Banana-Growers Want to Bypass Big Middlemen

By Néfer Muñoz, IPS, 26 October 2000

SAN JOSE, Oct 26 (IPS) - Independent farmers in Costa Rica should find a way to sell their fruit directly to U.S. and European markets, in order to break the grasp of transnational corporations as middlemen, representatives of the main banana-growers association told IPS.

Given the current crisis shaking the international market for bananas, independent growers in Costa Rica -- the world's second biggest producer of bananas -- see a need to develop a long-term strategy for selling their fruit directly to large supermarket chains.

Luis Umaña, vice-president of Costa Rica's Chamber of Independent Banana Producers, said in an interview with IPS that as intermediaries, U.S. transnational corporations are pressing the slumping global prices down even further.

In the last two years, the price of a box of Costa Rican bananas has fallen from between 5.80 and 6.00 dollars to a range of 5.20 to 5.35 dollars.

"This is a fight between a fettered donkey and a loose tiger," said Umaña, who urged the government to support the growers in a future plan to market their goods directly, without middlemen.

Umaña said the large U.S. and European supermarket chains are important actors in today's market, to which local producers should sell their bananas directly.

Latin America's banana-growers have been hit hard by the current crisis caused by a flooded market, low international prices and the recent European Union (EU) decision to adopt a new quota system under which import licences would be allocated on a "first-come, first-served" basis.

In Central America, Costa Rica has felt the greatest impact, with the threat of mass dismissals of workers and setbacks to progress on banana industry-related environmental and labour rights questions.

Ten years ago, the bananas grown on Costa Rican plantations were sold entirely to three U.S. transnational corporations: Standard Fruit Company, Del Monte and Chiquita Brands, which export the bananas.

But today, 19 percent of the bananas grown by independent producers are directly marketed abroad -- a proportion that could grow, said Umaña, since independent banana farmers account for 58 percent of the more than 100 million 18.14-kg boxes exported annually by Costa Rica.

This week, the three giant fruit companies recommended that Costa Rica scale back its banana plantations by 25 percent, or 10,000 hectares, and sack 5,000 workers in order to shore up the country's competitiveness on the world market.

Some 48,000 hectares are currently under banana cultivation, directly employing 40,000 people, and indirectly creating jobs for another 100,000 in this country of 3.5 million.

With that backdrop of uncertainty regarding the fate of thousands of workers, Costa Rica's Deputy Minister of Foreign Trade Anabel Gonzalez told IPS that two measures could give banana producers a boost.

"Direct marketing would certainly be one possibility, and the second would be a higher level of processing of the fruit," she said.

But Gonzalez stressed that since past efforts to sell local bananas without middlemen have fallen flat, a future strategy would have to be carefully studied.

"We must also be careful regarding the government's eventual participation in that kind of activity, because I really don't believe that this should be part of the government's business," she added.

Authorities believe one solution that should be studied is to sell bananas with greater added value, not simply as raw materials, but with some degree of processing.

Central America's other banana producers -- Guatemala, Honduras, Nicaragua and Panama -- are also worried about the future.

In Panama, the world's fourth largest producer, authorities estimate that this year's exports will be 12 percent down from last year's 33.7 million boxes.

"The activity of the banana sector in Panama is also in the grip of its worst crisis," Diana Kieswetter, director-general of bananas in Panama's Economy Ministry, told IPS.

Kieswetter said that by yearend, the 14,000 hectares currently planted in bananas would be reduced by 500 hectares.

Guatemalan Economy Minister Eduardo Weymann blames the current crisis on the EU's zeal to protect former European colonies in Africa and the Caribbean, which he says has brought "serious repercussions for Guatemala's banana exports."

Guatemala currently has nearly 20,000 hectares devoted to cultivation of the fruit, with annual banana exports of over 49 million dollars. (END/IPS/tra-so/nms/sw/00)