Some Agrarian Reform Beneficiaries (ARBs) from the banana industry in Mindanao were surprised by the proposed House Bill 5161 authored by Ifugao Representative Teddy Brawner Baguilat.
These ARBs were not consulted and yet they were lumped together with Hijo Agrarian Reform Beneficiaries Cooperative (HARBCO), a cooperative of the Lapanday Foods in Davao del Norte, which had a “contract growing” agribusiness ventures arrangement (AVA) with the company.
HARBCO reportedly incurred P290 million in debts with Lapanday owing to controversial provisions in the AVA.
HB5161 is a proposed act to regulate the establishment and implementation of AVAs in land reform areas.
The country’s thriving banana industry is being threatened by this bill, said a key industry player who described HB 5161 as a “dangerous calamity.”
“While we can’t prevent natural calamities, there is now a more dangerous calamity threatening the industry. This threat to the banana export industry can be solved or eliminated if properly explained by the industry leaders,” Stephen Antig, executive director of the Pilipino Banana Growers and Exporters Association Inc. (PBGEA), said in A press briefing.
“We are inviting Congressman Baguilat to come down to Mindanao and talk to many of us so he will be able to see the real situation,” said Helmer Malacao, chairman of Wadecor Agrarian Reform Beneficiary Employees Multi-purpose Cooperative (WEARBEMPCO).
According to the ARBs, contract growing, without the right supervision from the company will not be managed properly by a farmers’ cooperative.
It will probably be mishandled right from the start when the company turns over the control of the land to the ARBs. Without the company’s supervision, the ARBs can divert both cash advances and farm inputs to other purposes other than what are really needed for the farm’s productivity.
Sometimes, fertilizers from the company are not used properly on their crops, reducing the productivity of the land. Thus, they cannot deliver the bananas according to the “contract growing” scheme signed with the company. They can also resort into pole vaulting.
Pole-vaulting is the illegal act of selling farm produce to traders or buyers other than to the company, which they have signed AVAs with. Pole-vaulting has become a serious problem not only in the banana industry but also in other agribusiness-related contracts.
Those are the disadvantages of “contract growing” as opposed to “lease-back contracts,” said Zosima Agustin, vice-chairman of Central Tadeco Agrarian Reform Beneficiary Employees Multi-purpose Cooperative (CTARBEMPCO).
“In our lease back contracts, the company provides all out support. We were like freshly hatched chicks which were raised until we’re full grown chickens. Since we became landowners, we enjoyed continuous backing and support from the company,” said Romeo Manuel, CTARBEMPCO chairman.
“In our lease back contracts, we enjoy sick and vacation leaves. We have health care and hospitalization services. We have scholarship programs and car pools to pick up and drop off our kids to and from school. We even have retirement relief funds,” said Agustin of CTARBEMPCO.
“Lease back” is a business transaction, where one sells an asset (in this case, land) and leases it back for the long-term; therefore, the seller continues to be able to use and manage the land although he no longer owns it.
“If Congress would really like to support the farmers, they should provide a support system for the ARBs. After the land was awarded to us, we’ve never received any support from the government, ” said Felipe Pagaduan of WEARBEMPCO.
“Our cooperatives are flourishing. We have other businesses other than our AVAs with our company. We operate stores selling consumer goods, we provide housing loans to our members (‘with the lands donated by our company’), we have a gasoline station, rubber plantations, tilapia growing livelihood and lending businesses. We are contented with our contracts with our company,” members of the cooperatives proudly said.
“Instead of interfering in purely private transactions between small landowners and banana growers, government should help educate the ARBs on values formation,” said Malacao of WEARBEMPCO. He explained that values formation is really needed by some members of the cooperatives so that they will not divert the resources intended for the plantations to other purposes.
“Government should just assume the problem of HARBCO but do not interfere with the rest of the AVAs because most of the provisions in the HB5161 do not apply to us. We do not have that kind of problem,” said Renato Vismanos, chairman of Nest Farm Employees Agrarian Reform Beneficiary Cooperative (NEARBECO).