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Is banana sagging?

/ 05:32 AM November 03, 2017

It may be playing on words, but our title is a serious question motivated by recent trends in the industry. Two years ago a newspaper bannered the report “Philippine banana export industry under threat,” while last year another broadsheet ran the article “Banana industry losing global edge.” Earlier this year “Banana industry troubles seen dampening Davao 2017 growth” and “Banana industry growing weaker” were also bannered in the papers.

The Philippines had long been the second largest exporter of bananas in the world, next only to Ecuador. In 2014, the Philippine Statistics Authority (PSA) reported that our exports of Cavendish bananas breached the $1-billion mark and earned us $1.14 billion, from $963 million in 2013, notwithstanding the devastating impact of Typhoon “Pablo” in late 2012. However, PSA figures show exports having dropped dramatically to $440 million in 2015, then rising to $619 million last year, by which time we ranked only sixth in exports; Guatemala, Costa Rica, Belgium and Colombia had already gone ahead of us. In Asia, where we have traditionally accounted for 95 percent of banana exports, our supremacy may soon be threatened by Cambodia, Myanmar, Laos and Vietnam, which enjoy lower land and labor costs, and are now boosting banana production. Observers warn that unless we act fast, banana may yet be the next export crop in which the Philippines fades and loses prominence to its neighbors and other competitors abroad, as what happened to us with abaca, sugar, coconut and rubber.

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That Pablo did not make a significant dent in 2013-2014 tells us that natural disasters are not the main challenge leading us to slip and sag in global banana performance. Sadly, our troubles in the industry are more self-inflicted and manmade. Three items figure prominently in the past year alone, exemplifying the largely manmade nature of the problems setting the industry back. One, the destructive attack by New People’s Army rebels on the facilities of Lapanday Foods Corp. in Davao last April did considerable damage, leading to an estimated P2-billion loss in facilities and production. It led Neda Regional Director Maria Lourdes Lim to note that the incident will affect the Davao region’s export capability, given Lapanday’s prominence in production and export of Cavendish bananas. The region accounts for the bulk of the country’s banana exports.

Another manmade problem threatening the industry’s overall performance concerns the Tagum Agricultural Development Co. (Tadeco), another major banana producer. The company faces possible invalidation of its decades-old contract with the Bureau of Corrections (BuCor) for the use of the latter’s 5,308 hectares of land at the Davao Penal Colony in Panabo City, Davao del Norte. The issue is seen rooted in politics, as it came to the fore as part of a much-publicized personal and political quarrel between the House Speaker and a fellow legislator from Davao. The Speaker personally declared the joint venture agreement between Tadeco and BuCor as illegal, and the Department of Justice has since come up with a preliminary finding that the contract is disadvantageous to the government. The Commission on Audit is reported to have recommended cancellation of the contract, throwing uncertainty on a major producer’s future operation.

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The third manmade issue arises from the Department of Agrarian Reform’s action to review all agribusiness venture agreements (AVAs) between banana export firms and cooperatives formed by agrarian reform beneficiaries (ARBs). Uncertainty now clouds the operations of even more major producers, and, according to industry stakeholders, puts at risk the livelihoods of tens of thousands of ARBs, who the industry claims to have earned more income than average farmers planting other crops do. “We cannot accomplish our goal of maintaining the global competitiveness of our banana industry if the government itself is the one sabotaging us,” lamented one stakeholder.

Indeed, we need to get our act together fast and reach solutions satisfactory to all, as right now it is people, not nature, that is making banana a sagging industry for us.

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TAGS: banana export, Banana industry
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