The Banana Saga (Part I)

by Edwin Laurent, Brussels

On December 30, the Government of Ecuador, the world’s largest banana exporter, announced the price to be paid to growers until the 31 March 2005, it is US$ 2.91 a price that includes the cost of the box!

Most of Ecuador’s 4 million tonne exports are sold on the world market but a quarter end up in the European Union (EU). There, along with bananas from Columbia, Costa Rica, Panama and other Latin American producers they account for 80% of imports. The EU market is attractive because its prices are over 60% higher than those existing on the over-supplied work market. Logically the EU should be flooded with cheap bananas, but this has not happened simply because imports are restricted by quotas. {{more}}A consequent benefit is that although Windward Islands’ bananas cost US$9 – $10 per box, they can still be sold once they meet the stringent quality standards. That situation which seems to defy the laws of the marketplace, did not just happen accidentally, but was the outcome of a major struggle that dominated the early years of the WTO.

New threats to the EU’s banana regime are currently looming. Ironically, that ongoing conflict and the value and fragility of the marketing arrangements have not always been understood even in the Windward Islands. It is therefore essential that we remain informed of the international developments which can have a fundamental impact on our economic national interests.

Recently, on an inter-island flight, I had a discussion with a Vincentian lady who seemed to embody the best prospects of our islands: young, intelligent, articulate and clearly ambitious – she was pursuing, in addition to her full-time job, a course in Business Administration. She shared with me her vision of our countries’ economic future and development path in which the banana industry, however, did not feature. Did she arrive at that position because she associated the industry with a bygone era, with backwardness or was it because she concluded that it cannot be internationally competitive? I probably will never know for the plane landed and we exchanged final goodbyes at the airport.

I was a bit disturbed by our chat even if it had enlivened an otherwise dull journey and provided insight into the perspectives of those who might be seen as the progressives in our society. She seemed oblivious to the epic battle tenaciously waged by our countries’ leaders and overseas representatives in Brussels, Geneva and Washington, that secured our continuing ability to trade in bananas. Whilst these were merely doing their duty, should not the role of those Governments, European Parliamentarians, NGOs and journalists who had supported us be recognized? Should we remain indifferent to their efforts? They fought for us, not out of self-interest but because they were convinced of the justice of our cause in the ‘David and Goliath’ encounter that pitted our small islands against the formidable alliance of the multinational companies, the US and the Central American banana plantations. The reasonably favourable outcome of the longest, most complex and acrimonious international trade dispute of recent years should not be taken for granted. It could well have been quite different and we would have lost our protected banana market a long time ago. Just think how different life would have been for all of us.

During the campaign we were able to secure international support by citing the vast numbers of farmers, workers and their families who earn a living from the banana industry. We stressed the importance of the foreign exchange receipts and the industry’s contribution to economic and social stability and the disastrous consequences of a precipitate collapse of such a pillar of our economy. The banana industry is more important to us than any single industry such as the automotive, textiles or even agriculture is to developed countries like the US, Japan, France etc. However, these countries would never be denied the right to defend their “national interests” and it is something they do not have the slightest hesitation in doing. Even though our countries are small, our trading rights are just as inviolable as those of the most powerful countries, although it is so much more difficult for us to effectively defend them.

But maybe my travelling companion viewed the battles as being fought in vain because she did not see value in what the islands were fighting to preserve. The farmers view things differently. They certainly understand the value of the jobs and the weekly income that comes from bananas and circulates throughout the economy. Some, like a friend of mine who retired to Saint Lucia from the UK with his savings and who invested in a banana farm, gave up the struggle in the face of stagnating market prices and rising costs particularly of workers who do not give a fair day’s work for a full day’s pay. Those who persevere continue to struggle on to make ends meet but are worried about a future that they cannot foresee or even understand.

The Vincentian lady, with youth and education on her side, has opportunities whether at home or abroad. But farmers and workers who, without other skills or fat bank accounts, sadly have no option outside of agriculture. Should the banana export industry be lost before viable replacement sources of income and employment are identified and developed, many of our people would be condemned to unemployment and hopelessness. The battle to save the banana industry must therefore continue. We have no choice. However it can only be won if we are fully committed to it, understand and master its domestic character and especially its full international dynamics.

When OECS Heads of Government met last November in the British Virgin Islands, they recognized the urgent need for fuller public understanding of the real situation with bananas. As a modest contribution to that objective, I will in the coming weeks be exploring relevant aspects of the banana negotiations. My aim is to make the process more understandable to all, both to the public and to the farmers who are faced with tough choices that will impact on the livelihood and welfare of their families and workers. In the coming weeks, I will review the case for supporting and safeguarding our banana industry, the threats to our market in Europe, the requirements for diversification, try to make sense of what is going on and finally assess the prospects for the future.

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