1

2

Contents

Acronyms............................................................................................................................................... 4

Situational Analysis .............................................................................................................................. 5

World Situation: ................................................................................................................................. 5

Exports: .......................................................................................................................................... 5

Imports: .......................................................................................................................................... 7

Philippine Situation: .......................................................................................................................... 9

Regional Production: ...................................................................................................................... 13

Export Market: ............................................................................................................................. 15

Players: ........................................................................................................................................ 16

Indicative Cost of Production and Income ........................................................................................ 18

Lakatan .............................................................................................................................................. 18

Cardaba ............................................................................................................................................. 21

Cavendish .......................................................................................................................................... 25

Value Chain ......................................................................................................................................... 25

Cavendish and Lakatan Fresh Fruit .............................................................................................. 26

Cardaba Value Chains ................................................................................................................... 27

Cardaba Processed Banana ...................................................................................................... 28

Cardaba Snack Food .................................................................................................................. 29

Banana Issues and Concerns: .......................................................................................................... 30

Existing and Emerging Issues and Concerns............................................................................... 30

Banana Industry Stakeholders and Enablers ................................................................................... 35

Development Direction ................................................................................................................... 37

Vision/ Mission: ............................................................................................................................... 37

Goals and Objectives: .................................................................................................................... 37

Strategic Actions ................................................................................................................................. 38

Development Directions and Upscaling Strategies ...................................................................... 38

Banana Industry Action Plan.......................................................................................................... 39

Monitoring and Evaluation ................................................................................................................. 47

Development Indicators:................................................................................................................. 47

Monitoring Structure: ...................................................................................................................... 48

References: ......................................................................................................................................... 50

3

List of Tables

Table 1. Value of Banana Exports by Country, 2013 – 2017. In USD ‘000 ..................................... 6

Table 2. Volume of Banana Exports by Country, 2013 - 2017 (in MT) ............................................ 6

Table 3. List of importing markets for the product exported by Philippines in 2017 ....................... 7

Table 4. Volume of Production by Year in Metric Tons, 2013 – 2017............................................ 10

Table 5. Area Planted by Major Variety, 2013-2017....................................................................... 11

Table 6, Productivity of Banana by Variety, 2013 - 2017 (MT/Ha.) ................................................ 12

Table 7. Volume of Production for Banana by Region .................................................................... 14

Table 8. Philippine Banana Export Markets by Country. 2017 ....................................................... 15

Table 9. Fresh Banana Volume and Value of Exports. 2013 - 2017 .............................................. 16

Table 10. Summary of Issues for Banana ........................................................................................ 30

Table 11. Banana Industry Stakeholders and Enablers .................................................................. 36

Table 12. Annual Targets for 2019 to 2022 ...................................................................................... 38

Table 13. Banana Industry Action Plan ............................................................................................ 39

Table 14. Development Indicators .................................................................................................... 47

List of Figures

Figure 1. Philippine Banana Export Drop ........................................................................................... 5

Figure 2. Map of Importing Countries of Philippine Banana ..................................................................... 8

Figure 3: Volume of Production by Variety by Year, 2013 – 2017. .................................................. 9

Figure 4. Area Planted to Banana by Variety. 2013 - 2017 ............................................................ 10

Figure 5. Productivity of Banana by Variety , 2013 - 2017 (MT/Ha.).............................................. 11

Figure 6. Banana Production per Region. January – March 2017 ................................................. 13

Figure 7. Distribution of Banana Production..................................................................................... 14

Figure 8. Mindanao Banana Industry Players .................................................................................. 17

Figure 9 Banana Fresh Fruit Value Chain ........................................................................................ 26

Figure 10. Cardaba Fresh Fruit Value Chain ................................................................................... 27

Figure 11. Value Chain Map for Processed Banana ....................................................................... 28

Figure 12. Value Chain Map for Cardaba Snack Food ................................................................... 29

4

Acronyms

ARMM Autonomous Region for Muslim Mindanao

ACPC Agricultural Credit Productivity Council

BAFS Bureau of Agriculture and Fisheries Statistics

BIDC Banana Industry Development Council

BOI Board of Investments

BPI Bureau of Plant Industry

BRI Banana Research Institute

BSP Banko Sentral ng Pilipinas

CALABARZON Cavite. Laguna, Batangas, Rizal, Quezon and Lucena City

CAR Cordillera Autonomous Region

DA Department of Agriculture

DAR Department of Agrarian Reform

DENR Department of Environment and Natural Resources

DepEd Department of Education

DND Department of National Defense

DOH Department of Health

DOST Department of Science and Technology

DSWD Department of Social Welfare and Development

DTI Department of Trade and Industry

FAO Food and Agriculture Organization

LBP Land Bank of the Philippines

LGU Local Government Unit

MBFEA Mindanao Banana Farmers and Exporters Association

MIMAROPA Mindoro, Marinduque, Romblon, Palawan

NCR National Capital Region

NNC National Nutrition Council

PAH Polycyclic Aromatic Hydrocarbon

PBGEA Pilipino Banana Growers and Exporters Association

PCIC Philippine Crop Insurance Corporation

PhilExport Philippine Export Authority

PQS Plant Quarantine Service

RPTAS Real Property Tax Assessment System

SOCCSKSARGEN South Cotabato, Cotabato City, North Cotabato, Sultan Kudarat, Sarangani, General Santos City

SUC State Universities and Colleges

TADECO Tagum Agricultural Development Corporation, Inc.

