Hawaii & the Philippines: Plantation Plunder
Since colonial times, the economies of the Third World have been structured to serve the world capitalist market. While the dominant capitalist countries have become independent industrial...
...agribusiness investors...
...PLANTATIONS ON THE RUN Although Hawaii remains the major pineapple producing area in the world, its share in the world market has dropped from two-thirds in 1950 to about one-third today, primarily because of expanding production in the Philippines...
...And when the Del Monte Directors met recently in Manila, Marcos had a personal consultation with them...
...economy...
...imperialism in the Pacific - the Philippine Islands...
...With this business as a nucleus, Del Monte soon became one of the three largest pineapple producers in the Islands...
...3 The labor requirements of the modern capitalist planta...
...Further, because their profits depend on control of vast landholdings and the exploitation of cheap labor, plantation operators like Del Monte must oppose progressive changes in the Third World, and consistently align themselves with the most conservative forces...
...With the days of making enormous profits from the labor of Asian-Hawaiian workers over, the pineapple companies reacted predictably...
...In 1956, seven years before its land leasing contract with the National Development Corporation was due to expire, the government renewed it for another twenty-five years (until 1988).12 When President Macapagal took office in 1962, he scrapped the earlier protectionist policies, and adopted a free trade, pro-foreign investment stance...
...has a large rice-growing operation, manufactures its own cans...
...This has created a situation where labor-intensive enterprises like Del Monte can thrive...
...companies could not hold agricultural lands.'s Marcos saved the day for Del Monte by acting swiftly to block the nationalist movement...
...When this limitation was written into the 1935 Constitution, the colonial government obligingly intervened on Del Monte's behalf to get around the restriction...
...In this situation, Del Monte found its most important ally in President Marcos...
...Under Del Monte's current contract, the land rental is still a fraction of its market value, and since it is set in pesos rather than dollars, the government's real income has decreased each time the peso has devalued...
...Some are now forced to work as hired labor on their own lands, and some remain unemployed, trying to subsist on the meager rent they receive from the company...
...The cooperation of the American military extended to providing Army engineers to construct a temporary dock to replace the company pier destroyed during the war...
...In 1973, for example, Del Monte and other pineapple producers, responding to world market conditions, cut back on exports from the Philippines by 20 percent...
...roads and railways ran from plantation to port...
...8 The post-war period saw a tremendous expansion in Del Monte's Philippine operations, along with the increasing penetration of US...
...Even after he left the firm to enter politics, Macapagal continued to maintain close relations with the head of Philpack.' 3 MARCOS: A CLOSE ALLY In the early 1970's, Del Monte's position was increasingly threatened by the growing strength of nationalist elements in the Philippine bourgeoisie...
...For Del Monte, Marcos' repressive labor policies provide security against the possibility of militancy on the part of the company's labor force...
...A major reason for this expansion has been the steadily rising wages won by cannery and agricultural workers in the Hawaiian pineapple industry in recent years...
...Dole has, in effect, brought Boston and Maine out to Hawaii with him...
...imperialism had secured its position in the Pacific, with the annexation of the Hawaiian Islands and the acquisition of the Philippines as a U.S...
...Almost immediately, the Employers Council and the Pineapple Growers Association mounted a counterattack on the ILWU, focused mainly on the pineapple industry...
...Furthermore, there is little evidence to support Del Monte's claim that its Hawaiian canning operations are not profitable...
...nationalism, the Philippines adopted a number of protectionist measures aimed at fostering some national development...
...HAWAII The economy of the Hawaiian Islands, where Del Monte acquired, its first plantation, was by 1900 already dominated by vast sugar plantations, most of them owned by the descendants of U.S...
...Del Monte's corporate executives undoubtedly heaved a sigh of relief when Marcos issued decrees reversing the court decision that would have prohibited US...
...Tens of thousands of Chinese, Japanese, and Filipino men and women were imported to the Islands...
...He has been hosted several times by the company at its Mindanao plantation, where he stays at the house reserved for the corporation's president...
...The NPA, which is the military arm of the newly constituted Philippine Communist Party, has developed a strong base among the peasantry of the northern islands, and Marcos has characterized the NPA as a serious threat to his regime's stability...
...At a national convention to draft a new constitution, several strong provisions limiting foreign investment were introduced, and these were supported by large popular demonstrations in Manila...
