Help revoke unfair contracts between Filipino Banana Farmers and Big Businesses!
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Support Filipino Banana Farmers in Mindanao! Revoke Unfair Agribusiness Contracts Now!
The Philippines is one of the top exporters of bananas in the world. Bananas are the second highest-earning agricultural export of the Philippines, next to coconut. Ninety percent of bananas in Asia are grown in the Philippines where the industry earns $1.2 billion annually. Despite this large and booming industry more than two hundred thousand banana farmers and farmworkers, in the Davao region alone, remain poor and buried in debt, with most of them earning less than the minimum wage of PHP 335.00 or USD 6.50 for a day’s worth of hard manual labor.
Banana farmer cooperatives, farmer groups and individual farmers sign contracts with large agriculture companies, like SUMIFRU (Philippines) Corporation and Lapanday Foods Corporation to name a few, that export our bananas to countries like Japan, China and regions like the Middle East.
Banana plantations located in Compostela Valley and other areas in the Davao region in Mindanao have been in operation for over twenty (20) years from the time that the banana farmers were mere farm workers until they became small landholders after becoming agrarian reform beneficiaries under the Comprehensive Agrarian Reform Program of the Philippines.
Over the span of the last two decades, little has changed. If anything, most farmers who entered into contracts with large corporations are worse off. An extreme example of this is the Hijo Agrarian Reform Beneficiaries Cooperative (HARBCO) who incurred up to PHP750 Million pesos (USD 14.7 Million) in debt to date, to its corporate partner, Lapanday Foods Corporation, due to charges and deductions. HARBCO continues to suffer from this huge and onerous debt, condemning its farmer members into a vicious cycle of debt and poverty.
Why are the contracts unfair?
The contracts are unfair because of the following reasons:
Contracts are executed without prior and meaningful consultation with farmers. This is in violation of the Philippine Contract Law and the specific rules and regulations that govern contracts between farmers and investors. Moreover, the contracts are written in English, and the terms and conditions are not explained to the farmers. They are simply made to sign upon the promise of a better life and a brighter future.
The contract period is typically between 15 to 30 years with provisions for automatic renewal for another 15-30 years. These extremely lengthy contract periods provide little to no opportunity for adjustment nor amendment, despite changing conditions. Hence such a contract binds the farmers for a long time, even to the onerous provisions of the contract. For example, the contract stipulates that the buying price for bananas is fixed at USD4.25 per box, even if market prices increase. The farmers are deprived of the opportunity to earn more because the price is fixed over the duration of the contract.
Under these contracts, all the risks and costs of production are largely shouldered by the farmers. The cost of a box of bananas damaged during shipment, for example, will be charged to the account of the Filipino farmer. In fact, the farmers bear the cost of all bananas rejected at the port in Japan.
Moreover, the contracts have no provisions for insurance coverage in times of climate-related disasters and other calamities. This was the case in 2012 when Typhoon Pablo (International name Bopha) hit and caused massive destruction of banana plantations in Mindanao. The agribusinesses did not provide any support to the affected farmers, forcing the latter to borrow money from banks at rates they can hardly afford, forcing them further into debt. The impact of the disaster, compounded with the unfair provisions of the contract, exposed the farmers’ vulnerability, and threatened their very survival in the face of adversity.
Many cases remain pending at the Department of Agrarian Reform (DAR), particularly under the Department of Agrarian Reform Adjudication Board (DARAB) and the National AVA Evaluation Committee (NAEC). Others are pending with the Presidential Agrarian Reform Council (PARC), who holds the mandate to revoke contracts. The PARC is chaired by the President of the Republic of the Philippines. Progress in these cases has been slow to none.
The fastest way to end the unfair contracts is for big agribusiness corporations to agree to fairer terms, such as reflecting buying prices based on current market conditions; providing for equitable sharing of risks and costs of production; and being open and transparent during contract negotiations and implementation.
All that the farmers want is to have their fair share of income and benefits from their product and hard work, so that they can have a chance at a better life for their families, and to eventually get out of poverty.
Together with our partner banana farmer cooperatives, we are calling for agribusiness corporations in the banana industry to:
1. Conduct meaningful consultation and renegotiate fairer contracts with farmers to adjust or revise provisions with the end in view of providing full protection of the rights and privileges of the farmers as agrarian reform beneficiaries, and installing regular economic assessment mechanisms and ensuring adaptability to changing market conditions;
2. Raise the price of bananas to reflect current market conditions in order for farmers to gain a reasonable share in export incomes; as well as institute an effective price setting mechanism to ensure that the farmers get a fair share of the gains and benefits of the enterprise;
3. Shoulder a fair share of the risk and cost of production, by providing risk insurance to help farmers cope with weather-related disasters and calamities;
We also call on the Department of Agrarian Reform and the PARC to:
1. Facilitate open and transparent contract negotiations between agribusiness corporations and banana farmers, banana farmers’ cooperatives in Compostela Valley and other areas in the Davao Region;
2. Revoke unfair contracts and expedite resolution of pending cases under the DARAB and NAEC;
3. Fulfill its mandate of providing comprehensive support services to especially to farmers who already own the land;
Finally, we call on the House of Representatives to:
1. Pass House Bill No. 5085, which aims to regulate agribusiness contracts called Agribusiness Venture Arrangements (AVAs), that agrarian reform beneficiaries (ARB) cooperatives enter into with agribusiness corporations; as well as safeguard and protect the rights of the ARBs, consistent with the vision of the Comprehensive Agrarian Reform Law.
Help Filipino banana farmers end their bondage to debt and poverty!
Support their fight for equitable incomes, decent working conditions and fair living wages!
Revoke #UnfairContracts now!
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