Davao Region development council moves to tame House bill threatening banana industry

del rosarioThe Regional Development Council XI has expressed worry over a proposed bill in the House of Representatives morbidly seen as a man-made “Typhoon Pablo” threatening to kill the banana industry in the Davao Region.
In a bid to tame down the bill, RDC XI has submitted to the House Committee on Agrarian Reform a matrix of inputs and recommendations for House Bill 5161 or An Act Regulating the Establishment and Implementation of Agribusiness Venture Arrangements (AVAs) in Agrarian Reform Areas.
baguilatAuthored by Rep. Teddy Brawner Baguilat, Jr., HB 5161 has been the subject of protests from banana plantations as well as cooperatives of agrarian reform beneficiaries (ARBs).

The banana industry, a major dollar-earning industry in the Davao Region, has yet to fully recover from the devastation that superyphoon Pablo inflected on the industry in the provinces of Davao del Norte, Davao Oriental and Compostela Valley.

The banana industry is being threatened by this bill, said a key industry player who described HB 5161 as a “dangerous calamity.”
bananaWhile we can’t prevent natural calamities, there is now HB 5161 which is a more dangerous calamity threatening the industry, Stephen Antig, executive director of the Pilipino Banana Growers and Exporters Association Inc. (PBGEA), said earlier.

Supertyphoon Pablo which visited Davao Region two years ago left in its wake hundreds of dead and missing, millions of pesos in damage to infrastructure and agriculture including thousands of hectares of banana plantations. Hundreds of banana farm workers also lost jobs as companies tried to cope up with the tragedy to put back to its feet the industry considered as one of the region’s biggest employer.
pabloRDC XI is moving to stop another blow to the banana industry and has proposed amendments to the Baguilat proposed bill.
RDC XI, led by its chairman Davao del Norte Governor Rodolfo P. Del Rosario, in its First Quarter Regular meeting, discussed the provisions of HB 5161 with the Pilipino Banana Growers and Exporters Association (PBGEA).
Among others, the regional development council recommended to the Agrarian Reform Committee that the rental for lease agreements should not be pegged at 10% of the gross sales per harvest.
Instead, RDC XI recommended that it should use the formula mandated by DAR (Department of Agrarian Reform), which includes “other factors such as projected inflation, environmental costs for soil and water conservation and fertility maintenance, and provision for other forms of remuneration/benefits for the lessor ARBs.”
The council also recommended that a specific time-frame be indicated “for the Presidential Agrarian Reform Council (PARC) to act on cases submitted to it for review and approval. Article 7(F) of the proposed bill provides that “The AVAs shall be subjected to the approval of the PARC, otherwise, it shall become void and become unenforceable. PBGEA, however, argued that the provision should be deleted or at least modified to read as follows: “The AVAs and any renewal or extension thereof shall be subject to the approval of the PARC within a period of 60 days from submission, otherwise, it is deemed approved.”
In a review titled A Report on the Status of Agribusiness Venture Arrangements (AVAs) in Region XI), it was revealed that there were several AVAs that were not acted upon by the DAR for more than a year and some applications remain pending for about five years. One of the recommendations was to deem the AVA applications approved if not acted upon by DAR within 90 days.

CONTRACT DURATION

Another controversial provision as provided in Article 7(G) says that the duration of the AVA shall be mutually agreed upon by all parties, but not more than 10 years subject to renewal. PBGEA’s claims 10 years will not enable the investor to fully recover with reasonable rate of return.

The RDC recommended that, “the draft bill distinguish specific guidelines and duration for each type of AVA considering their peculiarities.” There are different AVAs used in the banana industry, each of which provides different features. An AVA for lease agreements may not necessarily hold true for growership or joint venture arrangements.
The clamor of PBGEA to adjust the period of the contract in order for them to recover their investments should be considered but may not be the “initial 25-year period “ as suggested, the RDC said.
The RDC also commented that Article 6(C) pertaining to the qualifications of prospective investors is ambiguous as they are prone to subjectivity and/or misinterpretation. The council also suggested that, “the ground for the revocation of AVA contracts should be limited to the breach of the terms and conditions of the contracts reasonable to protect the interests of ARBs as well as that of the investors.
The RDC also recommended that the penal provisions specified in Article 13 be deleted due to its ambiguity, which may lead to various interpretations. The council also suggested that the house bill incorporate safeguards to protect the interest of the investors.
The council is still awaiting feedback from Rep. Baguilat on its recommendations.

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3 thoughts on “Davao Region development council moves to tame House bill threatening banana industry

  1. Every stone must be turned and every angle must be looked at before approving a bill that could potentially destroy such a high-earning industry like the banana export industry in the Philippines. The RDC’s proposal to tame HB5161 should really be considered unless the country is ready lose the revenue coming from this industry.

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  2. “The council also suggested that the house bill incorporate safeguards to protect the interest of the investors.
    The council is still awaiting feedback from Rep. Baguilat on its recommendations.”

    — Baguilat should really take time to consider these recommendations from the RDC unless he wants to be responsible for the downfall of the banana industry.

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  3. The limit on the duration of the agreements is something that should really be reconsidered. No investor will be willing to enter an agreement knowing they wouldn’t even have time to recover their investment.

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