...hegemony in the Far East was firmly established, and Del Monte was able to move back into its old base in the Philippines...
...As head of the Philippine Senate in the early 1960's, Marcos made a reputation as a staunch defender of U.S...
...investors have been assured of the "stable" investment climate they need...
...During the war, the CIO-affiliated International Longshoremen's and Warehousemen's Union (ILWU) began a massive organizing drive among Hawaiian workers, including those in the sugar and pineapple industry...
...9 The company has also branched out into other areas: it conducts a broad range of tropical fruit and vegetable canning...
...imperialism has suffered serious cracks of late...
...Marcos has brought all unions directly under the control of the Philippine Labor Department, and has completely outlawed strikes in "strategic" industries (such as agribusiness) which are major foreign exchange earners...
...capitalists were also drawn by the rich natural resources of the Pacific Basin to make direct investments in production...
...Here, Del Monte found the ideal conditions for a lucrative venture: rich agricultural land in Mindanao, the largest and southernmost island in the Philippines...
...colonial dependency...
...Then, in the summer of 1972, nationalist forces won an important victory when the Philippine Supreme Court made several rulings that effectively voided U.S...
...mainland.' Eames, a farmer who had left California to homestead in the new colony, soon began his own pineapple plantations, and by 1906 had set up the Hawaiian Islands Packing Company...
...Del Monte also escaped from its obligation to pay the government a share of its profit...
...interests were exempted from a constitutional restriction on foreign exploitation of natural resources...
...Until the beginning of this century, Mindanao and the southern Philippine island of Sulu were inhabited exclusively by Moslem tribespeople...
...tions led to the creation of a new population of immigrants, who today make up the bulk of Hawaii's working class...
...Del Monte's plantations have thus far been spared from direct attack, since the heaviest fighting has taken place in adjacent provinces...
...Philpack's profit rate is a spectacular 33.4 percent, or four times that on consolidated equity in the U.S.2 The Philippines has become a key offshore production center allowing Del Monte to serve growing markets in the affluent countries: only an estimated 10 percent of its production is sold locally (including those canned goods that do not meet foreign health specifications) and 90 percent is exported...
...The article that follows discusses Del Monte's early expansion in Hawaii, where the company was a major force in shaping the Islands' economy as a U.S...
...As the company reported in 1949, it was able to rapidly reconstruct its cannery and plantations "thanks to the cooperation of General MacArthur and the assistance of our friends in the Philippine government...
...Del Monte highly commended the passage of the Philippine Trade Act in 1946, which reaffirmed the "free trade" policies that had made the country a supplier of agricultural Philippine President Marcos confers with Del Monte directors and executives19 commodities...
...Del Monte had a special friend in Macapagal, whose association with the company dated back thirty years...
...companies the right to "parity," that is, the same right as Filipinos to exploit the Islands' natural resources...
...and purchases tuna from local fishermen...
...Dissatisfied with the "indolence" of the remaining native Hawaiians, the planters turned to the Asian mainland as a limitless source of cheap but "reliable" agricultural workers...
...Wartime labor shortages were solved when, under the Islands' military government, authorities arranged for school children to work in Del Monte's fields and canneries.7 With the defeat of Japan, US...
...Sugar workers, faced with similar cutbacks, joined the pineapple workers for a massive strike in 1974 to protest the run-away plantations...
...THE PHILIPPINES When, in the early 1920's, an insect infestation threatened to wipe out Del Monte's pineapple fields in Hawaii, the company was forced to seek an alternative source of supply for the growing U.S...
...parity rights...
...Sanford then became the first president of the short-lived republic...
...Annexation also opened the way for other agricultural investors to exploit the land for export production...
...After this blow, Del Monte and the other companies kept the union in a weak position for the next 18 years, and held salary increases to a minimum...
...During the 1950's, in the midst of rising anti-U.S...
...It is regrettable that pineapples do not grow in Boston or Maine...
...missionaries and traders...
...expansion in the Pacific Basin...
...Moreover, the contract still sets the value of raw pineapple (the tax basis) at the 1938 level, which is about 95 percent less than the value of pineapples Del Monte produces in Hawaii.2 Although it can claim that its pineapple and banana exports bring sizeable foreign exchange earnings to the Philippines, Del Monte is in fact the main beneficiary, since the revenue is either repatriated as profits or plowed back into the company to finance expansion...
