Can coconut improve rural economy?

V R Ajith Kumar
V R Ajith Kumar

Can coconut improve the rural economy? It is a century-old question among economists and scientists. It is a known fact that coconut palms exert a profound effect on rural economy in many countries. It provides livelihood security to 64 million farm families across the globe, 12 million being Indians. Indonesia holds the largest area under coconut (29%) and the Philippines comes second. India stands third in the area (17%) under coconut, but first (31%) in total production in the world. Brazil holds the highest position in productivity (11,630 nuts/ha) followed by India (10,119 nuts/ha). The data released by various organizations show that India produced 20,439 million nuts during 2014-15 from an area of 1.97 million ha with a productivity of 10,345 nuts/ha. Tamil Nadu is the leading coconut producer in the country with an annual production of 7,057 million nuts (34%), followed by Kerala which produces 6,211 million nuts annually.  Even though, Coconut contributes Rs.92,000/- million annually to the Gross Domestic Product(GDP) of the country and the foreign exchange earnings is in tune of Rs.21,385/- million through the export of coconut products and coir, the coconut processing industry is not matured enough to compete at the international market. Technology up-gradation, quality control, and packaging techniques should be improved to tap the rich market.

Production of edible oils in the world increased to 71.6% and palm oil alone contributed to the tune of 34.5% due to tremendous increase of oil palm production in an extent of 141%. The increased availability of a variety of edible oils reduced the share of coconut oil in total edible oil production to 2.13%. The export of coconut oil is also reduced though the largest single import was done by USA (31%) and that of EU -27 countries ( 34%). Virgin coconut oil, a high value cosmetic and medicinal product has a niche market. The Philippines, Sri lanka and Solomon Islands are the major exporters of VCO. Another well established product is desiccated coconut. Philippines is the largest exporter in this sector also.

Activated carbon from coconut shell charcoal is of high demand for its superiority in terms of adsorption of gas/ vapour and removal of color and odor of compounds. The global market of activated carbon will grow faster in the coming decades chiefly because of its use in mitigating environmental pollution, especially removing heavy metal residues in industrial pollutants. The global market for activated carbon was estimated to be 1.25 million tons in 2012 and is expected to grow at a rate of 11.7% from 2014 to 2020. Just over 10% of global demand for activated carbon is met from a coconut shell.

Coir sector is also of good demand. Till recently, India and Sri Lanka were the only coir producing and exporting countries. In the recent past, a few more countries started export, but the total produce is insufficient to cater the global demand.  China is the major buyer of coir fibre(90%) and its requirement is expected to increase 10-20% every year. At present, there is deficit of nearly 20% in supply of coir fibre in the world.

Table – Global scenario of coconut 



(‘000 ha)


(million nuts)



Export value

(million US $)





























Sri Lanka



















           Source- APCC year Book 2011, CDB Annual Report 2012 -13


Coconut is predominantly cultivated by small and marginal farmers in our country. Presently, coconut growers are more exposed to economic risks and uncertainties owing to a high degree of price fluctuations. Integrated farming in coconut farms with the cultivation of pepper, banana, nutmeg, pineapple, ginger, turmeric, and elephant foot yam generate 150% higher net income than that of coconut monocrop and that with livestock will generate 288% higher income.

At present, of the total production of coconuts in the country, about 50% is used as mature nuts, 35% for copra and 15% is used as tender coconut drink.92% of the mature raw nuts are consumed for domestic purpose while a meager 8% is absorbed by the industry for converting into value-added products. In India, coconut is cultivated in 2.1 million ha land and the average annual requirement of coconut seedlings is estimated at 15 million. However, production and supply of coconut seedlings by the public sector research and developmental agencies is only 5.5 million and 4 million by private nurseries and farmers. That means there is a gap of 5 million seedlings annually. Breeding new varieties are faced with many problems that are unique to coconut. Long juvenile period, the requirement of a climber to make crosses, large area for planting field and slow multiplication rate , many selections and hybrids makes the breeding a difficult task. Today there are 49 improved varieties are available in the country. It includes 11 high yielding dwarfs, 18 high yielding talls, 8 DxT hybrids, and 12 TxD hybrids . Shortage of seedlings and proper nurseries are the major issues facing the coconut farms. The situation calls for urgent steps to restructure the existing coconut nurseries by establishing mother palms of newly released varieties on a long term basis.

Rapid multiplication of coconut using tissue culture technique is the most viable strategy for ensuring supply of quality seedlings of improved varieties. Evaluation of mother palm resources of coconut in existing seed gardens to mark the superior mother palms also needs attention so as to enhance the efficiency of quality seedling production in these nurseries. Nursery accreditation should be made mandatory to ensure quality control in planting material production and its distribution. Farmer participatory seedling production initiatives are to be promoted to meet the planting material requirement utilizing the locally available resources/mother palms. A decentralized approach for enhancing the production of seedlings of improved varieties should be promoted by establishing more number of nucleus seed gardens. Such seed gardens may be encouraged in marginal and small farmer holdings.

Improved variety of seedlings having more yield and disease resistance and a reasonably good price for coconuts and by-products assured by the market would definitely help the farmers to increase the income and in that way to improve the rural economy.

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