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Banana Industry Roadmap 2019-2022

Situational Analysis

Banana is the top traded fruit worldwide and the Philippines is one of the major banana exporters and was ranked no. 2 next only to Ecuador in the past decades. Typhoon Pablo in 2012 was a turning point that caused a sharp decline in production in the hard-hit areas in Mindanao where the major production areas are located. Recovery has been affected by other factors such as pest and disease, changing weather patterns, and even the government focus on the rise of other crops such as Cacao. In 2017, the Philippines regained the number 2 rank as banana exporter. The sharp decline in Philippine banana export is starkly demonstrated in the fact that from a 237 million boxes exported in 2011, only 187 million boxes were exported in 2016 or a 21% decline in volume in a matter of five years. At an average price of $6 per box, this translates to a $300 million loss to the economy of Mindanao where most of the banana growing areas are located.(Delorenzo, 2017)

World Situation:

Exports:

Banana exports by country totaled US$12.09 billion in 2017, up by an average 22.3% for all banana shippers over the five-year period starting in 2013 when bananas shipments were valued at $10.1 billion. Year over year, the value of global banana exports appreciated by 14.8% from 2016 to 2017. From a continent perspective, Latin American (excluding Mexico) plus the Caribbean accounted for the highest dollar value worth of banana exports in 2017 via shipments amounting to $7.2 billion or 58.5% of international banana sales. European exporters were responsible for 21% of total exported bananas, followed

2011 2016

90,000

60,000

30,000

0

Milli

ons o

f [13

Kg] B

oxes

237240,000

210,000-21%

180,000

150,000

120,000

270,000

PHILIPPINE BANANA EXPORT50MM BOXES DROP

$300Million LOSS TO MINDANAO

187

Figure 1. Philippine Banana Export Drop

6

by Asian shippers at 7.4%. African countries supplied 6.6% of globally exported bananas with North American exporters coming in at 5.6%.

Table 1. Value of Banana Exports by Country, 2013 – 2017. In USD ‘000

Country 2013 2014 2015 2016 2017 % in 2017

Ecuador 2,332,207 2,590,205 2,820,053 2,742,005 3,045,158 25%

Philippines 963,412 1,137,316 439,902 618,830 1,128,280 9%

Belgium 1,418,681 1,335,551 946,780 940,884 1,051,932 9%

Costa Rica 780,183 907,683 835,264 996,815 1,044,313 9%

Columbia 763,859 835,546 802,628 914,937 918,095 8%

Guatemala 651,954 721,443 763,620 848,079 882,341 7%

Netherlands 165,010 249,783 272,548 394,154 487,524 4%

United States of America 458,087 470,247 442,695 431,308 445,186 4%

Germany 344,037 391,873 344,824 328,038 319,520 3%

Panama 95,594 97,901 99,775 91,930 317,606 3%

Rest of the World 2,126,530 2,336,089 2,234,549 2,401,558 2,456,606 20%

World 10,099,554 11,073,637 10,002,638 10,708,538 12,096,561 ( ITC calculations based on UN COMTRADE and ITC statistics, 2018)

Table 2. Volume of Banana Exports by Country, 2013 - 2017 (in MT)

Country 2013 2014 2015 2016 2017 % in 2017

Ecuador 5,460,838 5,977,281 6,287,605 6,176,269 6,587,037 27%

Philippines 3,267,968 3,982,044 1,409,931 1,521,657 2,919,577 12%

Guatemala 2,097,296 2,246,590 2,333,894 2,478,434 2,580,267 10%

Costa Rica 1,930,756 2,173,028 1,978,185 2,370,238 2,529,679 10%

Columbia 1,643,108 1,799,666 1,684,148 1,960,539 2,002,602 8%

Belgium 1,381,200 1,318,975 1,150,981 1,144,132 1,305,905 5%

United States of America 563,037 578,015 586,569 592,358 614,311 2%

Honduras 895,381 635,956 689,731 659,643 605,750 2%

Netherlands 169,913 253,034 315,159 463,692 584,880 2%

Mexico 361,823 407,387 440,703 462,367 576,645 2%

Rest of the World 3,468,998 3,872,402 3,869,338 4,113,862 4,404,626 18%

World 21,240,318 23,244,378 20,746,244 21,943,191 24,711,279

( ITC calculations based on UN COMTRADE and ITC statistics, 2018)

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The listed 10 countries shipped 80% of all banana exports in 2017 (by value). Among the above countries, the fastest-growing bananas exporters since 2013 were: Panama (up 861.6%), Cameroon (up 280.8%), Dominican Republic (up 134.2%), Côte d’Ivoire (up 131.5%) and the Netherlands (up 108.4%). Five countries posted declines in their exported bananas sales: the Philippines (down -28.7%), Belgium (down -25.9%), Germany (down -7.1%), Honduras (down -6.5%) and the United States (down -2.9%).(Workman, Banana Exports by Country, 2018)

Imports:

Global purchases of imported bananas totaled US$15.3 billion in 2017. Overall, the value of bananas imports for all importing countries was up by an average 5.1% since 2013 when international purchases of bananas were valued at $14.6 billion. From 2016 to 2017, imported bananas appreciated by 3.8%. From a continental perspective, European nations accounted for the highest dollar worth of imported bananas during 2017 with purchases valued at $8.8 billion or 57.3% of the global total. In second place were North American importers at 20.7% while 18.1% of worldwide bananas imports were delivered to Asian nations. A much smaller percentage of imported bananas were bought by Africa (0.9%) and Oceania (0.5%).

Table 3. List of importing markets for the product exported by Philippines in 2017

Importers Value exported in 2017 (USD

thousand)

Quantity exported in 2017

Share in Philippines's exports (%)

World 1,128,280 2,919,577 100.00

Japan 390,227 826,962 34.60

China 290,234 800,407 25.70

Korea, Republic of 176,554 379,162 15.60

United Arab Emirates 94,821 285,603 8.40

Iran, Islamic Republic of 78,533 322,650 7.00

Saudi Arabia 20,539 77,260 1.80

Iraq 20,186 60,384 1.80

Hong Kong, China 16,856 47,744 1.50

Kuwait 11,900 44,692 1.10

New Zealand 6,573 12,939 0.60 ( ITC calculations based on UN COMTRADE statistics., 2018)

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Figure 2. Map of Importing Countries of Philippine Banana

(www.trademap.org, 2018)

