New Internationalist

One Short Of A Bunch

Issue 317

new internationalist
issue 317 - October 1999

One short of a bunch
David Ransom argues that the banana multinationals are in big trouble –
and greenwashing is no substitute for an alternative that already exists.

Washing bananas in Ecuador.
PAUL SMITH / PANOS PICTURES

If you travel as I did from plantation workers in Guatemala to small farmers in Dominica and fair-trade organic growers in the Dominican Republic, it is blindingly obvious – you’re moving away from a landscape that is best left behind, towards a more desirable and sustainable future. You are also rediscovering how millions of people grow most of the world’s bananas without getting into the kind of mess that plagues the international business.

What is it that attracts world trade so unfailingly to the worst option? Why on earth should the self-styled ‘modernizers’ of Chiquita, Dole and Del Monte be so anxious to retreat into the distant past? The fact that they appear to have no choice seems to me to be a symptom of terminal decline in an obsolete industry.

This may sound like mere wishful thinking. After all, the fact of the matter is that the Big Three are extremely efficient producers of cheap bananas which they export into a rapidly expanding and lucrative market. And conventional wisdom at least suggests that Northern consumers are always going to prefer their tropical fruit cheap, unblemished, uniform and big – for that you can’t do better than the Big Three. Immensely wealthy and powerful, the Big Three look set to win the Banana War at the World Trade Organization (WTO), which lays down the law of international trade, and wipe out the alternatives. One way or another, the future surely belongs to them.

Curious, then, that the hard-nosed brokers of high finance are not quite so sure. Chiquita Brands International has been making big loses of late and its stock price has been getting very depressed. Sure, Chiquita made some silly mistakes. The company anticipated lush new markets in Eastern Europe which failed to materialize. That, so they say, is why Chiquita has been the most aggressive of the banana warriors – it’s attempting to recover its position.

But the problems of all the Big Three run much deeper than this. The giant old multinational corporations which once practised ‘vertical integration’, from production and shipping to processing and distribution, have fallen out of financial fashion. You can’t physically shift a plantation on the Internet, so freewheeling finance capital doesn’t like to get too mixed up in the sticky, risky business of actually producing things like bananas. Its only interest is in stock prices.

Falling apart
What’s more, the best returns in the food business are made at the other end of the production chain – from retailing, where giant superstores now rule the roost. Slowly but surely, power and profits have shifted away from the monopoly selling power of the old corporations, like the Big Three, towards the monopoly buying power of the new retail giants, whose vice-like grip on what food we buy is another dismal tale. These retailers must have what they want: low prices, consistency of supply and high-quality produce. Though this is precisely what the Big Three claim to provide, in practice they’re being driven to distraction on all three counts.

Keeping prices down and ‘competitive’ means, among other things, cutting the cost of labour. Since, as we have seen, conditions on many banana plantations already amount to slavery, further savings here are hard to find. If anything, an opposite and upward pressure is likely to mount, as persecution of the labour movement gets harder to sustain in the face of popular resistance. For sure, in countries like Guatemala and Honduras labour conditions in general are rarely better and often worse than on the plantations – otherwise no-one would work on them. Which is why the banana companies have used their influence for the past 100 years to keep everyone in their ‘banana republics’ as poor as possible, by staging coups, supporting the most reactionary elements in local élites and mocking democracy, all in order to keep labour costs as low as possible. Whether the same strategy will work for another 100 years is a different matter altogether.

Resistance to the Big Three’s banana operations is coming from another direction as well – from the banana plants themselves and the very eco-system in which they grow. The poisons plantations use in vast amounts are becoming less effective: lethal diseases, like the dreaded Black Sigatoga, are developing immunity to all the available pesticides.

The industry is also sitting on a genetic time-bomb. The plants used for the export trade have a very narrow genetic base. One expert warned some time ago: ‘Bananas constitute perhaps the best example in the history of agriculture of the pathological perils of monoclone culture... Indeed, without clonal diversification, the trade can hardly be expected to survive indefinitely.’1 Genetic modification may be the only remaining option, but that too would certainly be met with consumer resistance. Add to this the increased incidence of devastating hurricanes, and the fact that many of the plantations in Central America are nearing the end of their useful life, and the long-term future of the entire operation begins to look very shaky indeed.

