SVFPMPC/Romtron made a net income worth P149,000 as of December 2007. Project bookkeeper Jacqueline Bendoy says that although the plant operations have temporarily stopped and they still have the highest buying price in the market, their financial analysis still assures them that the project would be able to make financial returns enough to maintain its operations.

The ‘Higher-By-P1’ Strategy
In order to attract coconut farmers to sell their copra to the plant, Romtron has tried buying them at a price that is at least a peso higher than the competing buyers. This way, Conanan says, farmers are motivated to continue attending to their coconut farms. “So far, the strategy has been successful because competing copra buyers feel obliged to raise their buying prices to compete with us, although we make sure we’re P1 higher,” Conanan says. “I believe we made an impact in the increasing prices of copra today. “It’s always a challenge to balance business interests with community interests. But we want the farmers to be the first to benefit from this industry, and no longer be seen as underdogs.”
A P6.8 million worth of expansion project for Romtron is now in the pipeline with commitment of funds from the Romblon governor, the local congressman and the DOST.