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Costa Rica
Taking Considerable Steps To Improve
Position In The Export Market
ICT Unveils
Regional Office in Guanacaste
Costa Rica
Taking Considerable Steps To Improve
Position In The Export Market
The ‘banana wars’ have long dogged the
import industry into the EU, with Latin
America at the heart of the debate. Costa
Rica, the world’s third-largest banana
exporter, is taking considerable steps to
improve its position in the export market,
implement biological control and achieve its
ambitious plans to become carbon neutral.
Alex Lawson reports from the country.
“The tariffs we pay are simply too high; we
are ready to sit down and look at any
standards the EU chooses to require, but we
need to settle an agreement to improve our
position,” says Marco Vinicio Ruiz, minister
for foreign trade.
Ruiz sits at the heart of one of the biggest
debates in the global fresh produce
industry, with the banana trade into Europe
from African, Caribbean and Pacific (ACP)
states and Latin American countries divided
by export tariffs.
“We don’t get the zero tariffs [as the
former colonies do] that we deserve; they
say in the EU that there is a ‘preference
erosion’ and that there should always be a
differential between Latin American and ACP
countries,” Ruiz says.
This highly politicised debate comes against
the background of Costa Rica – often
referred to as the ‘Switzerland of Central
America’ due to its political stability –
calmly sitting as the world’s third-largest
banana exporter, after Ecuador and the
Philippines, with 19 per cent of the
European market.
Some 25.7 per cent of Costa Rica’s banana
production goes to the UK, with Belgium,
Italy and Germany also receiving significant
sendings. The US accounts for 45.6 per cent
of the remainder of production, with product
largely reaching the East Coast.
The export charges come against a tumultuous
background, with Fander Falconi, Ecuador’s
foreign minister, continuing to put pressure
on the EU and, at the same time, Nicaragua
pulling out and subsequently rejoining the
Central American regional association for
bananas.
Jorge Sauma, chief executive of Corbana, the
National Banana Corporation of Costa Rica,
thinks there has been too much support for
producers in countries such as the Canary
Islands, which receive subsidies of up to $8
(£5.30) a box. “It is simple,” he says. “We
don’t think there should be high tariffs and
all countries should be treated the same, as
we have social and political problems in
several Latin American countries. There
should be winners all round, not just in one
region – and there can be.”
When broken down, the pricing structure of
banana boxes leaving Costa Rica is complex.
Eduardo Gómez Bodden, president of Bananera,
worked for Chiquita for 40 years before
leaving to set up El Esfuerzo farm 19 years
ago, and now supplies Dole, among others. He
estimates that the producer gets around $8 a
box while the retail value is $47. Within
this, the importer will have to pay for the
export tariff (around $4 for an 18.14kg
box), ripening, supply and freight costs
amounting to $14.50. Meanwhile, producers
pay around $4.65 a box on labour,
fertilisation, materials and spraying. “I’m
not complaining about the deal as it is, but
I would like to see where the remaining
money goes. I feel that certain countries
should have advantages as their soil and
labour is not as efficient as in Costa Rica,
but not as much they get at the moment. We
are charged $4 a box and they are given $6 a
box – a $10 difference is crazy.”
But the Costa Rican industry is a resilient
one. In 1985, the country suffered the
sudden pull-out of Chiquita from the Pacific
production areas in the south of the
country, as a result of a labour strike,
with 10,000 jobs lost in the process. More
recently, last year 10,300 hectares – 24 per
cent of production – were hit by heavy
rainfall, causing considerable difficulties.
Some 98 per cent of the 156 plantations are
now based on the Caribbean side of the
country, where the humid conditions are
perfect for banana growing, alongside the
lucrative pineapple industry, which requires
comparatively little labour and has been
adopted as an extra revenue stream by some
banana growers. Less than one per cent of
Costa Rica’s land is used for banana
production, illustrating how fertile its
land is, while 25 per cent of the country’s
land is protected.
This year, due to the inclement weather at
the start of the year, Corbana said exports
will be down an estimated six to eight
million boxes on the 103.1m produced in 2008
– a 9.3 per cent fall on 2007’s export
volume.
Corbana is owned equally by the government,
three state banks and banana growers and is
funded mainly via a five- cent contribution
from every exported box of Class I bananas.
Independent growers represent 51 per cent of
the total banana industry nationwide and the
remaining exports belong to international
companies in Costa Rica such as Dole,
Chiquita, Del Monte and, to a lesser extent,
Fyffes, which operate their own farms. The
independent producers supply to the
exporters, but do not grow on farms owned by
these companies. Relations between the two
types of farms remain good but the
independence is valued when it comes to
subjects such as the ‘c-neutral’ programme.
