Overregulation worries PH banana exporters

A group of banana exporters yesterday said the industry that earned $1.1 billion in 2014 is threatened with a proposed law that overly favors farmers and which makes it harder for investors to do business.

According to the Pilipino Banana Growers and Exporters Association (PBGEA), House Bill No. 5161 adds to already-mounting threats that the industry faces, including the effects of recent natural calamities and market disruptions as well as the ongoing El Niño phenomenon.

PBGEA executive director Stephen Antig, citing data from the Philippine Statistics Authority said that the value of Cavendish bananas exported surged by 18 percent to $1.14 billion last year from $962.6 million in 2013.

But Antig said the industry—which is the second-biggest dollar earner in agriculture after coconut oil—is still slowly recovering from disasters that hit plantations in Mindanao about three years ago.

“The industry was caught in a quagmire as a result of the market crises in China and Iran, intermittent weather conditions, the onslaught of Typhoon Pablo in December 2012, and now the series of flooding that intensified the risk of the spread of plant diseases,” Antig said.

“But there are now more dangerous calamities threatening the industry,” he added. “At the local level, some ordinances tend to prevent the industry to grow and prosper while at the national level, a HB 5161 might even kill the industry.”

Antig explained that the bill proposes to regulate the establishment and implementation of agribusiness ventures arrangements (AVAs) in land reform areas.

According to Antig, the bill will unnecessarily allow government interference in purely private commercial transactions.

If Congress is minded to protect the interests of agrarian reform beneficiaries (ARBs) who enter into contracts with the private sector, Congress should provide support services to these ARBs instead of mandating governmental approval of all contracts with them,” he said.

Antig said that HB 5161 undermines the obligatory force and mutuality of contracts because of the provision that an ARB can unilaterally opt out of the contract upon change of economic conditions.

“The bill virtually shields an ARB as a landowner and entrepreneur from investment and other risks and shifts these burdens to the private investor,” he said. “With its restrictive regulatory requirements, HB 5161 removes the incentive for private investors to transact with ARBs.”