New Internationalist

Battle Of The Banana

Issue 317

new internationalist
issue 317 - October 1999

The Battle of the Banana
Corporate coups and the rise and fall of political regimes -
all par for the course in the ongoing war to control the banana trade.

Business in bunches
In 1870 Captain Lorenzo Dow Baker landed the schooner Telegraph in Jamaica and saw that bananas were popular on local markets. He purchased 160 bunches for one shilling per stalk on Port Antonio docks; 11 days later he sold bunches for two dollars each in Jersey City, making a huge profit. The legendary bounty of the banana trade was established. Bananas were shipped to Boston and New Orleans from Cuba and the Dominican Republic as well as Jamaica. By 1898 some 16 million bunches were being imported into the US.

 

Uncrowned king
In 1899 the United Fruit Company (UFCO) was formed in Boston and began to develop its own plantations in Central America. In Costa Rica, Minor Keith did a deal with the Government to build - with great loss of life - a railway to the Atlantic coast and planted bananas beside the track. He married the daughter of the President and became known as the 'Uncrowned King of Central America'. UFCO's 'Great White Fleet' totalled 95 ships by 1930. Panama disease or wilting first destroyed banana farms in 1900, and continued to create major problems for UFCO's banana plantations thereafter.

 

Sam the Man
Samuel Zemurray - 'Sam the Banana Man' - went to Honduras in 1905, where he financed a coup that brought very favourable concessions for his developing banana business. He pioneered new plantation techniques, and in 1915 began production from large new landholdings in the Motagua Valley, on the disputed Honduras/ Guatemala border. In 1930 United Fruit bought out Zemurray's holdings for $31.5 million; in 1933, as the largest shareholder, he became UFCO's Managing Director. By then the company owned plantations the size of Switzerland in Central America and the Caribbean.

 

Imperial unease
The British Government became worried about US influence in its Caribbean colonies. In 1901 it provided a large subsidy for the Elder Dempster shipping company to begin a refrigerated service to Jamaica (pictured right). In 1913 the Fyffes company was created for the banana trade, but it ran into financial difficulties and was taken over - by United Fruit. The Imperial Economic Committee in London reported in 1926 that an 'organization under American control monopolizes the whole supply of bananas from Central America and Jamaica to the United Kingdom'. A strategy of providing financial assistance to associations of banana growers, who would supply the British market independently of UFCO, was implemented. By 1938 Jamaica produced 78 per cent of British imports.

 

War of the Worlds
The Second World War brought the banana trade to a halt - boats were requisitioned for the war effort and shipping was disrupted, causing great hardship in the region. In 1945 bananas returned again to Britain, shipped from Jamaica under the control of the Ministry of Food. The Moyne Commission published its pre-war findings on the dreadful conditions in Britain's West Indian colonies. It recommended financial support for small-scale banana production, particularly in the Windward Islands. On 6 December 1950 a ship arrived at Liverpool from Sierra Leone with a cargo of bananas of which 78,000 were too ripe; 3,000 dock workers were asked to eat all they could and got through 37,000. The British taste for bananas had survived the war.

 

Carve-up
In 1952 the British Government 're-privatized' the banana industry. Imports paid for in US dollars - which, in bankrupt Britain, were extremely scarce - required a licence. In 1954 Geest, a company owned by Dutch brothers based in Britain, signed a ten-year contract with all the growers' associations operating in the Windward Islands. In 1958 the Windward Islands Banana Growers' Association (WINBAN) based in St Lucia was formed. By 1959 banana imports to Britain had for the first time surpassed the pre-war high. Between 1964 and 1966 a mini Banana War broke out between Geest and Fyffes, who eventually agreed to split the British market between them. In 1969 Fyffes unilaterally broke its contract with Jamaica, importing low-cost fruit from Côte d'Ivoire and Surinam instead.

 

Miss Chiquita Miss Chiquita
UFCO launched a 'Miss Chiquita' (pictured right) advertising campaign in the US in 1944. Technical changes were also made to the production process. In 1961 bananas were pre-cut and placed in boxes instead of bunches, to protect against bruising. Following a period of unrest on its plantations, in 1954 the company orchestrated a coup against the Government of Guatemala. After an anti-trust suit in 1958, UFCO was slowly broken up into the 'Big Three' banana companies. Between them, they increased their domination of the European market, by now the world's largest importer. All three were subsequently absorbed into a succession of multinational conglomerates.

 

Bust and boom
The Windward Islands faced two major setbacks in 1973; the oil crisis which increased the cost of shipping and chemical inputs, and the accession of Britain to the European Economic Community. Here it joined France, whose 'Overseas Departments' in Martinique and Guadeloupe were guaranteed two-thirds of the French banana market. Britain negotiated a 20-per-cent tariff on 'dollar' bananas. Then, in 1975, the first Lomé Convention guaranteed 42 former colonies in Africa, the Caribbean and Pacific ('ACP') trading terms on a par with the best of the preceding years. From the late 1970s to the early 1990s a 'banana boom' swept the Windward Islands.

 

Rules of engagement
In 1992 the Single European Market and European Union (EU) were designed to remove internal trade barriers. A single new banana 'regime' imposed tariffs and quotas for each exporting country, overall quotas for 'dollar' bananas and 'traditional' or ACP countries, plus additional tradable licenses. Chiquita decided to oppose the new EU regime altogether at the World Trade Organization (WTO) after it was established in 1995. On three separate occasions the WTO has found against the EU regime. In early 1999 Chiquita persuaded the US Government to impose punitive import tariffs on EU imports. The latest skirmish in the Banana War continues, with another adjudication from the WTO expected in November. During the 1990s, however, an increasingly effective international network of trade unions, campaigns, organic and fair-trade producers has joined the fray to change the rules of engagement.

 

Sources: Stephen Schlesinger and Stephen Kinzer, Bitter Fruit, Sinclair Browne, London, 1982; Lawrence S Grossman, The Political Ecology of Bananas, University of North Carolina Press, Chapel Hill and London, 1998; Green Gold, Latin America Bureau, London, 1987.

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