Lapanday seeks gov’t help in penetrating key export marts

Lapanday Holdings Corp. is urging government to work for the lifting of non-tariff trade barriers put up by key export markets such as the United States, Taiwan, Australia and Europe.

Although commercial agricultural exports have gained significant foothold in such huge markets as Japan, Philippine products especially fruits have found it difficult to penetrate them.

Lapanday chairman and chief executive officer Luis Lorenzo Jr. said Lapanday now supplies bananas to all major markets in the world except these key export markets where the Philippine government has yet to "champion" its efforts in bilateral trade discussions.

According to Lorenzo, exporters have been precluded from exporting to these countries by phytosanitary or non-tariff barriers that most countries use to limit the entry of imported agricultural products.

Lorenzo said Lapanday has successfully broken into new markets, most notably, China but at great cost. "We have paid a high tuition fee," he said. "Today we enjoy a 36-percent market share for bananas, selling under our own brand, Mabuhay."

According to Lorenzo, Lapanday has expanded its product lines beyond bananas to include other tropical fruits in order to maximize its cold chain logistics and distribution system.

But to fully entrench itself as global Filipino company, he said markets in the US, Taiwan, Australia and Europe have to be opened to Philippine exports in general.

Although the rules of the World Trade Organization (WTO) prevent the use of tariff barriers to restrict trade, they allow the use of non-tariff measures.

Some countries use phytosanitary standards as barriers, often imposing unrealistic quality standards on agricultural produce, particularly fruits and processed foods.

Opening these markets to Philippine tropical fruits, Lorenzo said, would be the boost needed by the domestic farming sector, both the commercial and small farmers.

The US Department of Agriculture (USDA) approved recently mango exports from the Philippines, a process that took almost a decade. Even then, the permit only allows imports from the island of Guimaras in the Visayan region.

What the commercial farming sector needs from the government, according to Lorenzo, is assistance in gaining access to export markets especially when non-tariff barriers are utilized to prevent the entry of Philippine exports.

According to Lorenzo, government should pursue bilateral trade negotiations with countries that the Philippines wishes to trade with and ultimately lower tariff and non-tariff barriers to trade.

Lorenzo pointed out that the commercial farming sector is composed of large corporate farms with a considerable potential to make substantial contributions to the country’s economic growth.

By providing purchase orders to farmers and by offering growership arrangements or subcontracting schemes, they alleviate the risks attributable to agriculture, Lorenzo said. They enable the small farmers and traditional agribusiness to diversify crops and become competitive.