The listed 10 countries purchased 98% of all bananas imports in 2017. Among the above countries, the fastest-growing markets for bananas since 2013 were: Netherlands (up 162.7%), China (up 72.5%), South Korea (up 44.2%) and Saudi Arabia (up 31.9%). Four countries posted declines in their imported bananas purchases namely Belgium (down -12.5%), Germany (down -10%), Italy (down -1.4%) and United Kingdom (down -1.3%).(Workman, Banana Imports by Country, 2018)

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Philippine Situation:

The Philippines is a major producer of bananas. Aside from the Cavendish banana for export, it also produces other varieties of bananas and plantains such as the Lakatan and the Saba/ Cardaba varieties. While Cavendish is mainly produced as an export product, the Lakatan is consumed mostly as fresh fruit in the domestic market while a good portion of the Saba/ Cardaba variety is processed into banana chips and other products for domestic use and export. The Philippine production of bananas since 2010 peaked in 2012 with more than 9.2 million metric tons followed by a sharp decline in 2013 as a direct result of the damage wrought by Typhoon Pablo. In terms of area planted, from a high of about 454,000 hectares in 2012, this declined to about 446,000 hectares in 2013 and further down to 443,000 hectares in 2014 and 2015.(Philippine Statistics Authority, 2014 - 2017) Viewed from a production standpoint, production of Cavendish bananas dominates the national production. Philippine Statistics Authority data for the past 5 years show a slow growth in the volume of production on a year to year picture.

Figure 3: Volume of Production by Variety by Year, 2013 – 2017.

(Performance of Philippine Agriculture Reports, 2013-2017)

Lakatan

Cavendish0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

2013 2014 2015 2016 2017

P

r

o

d

u

c

t

i

o

n

Year

Volume of Production by Year in Metric Tons. 2013 - 2017

Lakatan

Saba

Cavendish

BANANA

10

Cavendish accounts for about 50 to 60% of the total banana production despite using a smaller aggregate land area compared to the Saba/ Cardaba variety due to its high plant density per hectare and higher productivity.

Table 4. Volume of Production by Year in Metric Tons, 2013 – 2017

2013 2014 2015 2016 2017

% Change

2017/2016

Cavendish 4,230,089 4,448,460 4,566,907 4,638,328 4,836,253 4.27%

Lakatan 930,032 954,856 970,496 898,515 910,983 1.39%

Cardaba 2,557,109 2,567,495 2,627,129 2,474,199 2,520,011 1.85%

BANANA 8,646,417 8,884,857 9,083,929 8,903,684 9,166,334 2.95% (Performance of Philippine Agriculture Reports, 2013-2017)

In terms of area planted in the past 5 years, 2017showed a great improvement towards attaining the 2012 (pre-Typhoon Pablo) level of about 454,000 hectares.

Figure 4. Area Planted to Banana by Variety. 2013 - 2017

(Performance of Philippine Agriculture Reports, 2013-2017)

Cavendish

LakatanSaba

BANANA

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2013 2014 20152016

2017

A

r

e

a

(

H

a

.)

Year

Area Planted to Banana by Variety (ha.)

Cavendish

Lakatan

Saba

BANANA

11

Table 5. Area Planted by Major Variety, 2013-2017

2013 2014 2015 2016 2017 %

Change 2017/2016

BANANA 446,017 442,751 443,370 442,865 446,764 0.9

Cavendish 82,903 84,133 85,809 86,668 88,010 1.5

Lakatan 55,908 56,395 56,473 54,675 54,978 0.6

Saba 183,484 182,416 182,001 182,414 185,279 1.6 (Performance of Philippine Agriculture Reports, 2013-2017)

Using the data from the two previous tables, we can find that productivity differs between varieties with Cavendish beating the two other varieties by a large margin owing largely to its more intensive cultivation standard and higher input requirement. Cardaba, being a bigger variety has less plants per hectare, and as expected has the lowest productivity rate with an average of around 14 tons per hectare compared to the average of 50 tons per hectare of Cavendish and the 17 tons per hectare of Lakatan. On the average, productivity of banana hovers around 20 metric tons per hectare across all varieties. Figure 5. Productivity of Banana by Variety, 2013 - 2017 (MT/Ha.)

Note: Computed from previous tables

BANANA

Cardaba

LakatanCavendish

-

10.00

20.00

30.00

40.00

50.00

60.00

20132014

20152016

2017

Pro

du

ctiv

ity

(MT/

Ha.

)

Year

Productivity of Banana by Variety 2013 - 2017 (MT/Ha.)

BANANA

Cardaba

Lakatan

Cavendish

12

Table 6, Productivity of Banana by Variety, 2013 - 2017 (MT/Ha.)

Productivity (Metric Tons per hectare)

2013 2014 2015 2016 2017

% Change

2017/2016

Cavendish 51 53 53 54 55 2.68%

Lakatan 17 17 17 16 17 0.83%

Cardaba 14 14 14 14 14 0.28%

BANANA 19 20 20 20 21 2.05% Note: Computed from previous tables

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Regional Production:

In terms of regional production, Region XI, X, XII, and ARMM, all located in Mindanao are the top producers mainly due to the large plantations of Cavendish which accounts for more than half of the total production followed by Lakatan which is about a quarter of the total produce.