The wreckage left by Hurricane Mitch - and the Big Three - in Honduras.
NIGEL DICKINSON / STILL PICTURES

Finally, ‘quality’ in the retail business is still only skin-deep. It has everything to do with appearance, with the way bananas ‘present’ themselves on superstore shelves: the brightness of the yellow, the spotlessness of the skin, the imposing size. Customers are not told what these bananas actually are; that the bright, spotless monster is the progeny of deadly chemicals that add nothing whatever to nutritional value or taste. So the trade still relies on consumer ignorance at a time when food-security scares are proliferating and industrial methods in agriculture are coming under closer public scrutiny than ever before. The more people know about the way most of the bananas they eat are produced, the less reassured they are likely to be.

Putting on a friendly face
So the Big Three appear to have few remaining options but to ‘diversify’ into cosmetics. For example, in 1992 Chiquita joined the Better Banana Project launched by the New York-based Rainforest Alliance. The point of the project was to allay growing consumer unease about the standard Chiquita-style banana – and spike the guns of its critics. Dole and Del Monte are involved in similar initiatives. However, the criteria for certification by the project are so broad, the inspection regime so limited and the precise financial relationship between the participants so unclear that the Better Banana looks very much like a Greenwash Banana. Nowhere in Guatemala did I encounter anyone who had ever heard of it, let alone noticed the difference.

But if the ‘dollar’ banana is in trouble, the ‘Euro’ banana isn’t in much better shape. For sure, by any measure this banana is pretty harmless. It also has the great virtue of introducing into world trade other considerations than mere cheapness and competition. The trouble starts, however, when you look in more detail at what these other considerations are.

What is it that attracts world trade
so unfailingly to the worst option?

The European Union (EU) banana regime is colonial in its origins. In technical terms it is ‘mercantilist’, since its purpose is to guarantee supplies from former colonies by giving them quotas and raising tariff barriers against everyone else. France still regards its banana-producing colonies in Martinique and Guadeloupe as ‘Overseas Departments’, and therefore part of France. When Britain joined the ‘Common Market’ in 1973, a separate deal was agreed for bananas coming from its former colonies. The first Lomé Convention in 1975 formalized a preferential trade status similar to that accorded to bananas across a range of commodities from some 42 former colonies of Europe in Africa, the Caribbean and the Pacific (ACP). The idea was to provide transitional support to these very poor, often newly independent countries – until they could take care of themselves on world markets.

Bit by bit, these ‘transitional’ Lomé arrangements have been eroded ever since, principally by the Single European Market, which abolished preferential access to individual European countries after 1992. The Byzantine Euro ‘regime’ is the result. No-one seriously believes that when Lomé is renegotiated again next year its benefits will not be diluted still further – ‘Lomé fatigue’ has set in.

The trouble with colonial regimes is that they are devised by colonial powers in their own interests. It’s a very hard habit to kick. So, while the Euro banana costs upwards of $1 billion every year to maintain, very little of the cash has reached the banana growers in the South, remaining instead in the firm grasp of traders and retailers in the North. No wonder the growers are simply throwing in the towel. What they then discover is that the supposed ‘transition’ has not happened – there is no other living to be made. The Windward Islands remain as dependent today as they ever were on preferential treatment by their former colonial masters in Europe.

Moving the goalposts
In the meantime, the goalposts of world trade have been moved. In 1995 the WTO was established with a new set of rules to enforce ‘free trade’ worldwide. In the banana business, that meant favouring the currently ‘cheap’ but otherwise obsolete dollar banana of the Big Three – and ruling the Euro banana, with its quotas and tariffs, illegal.

Unfortunately, the WTO is the kind of institution that can produce a 400-page adjudication on just one aspect of the banana dispute. Backed up behind this dispute are all sorts of others, the superficially trivial symptoms of much deeper and more serious conflicts – over the future of genetically modified organisms, for example. What powerful corporations expect of the WTO is that it should enforce price competition as the sole measure of free-market values, excluding altogether what are called ‘Process and Production Methods’ – the way things are made.

