FAST BACKWARD: Davao’s thrive in Ecuador

Oda Kyosaburo (1876-1917), or simply Ota, was “a Kobe merchant  who had come to Manila at the turn of the century with a profound belief in the future of Japanese-Philippine trade and who had made his mark both with the American authorities and his fellow Japanese.”

Ohta’s achievements lured more Japanese to invest in and organize corporations in Davao. Interest in the expansion of abaca plantations was feverish, and it was Yoshizo Furukawa, who was among those who capitalized on the opportunity. In 1914, after a brief sojourn to Davao to learn abaca cultivation, Furukawa organized the Furukawa Plantation Company, Ltd., with the assistance of Ito Trading Company, with himself as president and Leopoldo R. Aguinaldo as secretary. Given his agriculture background, his firm soon hit pay dirt. Four years later, his holdings expanded beyond expectation. Some 1,010 hectares of land that were developed as abaca plantation were placed under his name.

Furukawa’s first acquisition was the plantation owned by Captain James Burchfield, the frontiersman man from Louisville, Kentucky, which he bought in 1915. Here he established his first office and built factories inside the sprawling farm. At the time there were no roads linking the town proper to Daliao, and reaching the poblacion was mainly by horseback. Apparently buoyed by the positive results from his initial venture, he expanded his holdings by purchasing another Burchfield firm, the Davao Mercantile Corporation, aside from getting positions in other firms where the Japanese corporate capitals he had gathered were invested.

Departing from Ohta’s concept of developing virgin forests into abaca farms, Furukawa concentrated his acquisitions mainly on American plantations and companies, including subsidiaries sold for a profit by their owners who were decided to return home to the U.S. Because of sufficient capital and his growing reputation as an astute investor, he had little problem gobbling up numerous corporate interests in Davao. Over a short period, Furukawa nearly approximated the plantation holdings of the Ohta company during its heyday.

By 1918, with Japanese population surpassing the 10,000 mark, the number of Japanese-managed agribusinesses operating in town reached seven, encouraged in part by the lease of government lands by many private companies. Since the cultivation of Japanese-owned abaca plantations brought about lucrative production, Davao would later be called Dabao-kuo, after Manchu-kuo, the state established by the Japanese colonists in northern China.”

The economic gains achieved by the Japanese in Davao afforded them the chance to branch out to other investments, including large-scale import-export and merchandising concerns. Aside from abaca production and processing, deep-sea fishing was another significant area that would later be placed under their control. Japanese imagination, industry and perseverance helped transform Davao into a bustling and prosperous region. This was visible with the sprouting of Japanese corporate names like Mitsui Bushan Kaisha, Ltd. and the Osaka Boeki, Inc., which were organized to supply Filipino and Japanese needs at prices relatively cheaper than in Manila, Cebu, or Iloilo.

Although the Japanese were the minority, half of the taxes collected in Davao were paid by Japanese. Because of their numerous interests, they employed around 14,000 local workers that made the formidable Japanese investment machinery operational.

It is a little known fact that Furukawa is acknowledged as the father of the abaca industry of Ecuador. As early as 1930, with abaca experience from Davao coming in handy, he started testing hemp seedlings for cultivation in South America using samples of strains originating from the Philippines. This was confirmed by a 1953 U.S. research showing that the planting materials, mostly the Tangongon variety that were first brought to Panama before these were exported to Ecuador came from Davao. In fact, six rhizomes that were traced from a Philippine coconut variety were discovered in the seedlings.

Commercial production of Ecuadorean hemp, though, did not start until 1965. In Furukawa’s plantations adjacent to Santo Domingo de los Colorados, a fourth of the 20,000 hectares set aside for abaca were owned by and planted with seedlings the Japanese investor provided. Compared to its Philippine counterpart, the Ecuadorean hemp, except for the benign nematode, is not susceptible to abaca mosaic, and the location of the plantations is storm-free.

Furukawa also introduced a five-point scale “that incorporates the quality of cleaning location of the fiber in the plant, and its texture and color.” Another added factor that helped South American plantations is the lack of government intervention. Fiber transactions are made based on commitments, an arrangement that is hugely different from the Philippines where control of hemp in terms of quality, pest control, and planting technology is handled by the Fiber Industry Development Authority (FIDA).

Despite Furukawa’s early introduction of abaca in South America, the stability of the Ecuadorean hemp, like the Davao experience, is dependent on world market prices. Although he focused his energy in South America after the war, the more than 1,000 hectares of hemp estate he left behind in Bago Oshiro have since been apportioned by squatters. Only 80 hectares are left in government hands and are now home to a state-run research laboratory established for detecting hemp diseases, and a nursery that cultivates different varieties of abaca.

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