The idyllic image of a pristine South Pacific is being tarnished by governance, environmental and trade issues. Coconut is an abundant resource in the islands, but it is increasingly being viewed simply as a subsistence crop since farmers are less and less willing to produce copra for industrial extraction of oil. A major cause of this has been failure of institutional export marketing services which has been catastrophic for farmers and their families. Sustainability of a coconut sector based on copra is questionable owing to falling and volatile prices of the oil on world markets. Embodied crop technologies are shown to be inappropriate and that long-term reliance on copra can have adverse consequences. Product diversification, attention to processing technologies drawing on local knowledge and to local demand is the keys to sustained benefit. The small-scale DME Technology yields edible virgin cold-pressed coconut oil, which is also suitable as a diesel-fuel substitute with low carbon emissions. It also has properties attractive to cosmetic industry. Such technology has important contributions to make to income, health and environmental sustainability.