Fair trade on Volta Estates in Ghana - the potential is there.
RON GILING / STILL PICTURES

The purported reason is that ‘protectionism’ would otherwise proliferate at the behest of national governments and special-interest groups. This line of reasoning is, as the saying goes, one banana short of a bunch. Trade is not just a dispassionate observer of world events – it’s an active participant. Because the abuse of human rights and the environment make for the cheapest products on world markets, there’s an incentive for producers to engage in both. The full price still has to be paid, but the rules of the WTO are there to ensure it is paid in the currency of human suffering and environmental degradation. There are now, however, few serious economic arguments for excluding such ‘external’ costs from the final price of a product. If there is a function for the WTO, then it is to create a ‘level playing field’ on the firm ground of basic, universal standards of human rights and sustainability, not on the wind-swept swamps of outdated banana plantations.

Something must and can be done about this. The priority for the ‘dollar’ plantations is not that they should be closed down immediately, but that trade-union rights should be fully recognized, collective bargaining legitimized, working conditions substantially improved and much more significant steps taken to reduce environmental damage – and fast. If the result is a few more cents on the price of a banana in Benidorm, so be it.

Future perfect
Meanwhile, fair-trade organic bananas actually exist. The scale is still quite small, and the full potential remains to be explored – no-one seriously suggests, for example, that they can solve the immediate problems of the Windward Islands. More’s the pity. But if even a fraction of the resources – research, government subsidies, political patronage – that are consumed by the ‘dollar’ regime were devoted to fair-trade and organic production instead, their true potential might be realized much more quickly than anyone presently imagines. Where organic production is not an option, fair trade can be developed nonetheless; where fair trade remains problematic, organic production is still possible.

One caveat often raised is that ‘pre-industrial’ production methods used for growing organic bananas will never be able to meet world demand. Of course there are problems with selling perishable fruit outside the tropics. But the fact that three-quarters of the world’s bananas (which are eaten locally) are produced very differently – and much closer to the fair-trade organic model – suggests that the volume of supply is not a serious constraint. Besides, anyone who knows anything about bananas will tell you that the very best and tastiest have always been kissed by birds, with the marks on their skins to prove it.

Another caveat is that fair-trade and organic bananas cost more to buy in some countries. Does that mean they’re a luxury, not for the relatively poor in the North? Well, in Europe we’re already paying more for the Euro banana because of the current ‘regime’, but bananas have not become an exclusive product as a result. Again, if the same resources were shifted into organic and fair-trade production, then no significant price rises would be necessary at all.

'Quality' in the retail business is still only
skin-deep. It has everything to do with
appearance: the brightness of the yellow, the
spotlessness of the skin, the imposing size

Eventually, fair-trade and organic methods have to come together. Though organic production has real benefits for growers, without fair trade it merely reflects the self-interest and fads of consumers in the North. And though fair-trade principles may assist the development of organic methods – because, for instance, growers who control their own production are more likely to tackle the health hazards of pesticides – there’s little point in a fairer industry that destroys its own environment.

In the long term, more fundamental questions will have to be answered: about the power and consequences of retail superstores in the North; about other key elements of the trade, such as shipping, insurance and finance. These in turn raise broader questions about the scope of democratic control, the function of government and the need for political change, that cannot be avoided indefinitely.

The challenge to the supremacy of big banana business, particularly in Central America, has come from defiant labour unions, co-operatives and international solidarity. We are all indebted to them for the possibility of a sustainable future.

In the meantime, the simple fact of the perfect, fair-trade, organic banana is genuinely subversive – no-one can say it’s impossible. If anyone tries, let them first produce a more shameful image than this: a woman in Guatemala washing bananas for the North, to remove all trace of the poison she must live with every day – as if she belonged to a different species altogether.

1 NW Simmonds, Evolution of Crop Plants, Longman Scientific and Technical, Harlow, 1976.

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