The Philippines has lost its standing as the world’s second largest banana producer and exporter due to unreliable government policies, the communist insurgency and unstable weather patterns.
Banana industry players fear these negative factors could further weaken the industry, one of the country’s top export earners.
PAENG MARIANO under fire
While the communist New People’s Army and the extreme weather patterns El Niño and the La Niña deal deadly blows, the industry specifically blames the Department of Agrarian Reform (DAR) and its “unreliable policies that disregard established practices and contracts” as a key contributor in the decline of the export Cavendish banana industry. Rafael Mariano is the DAR Secretary.
The country’s export earnings from banana plunged to $440 million in 2015, down by about 60 percent from $1.1 billion in 2014.
“We used to be the world’s second largest banana producer and exporter next to Ecuador. But today the Philippines has been edged out by Costa Rica,” said Antero Sison, Jr., president of Marsman Estate Plantation Inc. (MEPI).
The Philippine banana industry faces the triple woes as it also misses export opportunities from new markets.
“Ironically, this (is supposed to be) the best time for us to recover because of the increasing demand from large markets like China, but unpredictable state policies are pulling the industry down,” said Sison.
The unpredictable government policies is the worst enemy facing MEPI now, according to Sison.
“We can learn to cope with extreme weather phenomena like the El Niño and the La Niña by applying and developing climate-resilient technologies,” Sison said.
“But (there is) no technological application (that) can be developed against the inconsistency of the DAR policies,” Sison said in jest.
MEPI is fighting off DAR’s order to revoke the banana company’s long existing Agribusiness Venture Agreement (AVA) with Agrarian Reform Beneficiaries (ARBs).
AVAs between cooperatives formed by ARBs and banana plantation developers are among the most successful partnerships in the agriculture sector. The AVAs have enabled ARBs to earn more than farmers planting rice or other crops.
Hernando Rivero, a member of the Davao Marsman Agrarian Reform Beneficiaries Development Cooperative (DAMARBDEVCO) said “DAR officials, whether deliberate or not, have been contributing to the decline of the banana industry, which has helped tens of thousands of agrarian reform beneficiaries significantly improve their living standards and that of their families.”
The DAMARBDEVCO has an AVA with MEPI, which donated the land cultivated by members of the cooperative.
Another banana company, Lapanday Fruits Corporation (LFC), is in the same boat as MEPI, battling DAR over the company’s AVA with ARBs.
Hernani P. Geronimo, spokesperson of LFC said that “the DAR’s move to break legitimate AVAs that have enabled many ARBs to earn better than decent wages and that have provided well for their families, violates the non-impairment clause contained in Section 10, Article III of the Constitution.”
Sison said the DAR appears to be unconcerned over the plight of banana ARBs when its head, Secretary Rafael Mariano, ordered a blanket review of all AVAs or leaseback agreements despite these deals already upheld as legal, fair and aboveboard by government authorities and the courts.
The DAR has been after the cancellation of the AVA of MEPI and LFC.
“It saddens us to think that the DAR doesn’t care whether our ARBs and other workers in our plantation lose their jobs. Their officials are indifferent to their plight and couldn’t care less if our farmers and their families go hungry,” Sison said.
LFC and its workers, and the ARBs, are lamenting the “attempts by officials of the DAR to scuttle legitimate and valid agribusiness venture deals between banana plantation developers and ARBs, in blatant disregard of President Duterte’s policy of honoring all contractual obligations of the government,” said LFC spokesperson Hernani P. Geronimo.
He said that “the DAR’s move to break legitimate AVAs that have enabled many ARBs to earn better than decent wages and that have provided well for their families, doesn’t just violate the non impairment clause contained in Section 10, Article III of the Constitution. It also apparently has emboldened the communist insurgents to continue with their extortion activities and attacks against banana plantations.”
On April 29, NPA rebels attacked LFC’s two packaging plants and farm in Mandug, at the outskirts of Davao City. The rebels burned plant equipment and exploded an Improvised Explosive Device (IED) that killed a fish vendor.
The Tagum Agricultural Development Corporation (TADECO) paid nearly half a billion pesos in taxes in 2016, belying allegations its agreement to develop idle prison lands into a banana plantation was “disadvantageous” to the government.
An audited financial statement obtained from the giant Cavendish banana growing and exporting company, revealed that in 2016 alone, Tadeco paid to the government P438 million representing taxes and fees. The payments included real property taxes, business permits and fees, withholding tax on compensation, fringe benefits, and regulatory fees.
House Speaker Pantaleon Alvarez has called for a congressional investigation into the Joint Venture Agreement (JVA) between Tadeco and the Bureau of Corrections (Bucor) over unproductive lands of the Davao Penal Colony (Dapecol) in Sto. Tomas town in Davao del Norte.
