Financial and economic performance of coconut plantation rejuvenation assisted by engineered wood products: A Fijian case study

Coconut plantations support the livelihoods of millions of smallholder families globally, including a high proportion who live in poverty. Many growing regions are caught in a ‘senility trap’, with large areas over the age of 60, with nut yields well-below their potential. Presently, senile palm removal incurs high direct costs and opportunity costs associated with foregone nut production before replanted coconuts become commercially productive. However, demand for coconut engineered wood products (EWPs) could catalyse a circular economy model for the coconut industry. The aim of this study was to determine the farm-scale financial performance and regional-scale economic performance of EWP-assisted coconut plantation rejuvenation. An ex-ante case study analysis was performed for Fiji, a nation with a high proportion of senile coconut plantations on a substantial fraction of the nation’s agricultural land, which is mostly managed by smallholders who experience a high rate of poverty. Financial performance was evaluated based on net annual cash flow and net present value (NPV; r = 10%), while economic performance was evaluated for three regional coconut rejuvenation scenarios and based on gross value of production (GVP), rural employment generation and income-based pro-poor economic growth metrics. The analysis revealed that the addition of an income stream with senile palm removal in the year a site is replanted with coconut seedlings would increase the NPV of farmers by FJ$970/ha relative to retaining the senile coconut plantation. Regional scale adoption could potentially increase GVP from EWP and coconut oil production by tens of millions of Fijian dollars annually, generate hundreds of rural jobs and facilitate relative to strong absolute pro-poor economic growth. These positive findings indicate EWP-assisted coconut plantation rejuvenation has the potential to make substantial contributions to Fiji’s national development goals, including reducing poverty, unemployment and rural-urban migration through decentralised and diversified growth. However, targeted policy reforms are likely to be necessary for this transformative potential to be realised, including property rights to natural resources. Methods and findings are broadly applicable to other coconut growing regions in Asia and the Pacific with high levels of coconut senility.