Globalized Fruit, Local Entrepreneurs. Douglas Southgate

del Banano Reybanpac Rey Banano del Pacífico SAFCO South American Fruit Company SICA Servicio Interamericano de Cooperación para la Agricultura TR4 Tropical Race Four UBESA Unión de Bananeros Ecuatorianos UNIBAN Unión de Bananeros de Urabá UPEB Unión de Países Exportadores de Banana WHO World Health Organization WTO World Trade Organization

      Map of Colombia.

      Map of Ecuador.

      Map of Honduras.

      Introduction

      A tropical commodity bought and sold by the boatload throughout the world. Agribusinesses with worldwide reach, including a firm that has been a lightning rod for anti-corporate criticism since the Great Depression. Minor Latin American states on the receiving end of globalization. An uncomplicated, and oft-told, story of banana republics and the misfortunes visited on them by multinational companies. What more need be said?

      Bananas are the ultimate nonlocal food. More tons of wheat are exported. Cross-border shipments of corn and soybeans are more sizable as well. Barley holds fourth place in a ranking of agricultural exports by weight because harvests in Europe are routinely sold to feedlots and breweries in neighboring countries. But bananas come next, in fifth place and far ahead of every other fruit and vegetable. International shipments of bananas are a full order of magnitude greater than the cross-border trade in rice, which is produced in enormous quantities in China, India, and other Asian nations though almost entirely for domestic consumption. Economists characterize the international rice market as thin, which is another way of saying that the staple grain of the world’s most populous continent is primarily a local food. In contrast, countless bunches of fruit are purchased in the United States, Germany, and other places where few bananas grow. These places’ imports come from countries where negligible shares of production are consumed domestically, thereby allowing practically all output to be dispatched overseas. Safe to say, no farm product is more globalized than bananas.

      Likewise, no agricultural commodity is associated more closely with large corporations based in the United States. The banana business was largely the creation of the United Fruit Company, called The Octopus because of its near monopoly in the U.S. market and its control of supplies in Central America and other parts of the Caribbean Basin for many years after the firm’s founding right before the turn of the twentieth century. The banana republic narrative derives from this period, when The Octopus overwhelmed its commercial rivals and controlled the fortunes of entire nations.

      Chiquita Brands International (the current incarnation of United Fruit) has not had a lock on the production and marketing of bananas for decades. Nevertheless, corporate power and wrongdoing in Latin America are a recurring theme of books and articles about the tropical fruit industry—so much so that events and trends that do not fit with this theme are downplayed, if not ignored completely. Relatively little has been written, for instance, about the impact Colombians competing against United Fruit have had on banana development in their country. An even more striking example of neglect is Ecuador, which has been the world’s leading exporter of bananas for sixty years and counting. In various ways, the country contradicts the two-dimensional tale so many authors relate of The Octopus and the tropical lands it plunders. The truth is that Ecuador’s banana industry, which is the subject of this book, is independent, has been forged in competition, and ably serves customers wherever they are found.

      Multinational enterprises have had a presence in Ecuador—an important presence, dating back to the 1930s and continuing today. However, the country has not achieved and sustained export leadership at the expense of turning itself into a corporate satrapy; to the contrary, its commercial accomplishments have gone hand in hand with its insistence on steering its own course. Still, the South American nation is treated as just another banana republic by authors bent on chronicling the power and abuses of The Octopus. Take Peter Chapman, who mentions Ecuador barely five times in a book titled Bananas that was published in 2007. Only once does Chapman distinguish the country from places that arguably have been under United Fruit’s thumb, by acknowledging in passing that an unnamed Ecuadorian firm competes in the global marketplace against Chiquita and a couple of other multinational fruit businesses.¹ In a volume with a nearly identical title released a year after Chapman’s book, Dan Koeppel goes so far as to mention the Ecuadorian brand (though never the name of the company, itself) on two separate pages.² No matter. One can read both books, which are supposed to be about the tropical fruit sector in its entirety, and still be unaware that the world’s largest fruit exporter has never been a banana republic.

      Many authors whose writings have a narrower geographic scope hew to the prevailing narrative every bit as much as Chapman and Koeppel do. Historian Marcelo Bucheli does not do so. His book underscores United Fruit’s monopolization of Colombia’s banana industry before World War II, yet details the achievements of national planters and exporters since the middle of the twentieth century.³ In contrast, The Octopus looms very large in a book about Ecuador published in 2002. The author, Steve Striffler, is also dismissive of “local capitalists,” whom he lumps together with “small-time con men.”⁴ Aside from describing their conflicts with peasants and workers, Striffler devotes little more attention than Chapman and Koeppel to Ecuadorian growers and exporters. As a result, opportunities are cast aside to examine the significant contributions these economic actors have made to agricultural trade and development.

      Geography and history have mattered a lot in Ecuador’s banana industry, including in terms of local entrepreneurship. The western part of the country, between the Andes Mountains and the Pacific Ocean, abounds in the natural resources needed for tropical fruit production: fertile soils, generous precipitation in some places and easy irrigation elsewhere, and a Caribbean climate though without hurricanes. The area also boasts a port city of long standing: something the Caribbean coast of Central America lacked at the turn of the twentieth century, when United Fruit and other U.S. companies started carving banana plantations out of the region’s tropical forests. Remote from governmental authority for hundreds of years after its founding by Spanish conquistadors, Guayaquil was a hub for business long before opportunities arose to export tropical fruit.

      With a commercial city in its midst, western Ecuador has a banana market worthy of the name, with dozens of exporters and other merchants purchasing and selling the harvests of hundreds of farms. Few of these farms are large enough to qualify as plantations. By the same token, no fruit buyer, either foreign or domestic, monopolizes the market. Under the pressure of competition, entrepreneurial innovation, such as sales of bananas in places where U.S. firms rarely if ever venture, is rewarded. Additionally, business skills are honed. Not least among these skills is a knack for mutually advantageous partnerships, of the sort Ecuadorian exporters have harnessed in their ascent to the very heights of the global banana business.

      Some of the most rewarding partnerships have been with agribusinesses headquartered in the United States, thereby demonstrating that the relationship between Ecuador and companies such as United Fruit has always been a mix of the cooperative and the adversarial. The country’s growers rely on the multinationals for technology, which those firms have been willing to share