Figure 6. Banana Production per Region. January – March 2017

Source: (Philippine Statistics Authority, 2014 - 2017)

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Figure 7. Distribution of Banana Production

Source: (Philippine Statistics Authority, 2014 - 2017)

Source: (Philippine Statistics Authority, 2014 - 2017)

Table 7. Volume of Production for Banana by Region

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Export Market:

The export markets of the Philippines are mainly in the Asian and Middle East countries. Below are the top 15 countries that comprise the highest dollar value worth of bananas exported from the Philippines during 2016:

Table 8. Philippine Banana Export Markets by Country. 2017

Importers

Value exported in 2017 (USD thousand)

Share in Philippines' Exports (%)

Quantity exported in 2017 (Tons)

Unit value (USD/ unit)

World 1,128,280 100 2,919,577 386

Japan 390,227 35 826,962 472

China 290,234 26 800,407 363

Korea, Republic of 176,554 16 379,162 466

United Arab Emirates 94,821 8 285,603 332

Iran, Islamic Republic of 78,533 7 322,650 243

Saudi Arabia 20,539 2 77,260 266

Iraq 20,186 2 60,384 334

Hong Kong, China 16,856 2 47,744 353

Kuwait 11,900 1 44,692 266

New Zealand 6,573 1 12,939 508

Malaysia 5,179 1 15,727 329

Singapore 5,155 1 13,213 390

Qatar 4,284 0 11,673 367

Russian Federation 1,651 0 3,558 464

Bahrain 1,375 0 6,908 199

Others 4,213 0 10,695 (www.trademap.org, 2018)

The listed 15 countries absorbed 99.7% of bananas exports from the Philippines in 2017 while other minor markets consumed the 0.3% remaining volume. Among the above countries, the fastest-growing bananas markets between 2016 to 2017 in term of growth in exported value in USD were: Canada (up 6,533%), Bahrain (up 2,889%), USA (up 588%) and Iraq (up 560%). Those countries that posted declines in their Filipino bananas purchases were led by: United Kingdom (down -98%), Mongolia (down -47%), Kuwait (down -41%), Brunei Darussalam (down -36%) and North Korea (down -35%). (www.trademap.org, 2018)

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Cavendish accounts for the bulk of the volume of fresh bananas exported to other countries. Banana accounts for around 17.2% of the total Agricultural export of the country in 2017.

Table 9. Fresh Banana Volume and Value of Exports. 2013 - 2017

YEAR Quantity (In MT)

Value (US $, ‘000)

Percentage Share to Total Agri Exports

2013 3,266,547.6 962,575.3 15.04

2014 3,630,976.3 1,129,890.9 17.27

2015 1,795,219.2 657,870.1 12.82

2016 1,733,836.3 730,363.5 13.83

2017 2,850,847.0 1,128,580.0 17.2

(Highlights of Philippine Export and Import Statistics, 2017)

Players:

The top players in the Banana Export industry are: Unifrutti, Dole, Sumifru, Lapanday, TADECO, and Del Monte. The map shows the location of these players in Mindanao where the bulk of bananas for export are produced. There are other smaller independent exporters such as MBFEA. Mega, among others. Other value chain players include processors under the Organization of Banana Chips Exporters and other independent processors.

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Figure 8. Mindanao Banana Industry Players

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Indicative Cost of Production and Income

The figures shown below for Lakatan and Cardaba are lifted directly from the “Banana Production Guide” (Herradura, 2015) published by the Bureau of Plant Industry of the Department of Agriculture Pages 24-27. Cavendish Banana figures are from the Philippine Banana Growers and Exporters Association.

Lakatan

19

20

21

Cardaba

22

23

24

25

Cavendish

Value Chain In viewing Agriculture as an Industry, one of the common tools used if the Value Chain Analysis. The Value Chain shows the evolution of the product from production of the raw product to the eventual form in the marketplace. It also shows the Value Chain Players who handle, transform, or otherwise add value to the product in its transformation and journey to the marketplace. For banana, there is a general flow of products for Fresh Fruits which is applicable to table bananas like the Cavendish, the Lakatan, and even the Cardaba Varieties.

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Cavendish and Lakatan Fresh Fruit

Figure 9. Banana Fresh Fruit Value Chain

(Department of Agriculture - Mindanao Cluster, 2014)

In general, the value chain for Fresh Fruit Banana goes into five (5) stages as follows:

1. Pre-production or Input Provision which includes the planting materials,

agricultural chemicals, and other inputs.

2. Production which includes plant care and maintenance, application of agri-

chemicals, and other production inputs and practices

3. Post-Harvest Consolidation and Packing which includes cleaning, selection,

grading, and labeling.

4. Trading and Distribution which includes storage, transport, and distribution to the

wholesale markets

5. Final or Retail Sales where the product is sold to the eventual consumers for

consumption as fresh fruit or further processing into manufactured products.

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Cardaba Value Chains

(Department of Agriculture - Mindanao Cluster, 2014)

Among the three major varieties, Cardaba is not usually consumed as fresh fruit due to

its high starch content, although there are some sub-varieties suitable for fresh fruit

consumption when adequately ripe. The Value Chain for Cardaba fresh fruit is mostly for

the local market where household level buyers or consumers purchase the fresh fruit for

their own consumption or for home cooking as snack food. The value chain is very similar

to the General Value Chain in terms of stage, except for the absence of the large

Multinational Companies in the players.

Figure 10. Cardaba Fresh Fruit Value Chain

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Cardaba Processed Banana

Figure 11. Value Chain Map for Processed Banana

(Department of Agriculture - Mindanao Cluster, 2014)

One major product of Cardaba is the Processed Banana which is basically the Banana Chips which is mostly for the export market and on a limited scale for the local or domestic market. The first three stages are generally the same as the Fresh Fruit value chain. However, instead of being distributed to the fresh fruit market, the product is sold to processors who convert it into semi-processed products (first fry chips which are used as raw materials for processed banana chips by manufacturers or processors who have their own proprietary finishing and flavoring), and processed products (final fried chips with the desired flavoring and packaging ready for distribution to the consumer market. First Fry Banana Chips are usually packaged and sold in bulk form while Final Fry Banana Chips are usually packaged and sold in consumable and retail sized packs.

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Cardaba Snack Food

Figure 12. Value Chain Map for Cardaba Snack Food

(Department of Agriculture - Mindanao Cluster, 2014)

The third product form for Cardaba is the Snack Food where the first three stages are basically the same as the Processed Banana. The big difference is that Snack food is usually processed and consumed within the same day, and the processor and eventual retailer is usually the same person. Most of the processor/ retailers in this product form are micro-enterprises who sell the snack food along the streets to the general public. There are some Small enterprises who sell the snack food as part of the menu in restaurants or cafes catering to their customers.

