The philippines is asia’s top exporter of the so-called sunshine fruits, namely the mango, banana and pineapple. However, neighbouring Thailand has surpassed the country in terms of total fruit export earnings, ironically thanks to growers trained in the Philippines.

There are many reasons why the Philippines has failed to turn the fruit and vegetable sector into a billion dollar industry, not least of which are the dominance of small-scale farming and tariffs in target markets like Japan, Australia and South Korea.

“It’s a mature sector – we are the ones dominating the export of bananas, pineapples and mangoes among the Asean (Association of Southeast Asian Nations) countries,” Dr Clarito Barron, director of the Department of Agriculture’s Bureau of Plant Industry told Fruit & Veg World.

But while the country is globally ranked number two in the export of Cavendish bananas, number three in fresh and canned pineapple exports, and number five in mango exports, exports of fruit as a whole remain a paltry US$864 million (in 2013), with bananas making up the bulk of that. That’s compared with Thailand, which exported US$904.64 million in the first ten months of 2013.

Dr Barron, a graduate of Asia’s top agricultural school – the University of the Philippines in Los Baños, Laguna, where growers around the region study – listed five reasons why the Philippines is having a tough time being number one in the sunshine fruit category.

He said the Philippines needs a more effective export promotion strategy; it needs to survey overseas demand in a more robust and aggressive way, as information is lacking and the country’s predominantly small-scale farming industry is dominated by low volumes and fragmented production. As well, he added that the Philippines lacks value-added processing such as hydration, juicing and canning as well as a good packaging system.

Plans are underway, though, to nudge up such exports as part of the current government’s anti-poverty programme. While total agricultural exports (which includes coconut products) contributed a mere 2.05 percent of the GDP in 2010 - down from 6.03 percent in 1980 - the sector employs nearly a third or 10.66 million of the country’s workers. And most of these workers are dirt-poor.

BANANAS

Has been some progress, especially when it comes to the Philippines’ sale of its top fruit – bananas – though import tariffs from its top markets remain a challenge.

Early this March, the Philippines’ Department of Agriculture gave 57 million pesos to small banana farmers to, among others, improve packaging. It also promised to negotiate lower tariffs with Japan and South Korea.

The Philippines’ top three export markets are Japan, which takes 1.5 million metric tonnes of bananas, Korea, with 800,000 MT; and China, which imports 500,000 MT per year.

Even though a devastating typhoon hit the Philippines in 2012, the country saw exports surge to a record US$646.66 million, mainly because the global market price of bananas soared to US$11 a box from US$2.50 that year, Dr Barron said.

Stephen Antig, executive director of the Pilipino Banana Growers and Exporters Association (PBGEA), told Fruit & Veg World that most banana growers in the country are in the southern Philippine island of Mindanao. Half are corporate plantations owned by companies like Japan’s Sumitomo Fruit Corp.(Sumifru) and Del Monte Philippines Inc, set up by the American Del Monte family in the 1920s but now in Filipino hands. Other plantations are owned by Dole-Stanfilco, Tadeco, Lapanday, Marsman-Drysdale, Tristar Group and Hijoh Estate. Small farmers and cooperatives make up the other half.

“We supply more than 90 percent of the requirement of Japan (for Class A bananas),” Antig of the PBGEA told Fruit & Veg World. Japan slaps a 10 percent “summer tariff” and a higher 20 percent “winter tariff” – to protect its farmers’ winter fruits, he explained.

South Korea’s tariffs are a higher 30 percent for the same reason. China’s imports dropped to 100,000 MT from 600,000 MT in 2012 following the tense stand-off with the Philippines over its South China Sea territorial claim. In 2012, China said it found pests in the shipment and sent most of it back.

Antig said he recently met with Chinese quarantine officers to tell them of the corrective measures farmers had taken to ensure pest-free shipments.

Meanwhile, Australia has yet to buy a single banana from the Philippines, claiming it first needs to make numerous tests for pests and disease. Manila has a pending case of unfair trade practice against Canberra before the World Trade Organization, Dr Barron said. Antig added that banana farmers in Queensland have a strong political lobby.

