Philippines is a land of glaring contrasts that extend far beyond the million squatters living in the shadows of Manila’s burgeoning modern skyline. The island nation has perhaps the richest food potential in all Southeast Asia. In fact, by the end of the 1970s the country began to export rice after decades of being a chronic rice importer.

Yet the vast majority of Filipinos today eat even less than a decade ago. Although agricultural growth averaged five per cent a year from 1970-80, according to the World Bank the number of families living in absolute poverty zoomed by 25 per cent.

A confidential version of a controversial 1980 World Bank Poverty Report on the Philippines managed to put its finger on the problem in the usual understated way of such reports. Despite strong agricultural growth, the Bank paper intoned, ‘One could argue that the benefits of the high level of agricultural growth . . . may not have reached substantial numbers of the poor.’

By the early 1960s, the ‘land frontier’ in the Philippines had been reached. With no new land available for cultivation, expansion of commercial farming could come only at the expense of subsistence food crops. From 1960-70 cultivated land devoted to rice declined only gradually from 3.2 million hectares to 3.1 million hectares. But by the mid 1970s, export agriculture was gobbling up valuable food lands. The amount of land devoted to sugar, coconut and other commercial crops increased by over 650,000 hectares between 1970 and 1976. By the end of the decade over a third of the country’s 10 million hectares of cultivated land was growing food for export rather than local consumption.

When President Ferdinand Marcos introduced martial law in September 1972 one of the first things he did was to declare exempt from land reform the three million hectares planted with commercial crops. Foreign agribusiness companies were also reassured when Marcos drove underground the militant nationalist movement that had called for nationalisation of Company-owned plantations on the island of Mindanao.

Large-scale export production was given a green light, but the regime took a different approach to big Filipino landowners. When the great sugar market bust of the late I970s dropped sugar exports from $766 million in 1974 to $216 million in 1978 hundreds of sugar barons were driven to the edge of bankruptcy. In the scramble that followed. Marcos’ associates were able to gain monopoly control over the financing, milling and marketing of sugar.

The sagging fortunes of coconut also provided an excuse to ‘rationalise’ that industry. All phases of coconut production from financing to marketing came under the control of two close friends of Marcos, Defence Minister Juan Ponce Enrile and ‘Coconut King’ Eduardo Cojuangco.

Control over sugar and coconut served as a power base for what the World Bank calls ‘a new-ruling coalition consisting of the Marcos family and personal associates, high level technocrats, key bureaucrats and military officers and some wealthy’ businessmen.

The Marcos dictatorship was far more charitable with foreign-owned agribusiness companies. The most visible examples are Del Monte Corporation’s 15,000-hectare pineapple plantation in Bukidnon Province and Castle and Cooke’s 20,000 hectare pineapple spread in Southern Cotabato. Indeed, both US-owned firms were encouraged to expand their operations. According to Robert Landis, chief executive officer of the Del Monte Corporation, the expansion of the firm’s Philippines operations ‘was a response to an ongoing program of the Philippine Government to promote national and foreign investment in exports.’

The government’s congenial approach to the American agricultural conglomerates was part of a World Bank-devised strategy which President Marcos accepted in 1973 in return for a Bank commitment to make the Philippines a ‘country of concentration’ for billions of dollars in development aid. The Bank’s master-plan stressed foreign investment, an open economy and export-led growth.

Megaplantations
Still, the agribusiness giants were not quite satisfied. They made sure to tie key government officials directly to their prosperity. Defence Minister Juan Ponce Enrile sat on the board of the DoleFil (Castle and Cooke’s pineapple subsidiary) while United Brands, (marketeer of ‘Chiquita’ brand bananas) contracted TADECO, a 5,500 hectare megaplantation in which Marcos himself has substantial interest, to grow all its Philippines bananas.

When Castle and Cooke took over the Dole Pineapple Corporation in 1961, one of its first moves was to acquire plantations in the Philippines. The reason was simple: its competitor Del Monte, a Philippines resident since 1926, was profiting handsomely from the huge difference between wages of plantation workers in Hawaii and workers in Mindanao. Plantation hands in Hawaii were making over $2.60 an hour, Del Monte field workers in Mindanao 15 cents an hour for the same job. Hawaiian cannery workers were earning $2.69 an hour, Del Monte’s workers in the Philippines were getting 20 cents an hour.

