Monday, 2 February 2009

Banana farms in Mindanao ‘expanding’ despite crisis

Carmelito Q. Francisco
BusinessWorld Online
http://www.bworldonline.com/BW020209/content.php?id=054

DAVAO CITY — While many industries in Mindanao have started laying off workers, banana plantations remain on an expansion mode.

"The expansion is being done cautiously," said Anthony B. Sasin, spokesman of the Pilipino Banana Growers and Exporters Association (PBGEA), a group composed of over a dozen companies that ship out to foreign markets at least $400 million worth of fresh bananas annually.

The cautious stance, he said, is because during a financial crisis, banks become stricter in lending to growers, including big plantation companies.

This could have an adverse impact on the industry if the crisis drags for more than a year, Mr. Sasin said.

Expansion, on the other hand, is due to local exporters’ penetration of two major export markets: Iran and Russia.

The bulk of the country’s Cavendish bananas, or up to two-thirds of the country’s production, goes to Japan, the rest to the Middle East, Southeast Asia, and China.

PBGEA firms directly employ 100,000 workers and employees and support a bigger number of jobs in downstream industries.

The group controls over 40,000 hectares of plantations mostly located in the Davao region.

Firms generally sign annual supply contracts with importers in advance, significantly shielding them from losses if shipments are cancelled.

The expansion plan was confirmed by Gil M. Dureza, head of the Board of Investments in southern, central and western Mindanao.

A company, which he did not identify, has been scouting for 3,000 hectares of land fit for banana plantation. —

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