The country’s multi-billion dollar banana export industry which has become China-dependent needs government intervention as it is adversely affected by the Coronavirus crisis and other key challenges, including the Iran sanction as well as the emerging competition from other Asian countries.
Alberto F. Bacani, chair of the Pilipino Banana Growers and Exporters Association (PBGEA), told Davao business writers that the Novel Coronavirus worldwide emergency would result in shipping companies thaving a hard time to ship cargoes to China, now considered the biggest market at present as it buys about a third of the country’s total exportable volume, overtaking Japan.
“What is scary is we have become dependent on the China market,” said Bacani, pointing out that whatever the issues that the China market has to face, these will impact on the local industry.
He added that the country has also lost an alternative in Iran as a result of the sanctions that the American government has imposed on the country and that it has not found any other alternative markets for the product aside from the traditional markets like Japan and South Korea.
As of November 2019, the Philippine Statistics Authority (PSA) reported that the value of exported Cavendish banana has gone up to $1.8 billion from $1.38 billion during the entire 2018.
Victor S. Mercado Jr., PBGEA president, said although the value was higher, based on the data of the association, production actually went down to 207 million metric tons in 2018 to about 195 million metric tons last year.
This was partly because last year there was a mild drought whose effect is expected to continue this year, he said.
“But the biggest that the threat that has really caused the reduction (in the size of the farms) is Panama disease,” he said as he noted that the infestation has led some companies have abandoned their farms.
PSA data also showed that 88,667 hectares are planted to the crop, or about 20% of the total area planted to banana varieties, although the association said that the area planted to the crop has shrunk as more farms, especially smaller ones, have failed to control the spread of Panama disease, or Fusarium Wilt, a soil-borne infestation that renders a farm useless.
The Department of Agriculture has started conducting a survey of the total area of farms affected by the disease as the association estimated it at about 30,000 hectares.
“The big problem is that it is hard to look for areas to plant,” he said, pointing out that aside from the needed infrastructure facilities like ports, most areas have been placed under agrarian reform, although some companies have leased back the farms that they have distributed to the farmer-beneficiaries and making them earn both as rental collectors and as workers.
The industry has also started adopting a Panama disease-resistant variety, but its propagation has not been much because of the needed interventions like irrigation systems.
Another huge challenge, said Mercado Jr., also the president of the Marsman-Drysdale Agribusiness Group, is that some Asian countries that have started planting banana have been poaching the technical experts of the local industry.
These countries, he said, have started developing their Cavendish banana industry with the help of the Chinese companies because they are nearer to China and the Philippines.
Because of the expertise of the Filipino technicians hired to help the industry in the Asian countries, Mr. Mercado said companies have been able to plant huge farms. “They can plant from 50 hectares to 500 hectares a day,” he said.
“Their biggest is that they are closer to China,” he said as a container of banana from Vietnam to China is about $500 compared with $150 is shipping the same volume of cargo from the Philippines to the same destination.
Bacani said his company, Unifrutti Tropical Philippines Inc. where he sits as president, even sent a team to Cambodia to look into the progress of the banana industry.
“It’s scary,” said Bacani, although he added that the Philippine banana industry is still superior mainly because, for one, the labor force there “is still hard to manage.
“It will take a while before they (other countries in Asia) can catch up with the Filipino way of growing bananas,” he said, although he warned that the government should start helping the industry because it might eventually lose to competition.
