Legislated funding eyed to revitalize ailing banana industry

MANILA, Philippines — The government and industry stakeholders are looking at legislating a plan that will not just revitalize the country’s ailing banana sector but also salvage the country’s eroding market share abroad.

The Pilipino Banana Growers and Exporters Association (PBGEA) and the Department of Agriculture are drafting a banana industry revitalization plan to immediately address the concerns of the local farmers, from production costs, pests and diseases to market competition.

PBGEA executive director Stephen Antig said the plan is similar to the salt industry development plan that was enacted into law earlier this year, which would utilize legislated funding to bankroll various programs and projects to reinvigorate the banana industry.

The salt industry development law earmarks tariffs collected from imported salt to bankroll programs to improve domestic production.

The banana revitalization plan will be turned into a legislative bill that will be pushed by both the government and private sector for enactment into law.

There have been previous attempts to enact a law that will bankroll certain programs for the improvement of the banana industry, especially with the worsening impact of Panama disease on farms and plantations.

“Hopefully, once implemented, we should see some improvement not only in production and more so in the sustainability of the industry,” Antig told The STAR.

The crafting of the revitalization plan comes at a time when the Philippines is losing substantial market share in key Asian markets particularly South Korea and China.

International Trade Center (ITC) data showed that the Philippines lost nearly 11 percentage points of banana market share in South Korea from January to August on an annual basis.

The Philippines also lost almost 13 percentage points of market share in China from January to July versus the same seven-month period last year.

With the latest figures, the Philippines’ share in South Korea’s banana market is now down to 60 percent while in China, the country currently accounts for nearly 25 percent, based on ITC data.

The University of Asia and the Pacific’s Center for Food and Agri Business recommended that the government should “work closely” with the industry players in order to “strategize” and “prioritize” necessary measures to help the sector.

“It is important that the government listens to what the industry needs rather than prescribing based on what it thinks the industry needs (and) then act with urgency,” the think tank told The STAR in an email.

The Philippine Chamber of Agriculture and Food Inc. also threw its support behind the revitalization plan and argued that a higher budget allocation for the banana industry is needed.

Government officials earlier pointed out that the immediate ratification of the Philippines-South Korea free trade agreement (FTA) would provide local producers with a level playing field in terms of the tariff rate slapped on the country’s banana exports.

Under the trade accord, South Korea will cut its tariffs on Philippine bananas to zero from the current 30 percent within a five-year period. Foreign banana competitors are already enjoying lower tariffs compared to the Philippines, with the likes of Vietnam benefitting from a zero tariff beginning next year due to an FTA with South Korea.

Industry analysts have identified some of the major problems hampering the local banana industry, such as increased foreign competition from neighboring countries, production challenges, quality concerns and tariff disadvantages.

The STAR earlier reported that rising geopolitical tensions in the West Philippine Sea have impacted Filipino banana growers as China has cut back its purchases of the country’s prized commodity, worsening the erosion of the Philippines’ foothold in key Asian markets.