A study of supply response of coconut in Western Samoa

Abstract

The coconut industry has occupied an important place in the Western Samoa economy, but recent performance of the industry both with respect to replanting and the deteriorating position of coconut in world trade has caused great concern in Western Samoa. The government has attempted to address this with a coconut replanting subsidy and investment in a coconut oil mill. However, despite these efforts, the results in terms of coconut output have not been encouraging.

This study estimates the short-run and long-run supply response of smallholders subsistence coconut producers. In order to address this problem, coconut is considered a perennial crop and the decisions by coconut growers to harvest and plant coconut trees are based on separate short-run and long-run supply responses. In the short-run coconut production was mainly affected by the price of coconuts and a mixture of mill closure and cyclones. In contrast in the long-run profitability was determined by costs and prices are the major factors on replanting coconuts by smallholders.