THE country’s $1.14-billion banana-export industry will suffer once a proposed bill on agribusiness becomes a law, the Pilipino Banana Growers and Exporters Association Inc. (PBGEA) said on Tuesday.
“Right now, we are also experiencing drought brought about by El Niño, but there are now more dangerous calamities threatening the industry. At the local level, some ordinances tend to prevent the industry to grow and prosper, while at the national level, House Bill [HB] 5161, waiting for deliberations, might even kill the industry,” said Stephen Antig, executive director of the PBGEA.
Saying that the banana industry was already caught in a quagmire as a result of the market crises in China and Iran, weather conditions, including the onslaught of Typhoon Pablo (international code name Bopha) in December 2012, and now “the spread of plant diseases,
including Fusarium wilt, popularly known as Panama Disease,” will not be helped by an “interventionist” approach from the government, Antig said in a statement.
HB 5161 seeks to regulate the establishment and implementation of agribusiness venture arrangements (AVAs) in land-reform areas.
On March 6 the group filed a position paper submitted to Rep. Teddy B. Baguilat of Ifugao, the author of HB 5161, asking to do away with the proposed bill.
“The bill itself was deemed unnecessary, because there is no need or justification for a law on the specific and restrictive regulation of AVAs between private investors and agrarian-reform Beneficiaries [ARBs],” Antig said.
Antig said that HB 5161 “will unnecessarily allow interference by the government in purely private commercial transactions,” adding that the private sector is the most efficient and effective mover of business and investments.
Involving the government in AVAs will further increase the cumbersome regulatory requirements for investments in the Philippines, including investments in agribusinesses, in tandem with ARBs, Antig noted.
If Congress is thinking 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 also said, adding that HB 5161 will alter a lot of contract principles and rules, the group said.
Antig said that, once passed, the intended law will undermine the obligatory force and mutuality of contracts, because under the bill, an ARB can unilaterally opt out of the contract upon change of economic conditions.
“The bill virtually shields an ARB as a landowner and entrepreneur from investment and other risks, and shifts these burdens to the private investor,” Antig said, adding that it will also negate the autonomy of contracts by providing mandatory provisions that will deter investors from entering into a contract with ARBs.
With its restrictive regulatory requirements, HB 5161 removes the incentive for private investors to transact with ARBs and, thus, denies ARBs access to the private sector’s expertise and resources that the government cannot provide, “ultimately working to the detriment of the ARBs and the agricultural industry,” the group also said.
Exports of Cavendish bananas has breached the $1-billion mark, as it grew 18.06 percent from $962.58 million in 2013 to $1,136.42 million last year, according to the Philippine Statistics Authority (PSA).
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.
The top major export destinations for fresh Cavendish bananas are China, Japan, South Korea, the Middle East and New Zealand.
In 2014 the total land area planted with different varieties of bananas all over the Philippines reached 441,951 hectares. The majority of the country’s banana production is from Mindanao, which is produced from 243,450 hectares. Cavendish for export accounts for 34 percent, or 83,843 hectares, of that total area.
Antig said the Cavendish banana export industry employs 503,058 people, receiving an estimated P44 billion in annual wages.
8 comments
Truth is, the industry has prospered because the government wasn’t involved. We are the 2nd largest exporter of bananas in the world,generating billions in income, employing thousand of people. Once the government steps in, all will be lost.
Hmmn, so for over 44 years, the banana industry has flourished to become the 2nd largest banana exporter in the WORLD playing a prominent role in the national economy by providing top dollar income with almost no assistance from the government and now this same government that is known for corruption and inefficiency wants to interfere.
Of course when something is going good, the government wants its hands on it. It’s so frustrating because this industry is one of the top dollar earners of our economy, and it might all come crashing down because of this bill.
These natural and man-made calamities threaten the banana industry’s sustained growth. And these House Bill 5161, proposed by Representative Teddy Baguilat, just adds to already-mounting threats that the industry faces.
The banana industry is one of the Philippines’ top exports, earning over a billion dollars in 2014 alone. What in the world makes Rep. Baguilat think that the government’s interference is needed? Providing support to the farmers is one thing… that can be done in a many number of ways. His bill will drive away investors and ultimately kill the industry.
Does congress know what they’re playing at? This is a billion dollar export industry that they could potentially kill, simply by butting in. Obviously the system currently in place works, otherwise we wouldn’t be the second biggest banana exporter in the world. Why mess that up?
The banana industry is chugging on and thriving despite the calamaties left and right that affect and threathen its growth… but this House Bill 5161 might just be the thing that fully destroys the industry. Hopefully that is not the case. Hopefully it doesn’t get passed. And hopefully congressmen who know nothing about the business consult with industry experts first before butting in and coming up with these industry-threathening new laws.
This congressman from Luzon should have studied the banana industry first,learn how banana’s are planted and harvested, how it is being moved from plantations to packaging warehouses, learn how to properly handle the produce when being packed. He should have consulted experts and those on the ground, talk to the farmers, the community near plantations. Find out how much money they make, he has been able to send his children to school through his income. If he did this then he would have discovered that there are other ways to help ARB’s.