Globalization Uproots Island’s Banana Trees

Paved roads, free public schools and pastel-painted houses covering the lush hillsides testify to the relative prosperity that swept this Caribbean island during its stint as a banana republic.

But with the Jan. 1 end to an era of preferential access to the European Union, the world’s biggest banana market, farmers here are turning over their fields to more viable crops and waxing nostalgic about the days when anyone with a small plot of land and a good work ethic could make a decent living.

Globalization has delivered a gut punch to Caribbean farmers in the form of World Trade Organization rulings over the last decade that the special access to markets of their former colonial masters constituted unfair trade practices. The challenge was led by Ecuador, the world’s largest producer of bananas for export and a key supplier for multinational market leaders Chiquita Brands International Inc., Westlake Village-based Dole Food Co. and Fresh Del Monte Produce Inc., based in Coral Gables, Fla.

“I’ve gone completely out of bananas. I’m not comfortable with the direction the banana industry has gone,” said Gregory Avril, who has converted his 25-acre farm to growing peppers for a local hot-sauce producer, Baron Foods Ltd.

St. Lucia growers, he said, need to face the fact that they’ve been bumped out of the banana market.

“We need to wake up and reorganize ourselves,” he said, exhibiting the chin-up determination characteristic of many Caribbean farmers. “We can’t match the economies of scale enjoyed by the big growers.”

Without the market ensured by the EU quota system that was phased out over the last five years, a St. Lucian banana farmer can’t command a price for his produce that will cover the cost of fertilizer, pesticide and transportation. The three U.S.-based multinational exporters, which together supply two-thirds of the world’s traded bananas, grow their crop on huge Latin American plantations, where labor and production costs are lower.

Heeding the handwriting on the market walls, St. Lucian business and government leaders have encouraged banana farmers to switch crops and occupations. One by one, growers are leaving their fields to get into an expanding tourism sector and production of other goods including chocolate bars, rum, condiments and bottled water.

The St. Lucia Agriculturalists Assn. last year signed with Chicago-based World’s Finest Chocolate Inc. to supply half a million pounds of cocoa beans in each of the next three years, said association director Kerde Severin. The group is also in talks with Sandals Resorts, a chain with three locations in St. Lucia, to supply fresh vegetables to its gourmet restaurants.

Organically grown exotic fruits are also being cultivated to cater to tourists here and niche markets throughout the Western Hemisphere in which consumers are willing to pay more for quality foods, Severin said.

But farmers were so deeply invested in bananas in the years after World War II that even with government help, Severin said, it would take a decade to recover from the banana trade changes.

Just a dozen years ago, St. Lucia was producing 128,000 metric tons a year, less than 1% of the world market but the source of 50% of the island’s export earnings. Banana growing then employed 25,000, half the island’s workforce. Under an EU agreement aimed at helping the nearly 80 developing nations in the African, Caribbean and Pacific Group of States, or ACP, many of them former European colonies, producers such as St. Lucia enjoyed guaranteed, tariff-free markets through a system of quotas.

Now banana output here is less than 40,000 tons, and fewer than 3,000 islanders are growing the fruit.

“I don’t think the Windward Islands ever accounted for more than 0.5% [of global trade]. Even the ACP together wasn’t much,” said Brian Louisy, director of the St. Lucia Chamber of Commerce, Industry and Agriculture. “That’s why the WTO has been such a bitter pill for us to swallow. We were never talking about market-distorting quantities.”

Bananas are the No. 1 fruit export in the world. Because of their nutritional value and importance to food security in the developing world, however, most of the crop is consumed in the countries where it is grown. Only about 20%, or 15 million tons, is produced for trade on the international market, according to the U.N. Food and Agriculture Organization.

India, Ecuador, Brazil and China collectively produce half of the global crop, with Ecuador the only one focused on the export market. The country of 13 million is Cincinnati-based Chiquita’s biggest producer and accounts for 28.5% of global banana exports. Costa Rica, Colombia and Guatemala combined deliver 30%, mostly through the U.S. giants.

Since the EU agreed in 2001 to abandon its quota system, St. Lucian economic planners have been whittling away at reliance on bananas.

Tourism is now the most important sector of the economy, but 70% of the revenue goes to foreign investors, said Cuthbert Phillips, a veteran farmer and head of the island’s newly formed Chamber of Agriculture.

Several hoteliers have improved their properties to compete with foreign-owned resort chains. The small-scale investments have transformed the Rodney Bay area into a thriving village of family-run inns, restaurants and marinas. Sixty-eight hotels are now registered with the St. Lucia Hotel and Tourism Assn., up from seven 20 years ago.

Because St. Lucia’s food-processing industry is woefully underdeveloped, Phillips said, the chamber is working to link farmers and investors interested in new production.

Despite a sizable sugar cane crop and good conditions for growing hops, the island has only one rum factory, St. Lucia Distillers, which makes Bounty Rum, and one brewer, Windward & Leeward Brewery Ltd., maker of the local Piton brand. Investors are being encouraged to broaden the spirits business, with an eye toward cutting import costs for local businesses.

The banana trade changes have afflicted St. Lucia with unemployment of about 20%, but economists contend that St. Lucians will pull through.

“Nations do not curl up and die. They fight for survival,” Louisy said. “Some people may become poorer. They may suffer some quality-of-life losses. But we won’t just give up.”

He recalled the development boost that bananas gave to his homeland in the 1970s, when the island segued from a sugar-producing British colony to independence.

“The economic transformation from the 1970s to the ‘80s was virtually miraculous. It was grass roots. We’re a rural society, and everyone with even the smallest patch of arable land grew bananas,” Louisy recalled, crediting the crop with allowing thousands of rural families to build homes and send their children to school. The number of elementary schools shot up from four to 23 in the 1970s, he noted.

Though he lamented the end of preferential access to the European market, Louisy said island farmers weren’t brooding. “The reality is that it’s not a fair world,” he said. “The reality is that size matters.”

Not all here are as sanguine about their defeat at the hands of the banana Goliaths.

Bernard Cornibert, managing director of Windward Islands Banana Development & Exporting Co., accuses Chiquita of greed in instigating the challenge by Latin American countries to the quotas.

“The United States was wrong in pursuing this in the way it did, inflicting dire consequences on these small islands,” Cornibert said.

The Windward Islands of St. Lucia, Dominica and St. Vincent and the Grenadines produce 70,000 metric tons of a 15-million-ton global market, he said.

“Why can’t things work out in a way that doesn’t hurt us? We’re not a threat to anyone.... The international community has to understand that we are each other’s keeper,” Cornibert said.

Chiquita spokesman Michael Mitchell said the challenge to the EU’s preferential trade with Caribbean and other nations was brought by Latin American banana-producing countries, not by the United States or the U.S.-based exporters.

He said he did not know whether Chiquita’s EU market share had improved as a result of the changes, because the quota system had just ended and negotiations were continuing on the Latin American exporters’ tariff levels.

The EU is currently leveling a tariff of 176 euros per ton of bananas from Latin America, but that remains under challenge.

Few in the industry here are expecting a reprieve. A drive through the verdant hills reveals a rural culture in crisis: “House and Land For Sale: Price Negotiable,” read signs posted outside idle farms where abandoned banana plants wilt in the sun.

“People have lost the love for it that we had 15 years ago,” said Sylvester Dolcy, who left his stepfather’s banana farm after high school to become a taxi driver and tour guide. “I used to drive bananas to the port. Farmers would be lined up every week because it was good money and you got paid in cash. Now all you see at the port is ferries and cruise ships.”