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No goodwill in United Kingdom

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In my previous column, I began looking at the perilous situation where the European regulations (banana marketing regime) governing the access of our bananas to the European/British market are concerned. In particular, the actions of the European Commission to seek an agreement with Latin American banana-exporting nations which would undermine any advantage offered by the recently-signed EPA constitute a major and imminent threat to the survival of the banana industry in these islands.{{more}} Worse, it can mean the overnight wiping out of the livelihood of thousands of farm families, whether in Castle Bruce, Dominica, Dennery in St. Lucia or the Marriaqua valley in St. Vincent.

But this is not the only danger. Developments on the British market itself are far from encouraging. The banana market of the 21st century is a far cry from the market of the early nineties. Today, in most of the European countries, and in Britain especially, it is the giant supermarket chains-TESCO, ASDA (Walmart), SAINBURYS etc. which call the shots. They have become the dominant force in the retail business, not just in food, but in a wide range of consumer variables. They even provide financing, operate gas stations, sell clothing and other consumer items.

This has fuelled intense competition between these giants. Given the popularity of bananas as a fresh fruit and growing consumer consciousness, our delicious banana is often used to attract consumers. So there are often discounts on banana prices. The problem for us is that the supermarkets do not absorb this price cuts, they use their muscle to force ripeners and supplies like WIBDECO to lower prices. These lower prices are in turn passed on to our farmers, the bottom of the banana chain. Even as I write, WIBDECO and other suppliers and ripeners are complaining about the intransigence of the supermarkets. This is part of what is described as “the race to the bottom.”

We in the Windwards have been able to survive over the past eight years or so because WINFA had the foresight to recognize growing trends and to tap the FAIRTRADE market. Unfortunately, the advantage we had is being eroded as the supermarkets, led by SAINSBURYS, moved to mainstream Fairtrade. Whereas in the UK, Fairtrade bananas were largely, not exclusively, associated with the Windward Islands, now the pressures are on for more and more sources, including plantations in Latin America, to get Fairtrade certification. So there is now competition in Fairtrade

It means that the same Latin American competitors, who have used their low production costs (built on cheap labour and poor social conditions in the banana communities), to muscle us out of the conventional market, are now competing against us with a cheaper Fairtrade banana. It is a matter which needs to be addressed urgently with the certification body and other major stakeholders in the industry.

All this is compounding the already critical situation. Yet there is more. The recession hitting Britain and Europe is having its toll on consumer spending as well. Even persons who would normally pay more for Fairtrade products must now balance principle and conscience as against affordability. Many will still choose Fairtrade but perhaps in smaller quantities. Then there is the declining value of the British pound with its negative effects on banana taking. Even WIBDECO is complaining that this combination of factors is “eating into its profits.” That is bad for WIBDECO and for us as well. But it is even worse for farmers, for they have no profits, no reserves, to tide them through the storm. 2009 is, therefore, going to be another battleground year. With Tourism under threat (St. Lucia is already bawling), we cannot afford to lose the banana industry, or any other industry in fact. Those who misguidedly look at statistics such as banana’s contributions to GDP (I heard quite a bit of this in the Budget debate), the relative growth of the non-banana sector, and the regional banana trade, to come to a conclusion that we should give up on the European market do not understand the overall importance and impact of the banana industry to rural life in the Windward islands.

Regrettably, this misconception is shared by too many of our policy makers and bureaucrats as we shall see in the final part of this article next week.

Renwick Rose is a community activist and social commentator.

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