Bananas - beware the bad bunch
Africa's international banana trade is about to receive a boost. Increasing interest in the continent from the big multinational banana producers means African exports to the European Union could rise sharply over the next few years. But while it might seem an attractive prospect, the beauty of the continent's promising banana export industry might be only skin deep.
It's easy to see why the big banana companies are interested in Africa. There is plenty of prime banana-growing land available, much of it near sea ports with shipping lines to the EU. Labour is also cheap and plentiful compared with Latin America, where the majority of internationally-traded bananas are grown. With supermarkets in the developed world continually forcing down supplier prices, bananas - so the logic goes - must become more competitive.
Africa also has an agronomic ace up its sleeve - it is relatively clear of the diseases that afflict the Cavendish bananas produced in Latin America. If that isn't enough to excite the banana companies, bananas from many African countries also enjoy duty-free access to the 27 EU member states. Following a decision by the World Trade Organisation (WTO) in November 2008, this may be about to change in order to achieve a level playing field for banana producers worldwide. Nevertheless, Africa is likely to be the world's new banana hotspot.
Commercial export plantations have been long-established in Cameroon and Cote D'Ivoire, and now plantings are underway in Ghana and Mozambique. Angola is likely to follow. Consequently, African banana exports that currently account for around four per cent of world trade, could reach ten or even 20 per cent within 15 years.
While this may seem cause for celebration, it might equally require a call for caution. Alistair Smith of the Banana Link cooperative explains: "The new players are essentially African plantation companies with experience in plantation crops, be it sugarcane or cashew nut but little experience in bananas." Smith believes it is these growers who will team up with the big banana companies that are leading the advance into Africa. "The multinationals will provide the technology and to a certain extent will help countries gain access to European funds for infrastructure development." But he cautions, "Small producers should not raise their hopes in any way that they could become part of the international banana trade."
That's not to say that the benefits of new plantations won't trickle down through local and regional economies - increased employment and investment in infrastructure are expected. But, after more than 100 years in Latin America, the international banana industry has much to be ashamed of in its treatment of labour and the land, which is another reason it will welcome a new base. In many Latin American countries soils are close to exhaustion: declining soil fertility and significant disease build-up require regular applications of ever-increasing amounts of agrochemicals, with severe and well-documented health implications for plantation workers and the environment.
Increasing wage pressure could also mean that the industry is ready to abandon Latin America to its own resources. "For the last three years, Latin American producers have been subject to a certain amount of blackmail," Smith continues. "If companies see wage demands as unreasonable they threaten to move operations to Africa to quell them."
So, should Africa be worried about the multinationals arriving on their shores? Possibly. But there is a line of defence against the kind of production that has left Latin American banana industries so distressed: European consumers and their growing appetite for organic, fairly-traded bananas from sustainable sources. Currently, the two biggest consumers of ethical bananas are Switzerland and the UK, where they account for one-half and one-third of domestic sales respectively.
Smith believes that in order to capitalise on the demand for organic bananas, producers will need to switch away from their Latin American business model. This will involve promoting sustainable development and ensuring their operations do not jeopardise local food security. "Chiquita is saying this will make it a model of how foreign direct investment in poor countries should be done," says Smith. "Let's hold them to it and let's hope they do it better than they did in Latin America, which led to a series of very negative social and environmental consequences for many of the communities involved."
Date published: January 2009
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