“Come Mr. Tallyman tally me banana,
Daylight come and me wan go home.”
Harry Belafonte’s “Day O” lament typifies the plight of the banana worker who labors long, arduous hours and receives some of the lowest pay among agricultural workers. Yet, as exploitative and laborious as it is, the banana industry has provided livelihoods for thousands of peasant farmers in the Caribbean basin, especially the Windward Islands — the four island states of Dominica, St. Lucia, St. Vincent and the Grenadines and Grenada.
That industry is about to undergo changes that may affect its very existence. Under the banner of free trade, the United States, backed by big banana interests, has pressured the UK and European Union to drop the traditional import quotas on bananas that have kept the industry alive in some of the Caribbean’s smallest states. This could sound the death knell for the Caribbean banana industry.
A short history of bananas
Bananas were introduced to the Caribbean islands by British colonialism after the collapse of the sugar industry there in the 1930s and ’40s, when Northern European farmers started growing sugar beets, encouraged by tempting state subsidies. Bananas were a means of providing a source of island revenue and eased colonial expenditures on the islands.
Today, in the post-independence Caribbean, bananas remain one of the most important commodities, particularly for the smallest states, feeding thousands of families in the most economically depressed areas. Before its expiration in 2003, the Lome trade convention (signed in 1975 in the Togolese capital of Lome) provided for a traditional arrangement allowing preferential access to European markets for former colonies, thereby safeguarding the livelihoods of thousands of people and sustaining the economy of the Small Island Developing States of the Caribbean. While some regard the preferential access as an arrangement that cements dependency, many in the region see it as a sort of reparations for many centuries of exploitation of Caribbean people.
The Lome provision has been the lifeblood of Caribbean bananas, which are otherwise unable to compete with the products from Latin American plantations. The European market is particularly important to the small economies of the Windward Islands, where income from banana exports to Europe contributes almost half of the islands’ total export earnings. Nearly 30 percent of the Windward Islands’ cultivated area is under banana cultivation. The fruit also constitutes a significant share of earnings for much of rural Jamaica.
Farmers in a ‘race to the bottom’
In an attempt to develop a contingency plan to deal with these impending changes, officials from the Caribbean, Latin America and Europe met in Brussels in April to examine critical issues affecting the industry. At the top of the agenda of the Second International Banana Conference was the long-running dispute over the marketing of bananas in Europe and increasing competition among banana multinationals and giant supermarket chains. This increased competition has resulted in driving down the prices being paid to small farmers, causing many to abandon banana farming.
In a show of Latin American and Caribbean unity, organizers of the meeting, which involved the Windward Island Farmers Association (WINFA), European Banana Action Network (EUROBAN), and Coordinating Center of Latin America Banana Workers’ Unions (COLSIBA), say they are seeking to reverse “a race to the bottom” in the industry. Organizers say they want to promote mechanisms for a socially, economically and environmentally sustainable banana trade worldwide.
Bananas are among the world’s top five most important traded fruit, second only to grapes. World banana production amounts to some 65 million tons per year, concentrated in Africa, Asia, the Caribbean and Latin America because of favorable growing conditions. Because bananas are so tender, larger yield is typically a result of increasing chemical use. It is estimated that an average of 280 different pesticides are currently authorized in banana cultivation.
Five multinationals — Chiquita, Dole, Del Monte, Noboa, and Fyffes — control 80 percent of the international banana trade. The top three corporations exert a virtual monopoly on Latin American plantations. Their products are commonly referred to as “dollar bananas.” Low wages, job insecurity, excessively long working hours, and denial of trade union rights and freedom of association are hallmarks of these corporations’ practices in Latin America.
It is largely because of the dirty practices of Chiquita and its processor, United Fruit Company (UFC), in Latin America that the sordid term “banana republic” was introduced in contemporary political economy discourse. UFC played a central role in coups de état, stealing of elections, union busting and other anti-democratic actions in Latin American countries.
