The Marshall Islands government's copra processing plant says it has no choice but to drop the price it pays to copra producers after the world coconut oil price has slumped.
The plant has announced it'll reduce the price paid to subsistence farmers for their coconut meat by about thirty percent from November 1st, but the farmers will continue to receive a subsidy on their produce.
The Tobolar plant manager, Wilfredo Candilas, says it's impossible to maintain the current price of 22 cents per pound of copra.
"Because of the world market price, the break even price to pay producers is five cents a pound. But Tobolar is receiving subsidy of ten cents a pound of copra, so that will make the total price paid to producers 15 cents a pound."
Wilfredo Candilas hopes that the world price for coconut oil will rebound.
Thousands of farmers and their families are affected by the cut.