Other markets for the Philippines’ bananas are Russia, which now buys 1.5 million boxes yearly and the Middle East, particularly Iran. Mongolia and Kazhakstan are being eyed by the Philippines as future target markets.

PINEAPPLE

Most pineapple exports from the Philippines go to the United States and are produced by seven corporate plantations in Mindanao: Dole; Del Monte; Tadeco; Lapanday; Asian Hybrid; Mt. Kitanglad Agricultural Development; and Davao Ventures. Del Monte owns Asia’s oldest and largest integrated plantation sprawled over 23,000 hectares. The US colonial government put it up in 1926, following a devastating pineapple disease outbreak in Hawaii. It fell into Filipino hands after the Campos family bought Del Monte Pacific Ltd in 2013.

In 2012, the country shipped abroad a record US$99.66 million worth of fresh, canned and juiced pineapples – its highest in six years.

MANGO

The national fruit of the Philippines is now cultivated all year, with 64 percent of production in the northern island of Luzon. The sweetest variety grows on the island of Guimaras in central Philippines.

Japan buys 51 percent of all fresh mango exports, while Hong Kong buys 31 percent. South Korea, the US, Singapore and China buy the rest. The Philippine government injected an initial 40 million pesos for a five year programme ending 2017 to strengthen this sector.

Dr Barron said the good news is that “the US now recognizes the whole Philippines, except Palawan (island) as a mango pulp and seed weevil-free area – meaning to say, we can export mango to the US not only coming from the island of Guimaras but from all of the mango-producing areas.”

He was confident Australia would follow suit. Mango is the only fresh fruit Australia buys from the Philippines, but it has to come from Guimaras and Samal islands and Davao del Sur province, Mindanao.

VEGITABLES AND OTHER FRUITS

The Philippines is a laggard in vegetable exports, which were as low as US$25 million in 2012. A disorganized farming sector, dominated by small, individual farmers is to blame for this poor performance. The only exceptions, where corporate farming is the norm, are in the growing of produce that goes to Japan.

Dr Barron believes the country can export vegetables like sayote (chayote), cucurbits (such as squash), ampalaya (bitter gourd), siling tingala (Thai variety chili peppers), as well as fruit like mangosteen, avocado, and dragonfruit. “Through bilateral negotiations, we can show it is not only pineapple, banana, mango, asparagus, and okra. But we can export other fruit and vegetables. The only problem, of course, is that we need volume,” he said.

Antig sees other challenges, including the climate, which when bad can bring more pests and disease, and the presence of rebels in farm-growing areas.

Dr Barron remains optimistic, though. He said Mindanao alone has some 500,000 hectares of idle agricultural land. The peace deal between Muslim rebels and the government could open up some of this land. At the moment, of some four million hectares of arable land – much of it devoted to rice – only 287,696 hectares are devoted to growing sunshine fruits for export. That is around 82,413 hectares for bananas, 58,442 hectares for pineapples, and 146,841 hectares for mangoes.

IMPORTS

As home to so many fruit and vegetables, the Philippines seemingly imports far less of these goods than it exports.

The Department of Trade placed the level of fruit imports at US$158.4 million in 2013, a 5.2 percent drop from the US$167 million in 2012. These include santol from Thailand; kiwis and strawberries from Australia; ponkan and pomelos from China; apples from the US, China and Japan; and grapes from the US. Imports of vegetables, meanwhile, were a low US$19.3 million last year, a massive US$11.9 million drop from US$31.3 million in 2012.

Official import statistics, however, do not capture the massive technical smuggling of these goods, especially onions and garlic, into the Philippines. Much of this is from China.

Rolando Ty, executive director of the University of Asia & the Pacific’s Center for Food and AgriBusiness, said this was evident from the large discrepancies between Beijing’s export statistics and Manila’s import figures.

In 2011, for instance, 60,999 tons of garlic worth US$78.5 million left China, but Manila customs records showed the arrival of only 7,800 tons worth US$1.4 million. Filipino garlic farmers are reeling from the competition.

The same story is true for imported onions. The Bureau of Customs has vowed a crackdown on smugglers but farmers have yet to feel the effect.