Banana agribusinesses expatriate most of the profits from producer countries. Only 12 percent of revenues remain in the countries. Plantation workers only take home 7-10 percent, while small farmers get only 1-2 percent.
While Latin American bananas are grown on large plantations controlled by these large corporations, Caribbean bananas are grown on small family farms and cooperatives, with union representation. Most Latin American bananas are marketed in North America; Caribbean bananas are sold to the European market, particularly the UK. The cost of farm labor in the Eastern Caribbean (about $15 per day) exceeds prevailing wages in Latin America, where banana workers rarely earn more than $5 a day.
Banana producers are constantly pressured to produce at lower prices and push wages down in order to drop prices, but the industry is a lucrative business for the multinationals. While the current legal minimum price paid to a producer for a box of bananas in Ecuador is $2.90, the same box will then sell in a British supermarket for about $25.00, with the supermarket taking 40 percent of the final price.
Bananalink, a public advocacy group focusing on sustainable banana trade, estimates that the British supermarket retailer Tesco makes about 1 million pounds profit per week from banana sales, enough to employ 30,000 full-time banana plantation workers at a living wage (which would be about twice what they’re paid currently).
Wal-Mart enters the picture
A major concern of Windward Island banana growers is the acquisition of Asda, the UK’s third leading supermarket chain, by Wal-Mart. Asda’s exclusive contract for Del Monte’s bananas from some of the world’s cheapest sources has already started a retail price war that has caused consumer prices for loose bananas to drop by more than a quarter.
“What they want to do is to drive everyone out of the market and then to raise the prices. The people who supply Wal-Mart are paying people starvation wages in Central America and Latin America” in deplorable conditions, said Dr. Ralph Gonsalves, prime minister of St Vincent and the Grenadines, in 2003 after the Wal-Mart Asda takeover, commenting on the negative effect on the islands’ economy.
Fair trade, not ‘free’ trade
The WTO will decide on preferential access at a meeting this December. Hardly anyone expects it will move in a favorable direction for Caribbean growers. Many see the U.S. and Chiquita targeting Caribbean bananas as part of a wider plan — CAFTA and, ultimately, FTAA.
With the stakes against them, many in the Caribbean are hoping for a fair trade alternative while making a simultaneous effort at economic diversification. The fair trade movement promotes trading partnerships that aim at sustainable development for excluded and disadvantaged producers. It seeks to provide better trading conditions by raising awareness.
Fair trade has had six-fold growth in banana exports since the inception of the grassroots association with Windward Island banana producers in 2000. The fair trade movement aims to help alleviate poverty in developing countries by building direct relationships with disadvantaged producers and fair access to markets in Europe and North America. Under the arrangement, conscientious consumers in the developing countries pay more for bananas than they would for “dollar bananas” distributed by the agribusiness multinationals.
The price is calculated to cover the farmers’ costs of production, even if the world market price fluctuates. Moreover, fair trade producers generate a social premium corresponding to the amount of goods that they sell under the fair trade label. This premium is reinvested locally, for example, building schools, strengthening collectivism, raising awareness on environmental and economic literary issues, and providing local assistance such as community centers and helping poor families pay for school.
The fair trade movement continues to grow in leaps and bounds. Fair trade bananas totaled 11.5 million tons in 2002. Four of every 100 bananas sold in the UK now carry the fair trade label.
Many workers in Latin American and Caribbean have not fallen for the divide and conquer strategy of capitalist globalization. In a joint CARICOM-Mercosur meeting in March, delegates signed a joint communiqué agreeing that certain special goods or sensitive products must be given preferential treatment, and set themselves a December deadline to iron out remaining differences on the issue. And on May 31, 50,000 Costa Ricans protested against the prospect of ratification of CAFTA by the U.S. Congress. Of particular concern is CAFTA’s weak workers’ rights provisions for an area already suffering from appalling disregard of labor laws.