The JVA was first signed in 1956. It was last renewed in 2013, after a review by Congress.
Under the JVA, Tadeco developed the land into a banana plantation without the government spending a single centavo. And as the JVA was primarily aimed as a rehabilitation program for inmates, Tadeco hired prisoners of Dapecol as workers paid with minimum wage.
Of the about 8,000 current workers employed in the banana farm under the JVA area, more than 1,000 are male inmates doing farm work and at least 100 women prisoners assigned to the packing plants.
Due to its success as a rehabilitation program for prisoners, BuCor is planning to adopt the TADECO-Bucor JVA for implementation in Iwahig Penal Colony in Palawan.
Tadeco, founded by the late banana magnate Don Antonio Floirendo in the 60s, is credited with the economic progress of once dormant Davao del Norte. The pioneering Tadeco has also placed the country in the map of the world’s largest banana-producing countries.
Today it continues to pump-prime the country’s economy, and that of Davao del Norte and neighboring provinces of the Davao Region where it extended its banana plantations, with revenues from export Cavendish bananas, one of the country’s biggest dollar earners.
In its statement on financial benefits and assistance to Dapecol and its inmates and the community, Tadeco shelled out P1.62 billion over a 12-year period (2004-2016).
Tadeco’s biggest spending – P2.2 billion went to cultivation of the 5,300-hectare land covered by the JVA, at P400,000 per hectare in development cost.
In calling for a House inquiry, Alvarez (First District, Davao del Norte), said the Tadeco-Bucor JVA was “grossly disadvantageous” to the government.
On the prodding of Alvarez, the House committee on Justice and the committee on Good Governance and Public Accountability, were to begin conduct of a joint committee hearing on May 9.
Aside from his House resolution to conduct the probe, Alvarez also has filed a graft complaint at the Ombudsman in connection with the JVA against Davao del Norte First District Representative Antonio Floirendo, Jr., son the late Don Antonio.
Alvarez said Rep. Floirendo has “pecuniary interest” in Tadeco, and was a sitting congressman who failed to divest himself of his interest in the company when the renewal of the JVA was approved by Congress in 2013.
Alexander N. Valoria, president and CEO of the Antonio O. Floirendo Management and Investment Corp. (Anflocor), has disputed Alvarez’s claim, saying the Tadeco-BuCor JVA, is “legal and advantageous to the government.”
“The JVA has been reviewed, and found to be advantageous to the government numerous times by the Executive and the Legislative departments in past administrations,” Valoria said, adding that “the most recent review in the 15th Congress in 2012 once again arrived at the same positive conclusion regarding the JVA and its benefits to the government.”
Alvarez’s call on the House to probe the Tadeco-Bucor JVA and his filing of the graft charge against Rep. Floirendo was a surprise.
Both are from Davao del Norte and are long-time friends and political allies who backed the presidential bid of President Rodrigo Duterte.
Reports said that the fall-out between the two was sparked by the reported public quarrel between their two partners; and by rumors that Floirendo was behind a plot to replace the Speaker with former President now Rep. Gloria Macapagal Arroyo, which Floirendo had denied.
For deceptive tactics, insensitivity to plight of agrarian reform beneficiaries
The management of the Davao-based Marsman Estate Plantation, Inc. (MEPI) said it may file charges with the Office of the Ombudsman against two officials of the Department of Agrarian Reform (DAR).
MEPI has decried the deceptive tactics employed by DAR Undersecretaries Marcos Risonar and David Erro in agitating and confusing agrarian reform beneficiaries (ARBs) regarding the fate of their Agribusiness Venture Agreements (AVA) with the company.
“MEPI reserves its right to take the appropriate legal measures to protect its interest, including bringing this matter up to the Office of the Ombudsman,” said MEPI president Antero Sison, Jr. in a letter addressed to the Presidential Agrarian Reform Council (PARC), which is chaired by President Rodrigo Duterte.
In the letter, MEPI assailed the insensitivity of Risonar and Erro to the plight of ARBs and other workers in MEPI’s banana plantation.
Sison said he found it both appalling and disturbing that the two DAR officials would resort to “deliberate and organized misinformation” when they held a consultative meeting in Tagum City last March 23 with members of the Davao Marsman Agrarian Reform Beneficiaries Development Cooperative (DAMARDEVCO).
In the meeting, Risonar and Erro told the ARBs that their cooperative’s AVA with MEPI has already been revoked.
Sison said the actions of the DAR officials were “totally unfair, misleading and devoid of due process as we have not been given the opportunity to correct these obviously erroneous and biased statements made by them.”
