WE have been told time and again about the challenge of globalization, integration, free- trade areas, etc. The narrative tends to emphasize benefits from the arrangement, and that is as it should be, to encourage us to embark on the road of accelerated development. But there are costs as well, which can be daunting if one is not prepared for them.
One such cost is now apparently emerging in the export markets for bananas. Our banana export industry is feeling threatened by the emergence of Vietnam as an export competitor. This can result in the loss of our dominant position in export markets for bananas.
Philippine banana exporters, as reported, are seeking help from trade and agriculture officials to negotiate for preferential or zero tariffs for bananas in importing countries. Stephen Antig, executive director of the Filipino Banana Growers and Exporters Association (FBGEA), is quoted as saying that local banana exporters fear that they will lose their markets if the government is not more aggressive in negotiating for reduced tariffs in the countries where we export our bananas.
For years past the Philippines was the dominant supplier of bananas to Japan, South Korea and New Zealand. But Vietnam, Indonesia, Mozambique and Costa Rica have been slowly penetrating those markets.
Philippine banana exporters should realize, however, that under the equal treatment rules of the World Trade Organization, countries granting preferential tariffs to Philippine bananas will be obliged to grant the same preference to other countries that export bananas. So while it is right for the Philippine government to negotiate for lower or zero tariffs for Philippine banana exports, such will not be helpful to the improvement of the position of Philippine bananas vis-à-vis their competitors.
As the FBGEA knows, Vietnam is industrializing its banana industry, scrapping some of its traditional banana-cultivation techniques, turning some of its rice farms into banana plantations, and growing what the global markets demand. The Philippine banana export industry must do something to help itself if it is to remain a viable exporter, much less continue as a dominant player in export markets. Specifically, it must investigate the industry’s productivity position, which is the key to competitiveness, whether globally or locally.
As FBGEA experts are suggesting, the industry must make investments in processing and postharvest preservation. This should result in the improvement in the quality of the finished product and a reduction of per-unit cost.
It is known in the export industry that the demand for bananas worldwide has continued to outstrip supply, resulting in lucrative incomes for exporters. From this viewpoint alone, not mentioning the need to meet the challenge of competitors, our banana exporters should have every reason to adopt improved technology in processing and preservation.
Exports are a vital component of our national strategy for economic growth, and banana exports represent a critical part of that strategy. We hope the industry continues to contribute to the growth and expansion of our national economy even as it takes advantage of the profit opportunities currently available in banana export markets.
Image credits: Jimbo Albano