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Banana Issues and Concerns:

Consultations with Industry Stakeholders and studies on the Banana Industry have surfaced common existing and emerging issues and concerns. These issues are usually interlinked with the various aspects of the banana industry and usually not isolated incidents or specific to certain areas or sectors. Many of the issues adversely affect the production and value chains of the different varieties of banana. Below are the issues with a short description, as well as identification of the affected sector of the industry.

Existing and Emerging Issues and Concerns

LEGEND (Banana Industry Sub-Sectors):

Cavendish Cardaba Lakatan Processors

Table 10. Summary of Issues for Banana

Issue Description

Market

“Fly-by-night” traders who encourage Pole vaulting

These are traders who buy bananas from farms under contract with companies (exporters or processors) or other traders who have financed or extended credit for the production of the bananas. This affects the production quota of the exporters and processors who have programmed the production of the farms into their volume requirement.

Unserved Markets There are markets that are asking for more fruits but unfortunately, due to poor productivity, they remain unserved.

Unstable Price – Domestic and Export

Prices of bananas are dependent on a variety of factors such as supply and demand, world price, dollar exchange rate, and other factors. This affects the farmers who take the risks and costs of production without a guaranty that the selling price will be sufficient to offset their production cost.

Lack of Entrepreneurial Skill of Farmers

Since a large percentage of the bananas are produced by small producers, most of these producers have little or no skills in entrepreneurship to manage and negotiate with their markets.

31

Issue Description

Poor and expensive transport system

Transport of the produce from the farms to the market is relatively expensive since most of the small farms are located in hard to reach areas with inadequate road network and transport facilities. A big percentage of the produce is transported by traders using small to medium sized vehicles that can enter the narrow roads leading to the farms, resulting in a high cost per volume transport cost.

Shipping Shut-out (Mindanao to Luzon)

Trading of bananas in the domestic market is affected by shipping shut-out when the bananas are consolidated for shipping from Mindanao to Luzon and are not loaded on the ship because the capacity of the ship is already allocated to other products or shippers. This causes undue delay in the shipping which may result to losses due to ripening, particularly since the product is not usually shipped in refrigerated vans for domestic markets.

Inadequate cold chain facilities This affects the trading of bananas in the domestic market. To reduce post-harvest losses, the field heat has to be removed from the bananas as soon as possible to delay or prevent ripening until it reaches the target market. There is inadequate cold storage and refrigerated van facilities to cater to this segment of the industry.

Inadequate Marketing infrastructure

For the local or domestic marketing of bananas, there is inadequate marketing facilities such as consolidation points, auction markets, and bulk marketing facilities. Local and domestic trading is usually done by small traders running small volume operations which are inefficient and hard to regulate in terms of quality and price.

Lack of Marketing promotions to other countries

The Banana Export market is dominated and controlled by the large multinational companies selling Philippine bananas under their own brand names. As such, promotion is based on the brand rather than as Philippine Bananas, to the detriment of the small exporters who find it hard to market the bananas as there is no market recognition. More emphasis on promotion of Philippine Bananas need to be done to open up new markets and assist small independent exporters.

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Issue Description

Competitiveness of Latin American bananas

In recent years, Philippine production dropped due to the effect of Typhoon Pablo which damaged a large portion of the banana plantations in Mindanao. While the Philippines was recovering, South American bananas were able to increase their market share in the traditional markets of the Philippines in Asia and the Middle East. The Philippines needs to recover these markets and expand to new markets in order to regain its position in the world market which has dropped from being number 2 to being number 6 in recent years.

Market price softening

Technical

Planting Materials Quality planting materials are vital to production of quality bananas. While big companies are able to supply the needs of their contracted farmers, many small holders do not have access to the quality planting materials. There is a need for more tissue culture laboratories and nurseries to produce uniform quality planting materials from certified mother plants to ensure variety and seedling vigor.

Proliferation and use of illegal chemicals

There are agricultural chemicals that are highly toxic and has long residual effect on the environment that are banned in the Philippines and in the countries where bananas are sold. These chemicals are considered illegal and not recommended for use. However, there are still some farmers who use these chemicals to control pests and diseases for convenience sake.

Pest and Disease Pest and disease are a normal occurrence in any crop but more pronounced in a monocropping system where the spread and impact of the pest or disease is faster and easily apparent. For bananas, the primary concern is the Panama disease which is a soil borne disease. Other diseases like the Sigatoka, bunchy top, among others are hard to control and contain. These diseases cause lower production and higher production cost or requires plantations to install more stringent and

33

Issue Description

costlier sanitary and quarantine measures to control and contain.

Poor cultural management by farmers

Smallholder farmers usually lack technology and resources to practice the recommended cultural management for their small operations. In addition, for smallholders, bananas are sometimes not the main crop, thus do not receive the care and maintenance required. This leads to poor production.

Inadequate post-harvest infrastructure

Post-harvest practices vary among the varieties. However, in general, there are inadequate post-harvest facilities such as washing tanks, packing plants, and even transport from the farm to the market, thus resulting in post-harvest losses.

Lack of quality standards for Fresh Fruits

While fresh fruit for export market have exacting standards, those for the domestic and local market do not have uniform standards. The lack of standards is also a factor for the instable pricing as the farmer cannot be assured of pricing based on the quality of his produce.

High Pesticide Use The proliferation of pests and diseases has brought about the need to use more pesticides and agricultural chemicals in order to produce visually good bananas. This is particularly true with plantation bananas where the monocropping system makes it susceptible to pests and diseases.

Very Labor Intensive Unlike plantation grown bananas where the labor to area ratio is set, smallholders usually have to work on their own farms due to the high cost of hiring labor and the relatively lower yield and value of produce per hectare. Smallholder production also does not lend itself well to mechanization and it is usually not cost effective to acquire and operate mechanized systems for small production operations.

