WTO ruling could force more farmers out of banana industry

The resolution last week of a 20-year trade dispute involving 11 Latin American nations and the European Union could see even more Windward Island farmers forced out of the banana industry.{{more}}

The accord would see tariffs on Latin American bananas reduced to 114 euros per tonne by 2017, down from 176 euros per tonne.

It comes as the erosion of preferential access, natural disasters, and high cost of production, since 1992, have reduced the number of banana farmers in the Windward Islands to 3,000 — down from 25,000.

But Renwick Rose, retired coordinator of Windward Islands Farmers’ Association, said the ruling of the World Trade Organization last week merely formalized a 2009 deal and is unlikely to cause anything worse than already exists.

“… over the years, they have been steadily forcing the European Union to change its banana regime,” he said of the Latin American nations — Brazil, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Venezuela, and Peru.

“And this is why they (the EU) have finally come up with what they call these banana assistance measures, which is really telling us: ‘Look, let me give you your money and you go ‘bout your business’,” Rose, who has lobbied extensively on behalf of banana farmers, told SEARCHLIGHT Wednesday.

“From the time they (the Latin American bloc) started the challenges, the European Union has successively been changing its banana regime in terms of restricting our (Windward Islands) preferential access. And you see what it has meant to our banana industry. It means it is not likely to cause anything worse than has happened up to now.”

Rose said the arrangement has resulted in Windward Island bananas becoming “more and more uncompetitive in terms of the prices for Latin American bananas”, because of the reduction in the tariffs on Latin American fruit.

“So, logically, what has happened is that our bananas, … more and more people are being forced out of production.

“Because, with costs going up and you not getting the same level of protection in the market, people are finding it more and more difficult to engage in it,” he said, noting the exodus of 22,000 farmers over the past decade.

But Chief Agricultural Officer Reuben Robertson told SEARCHLIGHT separately on Wednesday that there is still hope for Vincentian banana.

“… St Vincent and the Grenadines, with a well-planned banana industry, taking it to a level of being highly competitive, I think we can still have a place in the region and in the United Kingdom,” Robertson said.

“… the approach that we are taking here is one of enhancing the competitiveness of the banana industry…”

Stakeholders, he said, believe they “still have a place in the United Kingdom”, having differentiated their product by moving “from the open market, conventional type bananas to one of fair trade with a label, which had a demand in Europe”.

And, even with the competition from Costa Rica, the Dominican Republic and Suriname, Vincentian banana still has a place in the markets in Trinidad and Tobago and Barbados, Robertson further said.

“… we are targeting between 8 and 10,000 tonnes in these markets, collectively,” he told SEARCHLIGHT.

But Rose said the regional market is also under threat, not only because of last week’s WTO ruling, “but generally because of the globalisation and the trade trends within the region”.

He noted the source of Trinidad banana imports, adding that previously “secured” markets have to deal with the competition from Latin America.

But Rose also noted that WINFA has found a niche, through Fairtrade, an observation that Robertson also made.

“… had it not been for Fairtrade, we would not have been exporting any bananas to the United Kingdom,” Rose said.

“So, clearly, opportunities like those exist, but it means … even then, the whole question of the continued cost of production is a serious, serious matter. Because, fertilizer, with oil prices and so on going up, keeps going up, so that the margins are very, very, very tight,” he said.

Rose said the governments of the Windward Islands have responded differently, but have provides state support.

“But I think in the state and in the general society there is this feeling that agriculture has no future, that it is not looked upon as a profession as any other profession, and particularly among decision makers, top bureaucrats and so on, there is this dismissive thing that we in the region seem to want to find solutions everywhere else but what we have proven we can do,” he said. (kentonchance@searchlight.vc)