...For years, Del Monte, along with the "Big Five" sugar companies, resisted unionization...
...His cousin, Sanford Dole, had been one of the leaders of the 1893 "revolution," when white planters and merchants overthrew the Hawaiian monarchy with the help of U.S...
...The law gave U.S...
...Del Monte is the largest food company in the Philippines, and is also the leading exporter of two of the country's top ten foreign exchange earners - bananas and pineapples...
...From the beginning, Del Monte's ownership of the Mindanao plantation was in conflict with a long-standing Philippine law limiting corporate ownership of public agricultural lands (i.e., those considered to be previously unexploited) to 2,253 acres...
...The contract was written to apply only to profits made on raw pineapple, rather than the canned product, where the company makes most of its profit...
...Thus, when an all-Japanese or all-Filipino union went out on strike, the companies simply hired workers of another nationality...
...6 However, when the Japanese occupied Mindanao in 1942, Del Monte was forced to abandon its plantations and cannery...
...Finally, in 1965 and again in 1967, the long-exploited pineapple workers were able to mount successful strikes that won them the first significant wage and benefit increases...
...They were unable to stop the union drive, however, and in 1946 the ILWU succeeded in organizing both the sugar and pineapple industries...
...Many of those who do agree to lease to the company sign contracts without understanding the technicalities and terms of the contract...
...In both Hawaii and the Philippines, Del Monte was in the forefront of U.S...
...The NPA also presents a threat to Mindanao agribusiness interests like Del Monte, since its estimated 10,000 peasant members there are the same small and landless peasants who are being pushed off the land by agribusiness expansion...
...The challenge of rising nationalist sentiments came to a head in 1972...
...POLITICS AND PROFITS IN THE PHILIPPINES Today, Del Monte's privileged position in the Philippines is protected by the dictatorship of President Ferdinand Marcos...
...Del Monte's continuing expansion in the Philippines is a reflection of the lure of these super-profits, and a reminder of the corporation's tendency to roam the world in search of a more exploitable labor force whenever worker militancy threatens its profits...
...A short time later he set up a cannery to begin exporting the tropical fruit to the U.S...
...2 Along with the sugar industry, the pineapple companies made Hawaii into a US...
...But even before the advent of his martial law regime, dlel Monte had long relied on ties to the Philippine government and bourgeoisie which allowed the country's resources to be exploited by U.S...
...property and profits (including complete freedom from any restrictions on capital and profit repatriation...
...3 1 Even though the company has production facilities in every corner of the globe, Del Monte's corporate strategists realize that its position in many of these countries may not always be secure...
...The main alternative sources of pineapple supply are the Philippines in Asia, and Kenya in Africa - both areas where the protective shield of U.S...
...Today, modern agribusiness corporations like Del Monte are the successors to these colonial forms of exploitation...
...Filipino workers already familiar to the company from its California and Hawaii operations...
...But Mr...
...It then looks at the company's operations in the Philippines, where Del Monte's penetration has for fifty years pushed local people off the land, and where its historical reliance on special favors from the Philippine government today places the corporation in a strong alliance with the Marcos dictatorship...
...A 1930 Fortune article on the pineapple industry summed it up from the industry perspective: Hawaii has become so thoroughly Americanized that it is the few remaining natives who seem forlorn and foreign...
...In 1926, Del Monte created the Philippine Packing Corporation (Philpack), planted pineapples on large tracts of land in the Bukidnon province of Mindanao, and by 1930 Del Monte's cannery on the coast in Cagayan de Oro was packing and shipping canned pineapples to the U.S.s18 For the next three decades, Del Monte had a monopoly on the Philippine pineapple industry...
...Now they're using aerial sprays, harming farm animals and giving people terrible rashes.' * Although Del Monte refuses to release figures on the amount of acreage it controls, a recent UNCTAD study estimates that the company controls 12,230 acres of banana plantations in the Philippines, 2,530 of which it operates directly, and the rest of which is under contract.221 The consequences of this expansion are not only increasing social inequality, but also growing social unrest in the Mindanao countryside...
...corporations would be allowed no more than 40 percent ownership in their Philippine subsidiaries...
