The Courier

Landscape in Mesopotamia valley, St.Vincent, no longer a blanket of bananas.

© Debra Percival

On paper, the EU’s duty-free, quota-free offer under an EPA with Cariforum countries looks generous, says Renwick Rose, St. Vincent-based coordinator of the Windward Islands’ Farmers’ Association (WINFA) representing growers in St Vincent, Dominica, St. Lucia and Grenada.

On the table and due to come on stream on 1 January 2008, the EU’s open market access is for all but the most sensitive products, sugar and rice. It will replace the current market arrangements under the Banana Protocol enshrined in successive EU development accords with the ACP group. This currently gives duty-free access up to 775,000 tonnes allocated between ACP countries.

Dig a little deeper and there are jitters about how the post-protocol market will shape up. It will all come down to pricing, forecasts Rose, with the most vulnerable small farmers of the group; those of the Windwards, but also small holders in Jamaica, Belize and in some African nations such as Cameroon, will be most affected.

Alistair Smith of the UK-based NGO, Bananalink, which campaigns for a fairly traded, sustainably farmed banana, explains that big multi-nationals in ACP states have already become rooted in several African nations including Côte d’Ivoire and Ghana.

Price pressure

“The greater volumes in the market will put pressure on prices,” explains Rose. He adds: “If the price is not remunerative then the duty-free, tariff-free access makes no sense.”

Windwards’ farmers are no strangers to grasping the nettle of restructuring that began in the 1990s. The European Union (EU) has assisted with funding many projects to improve production methods such as irrigation, construction of roads, reception and distribution stations and for certification schemes. Other EU funds have gone to diversification into other farming and social schemes for those who have left the sector.

There’s now a steady core of growers Windwards-wide selling their fair trade produce to leading UK supermarkets. The small, creamy, sweet-tasting Windward banana – perfect for school lunch boxes – is little known outside the UK.

“Our worry is that when you open the market, the price differences between the fair trade and regular banana will get wider and wider,” says Rose. “A managed market is essential to us.”

“Whilst Fair Trade is a saving grace, it will not insulate us from the general pressure of the market,” warns Rose. He reminds EU-ACP negotiators: “There is nothing in the EPA text which suggests that we will be compensated for the banana.”

Bernard Cornibert

Executive Chairman of the UK-based Windward Islands Banana Development and Exporting Company Ltd. (WIBDECO), which markets the fruit, gives his take on the EPA proposals and his industry:

Is the Windwards’ industry fearful of more open competition from implementation of the EPAs?

Many in the Windward Islands banana industry understand that ultimately there will be open competition, but the industry is not quite ready for that as yet. It still requires some measure of support in the market, whatever form that takes, in order to continue to survive. We still do not know, even at this late stage, what the level of ACP preference will be under the EPA. If, as the question implies, the EPA will result in more open competition then this is ominous.

To the contrary, will the EPAs mean a more certain future for the Windwards banana industry by eliminating future challenges to the region’s exports in the WTO?

The EPA by itself will not bring a more certain or secure future for the Windwards banana industry. While the EPAs will eliminate the threat of challenges to the preferential access arrangements for ACP imports, in a quota-free environment it is the tariff on Most Favoured Nation (MFN) imports that will minimise the competitive pressure on ACP imports and ensure that they have a place in the market. Therefore, even with the EPAs, if the tariff is too low, ACP suppliers like the Windwards will have very little chance of surviving the harsh and competitive market environment.

By how much has the region’s production been cut back since the early 1990s?

Banana exports from the Windward Islands dropped from 274,500 tonnes in 1992 to 61,300 tonnes in 2006. Some 20,000 small holders have left the industry, as a result of increasing competition brought about by the steady liberalisation of the market.

Is the Windwards banana industry in a strong position now where it can hold its own in the global marketplace?

There is no doubt that the Windwards banana industry is now stronger and better able to fight in what is becoming a very crowded and competitive market. But it will never be able to survive, let alone win, the fight on it own. It needs all the support it can muster. Fairtrade and its growing band of consumers have played and will play a major part in the continued presence of Windward Islands bananas on the market. But Fair trade alone will not guarantee the continued survival of the Windwards banana industry. It will need the continued support of its loyal customers, supermarkets and consumers. More importantly, it needs the institutional support of the EU through the EPA and otherwise.

How have this season’s hurricanes affected the industry?

It takes only one major hit to cripple the industry; and Hurricane Dean this year almost did that. The damages to the banana crops have been significant. Dominica was the worst affected but across the Windwards the overall damage was in the order of 55%.The rehabilitation process has already started and we expect production and exports to bounce back in full around March-April next year.

Economic diversification is being encouraged throughout the region. Why is it important to retain a core Windwards banana industry?

Moving or transferring activities from one sector to another, or even with the same sector, is not easy. This involves extensive dislocation of both people and resources which (a) can only be accommodated smoothly in the very long term, and (b) only to the extent that there are viable alternatives. The banana industry is alive today – it still brings income to many people in the Windward Islands. No one with any sense would suggest that these people abandon their means of livelihood before they know what else they will do to earn a living.

Having said that, the Islands must continue to search for alternatives, but the objective must not be to replace bananas but rather to broaden the production base and economic base generally of those countries. As a company that is at the centre of the Windwards banana industry, we are actively encouraging diversification but we are under no illusion that the banana industry will and must remain, for the foreseeable future, an important part of the agricultural sector and economic live in those islands.