Sison said Risonar and Erro not only confused the ARBs but also caused “economic and reputational damage” to MEPI.
“Surely, the behavior of the DAR representatives is not aligned with the spirit in which President Duterte would like the pending issues to be resolved, which is that of fairness and transparency instead of misinformation and confusion,” Sison said in his letter that was also addressed to DAR Secretary Rafael Mariano.
Sison said that on MEPI’s part, it is “ready and committed to clarify and present factual and legal grounds” to back up its position.
The consultative meeting in Tagum was held to discuss whether the AVA between MEPI and DAMARDEVCO should be continued and determine the options open to ARBs in case they elect to get out of the existing lease contract. MEPI was not invited to the meeting.
Sison said in his letter dated March 24 that in the meeting, Erro, who also acts as the PARC Council Secretary, and Risonar, the DAR undersecretary for field operations, misled the ARBs by telling them the following erroneous statements:
The revocation of the AVA between MEPI and DAMARBDEVCO is already final and executory. Sison said this statement is “not factual and is misleading” because the PARC, in a March 7 letter to MEPI, informed the company that the Council agreed to defer action on the issue and that President Duterte had instructed the DAR to hold consultations with the parties involved “to discuss the intention to continue, modify or rescind the subject lease AVA with MEPI.”
MEPI no longer has legal ground to appeal the decision for the AVA cancellation. Sison said that this is again misleading because such claim “is not supported by legal grounds as MEPI’s motion for reconsideration has not been decided with finality.”
With the cancellation of the lease AVA with MEPI, the two other ARB cooperatives – SIFABCO and STARBENCO – may now take over the MEPI farm. Sison said that such a patently false statement “is alarming as it amounts to fomenting anarchy and instigating possible violence” and shows “conduct unbecoming of government officials.” Sison said that granting for the sake of argument that the lease AVA is cancelled, an interim period would still have to be observed by the parties involved to determine the arrangement that will govern their relationship.
The land originally donated by MEPI to DAMARBDEVCO was made to DAR and not to the ARBs and, therefore the ARB, need not worry about payment of just compensation to MEPI when the AVA is revoked. Sison said “this is completely wrong as the records will clearly show that the land was donated to DAMARBDEVCO and eventually subdivided to the individual ARBs to whom respective Certificates of Land Ownership Award (CLOAs) were issued.”
The ARBs will no longer have to pay for the land when the lease AVA with MEPI is revoked because they have House Bill 555, which bars the foreclosure of their land even with the nonpayment of amortizations to Land Bank, to rely on. Sison said this is another misleading statement. “How can House Bill 555 be used as a basis when it is not yet a law and there is no assurance that it will become a law?” Sison asked. Moreover, Sison said “the CARP law also clearly states that the Land Bank may foreclose the land in case of failure to pay three annual amortizations.” “With the DAR’s statement, the ARBs were given the wrong impression that they are not obligated to pay for the land at all,” Sison said.
Sison said he was also alarmed over the “uncaring” attitude of the DAR officials on the welfare of the ARBs and other MEPI workers who would end up jobless when the AVA is revoked. Sison said DAMARBDEVCO members informed him that the DAR officials told them that their plight was no longer DAR’s concern.
“Asked what will happen to the more than 1,800 employees of MEPI who will become jobless and to their 8,000 dependents if the lease AVA is cancelled and MEPI shuts down, the DAR representatives said that this is not their concern and that the employees can go to the Department of Labor and Employment to address that issue,” Sison said in his letter.
“This unfortunately shows utter disregard and uncaring attitude for the economic consequences of the Lease AVA cancellation,” he added.
Sison pointed out that on top of causing “economic and reputational damage” to MEPI, the deliberately erroneous statements made by the DAR officials also caused “confusion among the ARBs who may not anymore be able to make rational and intelligent decisions that will determine their economic future.”
“In the interest of fairness and transparency, we strongly urge the PARC to cause the DAR representatives to clarify as soon as possible the concerns expressed by the DAMARBDEVCO officers and members,” Sison said in his letter.
DAR OFFICIALS STIRRING UP LAND REFORM BENEFICIARIES INTO VIOLENCE VS. LANDBANK FORECLOSURE
Officials of the Department of Agrarian Reform (DAR) have added fire to the volatile situation in the banana industry in Davao del Norte by urging Land Reform Beneficiaries (ARB) to meet with violence officials of Land Bank of the Philippines (LandBank) serving foreclosures on banana farms they are currently tilling.
Attack them with bolos!, DAR Undersecretaries Marcos Risonar and David Erro told members of the Davao Marsman Agrarian Reform Beneficiaries Development Cooperative (DAMARBDEVCO) of Sto. Tomas town.