Priority for irrigation water Irrigation facilities are designed and focused on paddy rice production, thus, in times of water shortage, priority for the use of irrigation water is given to rice over other crops.

Organizational

Weak or no producers/ sectoral organization

There are very few organizations of small banana producers, especially for the Cardaba and Lakatan bananas. Since the market is

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Issue Description

fragmented and served by individual small traders, there is no effort to organize the farmers in order to gather volume and regulate production practices. This has resulted in the weak and fragmented representation of banana producers in government and business councils.

Financing

High interest rates Agriculture is considered by the banking industry as a high-risk portfolio, thus requires a higher interest rate, collateral requirement, and market assurance over other portfolios. Another factor in raising interest rates for agriculture is the gestation period of the crops which needs a grace period where the financial institution is not able to collect and roll over the loan capital.

Increasing production and business costs

Production and business costs are steadily rising due to inflation and other factors such as the exchange rate, availability of inputs, and increasing need for commercial inputs such as fertilizer and pesticides.

Environment

Climate change Recent years have shown extreme weather or climate changes leading to widespread damage or affecting the productivity of the banana industry. Typhoon Pablo affected about 25% of the commercial banana plantations which caused a downturn in production for the next two years while the plantations were recovering. Periodic El Nino and La Nina occurrences also affect the production and eventually the markets of bananas.

Prone to advocacy issues by NGOs

Plantations are easy targets for environmental advocacy groups who decry the loss of biodiversity, use of chemicals, and other environmental effects of the production operations.

Policy

Land Use conversion to other crops

Farming is an industry affected by trends and fads in the market. Thus, farmers sometimes convert to other crops that are more attractive or have high potential market at a given time or season. Bananas are not exempt from this even as it is also the cause of land conversion of riceland to banana. Other factors that cause

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Issue Description

conversion to other crops is the presence of soil borne diseases which makes the land unfit for growing bananas. All in all, conversion to other crops affect the production targets and ultimately, the income of the farmer.

Unresolved Agrarian Reform Issues/ Land disputes affecting productivity and investments

Plantation bananas have been affected by the Comprehensive Agrarian Reform Program and has forced the producers to shift their management practices from Corporate farms to individual growership contracts. There are some cases where the land distribution has resulted to disputes among beneficiary groups which have remained unresolved, thus affecting the production and investment into these areas.

Security Issues (NPA) Recent years have shown several instances of security threats from armed groups (rebel and terrorist) which have caused losses not only of facilities and equipment but also jobs and even lives of workers. Recent instances include the burning of packing plants, plastic plants, and even the strafing of a spray plane which caused the death of the pilot.

Trade barriers imposed by some countries

There are still some countries that impose unrealistic requirements which prevent the importation of Philippine bananas, thus limiting the market. Despite the existing Free Trade agreements, some countries still impose tariff and non-tariff restrictions which need to be negotiated and lifted for Philippine bananas to make inroads into the market.

Banana Industry Stakeholders and Enablers

The Banana Industry has many stakeholders and enablers. Foremost among the stakeholders are the Farmers and Small Growers who are the main drivers and players in the industry. Other major stakeholders are the individual Cooperatives, Consolidators, Traders, Processors, Financiers, and Exporters which range from small scale companies to large multinational corporations. Aside from these direct stakeholders, there are other stakeholders and enablers, both from the government and private sectors. Below is a listing of the institutions that are providing programs, functions or services to the banana industry.

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Table 11. Banana Industry Stakeholders and Enablers

Agency/ Institution Function/ Programs/ Projects

National Government Agencies

Department of Agriculture BPI – Accreditation of Plant Nurseries and Tissue Culture Laboratories

BPI – Production of Certified Planting Materials

AMAD – Marketing linkages

ATI – Technology Training and Extension

PQS – Quarantine Clearance

ACPC – Production Loan Easy Access

Department of Agrarian Reform Production technology and marketing assistance to ARBs

Department of Environment and Natural Resources

Department of Trade and Industry Product development and Entrepreneurial Development

Department of Science and Technology

Innovative/new product production, standards protocol

Philippine Crop Insurance Corporation

Crop Insurance

Department of Education Promotion of the Banana Feeding Program to Schools

Department of Social Welfare and Development

Promotion of the Banana Feeding Program to Day Care Centers

Department of Public Works and Highways

Farm to Market Roads

Department of Finance BOC – Export Processing Facilitation

Land Bank of the Philippines Agricultural Loans

National Nutrition Council Support to the Banana Feeding Program

Special Projects

Philippine Rural Development Program

Farm to Market Roads

State Colleges and Universities

University of the Philippines (system)

Research

Mindanao State University (system)

Research

University of Southeastern Philippines (system)

Research

Central Mindanao University Research

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Agency/ Institution Function/ Programs/ Projects

University of Southern Mindanao Research

Private Sector

PBGEA Advocacy, Policy, Networking

MBFEA Advocacy, Policy, Networking

OBEX Advocacy, Policy, Networking

PhilExport Advocacy, Policy, Networking

MEGA Advocacy, Policy, Networking

Development Direction

Vision/ Mission:

Philippine Bananas and Banana-related products to consistently meet world quality standards with good productivity, sustainable production practices, thus ensuring economic viability for its stakeholders.

