Agrarian Reform in the Philippine Banana Chain

Authors: 
Publication Type: 
Number: 
2009/03
Total Pages: 
47
Month/Season: 
Published On: 
2009

The Comprehensive Agrarian Reform Program (CARP) of 1986 had been the most far reaching postwar institutional change in rural Philippines. To evaluate the dynamic impact of CARP in the banana sector, we have compared the development of smallholders in both the domestic market and export chains. For exports the reform introduced contract agriculture between cooperatives of small Cavendish banana growers and export firms. Small farmers of banana cultivars like Lakatan supply the crop individually to open domestic market channels. Incomes and living conditions of reform beneficiaries improved significantly compared to former plantation workers wages, but remained below the official family living wage rate. Per Kg. of bananas the income of non-reformed domestic market growers has been of the same magnitudes as for the export chain. However, the percentage of the latter has been much lower in terms of the final consumers’ prices. The farmers of the domestic market have also more upgrading opportunities to organize cooperatives and reduce production and transaction costs. The export contract growers have already cooperatives and for upgrading will need the consent of powerful downstream agents in the chain. The reason for the limited impact of CARP is the power concentration by five multinationals and four influential Filipino families, which dominate the profitable wholesale supply and export stages of the banana chain.