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Better to work together

opinion / Columnists
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Better to work together

The Marsman Estate Plantation Inc. (Mepi) donated some 800 hectares for distribution to agrarian reform beneficiaries (ARBs) to support the ideal of the Comprehensive Agrarian Reform Program. President Gloria Arroyo approved the deal in 2002 and praised Mepi for its generosity. Mepi leased back the land as a condition of the donation in the expectation of a reasonable return, to get the cost back over the next 30 years—the life of the contract. A portion of the land remained with Mepi because of the communal services on it—an airfield, office buildings, roads, canals, warehouses, packing plants, etc.—that all the farmers could share.

Yet a minority group of 301 of the 760 ARBs was influenced by a discredited (left-wing) ideology to cancel the contract and revert to individual ownership. They said the move was to return ownership of the land to the farmers. But the farmers still own the land; they only leased it to Mepi. In return they’re deriving employment income of P690 a day compared to the national average of P181 for non-ARB farmers. If the farmers did go independent, it would reduce their incomes and put the farms at great risk. Panama disease is a viral attack on banana plants that can only be controlled by strict quarantine and the high discipline a corporate farm can maintain but a small plot can’t. Their banana plants are at risk of being lost totally, with no money being earned.

Let me take the numbers further. The average Filipino farmer in the Davao Region earns P104,855 per year. From that he must pay for food for his family, schooling for his kids, electricity for the home, and expenses to support his farm. Then there are the likely health and birth expenses. At yearend, he’s left with nothing, and is probably in debt.

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Mepi beneficiaries, on the other hand, are paid annual salaries and benefits of P222,000 (for rank-and-file employees)—more than double what the average farmer gets. On top of that, he/she gets up to P130,000 annually in land rental, dividends and savings from the foregone land amortization that was supposed to be paid to the Land Bank, but which they now get to keep because the farm has been donated to them by Mepi.

To promise them greater wealth if acting alone denies all economic and commercial reality. They would lose their market. Assuming they could even continue with the current efficiencies, who would they sell to? And even if they could find such people, they’d have no guarantee of continuance of purchase as they now have with Mepi, whose supply contracts are long-term.

If the minority 301 did break away, it would throw some 760 other farmers and some 1,100 associated workers out of a job as Mepi would have to close operations. The lots of the 301 are not contiguous, but scattered throughout the plantation. So running an organized farm would no longer be possible.

And if the contract is cancelled the land reverts to Mepi, not the farmers. That would need the application of the Comprehensive Agrarian Reform Law, which has expired. So it becomes not only a commercial but also a legal mess. And if a break-up occurs, it would be chaotic. Who has access to private roads, and who doesn’t? What happens to the contracts with buyers? Mepi can’t commit supply from people who’ve gone their own way.

Mepi has long-term contracts with buyers in Japan, the Middle East and China. Those contracts would be violated, and Mepi would face cancellation penalties. Those buyers would buy, not from individual farmers, but from Vietnam or Ecuador. And if the contracts with Lapanday are also cancelled, the Philippines goes from being the world’s No. 2 banana exporter to a pariah. No one will buy. Other crops will also suffer as buyers will not come to a country where contracts are not honored.

Banana is the biggest export crop for the island, by far. To put it at risk is foolhardy.

President Duterte wants to develop Mindanao, and as some of the poorest regions in the country, it sure needs it. But it won’t happen if farmers can’t work together for the common good. And it won’t develop if contracts aren’t honored by the government.

I urge the 301 to listen to wiser heads. They have a guaranteed good income under which they are well looked after. If would not make much sense to risk it.

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Email: wallace_likeitis@wbf.ph. Previous columns: www.wallacebusinessforum.com

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