BANANA companies have complained again about “pole-vaulting” in the industry with one of them, the Lorenzo-owned Lapanday Foods Corp., already filing a case against one of its growers.

Hernani P. Geronimo, head of the company’s Human Resources and Shared Services Division, said the pole-vaulting that has hit the company since June 22 has been “large scale and unique,” unlike in the past when “consolidators” were only buying when the season for bananas was indicated that prices were high.

“Obviously, this is (the work) of a mercenary (consolidator),” Mr. Geronimo said, pointing out that the the incident of pole-vaulting was “orchestrated and a targeted activity.”

The problem “has become an industry concern,” he said. Another official of another company confirmed that pole-vaulting has become prevalent in the industry, unlike in the past when volume was still negligible. “In the past it was just intermittent,” Geronimo said.

In the banana industry parlance, pole-vaulting is when a grower sells his or her produce to a company other than its supposed buyer. Since the implementation of the Comprehensive Agrarian Reform when former workers were made as owners of banana farms they were tilling, many of them signed up as growers of companies that used to own these farms.

About two years ago, pole-vaulting intensified when two big foreign companies were in disagreement over their marketing arrangements. In that incident, one consolidator, or the entity that buys from the growers, even lost about P20 million after the bananas he bought were rejected by the market.

In the latest incident in Lapanday, Bruce Laguesma, company’s manager for growership, said that the agrarian reform cooperative that it contracted to grow in its Hijo farms in Davao del Norte, decided to sell its produce to a consolidator at a price higher by about two US dollars (P91.75@$1=P45.87) per box.

A box is 13.5 kilograms.
Lawyer Jocelyn Arro-Valencia, assistant vice president for Shared Legal Services of the company, said the company decided to file a case of specific performance against its growers after it was able only to deliver about half of its 20,000 boxes of banana a week.

Valencia explained that the case was to force the grower to sell all its produce to the company as expressed in their agreement.

She added that the company is also collecting more pieces of evidence against the consolidator. “We are starting to finalize the case against it (consolidator),” she said. BusinessWorld tried to get in touch with the consolidator, based on the revelation of the company officials, but failed to get a comment from any of its officials.

Laguesma lamented that while the company has invested a huge amount in the farm, the consolidator and its big buyer are the ones who are making money. “You must understand that our company has poured a huge amount into these farms while those consolidators do not even have any investments,” he said.

Geronimo said his company will force the cooperative, the Hijo Employees Agrarian Reform Beneficiaries Cooperative, to pay the P162 million specified in their agreement if it will not abide by it.

He explained that the amount was the total cost that the company invested in the farm of the cooperative which measures about 500 hectares.

“But as much as possible we want to settle it with them without incurring any cost. However, if the cooperative will not still comply with the contract, they should pay. The company was already short of supply because they did not deliver boxes of bananas since June 22,” Geronimo said.(REPORT BY KRISTIANNE M. FUSILERO)