Full Disclosure
February 13, 2009
Another look at the Banana Industry

The resultant implications of globalization have impacted quite negatively on the Caribbean’s agricultural sector, and particularly so on the Banana Industries in the Windward Islands. The case is simple; our small scale of production makes us ill-prepared to deal effectively with the dynamism which globalization and market liberalization produces. It is safe to say that commercial agriculture has become globalized, resulting in the shifting of large-scale agricultural production to more competitive regions of the world. What does this mean for our banana industries in the Windward Islands?{{more}}

In Saint Vincent and the Grenadines, banana production has been a significant source of employment and a foreign currency exchange earner. In times past, the Banana Industry was considered to be the life-line of the four Windward Islands. Still, the economic significance of the industry to the sustainability of rural life can hardly be exaggerated.

The statistics reveal that the current cost of production of bananas in the Windward Islands is approximately three times higher than the world market price. Despite a high production cost, high preferential marketing prices have however assisted over the years to keep our banana industries afloat. Further, threats from the World Trade Organization have been brought to bear on our banana industry due to litigation pushed by the United States of America and its allies. This blow has gone to the heart of the industry.

During the past 20 years, Caribbean agriculture on a whole has been experiencing a decline in production. This decline has been attributed to various factors, including an increased dependence on foreign food, increased vulnerability of small farmers, an aging labour force, natural disasters, high cost of imported inputs, unavailability of appropriate technology and the lack of a culture of investment in agriculture by the private sector. The situation has further deteriorated over the past ten years due mainly to liberalized trading practices.

It is noteworthy that for the most part, our agricultural sector in the region rests on an historical footing which severely impairs its ability to expand. The small farm sector is deeply entrenched in British West Indian history. After developing very slowly in the first 20 or 30 years after Emancipation in 1838, peasant agriculture gained ground in the last quarter of the 19th Century as sugar went into a long irremediable decline. A poorly planned, structured and conceived approach to land distribution in times past as it relates to lands needed for agriculture has now proven to be a torn in the flesh. Geographic land space is also another inhibiting factor, owing to the rugged terrain in the banana producing Windward Islands and the comparatively miniscule size of our landmasses. The on-going Land Bank development arrangement by the Ministry of Agriculture must be applauded for its efforts ultimately aimed at expanding production generally.

Though cultivated by small rural farmers, the Windward’s Banana Industry is now fully integrated into the global economy as an export industry and will continue to face the impact of free trade head-on. Notwithstanding the industry’s importance in the Windward Islands, it is simply difficult, on its own, to compete successfully on the world banana market. Its high cost of production, compared to Central and South America, places it in a position where it requires an extremely high level of protection in order to be profitable. While we use a synthesis of creative and innovative means to expand our production in bananas, we must continue to focus on venturing with a greater sense of courage into other productive areas, which will permit us an advantage within the global economy. Agriculture will always have a significant part to play as we move forward. However, our plans to fully develop our tourism sector must be fully embraced by the citizenry, since at this point it appears, for the most part to be one of the more viable options. For this to be a reality, an international airport on mainland St. Vincent is critical.

Whatever the intentions of the architects, the Windward Island banana industry did not prosper under the new banana marketing regime. The unification of European product markets, referred to as the Single European Market (SEM), put at risk the region’s protected access. In almost any eventual outcome, what seems certain is that the losers will be the suppliers that are the most vulnerable. In contrast, the survivors will be those that have been able to enhance competitiveness, diversify and find higher value market niches in the fair trade or organic market. It is in this regard that the Fair Trade Organisation of St. Vincent and the Grenadines and the Windward Island Farmers Association (WINFA) must be recognized for significant work done over the years. Further, banana farmers would also benefit from the regional market for bananas, which is proving itself as having the ability of being capable of absorbing a larger quantity of our bananas. This must be coupled with a most serious effort to increase the productivity of our farms.

The Banana Industry Bill 2009, which seeks to repeal the Banana Industry Restructuring Act of 2001, was the subject of much debate when our Parliament met on Tuesday, February 3, 2009. The aim of the new legislative framework is to make provision for the dissolution of the Saint Vincent and the Grenadines Banana Growers Association; to facilitate the improvement of the banana industry in Saint Vincent and the Grenadines; and to provide for other related matters which aimed at ensuring the sustainability of the Banana Industry.

A subsequent article will analyze the manner in which this legislative framework as outlined in the Banana Industry Bill 2009 is intended to restructure the Industry so as to address many of the problems current being faced.

Saboto Caesar is a Lawyer and Unity Labour Party Senator.