Despite having no soil, no capital, cripplingly high freight costs and a brace of ducks he doesn't know what to do with, a micro-farmer is determined to build a viable agricultural business on the Cocos (Keeling) Islands.

The tiny horseshoe of 27 coral islands in the Indian Ocean, 2,700 kilometres north-west of Perth, has just 14 square kilometres of land and is home to about 600 people.

Much of the land is covered in the coconut palms that give the islands their name. For almost 150 years, the trees were harvested for copra by a local Cocos Malay workforce under the rule of the Clunies-Ross family.

The copra industry once employed the entire Cocos Malay community. ( Supplied: National Library of Australia )

But since the industry ended there in 1980, the palms have been left to grow wild and the coconuts fall to the ground and are collected by locals for personal consumption.

Tony Lacy arrived on the islands 10 years ago with his wife (a park ranger) and their four children.

He secured a position with the local government as a community development officer, giving him an insight into why the island wasn't growing economically.

While most of the expat population came to the islands to fill public service positions, unemployment among the Cocos Malay community is high (around 20 to 30 per cent), and much of the work they find is part-time.

Mr Lacy's background in food science — he was a viticulturalist in his home state of Victoria — got him thinking about how he could put his skills to use on the islands, where all food and supplies are flown in.

"Rather than complaining all the time about what we didn't have, like a sourdough bakery or nice funky cafe or even a farmers' market, I started to say, 'Well, if I am going to survive here in the small town, I have got to start to do things myself'," he recalled.

Evaporation beds use the sun to harvest salt from sea water. ( ABC Radio Perth: Emma Wynne )

"One of them was to create a sea salt evaporation system with the local Home Island guys, the seniors.

"I was inspired by one of the elders — he was evaporating sea salt by cooking the sea water in a 44-gallon drum.

"We set up a hybrid social enterprise; my aim was to set up a concept that the Cocos Malays could then take over.

"The challenge was to make something sustainable on the islands without government dependence."

Herbs and spices are grown on the farm. ( ABC Radio Perth: Emma Wynne )

The next step for Mr Lacy involved taking over the tiny farm established on West Island in the 1980s that had long since been abandoned. It is dotted with fruit trees and has a shade house for hydroponically grown herbs.

"We trialled different herbs and we started blending with our sea salt," Mr Lacy said.

Then, the business moved into hospitality, taking over a cafe space at the airport a few nights a week to increase revenue and find a way to take the sea salt further.

"Now the business is more hospitality geared, we do several food nights a week, including fish and chips, and the fish is caught by girls who make the sea salt and their partners, who go out once a week."

The cafe on West Island sells farm produce and creates extra work for locals. ( ABC Radio Perth: Emma Wynne )

The micro-business has two permanent part-time staff and a number of casuals doing various jobs from farm work to food production and hospitality.

Mr Lacy said he continually looked for new ways to expand the business and food production, which had, at times, led him down some experimental pathways that didn't always pay off.

"[After the sea salt success], we planted 10,000 lemongrass plants to make lemongrass tea ... a 100 per cent lemongrass tea, lemongrass and coconut.

"After six months we released it, and then I realised, hang on, people still love coffee; [the tea] wasn't going to be the export success that Cocos needed."

Cocos Malay elder Haji Idrie demonstrates basket weaving using coconut palm fronds. ( ABC Radio Perth: Emma Wynne )

The 30-odd ducks that waddle around the farm were also part of a trial that didn't take flight.

"We thought, why should we ship in frozen chickens from a farm out of Perth; we should have a source of meat here apart from fish," Mr Lacy said.

"But then we reached about 20 or 30 ducks and realised we haven't got enough food for them, we'd have to buy $60-a-bag feed from Perth.

"It wasn't viable, so we're trying to keep the numbers at about 30 to 40. Now that I've got 30 or 40, I can't really kill any because I'm a bit soft."

The ducks now spend their days at the farm and are fed on fresh coconut.

The ducks now eat coconut at the farm. ( ABC Radio Perth: Emma Wynne )

Cracking the coconut market

Until a few years ago, Mr Lacy had avoided using the islands' only abundant natural resource — coconuts — because of the export costs.

Air freight costs around $10 per kilogram, while a container on the ship that arrives every two months or so costs $12,500.

"Then two years ago we had an inquiry from a Japanese company that wanted only Australian coconut oil.

"We had a 10-week trial. It was easy to work out the system but I couldn't get it below four labour hours to produce a litre — at $25 an hour, that's $100 a litre before we got it off the island."

The coconut oil ended up becoming a range of body butters, creams and lip balms that can be sold more profitably, and the business also considered making soap.

The coconuts are free for anyone who wants to collect them. ( ABC Radio Perth: Emma Wynne )

But it's the latest venture that Mr Lacy hopes will finally propel the farm from micro-business to fully fledged job creator.

Shaved and dried out into chips, the coconuts, which fall in their thousands over the Cocos Islands, could be a quarantine-compliant product light enough be airfreighted to the mainland.

"Coconut chips are lightweight, vegan, organic — it's a health food, a snack for kids, adults — and I thought, 'Right, stop everything, forget about the soap, let's just focus on chips'," Mr Lacy said.

Coconuts grow wild, including on Home Island where the Cocos Malay community lives. ( ABC Radio Perth: Emma Wynne )

For the past six months that is what they have been doing — developing the product, creating packaging and branding and exploring potential markets.

Mr Lacy is planning a crowd-funding campaign to both pay for machinery that will automate some of the chip-making process and to generate interest in the product.

"Hopefully if that takes off and we get into the eastern states and around the world, we can get the price down.

"We can export with express-post bags.

"So, it's all about the coconut chips now — hopefully that will rejuvenate the whole Cocos Islands coconut industry and create a whole new industry for Australia."

The coconuts are currently processed by hand, but they are hoping to automate the process soon. ( ABC Radio Perth: Emma Wynne )

He said he hoped it would also lead to the creation of six permanent full-time jobs and four casual positions, and he was excited at the prospect of being able to create more employment for young people.

"It's OK for those who are retired on the island or who have current jobs, but for the youth there are no jobs, there is no industry.

"So it's exciting to be on the cusp of that, creating this.

"It's early days but we like to think it is sustainable. It's got a lot of support with the locals."

"We live in hope," he said, laughing. "That's all we do actually — we live in hope."