...1617 To explain the dynamics of modern agribusiness plantations, the last two articles of this Report will focus on Del Monte's plantation operations in the Pacific Basin and Guatemala...
...The main impetus behind this expansion was the desire of U.S...
...Dole proceeded to follow through with its cutback plans, closing down one plantation and putting 175 workers out of a job...
...2 1 An American priest, arrested for helping peasants resist, described the landgrabbing by U.S...
...They dominate vast tracts of land which are used to produce export crops, instead of being used to produce staple foods or to provide a source of income for the local population...
...In 1974, Del Monte's 2,500 cannery workers were paid only $1.20 a day for eight hours of work, the official industrial minimum wage...
...market, and whose labor force is one of the cheapest in the world...
...In addition tolosing their political independence, native Hawaiians were pushed off their lands, were killed off by white man's diseases, and became second-class citizens in their own land...
...1 For Del Monte, this is one more reason why its future in the Philippines rests on the continuing protection of martial law and the US.-backed Marcos regime...
...With anti-U.S...
...During colonial times, vast plantation systems controlled by foreign enterprises dominated the production and export of these agricultural commodities...
...The truth is more likely that Del Monte's Hawaii operations are less profitable than the Philippines, because a strong labor movement has prevented the high-level exploitation of workers the corporation finds so profitable under the Marcos government...
...Two of the pioneers of the pineapple industry were James Dole (whose Dole & Co...
...that they could not have direct representation on their subsidiaries' boards of directors...
...While the dominant capitalist countries have become independent industrial powers, the economies of many Third World countries have remained dependent on the export of agricultural commodities and raw materials...
...As long as Marcos can keep the lid on an explosive situation, the Philippines' importance is bound to increase, since its cheap labor provides an ideal haven for runaway plantations escaping an effective labor movement in Hawaii...
...duty free, while U.S...
...companies: They bulldozed people right off the land...
...One small pineapple company in Hawaii, with none of the advantages of the multinational corporations, reported a sixfold gain in earnings in 1972-1973...
...manufactured goods entering the Philippines would have the same privilege...
...and secondly, by Christian settlers from the northern islands, encouraged by the government to settle in Mindanao to relieve pressures for land reform in the north...
...To pressure small peasant holders to lease to the company, Del Monte's agents have threatened small peasant landholders that their farmlands would be encircled by the company and all access cut off if they refused to lease their lands to the company...
...and, in a direct blow to Del Monte, that US...
...Thus, the stage was set for the emergence of the pineapple industry, a new and powerful force that, along with the sugar industry, was to shape the Islands' political, economic, and social structure...
...Del Monte, however, continued to delay the cutback, and has recently announced it may continue Hawaiian operations in full force until 1985.25 But the reason for the turn-around has nothing to do with Del Monte's concern for its workers' welfare or the possible adverse effect on the Islands' economy...
...territory...
...markets...
...But because only the highest quality fruit can be exported to the fresh market, the cannery will be maintained to provide a profitable outlet for lower quality fruit...
...Thus, while other American interests were prevented by law from directly controlling large plantations, Del Monte's exploitation of the land was protected for decades to come.10 Formal independence in 1946 did little to alter the Philippines' status as an appendage to the U.S...
...nationalism held in check by the martial law regime, U.S...
...Dole left his home in New England to settle in the Islands, where his family connections undoubtedly proved useful in setting up his business venture...
...Besides expanding its pineapple acreage, Del Monte (along with its two main competitors, United Brands and Castle & Cooke) has gained control over vast new banana plantations* to supply the rapidly growing nearby Japanese market...
...These corporations exert enormous control over the economic life of countries where they operate, and often control their most important sources of foreign exchange...
...30 The company's decision to remain in Hawaii also reflects Del Monte's generally cautious strategy of keeping all its options open...
...Soon after, the Corporation subleased 17,429 acres of prime "public" lands in Mindanao to Del Monte, on highly favorable terms - even though the NDC was not empowered to sublease lands, much less those in excess of the constitutional limit...
...and the political and economic stability guaranteed by the Islands' status as a U.S...
...Claiming the wage increase would make their operations unprofitable, both Dole and Del Monte announced plans in early 1973 to close a significant part of their plantation and cannery operations - a move that would mean the loss of thousands of jobs...