Risonar and Erro dished out the call to violence during a meeting in Tagum City on March 23 with the 1,800-member DAMARBDEVCO to discuss the cooperative’s Agribusiness Venture Agreement (AVA) with the Marsman Estate Plantation, Inc. (MEPI).
The meeting was held to tackle the issue of whether the AVA between DAMARDEVCO and MEPI should be continued and to explore the options for ARBs who will be displaced if the agreement is eventually revoked.
DAMARBDEVCO members said they were shocked to hear the DAR Undersecretaries telling them that they should “attack with bolos” representatives from the LandBank if the banana farms they are currently tilling are foreclosed by the government bank in the event their AVA with MEPI gets permanently revoked.
They denounced Risonar and Erro for attempting to dupe them with misleading statements and inciting them to violence.
Rolando Lusterio, one of the ARBs present during the meeting, recalled Erro, a lawyer, saying that “kapag nagpunta ang Landbank para maningil, itakin ‘nyo (if the Landbank goes to you to ask for payment, attack them with bolos).”
Dioscoro Abellano, another ARB, also recalled the indifference and utter lack of concern of the DAR officials to their plight when he asked what would happen to the more than 1,800 ARBs of MEPI and their 8,000 dependents once the AVA with the company is revoked.
“Tinanong namin sila paano na kami kapag nawalan ng trabaho. Ang sagot nila, hindi na daw nila problema yun, at doon daw kami magpunta sa DOLE para magreklamo (We asked them what would happen to us if we are rendered jobless. They responded that it’s not their problem anymore, and that we should go to the Department of Labor and Employment to complain).”
Edwin Gil, another ARB, said Erro made the statement when he and the other ARBs asked what would happen if their AVA with MEPI was revoked and they have to start paying amortization to Landbank as required under the law.
“Ang sabi ba naman sa amin, itakin daw namin ang taga-Landbank nang tanungin namin kung anong gagawin namin, wala naman kaming ibabayad (Imagine, they told us that we should attack people from Landbank with our bolos when we asked what were we to do, we do not have money to pay Landbank),” Lusterio said.
The land being tilled by the ARBs inside MEPI’s farm in Sto. Tomas, Davao del Norte was donated to them by the company as part of the terms of their AVA. While they were given the land for free, the ARBs also received lease rentals, above-average compensation and other benefits from MEPI that are considered among the highest in the agriculture sector.
If the AVA, which is the condition for the donation is revoked, the donation itself is revoked and the government must pay MEPI more than P1.0 Billion representing the company’s just compensation for the land it had earlier donated to the ARBs. The ARBs, in turn, would have to pay Land Bank for the land that they already owned had the AVA not been revoked.
Abellano said the DAR officials also told them that House Bill 555 will protect them and stop Landbank from collecting payment from the ARBs and having their lands foreclosed, when such a proposal has not yet been approved and has long been languishing in the Congress.
Under the government’s Comprehensive Agrarian Reform Program (CARP) and its extension, ARBs can pay for the land awarded to them for 30 years at 6 percent yearly interest.
“Ano ba talaga ang gusto ng DAR, umunlad kami o maghirap? Bakit sila nagpadala ng mga opisyal na puro kasinungalingan ang sinabi sa amin? (What does DAR really want—for us to prosper or to become poor? Why did they send officials who told us all lies?),” Abellano said.
Lusterio, Gil and Abellano said the DAR officials tried to dupe them by saying that the AVA with MEPI was already “cancelled” when the Presidential Agrarian Reform Council (PARC), which is chaired by President Duterte, has not yet rendered a final decision on the motions for reconsideration that had been filed earlier by MEPI and DAMARDEVCO.
MEETING WITH DUTERTE
The DAMARBDEVCO ARBs said they could hardly argue with the two DAR officials, who introduced themselves as lawyers, even though the truth was that President Duterte even plans to attend the second round of consultations with them to discuss their AVA with MEPI.
Jun Mercado, another ARB present at the meeting, said Presidential spokesman Ernesto Abella was quoted as saying recently that the President would be attending the second meeting, along with Finance Secretary Carlos Dominguez III, who chairs the Landbank.
“So how is the AVA already cancelled, mag-meeting pa nga kami with President Duterte?” Mercado said.
Mercado also recalled Risonar as claiming that MEPI can no longer appeal the decision before the courts on the revocation of the AVA, which is false because it deprives the company of due process.
“They were trying to make us believe that the agreement with MEPI is already cancelled by telling us na tapos na dawang (we already ended our) relationship [namin] with MEPI,” Lusterio said.