Goals and Objectives:

1. Increase farmer productivity by: 4% per year for Cavendish, 2% per year for Lakatan and Cardaba

2. Increase production area by at least 3% per year for Cavendish, 2% per year for Lakatan and Cardaba

3. Increase Market share by 3% in both Fresh Fruit and Value-added Products. 4. Attain 100% standard product quality 5. Support Stakeholders in moving up in the Value Chain 6. Identify Resources and Financing windows for the Banana Value Chain players 7. Improve infrastructure and facilities in the Banana value chain 8. Establish Banana research and development structures and systems 9. Strengthen the Banana Industry Governance

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Table 12: Annual Targets for 2019-2022

Baseline Yearly Target

2019 2020 2021 2022

PRODUCTIVITY (Tonnes per Hectare)

Cavendish 53.20 55.33 57.54 59.84 62.24

Cardaba 14.00 14.28 14.57 14.86 15.15

Lakatan 16.80 17.14 17.48 17.83 18.18

AREA PLANTED (Hectares)

Cavendish 85,505 88,070 90,712 93,433 96,236

Cardaba 55,686 56,800 57,936 59,094 60,276

Lakatan 183,119 186,781 190,517 194,327 198,214

PRODUCTION (Metric Tonnes)

Cavendish 4,548,866 4,872,737 5,219,670 5,591,289 5,989,389

Cardaba 779,604 811,104 843,873 877,954 913,426

Lakatan 3,076,399 3,200,679 3,329,993 3,464,519 3,604,494

Strategic Actions

Development Directions and Upscaling Strategies

i. Improvement of Productivity ii. Increasing Quality and Sustainability Level iii. Expansion of Production Areas iv. Moving up in the Value Chain v. Ensuring Market Awareness vi. Resource Generation and Financing vii. Infrastructure (roads, irrigation, Post-harvest, etc.) viii. Research and Development ix. Industry Cluster Organizational Development and Human Resource

Development

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Banana Industry Action Plan

LEGEND (Banana Industry Sub-Sectors):

Cavendish Cardaba Lakatan Processors

These plans and programs were developed by the stakeholders, to be implemented and monitored by the appropriate

Government agencies and in tandem with the BIDC and other stakeholders.

Table 12. Banana Industry Action Plan

Strategy/ Activities Responsible Stakeholders

Budgetary Requirement

2019 2020 2021 2022

Improvement of Productivity Level

- Subsidy on fertilizers, and pesticides and farm machineries and equipment

DA, DAR, etc.

- Establish Crop Insurance for Banana Small Growers

PCIC

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Strategy/ Activities Responsible Stakeholders

Budgetary Requirement

2019 2020 2021 2022

- Establishment of a facility for manufacturing of organic fertilizer

DA, DOST (Benchmark Sto. Tomas, Davao Del Sur)

- Fusarium Wilt Management Support Intervention

DA 500,000,000 500,000,000 500,000,000 500,000,000

- Package of Technology (POT) for other pests and diseases

DA 200,000,000 200,000,000 200,000,000 200,000,000

- Package of Technology (POT) for Postharvest Quality

DA, DTI

- Package of Technology (POT) for GAP

-

DA

- Water recycling program (packinghouse)

DA, DENR, DOST

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Strategy/ Activities Responsible Stakeholders

Budgetary Requirement

2019 2020 2021 2022

- Waste water treatment in pesticides mixing facilities

DA, DENR, DOST

Microbial Antagonist and Meristem Production

DA 2,000,000 2,000,000 2,000,000

Yearly Soil Analysis

DA 30,000,000 30,000,000 30,000,000

POT for Natural Disease Control

DA 240,000,000 240,000,000 240,000,000

Expansion of Production Areas

- Develop program for adverse conditions like El Nino, La Nina, Earthquake, tropical storm

DA

- Use of Drone Technology

DA, DENR, DOST

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Strategy/ Activities Responsible Stakeholders

Budgetary Requirement

2019 2020 2021 2022

- Provide/ Ensure access to quality (inspected/ verified) Planting Materials for Rehabilitation purposes

BPI

- Accreditation of Tissue Culture Laboratories/ Nurseries/ planting material producers

BPI

Moving up in the Value Chain

- Quality standardization (packing houses, operations)

DA, DTI

- Certification and branding for all varieties

DA, DTI

Ensuring Market Awareness

- Harmonization of MRL in all markets

DA, NPAL-BPI

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Strategy/ Activities Responsible Stakeholders

Budgetary Requirement

2019 2020 2021 2022

- Open other markets (Indonesia, Russia and Europe).

DTI

Aggressive renegotiation of Tariff Rates

DA, DTI, DOF, DFA

International and Domestic Consumer awareness campaign

DTI, DA, BPI, BAFS 8,000,000 8,000,000 8,000,000 8,000,000

- Participation in International Fruit and Vegetable Congress/Trade Fairs/ Congresses.

DA, DTI, PhilExport 8,000,000 8,000,000 8,000,000 8,000,000

- Banana Feeding Program/ Banana Waste Utilization

DSWD, DepED, DOH, DND, NNC, etc.

30,000,000 30,000,000 30,000,000 30,000,000

- Banana Congress (Annual - October) / Island Group

DA, PhilExport, DTI 1,500,000 5,000,000

1,500,000 5,000,000

1,500,000 5,000,000

1,500,000 5,000,000

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Strategy/ Activities Responsible Stakeholders

Budgetary Requirement

2019 2020 2021 2022

Infrastructure and FMR

DA, DPWH

Resource generation and Financing Strategies

- Include Banana as a Priority crop in the PLEA Program and other Government Financing Programs

DA

Research and Development

- Establishment of a Banana Research Institute (BRI) in 2019.

DA, DOST 250,000,000 50,000,000 50,000,000 50,000,000

- Polycyclic Aromatic Hydrocarbon Laboratory Equipment

3,000,000

- Expand Tissue Culture Laboratory Facilities

DA, BPI 50,000,000

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Strategy/ Activities Responsible Stakeholders

Budgetary Requirement

2019 2020 2021 2022

- Establish a Varietal Selection/ Clonal Garden/ Seed Bank Center

SUCs, BPI, PAGRO 50,000,000 30,000,000 30,000,000 30,000,000

- Field Trials for Pest and Disease

BPI, DA, Academe 20,000,000 20,000,000 20,000,000 20,000,000

- Conduct Benchmarking activities (Local and International)

DA, International Partners,

24,000,000 24,000,000 24,000,000 24,000,000

- Establish/ Accredit Model Farms for each variety (private, academic or government)

DA, Academe, Private growers (Local and International)

