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LETTER OF INSTRUCTIONS
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LETTER OF INSTRUCTIONS NO. 790 |
Board of Investments
The Secretary
Ministry of Agriculture
The Governor
Central Bank of the Philippines
SUBJECT : Amending the Total Hectare Limitation of 21,000 Hectares Under LOCI. No. 58 of February 22, 1973 for Export Banana Plantations
WHEREAS, one of the government's present economic thrust is to increase the nation's foreign exchange earnings through intensified export promotion especially to non-traditional export products;
WHEREAS, there is definite indication of a growing demand for Philippine export bananas, both in the Japanese market as well as newly-developed markets in the Middle East and other countries as shown by the estimate of the 1983 market which is projected to reach 109.1 million 12.-kg. boxes, or an increase of 16.6 million boxes in the next five years. This increase alone requires an additional 4,500 hectares;
WHEREAS, in line with Paragraph 3 of LOI 58, there is now a need to allow the development of additional banana plantation areas the total acreage presently authorized under LOI No. 58 in order to meet the requirements of new banana export markets, while at the same time providing a "buffer" for the inevitable occurrence of such natural calamities as typhoons, droughts, etc.;
WHEREAS, such additional hectarage of banana plantation should be distributed pro-rata to existing growers presently listed in Annex "A" of LOI NO. 58 because these growers have the necessary agricultural expertise and established marketing tie-ups and would, therefore, be in the best position to attain the optimum degree of economic efficiency because of economies of scale deemed necessary to enable the industry to compete in the fiercely competitive banana export markets;
WHEREAS, it has been officially in excess of the total acreage allocated under LOI NO. 58 in order to rationalize the industry. However, considering the substantial foreign exchange earnings and employment generated by such plantings, and further considering the substantial investment of capital they represent, it is deemed necessary, on the basis of the appeal from the industry, to legalize the existence of these unauthorized plantings under definite guidelines and rules so that they could be incorporated as an integral part of the total acreage authorized for the industry, both for the existing as well as additional markets for Philippine bananas in the foreseeable future.
NOW, THEREFORE, I, FERDINAND, E. MARCOS, President and Prime Minister of the Republic of the Philippines, do hereby authorize an increase of 25% over the present hectarage limitation prescribed under LOI No. 58, and hereby directed the Board of Investments, the Ministry of Agriculture, and the Central Bank of the Philippines, which constitute the Banana Export Industry Committee (hereinafter referred to as the Committee) to:
a)
Strictly enforce the system of area allocation
hereinbelow prescribed for the distribution of such additional
authorized area for export banana plantations;
b) Verify,
monitor, and supervise the operations of banana growers relative to
their compliance with this Letter of Instruction.
SECTION 1. System of Allocation. — An across-the- board 25% increase in hectarage shall be given to all authorized growers under Letter of Instruction No. 58 on the basis of the survey of planted areas conducted in February, 1977. A confirmatory survey should be conducted by the Committee in order to verify the latest plantings especially of small planters since February, 1977, in order to fully cover all areas planted to export bananas as of the effectivity of this Letter of Instruction. The system of allocation shall be as follows:
a)
Undeveloped areas of authorized growers under LOI 58 shall be deducted
from their 25% additional hectarage allocation;
b) Areas
developed by authorized growers in excess of their acreage allocation
under LOI 58 shall be legitimized, provided double such excess
plantings are deducted from their 25% additional hectarage allocation
under this Letter of Instruction; and
c) Plantations
developed by unauthorized growers shall be legitimized but they may not
be entitled to any additional area allocation under this Letter of
Instruction.
Sec. 2. Conditions for Availment of Additional Area Allocation. — The following conditions are hereby prescribed to insure the orderly implementation of the additional plantation areas herein authorized in order to rationalize the supply of bananas with the known world demand therefor, thereby helping provide stability for the world market for bananas;
a)
Growers with undeveloped authorized areas under LOI 58 shall first
plant such areas, on or before June 30, 1979, unless the remaining
areas are found unsuitable for development, in which case equivalent
other areas may be developed provided they are within the total area
authorized for the growers concerned;
b) The
additional area allocations should be identified and their suitability
for banana development should first be ascertained, including the
expected produce thereof, the same to be converged a fixed marketing
contract to ensure that the additional production will be exported;
c) The growers
involved shall have proven management and financial capability to carry
out their development plans for the additional areas herein authorized;
and
d) The
additional area allocations shown in Annexes A & B must be fully
planted on or before June 30, 1982; all unplanted areas after June
1982, shall revert back to the Committee which shall in return
distribute the same to the other authorized growers who have complied
with the conditions herein set forth.
Sec. 3. Transferability of Authorized Area. — Authorized areas that have ceased production for any reason shall revert to the Committee to reassignment or transfer to other qualified growers.
Sec. 4. Penalties for Future Violations. — To
deter future violations after the promulgation of this Letter of
Instruction, the following penalties are hereby prescribed:
a)
Cancellation of export permits and/or licenses of any entity involved
in any unauthorized planting;
b) Destruction
at the expense of the guilty grower concerned, of any unauthorized
planting as verified by the Committee; and
c) Imposition
on the guilty grower of a cash penalty of P20,000 for each hectare of
verified unauthorized planting.
Sec. 5. Committee Support and Assistance. — To effectively carry out this Letter of Instruction.
a)
The Board of Investment, as lead agency of the Banana Industry Export
Committee and the Inter-agency Committee on the Implementation of P.D.
1090, is hereby authorized to use for 1979 P500,000 of its 1978 savings
for such staff work and related operations as are necessary to
implement this Letter of Instruction as well as to fund the operations
of the aforementioned Inter-agency Committee under P.D. 1090 relative
to the determination, administration, supervision, and review of carton
box quota allocations and their availment by fresh fruit exporters in
accordance with the guidelines established for the purpose; and
b) To carry
out its functions, the Committee may avail of the assistance of any
other government office, law enforcement agency and/or instrumentality
of the Government.
This Letter of Instruction shall take effect upon approval.
Done in the City of Manila, this 6th day of January, in the year of Our Lord, Nineteen Hundred and Seventy-Nine.
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