The 2007 outlook of the National Economic Development Authority in the banana industry is shown by “industry leaders bracing themselves for greater challenges in 2007"
The cautiousness was prompted by the City Council’s approval on second reading of the ban on aerial spraying as a mode of application of pesticides in farms and plantations in Davao City. The NEDA report said “banana industry leaders are very much concerned".
The NEDA outlook on the banana industry echoed that of the Pilipino Banana Growers and Exporters Association (PBGEA), which reacted to the City Council move.
The NEDA report, presented to reporters Friday at the Kapihan sa PIA, said the phase-out period of the use of aerial spraying was "perceived to be not feasible considering the major activities to be undertaken when reconfiguring the plantation from aerial to boom spray”.
The report, read by Nicasio Angelo Agustin, NEDA Southeastern Mindanao regional director, said the shift “entails reorientation or construction of access roads and cable lines, among others”.
"Aside from capital expenditure requirements for the purchase of equipment and implementation of related activities, banning aerial spraying will also affect the quality of export bananas and the perception toward Philippine bananas in the world market,” the report said.
NEDA said the shift would also lead to a reduction in the size of plantations, dependence on cheaper manpower, and to lesser revenue to the city government.
It also cited “the potential spillover effect of the approval to other areas in the region and in Mindanao”, which produces 76 percent of the Philippine production of export Cavendish banana.
NEDA said the continuing appreciation of the peso was placing financial strain to the industry. NEDA said banana is a labor-intensive industry and that reports of a possible P125 across the board legislated wage increase gave them uncertainties.
NEDA added that the stiff competition in the world market, the stringent quality requirements in the Japanese market and unpredictable weather conditions are high up in the list of the industry' other concerns.
The outlook also included the effect of the peso's appreciation to major exports, including banana. (Walter I. Balane / MindaNews)