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RAPCo, The Plight of a Small CME Producer

The biofuels industry has so far not been kind to small producers. Romtron, the small, cooperatively-owned CME producer in Romblon, has had to cease production of CME as it desperately tries to find another buyer for its product. Another small player in the coco-methyl-ester (coco-biodiesel) field is Rasza Agro Produce Corporation (RAPCo) based in San Pablo City (Laguna). The family-owned enterprise has been in the coconut milling business for twenty-six years. It was put up by the father of the current proprietor and general manager, Mr. Romy Awayan, a mechanical engineer by training. The business started out by acquiring the waste fibers (called oil foots) that came through with the oil that is extracted by screw press expelling by coconut mills. These fibers still contained oil and were sold to smaller millers such RAPCo for whom further extraction was feasible. To press these foots, RAPCo developed its own small presses. The business expanded into buying fresh nuts and copra from traders as well as directly from farmers, and processing these in the larger expellers that it developed over time. The company sold its output of raw oil and copra cake to refiners and feed millers, respectively.

Biofuels: Clean Fuels for the Poor?

Synthesis

The global concern with regard to climate change, due in large part to the greenhouse gas emissions resulting from the use of fossil fuels particularly for transport, has spurred many countries to try to develop alternatives that have diminished negative environmental impacts. One course of action that has taken on much recent significance has been the rapid development of fuels from plants, commonly referred to as “biofuels.” In the Philippines, this innovation in alternative fuels is directed towards replacing imported petroleum fuel, which is seen as largely benefiting motor vehicle owners and
transport operators, in addition to claimed environmental benefits. However, the impacts of these fuels on groups at the base of the socio-economic pyramid, particularly small farmers and agricultural workers, are unclear. It is the goal of this study to examine such effects, determine the ways that this development of alternative fuels is affecting the welfare of such groups, and determining possible points of policy intervention so that socio-economic benefits are broadly diffused using a value chain analysis.