After passing the US$1 billion mark for banana exports last year, Philippine growers could be deterred from further investment if a House Bill that threatens contract security is passed.

Pilipino Banana Growers and Exporters Association Inc. (PBGEA) executive director Stephen Antig told Interaksyon.com that House Bill 5161, which aims to regulate agribusiness venture arrangements (AVAs) in land reform areas, virtually shields agrarian reform beneficiaries (ARBs) from investment risks.

"The bill also negates the autonomy of contracts by providing mandatory provisions that will deter investors from entering into a contract with ARBs," Antig was quoted as saying.

"With its restrictive regulatory requirements, HB 5161 removes the incentive for private investors to transact with ARBs and, thus, deny ARBs access to the private sector’s expertise and resources that the government cannot provide.

"With the limitation of land contracts, it will constrict agricultural production and exports to the prejudice of the national economy."

Antig told the publication that under the proposals of the bill an ARB could unilaterally opt out of a contract if economic circumstances changed.

He said investments of P1.5 million (US$33,576) per hectare were needed for development, technology, logistics, and marketing in the Philippine banana industry, the story reported.

The executive told the publication the legislation threatened a sector that employed 503,058 people, and had already gone through a series of weather and politically-charged "calamities" in recent years. Philippine Statistics Authority (PSA) shows bananas are the country's second-biggest agricultural export crop, with shipments growing 18% last year to reach US$1.136 billion.

"The industry was caught in a quagmire as a result of the market crises in China and Iran, intermittent weather conditions, the onslaught of typhoon Pablo in December 2012, and now the series of flooding that intensified the risk of the spread of plant diseases including Fusarium wilt, popularly known as Panama Disease," Antig was quoted as saying.

"Right now, we are also experiencing drought brought about by El Niño.

"While we can’t prevent the natural calamities, these man-made threats to the banana export industry can be solved or eliminated if properly explained by the industry leaders. At the local level, some ordinances tend to prevent the industry from growing and prospering while at the national level, a House Bill (HB 5161) waiting for deliberations might even kill the industry."

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