...By 1937, Philpack was exporting $1.7 million worth of canned pineapples, and the company was a major supplier for Del Monte's world markets...
...multinationals dominate - agriculture and labor-intensive light industry...
...The strike, however, had no effect on the companies' decisions, since without some coordination with workers in other countries like the Philippines, Hawaiian workers had little leverage on the multinationals...
...4 They and their descendants became the workforce that made sugar and pineapple the Islands' most important industries, and made Hawaii one of Del Monte's most lucrative profit centers...
...But this time, the strategy was to organize workers of all races into one union...
...In September, he declared martial law, adjourned Congress, and undertook a massive round-up of his political opponents...
...Reflecting the drive to constantly broaden its options, Del Monte will next year begin pineapple production in Guatemala 3 2 - a country whose location gives it convenient access to the U.S...
...Philippine agricultural exports were to be allowed into the U.S...
...Since the * The land reform plan was originally supposed to benefit about one million peasant tenant farmers, but in fact only 15,000 tenants have actually obtained title to their lands...
...territory...
...In other cases, local officials have facilitated the company's landgrabbing by refusing to process disputed land titles unless the farmers agree to lease to Del Monte...
...Not to be deterred by wartime hostilities, Del Monte stepped up production in Hawaii to make up for the loss of the Philippines...
...agribusiness when he blocked nationalist moves to prevent the expansion of pineapple plantations in Mindanao...
...The pineapple business flourished, and it wasn't long before the Eames family business linked up with the emerging forces of monopoly capitalism on the mainland...
...Prior to the War, organizing had been done along ethnic lines...
...However, since 1974 another guerrilla force, the New People's Army (NPA), has begun operating in precisely those areas where Del Monte's facilities are located - in Davao and Bukidnon...
...Del Monte operates a network of plantations that stretches from Africa, to Central America, to Asia...
...But even more significant for Del Monte, the Marcos "development" strategy has been tailored to correspond to the interests of U.S...
...interests...
...The court ruled that U.S...
...Observers in Bukidnon report that Del Monte's attempts to gain control of land have been characterized by strong-arm tactics and intimidation...
...As in California, divide and conquer was a main technique, and the companies constantly tried to exacerbate conflicts between the different ethnic groups...
...While this did not hurt the company's profit picture, it was a si nificant setback for the country's foreign trade balance...
...In response to booming world demand and high prices for fresh fruit like pineapples, Del Monte has decided to focus its Hawaii operations on fresh fruit production...
...But Del Monte once again proved to have privileged status...
...Recognizing their common interest in resisting unionization, the Big Five and Del Monte set up the Hawaii Employers' Council in 1943 to coordinate their anti-union strategies...
...was later acquired by the agribusiness firm Castle & Cooke), and Alfred Eames, whose son and grandson were later to become presidents of Del Monte...
...Even more important to Del Monte, U.S...
...In Mindanao, where land pressure is already acute in many areas, the impact of this new penetration has been disastrous for many small farmers...
...In 1937, the government created a special body, the National Development Corporation (NDC), which was empowered to hold public agricultural lands in excess of the established limit...
...But for the 3,000 (out of a total of 5,000) pineapple plantation workers who are "casuals," without right to permanent employment, wages were below the official minimum of $1 for field workers.' 7 STRUGGLE IN MINDANAO Since the early 1970's, Mindanao has been the focus of an armed struggle led by the Moro (Moslem) National Liberation Front (MNLF...
...business interests to gain access to the Far Eastern markets...
...In 1917, when Del Monte had consolidated its position in the California canning industry, it took over the Hawaiian Islands Packing Company...
...The economic "development" that did occur was warped to serve the needs of agribusiness exporters...
...By 1972, Hawaii's agricultural workers had become the highest paid in the world (though22 Workers at Del Monte cannery in Hawaii they also had one of the highest livin costs in the world), earning an average of about $30 a day...
...operates a trucking fleet...
...There are also an estimated three million landless peasants in the Philippines who are not included in the plan.20 Moro National Liberation Front (MNLF) guerrillas declaration of martial law, about two-thirds of the Philippine army has been deployed in Mindanao, along with a sizeable force of the Philippine Constabulary, the national police...
...As one company vice-president commented on the decision to stay in Hawaii, "No company can afford to put all its eggs in one basket...
