Boost for bananas - $1b EU support for support for the next five years

By Claude Mills, Staff Reporter

JAMAICA'S BANANA industry is to receive almost $1 billion (26.5 million Euros) over the next five years to buoy its struggling local operations.

However, local experts contend that the allocation is merely to offset the deleterious effects the World Trade Organisation's (WTO) ruling will have on the local banana industry, as the organisation moves to negate preferential treatment given to former colonies by the European Union (EU).

"The billion-dollar programme will help the industry because once the ruling takes effect, the banana industry as we know it will be radically changed, and this money is just a small compensatory pay-off for us being such loyal colonial subjects over the years," Bobby Montague, a Councillor in St. Mary which has the largest number of small banana farmers in the island.

In 1997, the World Trade Organisation ruled that the EU's banana import regime favouring former colonies in Africa, the Caribbean and the Pacific over their Latin American and US counterparts violated international rules.

The billion-dollar allocation, provided under the European Union Banana Support Programme (EUBSP), is almost two and half times the $420 million allocated to the industry for the 1996 to 2000 period.

"It could conceivably cost Jamaica this amount over the next five years (when the WTO agreement takes effect)," said EUBSP Project Management Adviser Sebastien Coppieters. The EUBSP was designed to offset the potential negative effects on banana prices in Europe caused by the creation of the European Single Market in the second half of 1993.

Still, despite the large figure, not everyone is happy.

The allocation will only benefit large export farmers, contended Mr. Montague.

"The EU money was originally to help all farmers, but the money is not reaching its intended recipients, and therefore this money reminds one of the pay-off the planters got in 1834 when slavery was abolished," he said.

"The farmers who fell out of the industry through the '97 drought and Black Sigatoka disease are not being assisted by this money."

"The Government should reconsider renewing BECO's (Banana Export Company which comprises all local banana farmers) licence which becomes due in December, unless they can demonstrate a proper and workable plan to revitalise the banana industry," said Mr. Montague.

Both Mr. Montague and Ren Gonsalves, general manager of the Banana Board, also noted that Jamaica Producers (JP) Group, responsible for 80 per cent of the island's banana exports (through BECO) has for years imported bananas from Costa Rica to fulfil its export licence to the European market and take advantage of the preferential arrangement.

Jamaica only produces 50,000 tonnes of bananas per year but the licence makes provision that if local banana production does not exhaust the allocation of 78,000 tonnes, BECO can import from other countries if the company so wishes, explained Dr. Marshall Hall of the Jamaica Producers Group.

"So BECO can sell its licence to Jamaica Producers Fruit Distributors (a UK-based JPG subsidiary) and another company, Fyffes, and they can buy from other countries to make up the volume."

Mr. Montague also accused BECO and Jamaica Producers of rejecting locally produced bananas in favour of Costa Rican imports. But Dr. Hall contradicted this.

"Jamaican bananas always get first preference, we have never refused local bananas that are of a high quality," said Dr. Hall. "...the confusion arises because the same Jamaica Producers ship that picks up bananas from Costa Rica comes here to Port Antonio to pick up Jamaican bananas heading to England," Dr. Hall explained.

Costa Rican bananas cost US$5.50 per 18 kilogramme, and can be sold on the EU market for $10.50 per 18 kilogramme, says Mr. Gonsalves. Bananas produced in Jamaica cost US$11 per 18 kilogramme.

Dr. Hall noted that his company is committed to the local industry. "We want to build this banana industry, JP has invested millions in the local industry, right now, we have over US$500,000 loans outstanding to small farmers.

"We just need to concentrate on production, and stop quibbling," he said.

Meanwhile, there are plans to resuscitate banana production in St. Mary, the poorest parish according to a recent study, to help farmers to cash in on the booming local banana market.

"A proposal has been made to the Eastern Jamaica Farmers Support Programme to put on stream a programme to boost production of small farmers for the local market," said an extension officer from St. Mary.

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