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TO:	: The Chairman   Board of Investments
	: The Secretary   Ministry of Agriculture
	: The Governor   Central Bank of the Philippines
SUBJECT:	Amending the Total Hectarage Limitation of 21,000 Hectares Under L. O. I. 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 of 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 over 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 plantations 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 m the fiercely competitive banana export markets;

WHEREAS, it has been officially confirmed that there were unauthorized plantings 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 direct 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 proscribed 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 I - 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 tinder this Letter of Instruction.

Section II - 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 sane to be covered by 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 turn distribute the same to other authorized growers who have complied with the conditions herein set forth.

Section III - Transferability of Authorized Area - Authorized areas that have ceased production for any reason shall revert to the Committee for reassignment or transfer to other qualified growers.

Section IV - 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.

Section V - Committee Support and Assistance - To effectively carry out this Letter of Instruction,

	a)	The Board of Investments, as lead agency of the Banana Industry Export Committee and the Interagency 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 Interagency 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.x

DONE in the City of Manila, this 6th day of January, in the year of Our Lord, Nineteen Hundred and Seventy-Nine.

		AREA PER LOI - 58	Excess/ Unauthorized Planting (As of Feb. 1977)	Total Effective Hectarage (As of Feb. 1977)	Net Additional Area Allocation (Per Annex B)	Total Allowed Hectarage
STANFILCO GROUP
1. Chechered Farms		1,000	—	1,000	8	1,008
2. Golden Farms		1,000	—	1,000	204	1,204
3. Diamond Farms		600	—	600	—	600
4. Stanfilco Farms/Small Growers		3,400	—	3,400	684	4,084
		_________	_________	_________	_________	_________
Sub-total		6,000	—	6,000	896	6,896
Philippine Packing Group
1. Hijo Plantation		1,309	41	1,350	245	1,595
2. Marsman Estate Plantation		1,106	—	1,106	114	1,220
3. A M S F C		825	82	907	42	949
4. F. S. Dizon		458	—	458	39	497
5. Lapanday Dev. Corporation		500	50	550	25	575
6. Farmington Agro Developers, Incorporated		440	71	511	—	511
7. Evergreen Farms, Inc.		500	—	500	32	532
8. Delta Farms, Incorporated		296	124	420	—	420
		_________	_________	_________	_________	_________
Sub-Total		5,434	368	5,802	497	6,299
T A D E C O		4,500	—	4,500	1,035	5,535
Davao Fruits Corporation		3,000	—	3,000	516	3,516
Twin Rivers		1,000	—	1,000	—	1000
Desidal Fruits		480	427	907	—	907
Mabuhay Agricultural Corp.		356	58	414	—	414
Mt. Apo		180	—	180	27	207
		_________	_________	_________	_________	_________
Sub-Total		9,516	485	10,001	1,578	11,578
[*] Growers involved are:
	295 in Davao and 144 in General Santos a complete list of which is on file with the Committee

	AREA PER LOI - 58	Excess/ Unauthorized Planting (As of Feb. 1977)	Total Effective Hectarage (As of Feb. 1977)	Net Additional Area Allocation (Per Annex B)	Total Allowed Hectarage
C A D E C O	—	195	195	—	195
Sarmiento/SEI	—	176	176	—	176
Soriano Fruits	—	230	230	—	230
Nova Vista Management & Investement Corp.	—	108	108	—	108
	_________	_________	_________	_________	_________
Sub-Total	—	709	709	—	709
GRAND TOTAL	20,950	1,562	22,512	2,971	25,483
	========	========	========	========	========

	AREA PER LOI - 58	As of February, 1977		Across-the-Board Additional Area Allocation	Net Additional Area Allocation Subject to Condition
		Planted	Excess (Deficit)
	__________	_________	___________	__________	__________
STANFILCO GROUP
1. Chechered Farms	1,000	758	( 242)	250	8
2. Golden Farms	1,000	954	( 46)	250	204
3. Diamond Farms	600	412	( 188)	150	—
4. Stanfilco Farms/Small Growers	3,400	3,234	( 166)	850	684
	_________	_________	_________	_________	_________
Sub-Total	6,000	5,358	(642)	1,500	896
PHILIPPINE PACKING GROUP
1. Hijo Plantation	1,309	1,350	41	327	245
2. Marsman Estate Plantation	1,106	944	(162)	276	114
3. A M S F C	825	907	92	206	42
4. F.S. Dizon	458	383	( 75)	114	39
5. Lapanday Dev. Corporation	500	550	50	125	25
6. Farming Agro Developers Incorporated	440	511	71	110	—
7. Evergreen Farms, Inc.	500	470	(93)	125	32
8. Delta Farms, Inc.	296	420	124	74	—
	_________	_________	_________	_________	_________
Sub-Total	5,434	5,472	38	1,357	497
T A D E C O	4,500	4,410	( 90)	1,125	1,035
Davao Fruits Corporation	3,000	2,766	(234)	750	516
Twin Rivers	1,000	718	(282)	250	—
Desidal Fruits	480	907	427	120	—
Mabuhay Agricultural Corp.	356	414	50	89	—
Mt. Apo	180	162	( 18)	45	27
	_________	_________	_________	_________	_________
Sub-Total	9,516	9,377	( 139)	2,379	1,578

	AREA PER LOI - 58	As of February, 1977		Across-the-Board Additional Area Allocation	Net Additional Area Allocation Subject to Condition
		Planted	Excess (Deficit)
	__________	________	__________	__________	__________
C A D E C O	—	195	195	—	—
Sarmiento/SEI	—	176	176	—	—
Soriano Fruits	—	230	230	—	—
Nova Vista Management & Dev. Corporation	—	180	180	—	—
	_________	_________	_________	_________	_________
Sub-Total	—	709	709	—	—
GRAND TOTAL	20,950	20,916	( 34)	5,236	2,971
	========	========	========	========	========