Sep 202014
 

http://wikileaks.org/cable/2009/09/09MANILA1922.html#
Reference ID Created Released Classification Origin
09MANILA1922
2009-09-11 10:00
2011-08-30 01:44
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Manila

VZCZCXRO4456
OO RUEHCHI RUEHFK RUEHHM RUEHKSO RUEHNAG RUEHPB
DE RUEHML #1922/01 2541000
ZNR UUUUU ZZH
O 111000Z SEP 09 (CCY ADAF35BB MSI7779-632)
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5145
RUEHRC/USDA WASHDC IMMEDIATE
RUCPDOC/USDOC WASHDC IMMEDIATE
RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION IMMEDIATE
RHHMUNA/USPACOM HONOLULU HI
UNCLAS SECTION 01 OF 02 MANILA 001922

C O R R E C T E D C O P Y/REMOVED COLLECTIVE ADDRESSEE

SENSITIVE

SIPDIS
STATE FOR EAP/MTS, EAP/EP, AND EEB/TPP
STATE PASS USTR FOR BWEISEL, BKLEIN
STATE PASS USAID

E.O. 12958: N/A
TAGS: ETRD EINV ECON KTER EISL EAID RP
SUBJECT: PHILIPPINE SEAWEED SECTOR PACES CHALLENGES

MANILA 00001922 001.3 OF 002

¶1. (SBU) Summary. For four decades, U.S Government-backed seaweed
farming programs have promoted peace, security and economic
development in some of the Philippines’ poorest and least stable
provinces. In conflict-affected Mindanao, the United States Agency
for International Development (USAID) helped cement a 1996 peace
agreement with Muslim rebels by training demobilized combatants in
productive enterprises – including seaweed farming – and laying the
foundation for a broader peacetime economy. By nurturing all
aspects of seaweed production, from farming fundamentals through
processing technology to marketing enhancements, the U.S. has
enabled the development of one of the world’s largest seaweed
industries, currently employing 40,000 families. However, adverse
climatic conditions and competition from other developing nations
have resulted in a significant drop in production since its peak in
the mid 1990s. USAID is addressing these challenges by
strengthening local biotechnology capacity, drawing up industry
standards, and promoting high-value aquaculture that will improve
farmers’ productivity and profitability. End Summary.
Seaweed is Everywhere
¶2. (U) The consistent taste and texture that global consumers have
come to expect in everything from Twinkies to toothpaste is made
possible by additives such as carrageenan, a carbohydrate extracted
from seaweed. The Philippines is currently a world leader in the
production of dried seaweed and carrageenan, with exports in excess
of $100 million in 2008. Some 420,000 tons of raw seaweed is
processed annually by over 150 firms, including U.S. firms Cargill
and FMC.
It Can Be Profitable
¶3. (SBU) The USG first supported seaweed farming in the Philippines
in the 1960’s, promoting the “Eucheuma” variety that dominates
commercial carrageenan production today. It provided an income to
artisanal and subsistence fishermen who were suffering from
declining catches caused by overfishing, and destructive practices
such as dynamite and cyanide fishing. By the mid-1990s, the
Philippines was processing 95 percent of the world’s carrageenan,
with farmers in Tawi Tawi and Sulu provinces the principal suppliers
of raw material to the industry. According to biologist and
seaweed consultant Ronald Simbajon, a single hectare of seaweed can
generate an annual income of up to 300,000 Philippine pesos (PhP)
(over $6,000), far above the Philippine average family income of
173,000 PhP ($3,500).
Arms to Farms
¶4. (SBU) After the peace accord between the Philippine government
and the Moro National Islamic Front (MNLF) in 1996, USAID’s
Livelihood Enhancement and Peace Program (LEAP) took demobilized
fighters out of the jungle and placed them into productive
enterprises, including the seaweed business. By providing them with
seedlings and other materials, as well as training and follow-up,
LEAP gave 8,000 former combatants a sustainable cash income and
therefore, a stake in keeping the peace. Seaweed production now adds
some $30 million per year to the economy of the Sulu Archipelago in
Mindanao, where terrorist and criminal groups continue to commit
acts of violence. Although this program has helped to alleviate the
region’s deep poverty, the per capita regional domestic product of
this region of Mindanao remains far below the national average.
Challenges from La Nina and Neighbors
¶5. (SBU) The Philippine seaweed industry has suffered from
decreasing yields in recent years, largely due to rising sea
temperatures caused by “La Nina”. Higher water temperatures reduce
plant productivity, and also make the plants susceptible to
“ice-ice,” a disease that leads to deterioration of plant cell
walls. The near-tripling of world carrageenan prices in 2008 was
due to the scarcity of tropical seaweed caused by these conditions.
In addition to challenges presented by nature, the Philippine
seaweed industry faces increasing competition from growers in
Indonesia, and to a lesser extent, Kenya and Vietnam. Philippine
carrageenan processing firms now buy dried seaweed from Indonesian
farmers, since labor and fuel costs are lower, and Philippine
farmers are unable to consistently produce the volumes the
processors needed. Moving burlap sacks of dried seaweed from the
Sulu Archipelago and other outlying areas hundreds of miles to
Zamboanga City, Cebu City, and Manila — the principal processing
areas in the Philippines — is a logistical nightmare that raises
costs and degrades quality. In addition, the Philippine industry
has developed up to five layers of middlemen between the producers
and processors, reducing grower profits and incentives. Finally,
seaweed prices have fluctuated greatly over the last year, ranging
from 33 cents to 2 dollars per kilo for farmers, which can
discourage producers who pre-sell their harvest at low prices or
otherwise miss out on a rising market.
¶6. (SBU) To address the competitive and environmental challenges
faced by seaweed farmers, USAID’s Growth with Equity in Mindanao
(GEM) and STRIVE projects are responding with a variety of
approaches to improve quality, reduce shipping costs, and create

