Posts Tagged ‘coconut oil’

More Economics, More to the Point

August 5, 2013

Okay, I admit it: the last two posts were not really about economics. At least they were about economics only as much as everything else in our complicated world is in the end economics. They were part of a marginal branch to the main science and we might term them a kind of proto-economics. The mind is trying to understand the motivations behind the visible actions it is promoting in the real world. For today then let’s go into something a bit more mundane: real and hard economics, day-to-day practical kind of stuff, nitty-gritty management decisions, and common pant-bottom business development.

Throughout the Pacific Islands you encounter remnants of a once flourishing coconut industry, which we are told had substantiated much of the previous century’s influx of material wealth into the vast area. In fact, coconut oil and its many derivative products, were amongst the main actors who brought the Pacific Island nations into their tempered version of the industrial age, conspiring with the production of other Western commodities like sugar, whale products and mineral mining. Those giant plantations of palm trees from yesteryear are nowadays reaching enormous heights, with fat bundles of overripe coconuts hanging suspended a good hundred feet or more up in the tropical air, swaying back and forth majestically in the stiff breeze of the trade winds, dropping their fruits to an indefinable rhythm into a violent free fall that can be fatal to you if you happen to promenade absent minded amongst the palisades of slender and slightly curvy stems. It used to be high-yield farming until really quite recently. With the petroleum corporations’ ruthless invasion of the global market coconut oil took a serious hit and the Canola farmers did the rest to seal its fate when they cooked scientific date to show that their oil was much lighter on saturated fats than the venerable coconut oil. The fact is that almost from one year to the other the price of coconut oil came crashing down, literally falling out of the sky. This in turn sent white entrepreneurs of colonial styling all over the Pacific jumping ship towards more lucrative ventures.

palm1In our very own eternal quest to find lucrative ventures along our path of wanderings we have recently started the dance classes in the best local venue we could find here in sleepy Savusavu town. The venerable Planter’s Club looks out over the entrance of Nakama Creek and across the vast bay towards the silhouettes of Vanua Levu’s central mountain range at the far end of it. In its beginnings it was the town house of the Simpsons, a family of wealthy and powerful landholders across the bay and around Point Reef up the Hibiscus Coast. They built the structures on the lot in order to have a place to stay overnight on their runs into town before heading back to their plantations the following day. Soon the grounds turned into a meeting place for growers big and small, and they were formerly incorporated as the Planter’s Club with the mission of facilitating the exchange of information and know-how within the industry. In its heydays it hosted voluptuous social gatherings, balls, dances and all kinds of public celebrations.

Now every Wednesday and Saturday mornings we fulfill our weekly pilgrimage to the Planter’s Club for Beatriz to teach her new Stretch and Release class, a soft bodywork class for anybody who needs to nimble his or her cranky muscles. In the evenings of the same days we return to celebrate Afro-Latin dancing. We’re just in the second week of it all and publicity here in the rural void is not as straightforward as in other places. So attendance is still highly anorexic but promises to improve as long as we add a good portion of patience.

Let your mind wander back to last Saturday morning and you’ll see us arrive shortly before ten in the Club’s main hall. We find a big cardboard box and a dirty red backpack sitting on the pool table where we usually set up our sound system and install the brightly colored donation box. To stake our still young and fresh territorial claims within the premises we nudge it gently aside and unload our rucksacks. I hadn’t yet finished wiring up the speaker system when a grey haired but energetic and sunburned gent walks into the hall. His demeanor is characteristic of the acquired arrogance white colonial landowners impose whenever they feel the need to establish a picking order, which turns out to be pretty much all of the time.

Grumpy intruder:   The bar is not yet open. It doesn’t open until eleven!
Ever nosy yachtie:  So to you we look like we need a beer, do we! Don’t you worry about us; we’re holding a class here. We’re renting your premises.