And there was an important bonus. There was no equivalent in the Philippines of the International Longshoremen and Warehousemen’s Union, the tough labour organisation that has done much to improve the living standards of Dole’s Hawaiian workers. The companies were given a further boost after martial law banned strikes in ‘vital industries’, a category that included Del Monte, Castle and Cooke and other export producers on the grounds they were ‘vital foreign exchange earners.'

In the late 1960s, most of the direct agribusiness investment in the Philippines was in pineapples. But in the early 1970s Del Monte, Castle and Cooke and United Brands suddenly turned their sights on bananas. The move was triggered by a rising demand in Japan coupled with the discovery that the loamy, alluvial, and well-drained soil in southeastern Mindanao was perfect for growing bananas. And in particular, the Cavendish variety — a huge, tough fruit that is blander than local varieties but perfect for long-distance travel.

Banana exports
Almost overnight bananas became one of the country’s largest exports — topping $84 million in 1978. Almost 90 per cent of Philippine bananas go to Japan — with South Korea, Hong Kong and the Middle East far down the list.

While Del Monte and Castle and Cooke grow their own pineapples on thousands of acres leased from the government’s National Development Corporation, bananas are grown by local Filipino landowners who then sell to the multinationals at set prices.

There are, however, different variations of these ‘associate-producer’ arrangements. Closest to the classical plantation set-up is United Brands’ contract arrangements with the huge TADECO operation. A major part of the workforce is prisoners from the nearby Davao Penal Colony. Del Monte, in contrast has spread its contracts with nine large corporate growers, each averaging close to 700 hectares.

But the most interesting set-up is the Castle and Cooke subsidiary Stanfilco’s arrangements with over 370 small landowners whose plots range from four to seven hectares. According to Filipino researcher Temario Rivera, the small landholder retains legal ownership of his land but loses complete control over every phase of the production process.

Risks and costs
In many ways, the small landowners contracted to Sanfilco are worse off than their hired workers. They have to handle many of the risks and costs associated with production (weather, fertilizer, pesticide) including hiring additional labour. It is no wonder 97 per cent of Stanfilco’ s ‘associate-producers’ in the Davao area have an average debt to the company of $926 per hectare.

The average wage of workers in the banana industry in the late 1970s was $42.00 to $50.00 a month — about 25 per cent of the minimum cost of living then estimated by the government for a family of six. A recent United Nations study discovered that only 26 per cent of the final retail value of banana exports returns to the Philippines.

Agribusiness expansion in Mindanao has been largely at the expense of small peasant farmers. Stanfilco’s operations in Davao are one way of effectively controlling and occasionally dispossessing smallholders. But there are more direct and brutal methods. The expansion of Del Monte’s pineapple operations in Bukidnon, for instance has displaced families from their farms. According to one local observer, ‘the pressures on the small farmers are great. They are pushed. They are shoved. Those who refuse to move are threatened with having their rights of way cut off by Del Monte. Those who continue to try to get land titles through the Bureau of Lands are told they must wait or that they have no witnesses or that they are lacking the proper forms or that the lands have already been applied for. Inevitably, they will be given titles only if they promise to lease to Del Monte.’

Bukidnon farmers are not the only victim. In 1979, Del Monte’s banana expansion in Davao del Norte displaced 200 families, while TADECO used Filipino troops to eject 700 families from lands adjacent to its plantation.

The Ministry of Agrarian Reform has admitted that acts of dispossession like 'bulldozing farms and burning homes' have taken place. But the government has done nothing to stop the companies. In fact, to assist ‘vital foreign exchange earners’, the government has often been a willing accomplice in land-grabs. In the contract between Castle and Cooke and the government’s National Development Corporation there is a clause that blatantly sanctions landgrabbing: ‘NDC shall, from time to time, when and as requested by Dole, bring, acquire, and obtain title to such additional parcels of land as may be needed by Dole in its operations...'

The various forms of landgrabbing not only provide the land for corporate expansion but also a cheap labour force. Some of the workers are dispossessed landholders, others are impoverished ‘associate producers’. Many thousands find no work at all. Others travel to the port of Davao to become pedi-cab drivers, stevedores or just squatters. The lucky ones can earn enough to feed themselves and their families.

That is the upshot of agribusiness expansion in the Philippines over the last decades — on one hand it has been good business for the corporations and their allies in the Marcos government.

On the other it has meant increased misery for low-paid plantation workers, dispossession of small farmers from their land and declining living standards for the whole population.