12,000,000 12,000,000 12,000,000 12,000,000

Industry Cluster Organizational Development and Human Resource Development

- Creation/ Operation of a non-regulatory banana council

Industry Stakeholders, DA, DTI

25,000,000 25,000,000 25,000,000 25,000,000

- Continuing education on technical updates in the banana industry

DA, DTI, DENR, DOST

20,000,000 20,000,000 20,000,000 20,000,000

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Strategy/ Activities Responsible Stakeholders

Budgetary Requirement

2019 2020 2021 2022

- Establishing a Banana Database

Industry Stakeholders, DA, DTI

25,000,000 10,000,000 10,000,000 10,000,000

- Inventory of bills filed/enacted in Congress in relation to the Banana industry for review and refilling

Totals 1,231,500,000 1,215,500,000 1,215,500,000 1,215,500,000

Legend:

- Does not require Funding

- Requires Funding

Priority Projects: 1. Organization of the Banana Industry Development Council 2. Establishment of the Banana Research Institute 3. Conduct of the Banana Congress 4. Development of the Banana Database 5. Acquisition of Tissue Culture Laboratory/ Clonal Garden 6. Acquisition of the Polycyclic Aromatic Hydrocarbon Laboratory Equipment 7. Best practice benchmarking

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Monitoring and Evaluation

Monitoring and Evaluation are important cogs in any development system for to be able to know success is to be able to measure it. Defining and quantifying success indicators is critical as it not only provides direction for the implementers, but it also focuses the investments and resources poured into the development process. As important as having clear and quantifiable indicators is having a monitoring structure and system that gathers, consolidates, analyzes, and evaluates the results for use in improving and elevating subsequent implementation cycles. Such structure and system must be able to monitor and evaluate objectively and be supported by all stakeholders in order to be effective, reliable, and credible.

Development Indicators:

Table 13. Development Indicators

Goal/ Objective Indicator Means of Verification

Regain and expand the leading position in the Domestic and Global Market

Maintain or improve on #2 world ranking on exports.

FAO Statistics

Increase farmer productivity, quality, and sustainability

# of Tons/ Ha. # of Boxes/ Ha. # of Tons/ year

Industry reports PQS Reports, PSA, LGU reports

Increase production area

# of Hectares # of Hills Planted # of Productive Hills

Industry reports LGU RPTAS Reports DA Monitoring reports

Support Stakeholders in moving up in the Value Chain

# of Stakeholders/ groups assisted # of projects implemented Amount of projects implemented

DA, DTI Reports

Increase Market share in both Fresh Fruit and Value-added Products.

% increase in Fresh Fruit Market share % increase in Value-added Products market share

Export Statistics PhilExport Reports PQS Reports

Identify Resources and Financing windows for

# of stakeholders able to access financing

DA ACPC Reports LBP Reports

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Goal/ Objective Indicator Means of Verification

the Banana Value Chain players

Total Amount of financing accessed

BOI Reports

Establish Banana research and development structures and systems

Presence of a Banana Research Institute

News reports Annual Report of BRI

Strengthen the Banana

Industry Governance

Presence of a Banana Industry Development Council

National Level

Regional Level

Local Level

News Reports Documentation Report of BIDC Organization Copy of the Articles of Incorporation and Certificate of Registration

Monitoring Structure:

The existing monitoring structure is a mix of government and private institutions/ agencies mostly operating independently of each other. Not all the data is openly shared thus, sometimes the statistics do not tally from one agency to the other, and sometimes even within the same agency. It is proposed that a single central monitoring and evaluation institution or system be established for the banana industry. All the industry players and government agencies with concerns in the banana industry will be coordinated and monitored by this central monitoring and evaluation institution through a system of data sharing under a Memorandum of Agreement signed by each stakeholder and government agency with the said institution. This institution shall coordinate, cooperate, and network with the existing data generation systems to gather, organize, analyze and evaluate the information on a regular (quarterly) basis. It shall also feed back into the system the consolidated results of the periodic evaluation to ensure that everyone gets the opportunity to utilize the information and also to streamline the standard industry information. To make the process more efficient and effective, a set of industry performance indicators shall be set from which the data sets shall be derived for the various agencies and associations to gather and submit to the central monitoring and evaluation institution. Options for the institution are as follows: 1. The Banana Industry Development Council – as a repository and clearinghouse

of all the data and information gathered by the different government agencies and private industry associations pursuant to its mandate of developing and

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advocating policies to govern the banana industry. The BIDC shall be composed of Private and Government sector representatives and shall be jointly supported by all stakeholders for its operation.

2. The Banana Research Institute – as a consolidator of data gathered by the different government and private stakeholders in line with its mandate for research and development of the banana industry and technology. The Banana Research Institute shall conduct research in both macro and micro aspects of the industry including production, processing, marketing, and other critical aspects for the continued development and sustainability of the industry. It shall be supported mainly by the Government but may be assisted by the private stakeholders for specific purposes in line with their interests, such as specific researches and technology development efforts.

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References:

(2018). ITC calculations based on UN COMTRADE and ITC statistics.

(2018). ITC calculations based on UN COMTRADE statistics.

Delorenzo, D. (2017). Speech .

Department of Agriculture - Mindanao Cluster. (2014). Value Chain Analysis and

Competitiveness Strategy: Cardaba Banana.

Herradura, L. E. (2015). Banana Production Guide. Davao City: Bureau of Plant Industry - Davao

National Crop and Research Development Center.

(2017). Highlights of Philippine Export and Import Statistics. Philippine Statistics Authority.

(2013-2017). Performance of Philippine Agriculture Reports. Philippine Statistics Authority.

Philippine Statistics Authority. (2014 - 2017). Major Fruit Crops Quarterly Bulletin.

philippinesaroundtheworld.com. (2017). Philippines Bananas Exports by Country.

Workman, D. (2018). Banana Exports by Country.

Workman, D. (2018). Banana Imports by Country.

www.trademap.org. (2018). Retrieved September 24, 2018