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Banana industry reels from security concern

Peace and order issues may have been the biggest bane to one of the country’s top agricultural commodities: banana. This is because while stakeholders can always find a way to deal with weather phenomenon like El Niño, the worst thing that atrocities can make is drive our banana investors away.

Pilipino Banana Growers and Exporters Association, Inc. (PBGEA) Executive Director Steve Antig said the banana industry, which is highly concentrated in Mindanao, is still at risk because exporters no longer feel safe.

“The greatest challenge of the industry is of course the peace and order situation. This is a government concern. All the industry can do is ensure good relationship with the workers and the communities where we are operating,” Antig told Business Bulletin.

 /Manila Bulletin

/Manila Bulletin

Antig said the impact of peace and order issues in Mindanao in the overall Philippine economy could be bigger than everyone is expecting.

“The closure of plantations will lead to unemployment and then to poverty. There will be a domino effect on the economy of the locality unless peace and order is established. This will create a vicious cycle, thus, should be given priority,” he said.

He then cited that Dole-Stanfilco, a multinational banana firm operating in Tagbina, Surigao del Sur has recently shut down its operations indefinitely after it has been subjected to a series of attacks by the rebel group of New People’s Army (NPA) for  refusing to pay revolutionary taxes.

The NPA also burned 19 container trucks in total and has cost the company P20 million in losses since 2010.

According to Department of Agriculture (DA) Legal Consultant Israelito Torreon, there are now 85,000 hectares planted to banana in Mindanao, 42,000 of which belong to the group of big companies, while 43,000 are under small growers.

There are also 19,000 hectares that has no clear status.

Antig said that on a good year, the industry can produce about 2.2 million metric tons (MT) of banana but this is also considered as a conservative estimate.

However, the industry was also hit by El Niño, which dampened its exports by 14 percent in the first five months of the year.

From January to May, large companies exported 588,058 MT abroad compared to the 661.830 MT they exported in the same period last year.

By the end of the year, banana export is expected to decline further to 30 percent. In 2015, PBGEA’s total export reached 1.6 million MT.

Nevertheless, investors never lost hope that the conflict in Mindanao will be finally resolved and then the $1 billion banana industry can finally take off.

Despite this almost insurmountable challenges, Antig said the industry “is still very optimistic that the new administration will be able to do something about this.”