Author: Renwick Rose is the Co-ordinator of the Windward Islands Farmers Association. A version of this article was originally published in Bananalink - www.bananalink.org.uk
By Renwick Rose
Banana farmers in the Caribbean have faced multiple setbacks in recent years, including strong pressure from retailers to keep down prices, crop diseases, and a November 2009 deal at the WTO that provides Latin American banana producers with improved market access to the EU - a key export market for Caribbean farmers. Renwick Rose considers the challenges to putting Caribbean banana producers back on a sustainable footing.
Leaders of the Windward Islands Farmers Association (WINFA) are currently in the process of concluding negotiations with WINFRESH (formerly WIBDECO, the Windward Islands Banana Development and Exporting Company), for a new contract for the export of fair-trade bananas to the United Kingdom. WINFA is the registered producer organisation representing some 3300 fairtrade farmers from Dominica, St. Lucia and St. Vincent, whilst WINFRESH, owned by the governments of these three islands and farmers, nominally, is the sole registered fair-trade exporter.
Much hope abounds for better trading terms to derive from the contract. This is because farmers have been having a particularly difficult time for a variety of reasons. Externally, the protracted banana dispute between the trading giants, the United States and the EU, which drove thousands of farmers in the Caribbean out of the industry, was at last 'resolved' in a much-heralded 'deal' last November. However, as in every previous round in this battle, it was to the detriment of small family farmers. The agreement provides for further reduction of the tariffs on Latin American bananas, largely exported by US multinationals and large national producers, reducing the price competitiveness of bananas from the Windward Islands.
This blow came in the aftermath of a fratricidal war between the giant supermarket chains in the UK, led by the American-owned ASDA, a Walmart subsidiary, which late last year continued to put pressure on prices by using bananas as their loss-leader in a bid to win customers from their rivals. It was yet another manifestation of the 'race to the bottom' which BANANA LINK and EUROBAN had used to describe negative developments in the banana trade. As bananas were sold on the cheap in the supermarkets, pressure was put on suppliers and ultimately on farmers to reduce their own prices.
Yet farmers could ill afford further reductions. Fairtrade minimum prices, for instance, had not been revised for the last five years and in real terms, and banana farmers were earning much less than they were in 2004. Over the 2008/9 period in particular, the global economic crisis, the spectacular rise in fuel prices in 2008 and the steep rises in the costs of inputs made banana production an economically perilous occupation. To add to this, farmers had to meet astronomical hikes in the cost-of-living in open economies largely dependent on food imports.
On a wider scale, Caribbean economies are themselves in trouble as a result of the global economic meltdown. This has severely limited options for those who find it difficult to make ends meet in the banana industry. Tourism, for instance, which in the case of St. Lucia had absorbed some of the fall-out from the banana industry, saw tourist arrivals fall off by as much as 20%, causing lay-offs and dashing hopes for increased employment. Jamaica, which was forced to make the painful decision to abandon export production of bananas, had to go cap-in-the-hand to the International Monetary Fund (IMF) for budget support. Grenada, St. Lucia, St. Vincent and Dominica have all either accessed or sought concessionary IMF funding to make up for budget shortfalls. Such is the economic climate in which the EU and US deal in the World Trade Organization (WTO) virtually threatens to scupper the banana industry for good.
As compensation for this banana deal, the EU has come up with a fund supposedly to assist affected producers in African Caribbean and Pacific (ACP) countries, to improve their competitiveness and help them engage in alternative economic activities. This fund, under the acronym BAMS (Banana Accompanying Measures) amounts to some €190 million, less than half of what was originally proposed by the ACP countries. Based on scale of production rather than on degree of vulnerability, and hence extent to which countries are negatively affected, it is sure to result in the small producing islands of the Eastern Caribbean being the biggest losers.
Worse, the fund is being handed over directly to governments. WINFA has all along argued for direct access to any such compensatory fund by farmers' organisations. Current developments bear out the wisdom of this. There were two regional meetings in the Windward Islands to discuss the BAMs at which there was limited representation by farmers' organisations. Yet in contrast to this attempt at consultation, the governments of the islands have proceeded to develop their own programmes for accessing BAMs based on their own priorities and not those of the farmers most affected. The programmes emerging reflect this lack of consultation and skewed priorities.
Take St. Vincent as an example. The Ministry of Agriculture there has drawn up a programme to access €32 million of the BAMs funding. Only 25% of this is allocated towards "improving competitiveness in the banana industry", and only one-quarter of this paltry 25% is earmarked for banana farmers: €1.5 million for "improving productivity" and €0.5 million for "promoting good production practices and strengthening farmers' capacity". More than two-thirds of the funds have been officially allocated to Agricultural/Economic Diversification, but nobody has asked the banana farmers whether they wish to diversify, in what manner, at what pace, and what their requirements are. There is also a 13% for "Social Adjustments", not for banana farmers however.
If this is not gross disrespect for banana farmers, nothing else is. It must be remembered that the BAMs have come about out of recognition that the deal will hurt banana farmers. If they are the ones to be most affected, if the BAMs have been established on this basis, then it stands to reason that not only should they be the ones to benefit most, but that they should be integrally involved in the drawing up of any programme for that purpose. None of that has happened. It must also be remembered that it is the farmers' movement, through WINFA, even when their governments were silent or inactive, which carried the advocacy campaign in Europe for adequate compensation for farmers. We even made proposals to the negotiators of the Economic Partnership Agreement (EPA) signed between the EU and Caribbean states to that effect. Again the voice of the farmers fell on deaf ears.
It is a repetition of a long process that started with the allocation of STABEX (Stabilisation of Export Earnings) by the EU in the nineties to compensate for falling export revenues as a result in changes to the banana regime. The statist, lack of consultative approach resulted in a lot of wastage of the funds and a lack of clear focus in its utilisation. The same mistake was made with STABEX's successor, the Special Framework of Assistance to ACP States. WINFA and the farmers of the islands have no intention of allowing such mistakes to be repeated with the BAMs.
The fundamental task now is how to place the industry on a sustainable footing in the face of all the multiple challenges. Firstly, it must be borne in mind that the industry will never again reach the pre-1993 levels of production and export. This is not a bad thing for it permits a more diversified approach and a conscious movement away from mono-crop export, allowing for a blend of foreign-exchange banana earnings with emphasis on meeting local and regional food security needs. This must also involve value adding through processing of by-products. Developing and expanding local markets is critical to helping to supplement dwindling incomes, especially in these difficult times.
Environmentally-friendly production, already facilitated by fairtrade production must also be a key element of the sustainability strategy. The emphasis during the period of conventional production on heavy use of pesticides and agro-chemicals has resulted in widespread soil depletion and environmental degradation. WINFA has already embarked on corrective measures in this regard, but these efforts need to be consolidated and expanded. In all of this, close cooperation and support of all stakeholders and governments must be sought and obtained and collaboration with our friends and allies abroad vigorously maintained.