MANILA 00001922 002.3 OF 002

industry standards that will help Filipino growers remain
competitive. The construction of ten solar dryers in
seaweed-producing villages will phase out beach and roof top drying,
and make possible salt and sand-free seaweed of a consistent
dryness, resulting in a higher-quality product that commands a
premium price. Training farmers in marketing will help them retain
profits that have been siphoned off by the middlemen/traders that
now dominate the industry. Scientists are also working on methods
to extract the sludge or sap from seaweed, which is an extremely
rich organic fertilizer and currently lost during processing. And
finally, USAID is teaching seaweed farmers to move up the value
chain by raising abalone and other high value seafood products to
increase incomes and diversify their income streams.
¶7. (U) Additional USAID initiatives may help reduce the impact of El
Nino and other natural threats by harnessing biotechnology to
provide better varieties of seaweed to farmers. Support for gene
banks, as well as a land and seabank nursery at Mindanao State
University-Tawi Tawi may result in improved seedling strains that
are better adapted to changing climactic conditions, and that yield
more and higher quality carrageenan. Also, research into causes and
cures for “ice-ice” disease may not only provide a practical cure,
but will build local biotechnology capacity that will enable future
improvements of the genetic stock.
Comment
¶8. (SBU) For decades, USAID’s seaweed and aquaculture projects have
been a successful tool in combating rural poverty in the
Philippines. In recent years, they have even helped to create
conditions to support the peace process between the Philippine
government and the Moro Islamic Liberation Front, a group of
secessionist Muslim rebels in Mindanao. These projects provide
income in areas that do not have cash economies, and help provide
jobs to people who may otherwise turn to crime to earn money to feed
their families. However, seaweed farmers, like most small
agricultural producers in the Philippines, face challenges from the
environment, and from competitors in an increasingly global market.
USAID is applying many of the insights learned through its
successful work in the tuna industry to help seaweed farmers remain
competitive and diversify their income by establishing best
practices, and raising quality standards, marketing, and
profitability. While seaweed will remain a viable industry in the
Philippines for the foreseeable future, it is likely that seaweed
farmers, including demobilized combatants, will continue to need
outside support and new ideas to cement the economic and social
gains achieved in the last decade.
Kenney

   

 

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