Lifting of UN restrictions seen boosting PH banana exports to Iran

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The Iranian Ambassador to the Philippines is optimistic that export of fresh bananas to Iran will increase now that its market is again open because of the lifting of trade restrictions imposed by the United Nations.

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Ambassador Ali Asghar Mohammadi, during his recent meeting with members of the Pilipino Banana Growers and Exporters Association (PBGEA), said now is the right time for the Philippines to do business in Iran.

“Iran is a big country. It is five times the size of the Philippines and has 15 neighbor countries, this is a huge opportunity for the Philippines,” Mohammadi added.

The Philippines has been exporting fresh bananas to Iran for almost two decades.

In 2008, the export of fresh bananas was as high as 510,642 metric tons but, because of the UN’s trade restrictions over Iran’s nuclear activities, it went down to as low as 148,892 metric tons in 2014.

PBGEA executive director Stephen Antig said Iran continues to be one of the most important foreign markets of fresh Philippine bananas of the Cavendish variety.

“In fact, despite the difficulties encountered by banana exporters brought about by the economic and financial sanctions imposed by the UN of which we are grateful now that they are lifted, Iran continues to be one of our best destinations,” Antig added.

PBGEA president Alexander said “a trade mission is good and we should organize one soon.”

Deeper trade relations
Mohammadi, however, said the situation is changing and that both countries need to deepen the trade relationship by studying how to further improve trade deals.

“We want an open international market. We can’t supply our own market. Iran is a demanding market because we always import. Iranians demand bananas,” he added.

“The food industry is always in demand. The tourists have also been coming to Iran. Last year, we had 7 million tourists and we are targeting 25 million in 2020. The tourists are a good market for fruits,” the ambassador said.

Iran has a population of over 77 million as of 2014.

Besides Iran, the Philippine fresh bananas are also exported to the United Arab Emirates, Saudi Arabia, Oman, Kuwait, Qatar, Bahrain, Japan, China, South Korea, Hong Kong, Singapore, Russia, New Zealand, Mongolia, Ukraine, Turkey, Iraq, Egypt, Brunei Darussalam, Malaysia, Thailand and Indonesia.

Banana is one of the country’s best agricultural products, second only to coconut oil.

The Philippines is the second-largest banana exporter in the world, making the banana industry a consistent top dollar earner.

Threats
At present, the local banana industry is experiencing massive effects of climate change as well as prolonged drought brought about by the El Nino phenomenon.

“But there are now more dangerous calamities threatening the industry. While we can’t prevent the natural calamities, these man-made threats to the banana export industry can be solved or eliminated if the legislators involved will fully understand how the industry works. At the local level, some ordinances tend to prevent the industry to grow and prosper while at the national level, a House Bill [HB 5161] waiting for deliberations might even kill the industry,” Antig said.

HB 5161 seeks to regulate establishment and implementation of agribusiness ventures arrangements (AVAs) in land reform areas.

The Cavendish banana export industry employs 503,058 people receiving an estimated P44 billion in annual wages.

Together with the workers’ families and relatives, more than three million individuals are dependent on the banana export industry for their basic needs and self-esteem.

The industry also helps mould the future of two million children in Mindanao.

It 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.

The banana industry is a consistent economic contributor, not only to the Mindanao region, but also to the whole country.

The taxes and fees that it paid to the government in 2014 amounted to P6.5 billion.

Antig said HB 5161 will 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 cumbersome regulatory requirements for investments in the Philippines, including investments in agribusinesses in tandem with Agrarian Reform Beneficiaries (ARBs).

“This will definitely spoil Iran’s potential investments in the banana industry and other food-related businesses in the Philippines,” Antig said.

He pointed out 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 the ARBs and, thus, deny the 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.

Aerial spray
Another man-made threat hounding the banana industry is HB 3857 or “An Act prohibiting aerial spraying as a method of applying chemicals and similar substances on agricultural crops.”

Authored by Gabriela Women’s party-list Representatives Luzviminda Ilagan and Emmi de Jesus; Bayan Muna party-list Representatives Neri Colmenares and Carlos Isagani Zarate; ACT party-list Rep. Antonio Tinio; Anakpawis party-list Rep. Fernando Hicap; and Kabataan party-list Rep. Terry Ridon, the bill seeks a ban on aerial spraying in banana plantations.

“Aerial spraying is not only a nuisance. It is also injurious to the health of the people living near banana plantations,” the authors said.

It is perceived as an old issue.

Aerial spraying is a generally accepted agricultural practice by the World Trade Organization and the Food and Agriculture Organization of the United Nations under certain limitations.

The Philippine banana industry is strictly adapting, otherwise importers might stop buying.

The issue on aerial spraying was extensively discussed during a congressional hearing held in Davao City in November, 2009.

The public hearing was presided by House Committee on Ecology chairman Belma Cabilao with the participation of other congressmen, including then House Speaker Prospero Nograles and Representatives Rufus Rodriguez, Luzviminda Ilagan and Rafael Mariano.

During the hearing, non-government organizations pushing for the ban were exposed to be lying, fabricating ill effects of aerial spraying on villagers living near plantation areas.

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3 Comments

  1. Bianca Hernandez on

    While the rest of the world is going bananas for Philippine bananas, the Philippine government meanwhile does nothing to support and assist this thriving billion dollar industry. In fact, it even goes around to threatening it and scaring investors away with this ill conceived HB 5161 and limiting the productivity by stopping aerial spraying which is a science based and generally accepted agricultural practice by the World Trade Organization and the FAO of the UN.

  2. Apparently House Bill [HB 5161] will be a self-inflicted economic disaster for the banana industry so why even entertain such a bill? For political and ideological reasons? Good grief!

    • Couldn’t agree more! This HB 5161 will have tremendous effect on the Philippine banana industry which can lead to potential job loss for up to 503,058 people.