The Philippines as the Second Highest Banana Exporter: Providing Support to Our Banana Farmers to Ensure Sustainability

Written by Rene Estremera. Posted in Report

According to the Food and Agriculture Organization, the Philippines is the second top exporter of Cavendish Banana behind Ecuador. The Philippine Statistics Authority reported that ninety-nine percent (99%) of the country’s production comes from Mindanao and provides livelihood to many farmers on the island. However, challenges such as the Fusarium wilt, typhoons, and climate change affect the sustainability of our country’s production. The paper “Factors Affecting Participation in Contract Farming of Smallholder Cavendish Banana Farmers in the Philippines” by UP Mindanao researchers Melissa P. Loquias, Larry N. Digal, Shemaiah Gail Placencia, Ivi Jaquelyn T. Astronomo, Marvin Louie G. Orbeta, and Carol Q. Balgos published in the Agricultural Research explores ways to improve the current conditions of smallholder Cavendish Banana farmers in Santo Tomas, Davao del Norte. 

Through the Comprehensive Agrarian Reform Law (CARL), farm workers received land to till. Multinational companies (MNCs) used to own 50 to 6,0000 hectares of land. Through CARL, MNCs can only own up to five hectares now. To compensate, MNCs started offering contracts to smallholder farmers wherein the farmers plant the Cavendish Banana on their land and sell them exclusively to the MNCs. In return, contract farmers have access to new knowledge and technologies as MNCs usually have stringent protocols to ensure the quality of the bananas, access to formal lending agencies that offer low-interest rates, and ensured income–which lessens the risks of profit loss as the prices are fixed and the farmers have a guaranteed market outlet. They also have access to better aerial disease management protocols, which is costly for small independent farms. While contract farming seems a better choice for our farmers, there are still controversies surrounding these arrangements. Farmers complain that MNCs control prices and the companies do not reflect the increases in the foreign market. Since the farmers are contract-bound, they can not diversify their farms to have alternative sources of income. Due to this, some farmers prefer to be non-contract farmers. They sell their products in spot markets as the pricing usually reflects the foreign market, and spot markets have lesser quality requirements. However, non-contract farmers are more susceptible to profit loss than contract farmers as prices in spot markets are unstable. There is also zero financial and technical assistance from spot buyers, which leads to non-contract farmers having lesser access to new knowledge and technology on banana farming. 

Hence, the paper suggests that the government craft training, policies, and programs that focus on aiding and protecting our Cavendish Banana farmers’ welfare. More effective mechanisms to regulate contracts should be explored to help address the risks in contract farming. It also suggests that comprehensive training education that addresses the resilient and sustainable production of Cavendish Banana amidst the threat of climate change and diseases be provided to our farmers. Financial support and access to reliable credit lenders to enable smallholder farmers to have capital should also be looked into and examined. Overall, the government should provide more aid to our farmers to improve their welfare and ensure our country’s productivity and competitiveness in the Cavendish Banana production globally. 

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