Wednesday, March 12, 2008 Ledesma: Banana black market: bane or boon? By Jun Ledesma Sunbursts
THERE is absolutely no acceptable reason why some so-called banana traders should prey on the banana growers with existing contracts with other established exporters.
For fly-by-night traders to entice growers to sell contracted fruits at a price difference of $0.40 per 13 kilogram box is grossly unethical and this has not only encouraged unmitigated thievery it has also posed as a veritable peril to the banana industry.
Already, the Middle East market has complained of the decline of the quality of Philippine bananas to those kingdom nations. What is worrisome is that some officials in the Department of Trade is said to be abetting this unprincipled business practice by partnering with some known businessmen which are occupying influential positions both in private and government bodies. Add to this the lackadaisical attitude of the Quarantine Office under the Bureau of Plant Industry which has the habit of issuing phyto-sanitary certificates for fruits shipments to just any Tom-Dick and Harry who parade as exporter.
The plot grows even thicker these days. In Davao del Norte, a priest has disregarded his duty in the pulpit and has been reportedly engaged in buying stolen bananas from polluted source.
Everybody talks about this in the circles of the Philippine Banana Growers & Exporters Association but this businessman in priestly habit cannot be identified.
Are the members of PBGEA afraid this holy father will invoke the gods to summon the wrath of heavens against them? What is disturbing is that while both the national and local dailies have reported this flagrant thievery that is bedeviling the banana industry, the police authorities in the province have yet to apprehend a suspect. Strange but they acknowledged that the practice of "pole-vaulting" of bananas from contracted farms to buyers in the black market is rampant.
So what brought about the large-scale poaching of Cavendish bananas in Dvao farms? A brief from an insider in the industry had this account: Abbar and Zany (A&Z) are said to be partners of Unifrutti and together they set up Unifrutti Philippines, which market their products under the brand name Chiquita. Their partnership went sour when A&Z discovered that Unifrutti allegedly developed a plantation (La Frutera) in Datu Paglas using the partnership's capital. Senen Bacani who reputedly owns 51 percent of La Frutera will not like this rumor but he can always refute this as we have no way of getting in touch with him.
A&Z, so the story goes, found out that they were not among those listed as stockholders of the La Frutera corporation. From what I learned, they let this pass although they started to be wary about how the Unifrutti had been handling the movements of bananas from their Oribanex plantations in Bukidnon and elsewhere. Not long after that they discovered that Unifrutti had been secretly shipping and selling bananas to Sharbatly, which is A&Z's competitor. This virtually broke the camel's back so to speak. A&Z cut ties with Unifrutti Philippines.
The breakdown of the partnership resulted in shortages of quota to their respective markets. To supply their respective demands Unifrutti and A&Z separately started buying Davao cavendish bananas from virtually all sources harnessing local fronts to buy bananas from contracted growers, small independent growers and from other polluted sources. What appears to be ridiculous is that some members of the PBGEA who themselves have supply contracts with other multi-national exporters have been selling their bananas to the fly-by-night traders too. Unifrutti tried to out-bid A&Z thus starting the price war.
Vicente Lao, big time DPWH contractor and poultry raiser, is also now a buyer for A&Z. They are called "consolidators" by the industry players. Lao trumpets that the increase of the spot price in the black market brought bonanza to the banana growers. Maybe. Lao, who is regional chairman of the influential Regional Development Council (RDC) and chairman of the Mindanao Business Council, however took exception from the issue that he is buying from contracted growers and from fruits sold by "pole-vaulters." He said that he too has about 200 growers with whom he has marketing agreements.
He however openly admitted that he only started three months ago which is just about the time when the price war between Unifrutti and Abbar and Zany escalated. Just last week, he said that he sold to A&Z some 2,500 boxes of bananas.
Despite what is happening in the industry, Lao swore that he is not into price war. He said that he knew of a Father MM in Panabo that is also buying and selling to A&Z but Lao said he could not talk about MM's business operations.
PBGEA said that the predators are hurting them. They said that PBGEA members had invested millions of pesos in land development and the provisions of planting materials, farms inputs and sustained technical assistance on their contracted growers.
Fly-by-night traders have none of these expenses therefore they can offer higher spot price. They admitted that of late there has been a perceptible increase of demand of bananas in the world market but this, they explained, must have been precipitated by the decline of production in South American farms due to farm devastation following a series of natural calamities that hit them. Pretty soon they will recover and the supply will be up anew and the possibility that Philippine bananas bought from the black market will be displaced is not farfetched.
Nevertheless, PBGEA members have established a mechanism to address the temporary threat. They have established a quota system whereby a grower who can achieve a 4,000 box-quota annually will automatically get a $0.40 reward for every box produced. The challenge is quite fair. In short, for as long as the growers take care of their plantation and increase their productivity, they still can earn what the poachers pay them and maintain the harmony of their contracts with corporate exporters. Quality controls can also be properly monitored.
Maybe, Father MM, assuming he exists at all, can go back to the pulpit to continue providing spiritual nourishment instead of catering to the needs of the Arab buyers.
This kind of cloak-and-dagger operations will not last. Growers and even those fronting for Unifrutti and Abbar and Zany should know that one day soon this clandestine practice would have to end. Not everyday is Monday, and one day, the Bureau of Internal Revenue will be around to ask farmers and consolidators whether they had paid the right taxes for the spot price they were paid of. What if one day either Abbar or Zany will split and then just decide to partner with a Davao grower to develop their own plantations? To whom will the "pole-vaulters" turn to? Just asking.