The grumbler turns out to be, you guessed it, a plantation owner. Plantation on this side of the island almost exclusively means coconut, while along the north coast it would be sugar cane. Deep in my snow-capped DNA there must be a strong monkey gene wiggling about from some previous incarnations as a member of that limber genus in the animal kingdom. This results in my suffering from a fatal attraction to all things coconuts. Every couple of days I spend a good deal of precious early morning time husking and grating a coconut that goes into our food, either as an add-on to our breakfast muesli to support a bouquet of other delicious tropical fruits, or as the principal ingredients in a travesty of a ship-made shortbread cookie that is baked weekly aboard Aluna and has seen a veritable revolution of refinement once its marriage and consequent fusion with a hearty variety of coconut macaroons had been accomplished. A great deal of my time in general has therefore gone into researching the subject matter of the coconut in all its aspects and extensions. Just last week I had managed to solve the complex riddle of how to husk a dry coconut with the rounded flukes of Aluna’s sturdy Bruce anchor, following the ever-latent maxim of multiple-usage tools the reigns in the limited space of a sailboat. Today I am fortunate enough to find myself standing face to face with a real-life actor of the venerable coconut economy. This is too good of a chance to pass on!


Ever nosy yachtie:    Sir, can I ask you something? Just out of curiosity, it must not be easy to make a decent living in today’s coconut industry, or any living at all for the matter!
Grumpy intruder:    Certainly not, but we’re not producing at the moment. Only when the price of copra goes up and past the threshold do we start collecting nuts. It’s all manual labor, you must understand, the gathering, husking, cracking and drying, all manual, no mechanization! That’s a lot of man-hours. There is no way we can justify that much salary without the guarantee of a return. Forget it! No way!
ENY:    When was the last time that happened? That must be ages ago!
GI:        November last year! The price of copra was over 79 for three straight days, but then it plunged down again to where it’s been. And no way we can make things work for such little money.
ENY:    What about the global frenzy for virgin coconut oil? Wouldn’t there be a fatter profit margin in there for you?
GI:        That’s all amateur stuff. Virgin coconut oil? It’s a joke!
ENY:     Is that right, I wasn’t aware of that!
GI:         Really! There’s not serious money in that.
ENY:     How about expanding the market a bit. Doesn’t the diesel engine run fine on coconut oil? That would crank up the demand, wouldn’t it? Especially once the petroleum diesel runs out.
GI:        I hope it never comes to that. If it does, the price will never come back up!

A latest model pickup truck pulls up outside, polished and unblemished, its imitation chrome plastic parts reflecting the degraded Victorian facade of the Club building. On a posh seat behind the tinted windscreen sits the planter’s driver with skin as dark as a moonless night, and before the strange logic of his latest statement has a chance to disentangle and reveal itself to me, the planter clamps the cardboard box under his armpit, swings the filthy backpack over his shoulder, runs down the stairs of the feudal entrance to the Club and is whisked away on a brave wave of busy-ness.

There are practical tasks demanding my immediate attention, like greeting the participants of the dance class and roll out the yoga mat on which I will stretch and limber my skeleton frame for the next sixty minutes, but a couple hours later my mind wanders back into distilling mode and looks for the essence in that short conversation. The decision about what is done and what is not done is based on economic strategy. No prospects of profits, no actions taken. Costs need to be covered, I can understand that much. Salaries have to be paid, quite obviously so. Equipment must be amortized, as logic demands. Taxes have to be paid, for the common good. And on top of all this self-explanatory but also fast depleting and sometimes self-defeating enterprise dynamics the owner has to make a profit. The odds definitely are stacked against any sort of radical innovation here. The price of things on the global market, what makes that go up or down? Supply and demand? It is not that simple, and maybe after all it is not the economy, stupid!

One way to get a feel for a situation you find yourself contemplating without getting too much into intellectual circus acrobatics is to imagine yourself as a participant in it. What would I do, had destiny bestowed me with a colonial size swat of coconut groves somewhere off the beaten track? Would I waste the coffer of cash it had produced under my predecessors with fruitless experimentation, or would I have the grits to find a novel way to make it work? Would I choose the path of least resistance or would I go the extra mile? Would I have the nerve and stamina to pursue innovation or would I bark with the reactionary crowd? If I answer these questions I’m left with nothing but hypothetical statements, so I fall back on my ingrained distrust of the free market economy, my disdain for this dubious place of stock exchange where the real intentions are masked, appearance is bloated and the essence is always spun.

In the real world, especially if we live anywhere close to nature, we find ourselves constantly correcting and adjusting our behavior and I would love to ask our planter to do the same. His experience in the field of practicality is precious and invaluable for any adjustment of course towards a sustainable future for us all. I would very much like to continue our short conversation, probe his mind’s crevices to help me understand the real consequences of our actions, and while I’m at it add a grain of salt, a hue of doubt and a pinch of cosmic awareness to the standard business strategy of profitable exploitation.