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Friday, 13 November, 1998, 22:22 GMT
Banana losses threaten workers
Banana plantation
Bananas are one of Central America's most important crops
There are fears that up to 40,000 banana workers will lose their livelihood in the wake of Hurricane Mitch.

The banana plantations of Central America have been devastated by the hurricane which has damaged trees and destroyed processing centres, transportation links and ports.

The biggest producer, the US-based Chiquita Brands, has said that most of its production will be wiped out through 1999.

And Dole, owned by Standard Brands, says that 70% of its 40,000 acres throughout Guatemala, Honduras, and Nicaragua were completely destroyed.

Both companies have helped to rush food and emergency supplies to the region. Dole says it is feeding 20,000 people per day.

But the longer term future of the Central American banana industry is now at risk.

For the moment, Chiquita has said that its 7,000 workers had been suspended but would receive full pay for at least three months.

It says it may offer some employees a role in rebuilding work.

And it is discussing plans with the unions for the worker's rehabilitation.

Banana plantations

The hurricane's devastation has been all the worse for the mainly agricultural economies of Central America.

The crop damage to coffee and sugar has also been severe.

However, coffee plants are more robust, and grown on diversified plots by small individual growers.

Green bananas
Bananas grow all year round
Bananas on the other hand are grown in large plantations under conditions of intensive cultivation.

In Honduras half of all bananas are grown by one company, Chiquita.

It will take a huge investment to rebuild the plantations and all the related infrastructure. It takes 12 to 18 months just for the new banana trees to take hold.

During past years yields were increased through the use of more agro-chemicals, a method which increased the risk to the environment.

Now the plantations are gone, and the companies say the loss of up to 25% of their banana production could hit their profits by some $50-$70m in this financial quarter.

Chiquita, which had 17,000 acres under cultivation in Honduras, estimates the total damage at $850m.

The company's workers, who have struggled for years to achieve union recognition, will have an even harder time.

They have been surviving on wages of $2.50-$5.00 a day. Now the struggle to rebuild their homes and livelihoods could take years.

Years to recover

The future of the industry could hinge on the international relief effort.

"The economy in general is going to take years to rebuild," said Steve Warshaw, chief executive of Chiquita.

Without the rebuilding of the infrastructure, the banana economy will not be able to function - whatever the fruit companies do.

And that would hit Central American countries hard.

As producers of primary products and importers of manufactured goods, they are already running large trade deficits.

Honduras, for example, relies on banana exports to the tune of $184m.

Guatemala and Nicaragua are also significant producers.

The main export market is the US, where banana prices doubled last week to $9.50 a box.

The so-called "dollar bananas" are not sold as widely in Europe, where the EU has long given preference to bananas from its former colonies. This has become the subject of an acrimonious trade dispute between the US and the EU, which now threatens to escalate into a trade war.

This week the US threatened trade sanctions if the EU did not abide by a World Trade Organistion ruling to open its market.

Banana republic

Honduras has long been dominated by the big American growers who introduced banana production in the region in 1898.

In the old days, the two big companies boasted they could buy political influence at will.

Until recently, they did not recognise unions and operated an autonomous regime on their plantations.

Now the scale of the disaster will challenge all the parties, workers, companies and government, to work together to find a way of rebuilding their shattered industry.

See also:

10 Nov 98 | Hurricane Mitch
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