...Although the Depression made sales of pineapples plunge and caused Del Monte to temporarily convert the plant to tuna production, by 1934 pineapple sales were booming...
...Like the Hawaiian sugar industry, the pineapple industry was started by a handful of entrepreneurs, who at the outset had few connections with mainland finance and capital...
...Like their colonial predecessors, modem agribusiness plantations such as Del Monte's are a major obstacle to development in the Third World...
...In 1901, James Dole planted the first pineapples on the Islands (the plant being native to South America...
...And second, Marcos' land reform program, supposedly designed to improve the plight of hundreds of thousands of impoverished sharecroppers, applies only to lands devoted to the cultivation of rice and corn, thus exempting the two-thirds of Philippine agricultural lands used by multinationals like Del Monte to grow export crops.*E6 Along with completely curtailing civil liberties, martial law has meant a harsh crackdown on the labor movement...
...In order to implement its new marketing strategy, Del Monte recently purchased the Hawaii-based Aloha Papaya Company, a large distributor of fresh tropical fruit on the mainland...
...When Del Monte first arrived in the Philippines, it shared offices in Manila with its law firm, Ross, Selph and Carrascoco...
...Local farmers who have refused to abandon their fields have seen their lands fenced and cattle driven onto their cultivated fields by Del Monte employees protected by armed guards...
...companies which moved in to exploit the fertile lands and develop an export-oriented plantation economy...
...In fact, formal annexation of the Islands in 1898 was largely due to the lobbying efforts of the sugar planters, who wanted duty-free access to mainland U.S...
...They maneuvered the union into a five day lock-out in 1947, and when thousands of unorganized seasonal workers crossed the picket line the strike was broken...
...For the years covered by Del Monte's first contract with the National Development Corporation (1937-56), the company paid the ridiculously low annual rental of about $40,000 for over 17,000 acres of prime land...
...As President, Marcos has had close personal ties with Del Monte...
...Thus, the MNLF sees its insurgency both as a struggle for self-determination against government-backed land colonization, and as an anti-imperialist struggle against the incursion'of agribusiness interests like Del Monte.' The massive government military presence on Mindanao is an indicator of the high priority the Marcos regime places on protecting the status quo in the region...
...agricultural outpost in the Pacific - one vast plantation producing luxury foods for the mainland...
...But U.S...
...One of the firm's attorneys was the young Macapagal...
...The impact on the indigenous society was disastrous...
...First, the cornerstone of Marcos' Five Year Development Plan is increasing exports in two sectors where U.S...
...The Philippines is today one of Del Monte's most profitable operations...
...produces livestock feed from pineapple waste and operates one of the country's largest cattle feedlots...
...Rather, it flows out of the corporation's long-term growth strategy...
...marines...
...Del Monte's expansion in Mindanao in the last several years has spurred a process that is characteristic of current agribusiness penetration throughout the Third World - small peasant farmers are being pushed off their lands and often turned into wage laborers, and land is being concentrated into ever larger holdings...
...capital accounting for one third the invested capital in the country's 900 largest corporations...
...See photo...
...In addition to starting plantations in Haiti (which were sold several years later), the company turned its attention to another outpost of U.S...
...In its position as a major exporter, the company naturally acts to maximize its profits on a global scale, regardless of the detrimental impact this may have on the country's foreign trade position...
...The terms of the company's land leasing and tax arrangements are an example of how the company minimizes its contribution to the Philippine economy in order to maximize its own profits...
...PACIFIC BASIN EXPANSION The early history of Del Monte's plantation operations is also the story of US...
...Today U.S.-based multinationals dominate the Philippine economy, with U.S...
...Whereas in California Del Monte and other agribusiness interests had been successful in the '30's and '40's in smashing union drives in the fields and undercutting their militancy in the canneries, in Hawaii the story was somewhat different...
...By the early 1900's, U.S...
...PROFITS ARE A ONE-WAY STREET After decades of exploiting the country's natural resources, Del Monte has left behind little of the wealth created by its operations...
...In succeeding decades, however, the native inhabitants, without the protection of formal land titles, were progressively pushed off their lands - first, by the penetration of corporations like Del Monte, whose executives looked upon the rich lands as "untamed tropical wilderness...
...land ownership, and ensuring the safety of U.S...
Vol. 10 • September 1976 • No. 7
