Banana growers in Mindanao are yet to recover fully from the devastation caused by typhoon Pablo almost three years ago, but industry leaders said they face new and more dangerous calamities that undermine growth.
Stephen Antig, executive director of the Pilipino Banana Growers and Exporters Association Inc. (PBGEA), said natural disasters and man-made risks – particularly the uncertainty of business operations due to inconsistent government policies – are now the biggest threats to the banana sector’s recovery.
“We’re slowly recovering from disasters that almost simultaneously hit the banana plantations in Mindanao in 2012. But the continued growth of the industry now face threats not only from natural disasters but also from man-made calamities,” Antig said.
Banana growers and exporters were trapped in a quagmire of market crises in China and Iran, and intermittent weather conditions. But the industry made significant headway, even breaching the $1-billion mark in exports last year.
The Philippines is the second largest banana exporter in the world, making the banana industry a consistent top dollar earner. Banana is one of the country’s best agricultural products second only to coconut oil.
According to the Philippine Statistics Authority (PSA) exports of Cavendish bananas grew by 18.06 percent to $1.13 billion in 2014, from $962.58 million in 2013, according to the Philippine Statistics Authority.
The top major export destinations for fresh Cavendish bananas are China, Japan, Korea, the Middle East and New Zealand.
Antig said growth in export earnings may be short-lived as the industry face natural disasters, including drought and floods that spread plant diseases such as Fusarium wilt, popularly known as Panama Disease.
He said proposed legislation such as the proposed House Bill 5161, which aims to regulate agribusiness venture arrangements (AVAs) in land reform areas, also put unnecessary pressure to producers.
“While we can’t prevent the natural calamities, these man-made threats to the banana export industry can be solved or eliminated if properly explained by the industry leaders,” he said.
“How do we sustain growth with the industry faced with difficulties and threats? At the local level, some ordinances tend to prevent the industry to grow and prosper while at the national level, HB5161 waiting for deliberations might even kill the industry,” he said.
PBGEA submitted a position paper to Congressman Teddy Baguilat, author of HB 5161, citing major problems caused by the proposed law.
It said the bill was unnecessary because it would unnecessarily allow interference by the government in purely private commercial transactions.
“PBGEA maintains that the private sector is the most efficient and effective mover of business and investments. Involving the government in AVAs will further increase the presently cumbersome regulatory requirements for investments in the Philippines, including investments in agribusinesses in tandem with ARBs,” it said.
PBGEA also cited that HB 5161 alters a lot of contract principles and rules.
The bill virtually shields an ARB as a landowner and entrepreneur from investment and other risks and shifts these burdens to the private investor.
The bill also negates the autonomy of contracts by providing mandatory provisions that will deter investors from entering into a contract with ARBs.
“First, it undermines the obligatory force and mutuality of contracts. If Congress is minded to protect the interests of ARBs, who enter into contracts with the private sector, it should provide support services to these ARBs instead of mandating governmental approval of all contracts with them,” the group said.
PBGEA also stressed that HB 5161 will ultimately work to the detriment of the ARBs and the agricultural industry.
“With its restrictive regulatory requirements, HB 5161 removes the incentive for private investors to transact with ARBs and, thus, deny ARBs access to the private sector’s expertise and resources that the government cannot provide. With the limitation of land contracts, it will constrict agricultural production and exports to the prejudice of the national economy,” the group said.
But Antig said the banana export industry has been in existence for 44 years with little assistance from the government, adding that they have followed and implemented the agrarian reform law in its plantations.
“The Philippine banana export industry is an essential leader in the agriculture sector and constantly plays a prominent role in the economy by providing top dollar income and builds long term prosperity,” he said.
“The banana industry is consistently contributing a lot not only to the Mindanao region but also to the whole country. The taxes and fees paid to the government in 2014 amounted to P6.5 billion,” Antig said.
In 2014, the total land area planted with different varieties of bananas all over the Philippines reached 441,951 hectares. Majority of the country’s banana production is from Mindanao planted in about 243,450 hectares. Cavendish for export accounts for 34 percent or 83,843 hectares of that total area.