by Aurelio Peña
IF YOU CAN’T find me in the usual press conferences and media coverages, the only credible excuse I can give these days is that I’m so deeply involved in the industry development programs of the Japan International Cooperation Agency (JICA) and the Department of Trade and Industry’s regional office which have jointly set into action the Davao Industry Cluster Capacity Enhancement Project or DICCEP since 2008.
It would have been easier for me simply to act as the usual “business reporter” covering the various projects of DICCEP that cover such industries as mango, coconut, seaweeds, banana, wood, tourism, and information technology/communications (ICT). But having an extensive background in the banana industry, I found myself engrossed in their regular meetings to boost the industry and help solve its myriad of problems.
Of course, that doesn’t make me an industry expert since I look at this industry from the grassroots — from the vantage point of banana farmers who have been exploited for many, many years by multinational banana exporters who buy fresh Cavendish bananas at such low, low prices (while foreign buyers pay high prices), leaving many of these farmers wallowing in millions of pesos in unpaid debts.
These people who we refer to as the “big players” in the banana industry still can’t accept the idea that these lowly banana farmers who work their asses off tilling the land and growing exportable bananas for them, should own the farm and should deserve higher farm-gate prices for their fruit.
Banana farmers, on the other hand, feel helpless at the hands of these big banana exporters that they have grown dependent on them and won’t mind accepting 2.80 US dollars per carton box “guaranteed contract price” from them, whereas foreign buyers in Japan and the Middle East are willing to pay as much as four to five US dollars per box at farm-gate or packing plant — if bought directly from the farmers.
Of course, mi amigos, we are aware of the “economics” of the banana business, you know, like the bigger “overhead costs” of these multinationals that you have to add on top of the farm-gate price, otherwise you’ll lose a lot of profit to share with your investors. (You ask: What’s the point of investing if you don’t earn profit?)
But there’s a growing reality these big guys have to face nowadays — more and more foreign buyers (Japanese. Chinese, Iranians, Arabs, etc) are buying DIRECTLY from the small banana farmers themselves thru their cooperatives.
Foreign buyers send their own operations managers and purchasing managers (not purchasing agents)over to Davao, work out the deal right at the plantations, pay the farmers in CASH and supervise the loading of the boxed fruits into 40-foot refrigerated container vans right at the packing plant.
Now, if foreign buyers start by-passing the big fruit exporters and go direct to the farmers, these buyers earn bigger profit while the farmers enjoy much bigger prices for their fruits bought directly at the farm. The ones left holding the empty bag will be the big fruit exporters.
But since most of these banana farmers still have long-term buying contracts with these big exporters, this “dream scenario” for small farmers will remain a dream — unless they get together, unite as one organization to be able to run their own exporting firm and DEAL DIRECLY with foreign buyers.
Comments are welcome at: tradingpost_davao@yahoo.com)