There is a real feeling that Costa Rica,
known for the political stability that its
neighbours struggle to attain, has the
necessary harmony to achieve the
government’s goal of becoming carbon neutral
by 2020, while the banana industry has set
an ambitious separate target of 2012 for its
farms, excluding logistics, to be carbon
neutral.
The 2012 target, submitted to the department
for the environment last August, displays
the industry’s commitment to reducing its
carbon output, and it is working with the
National University of Costa Rica and the
weather institute to analyse the effects of
fertilisers. There is evidence that bananas
are leading the way in this, with the
16-month-old Corbana-funded La Rita
eco-research centre confirming that a
hectare of banana plantation captures 30
tonnes of CO2, while the equivalent forest
captures 8t. Moreover, Dole has moved to
offset its transportation emissions,
reforesting areas to equal emissions from
transferring fruit to the port of Moín,
Limón, while some independent growers are
already carbon neutral in response to
demands from the German market. Corbana
itself has a farm, comprising 1,200ha of
forest near the Panamanian border, which is
used to balance some of the carbon used by
the industry.
In practical terms, the Costa Rican banana
business is impressive in its approach to
plantations. With most farms certified by
the Rainforest Alliance and GlobalGAP at
least, and some packing more than 960 boxes
of Class I fruit a day, there is a slick
efficiency which is not seen in some of the
country’s other industries.
The family-owned Corporación Surá is one
such company on the ball. It has 614ha of
banana production, exporting both through
Chiquita and increasingly through its
revived own brand, Surá. It produces 3,000
boxes per ha compared to a national average
of 2,500 and is aiming to reach 2m boxes in
2009, employing almost 300 workers at its
Balatana farm. But potential fears over soil
issues have been allayed, as Surá is
renovating areas of its plantation at a cost
of $11,000-$18,000 per ha, to replace old
plants with new, which Corbana believes have
eight years good production in them before
quality and yield begin to slip. The average
bunch is hung for three months and protected
by a ventilated blue bag with the plant
supported either by ties between plants or
overhead cables. Surá also indicated that it
may take Corbana’s lead on biological
control implementations. “First, we have to
decide what our need and emissions are, wait
for the research, and look at what we can do
– there is no doubt it is a beautiful goal,”
says Gilberto Rojas, administrative manager
at Corporación Surá.
In response to growing demand for
pesticide-free product for consumers and
importers, producers around the world are
rapidly trialling and implementing
biological control – the use of natural
creatures to control pests such as nematodes
and black Sigatoka, which are the main crop
scourges. Integrated management of insects
such as banana weevils and adult whitefly
has proved successful in the early stages
and several growers, backed by Corbana and
government funding 18 months ago, have
converted to the method. After seeing
production levels leap by up to 20 per cent,
more growers followed the initial few, with
35 per cent of independent growers at a
stage of implementation and several of the
international companies showing interest in
the project.
Sauma says criticism of the country’s
industry has been unfair. “Costa Rica is
open to any type of labour organisation:
trade unions, ‘solidarista’ associations,
permanent committees, co-operatives and
other types of associations,’’ he says.
‘‘This is guaranteed by our constitution. It
is not only the type of organisation that
matters, but also workers’ conditions – that
is, the need for wages to guarantee a decent
living for workers: food, health, education
and also leisure. All this is guaranteed by
the salary that banana workers earn in Costa
Rica, between $16 and $18, compared to wages
of around $1.50-2 a day in some African
countries.’’
The social housing programmes run by some
farms within the industry show a unity and
responsibility between the administration
and workers in several companies. José
Herrera runs the Corporación San Alberto,
which consists of 690ha of production across
three farms and supplies Chiquita. “Our
mission is to sell bananas, but our vision
is to make the conditions of the workers a
priority,’’ he says. ‘‘The best asset we
have as a business is our people – by taking
responsibility for them, we will have a
better business. The health of the workers
is very important to us, both on a personal
front and also to prevent contamination of
the fruit and packing water.”
Herrera’s La Estrella farm illustrates this
well. Beyond the plantation lies a village
that houses a sizeable proportion of the
workers and administrative staff, a school
for their children and an on-site doctor,
who has cut work-related accidents by 250
per cent. Herrera hopes this can be an
inspiration and a working model for the
Costa Rican industry. “The security the
workers get from this improves their lives,
and also their feelings about work,’’ he
says. ‘‘It is a very social way to live. We
give the field workers flexible hours to
suit them, as well as a lifelong career.”
But Gómez Bodden, who is in the process of
providing 90 homes near his El Esfuerzo farm
for workers to acquire, sounds a note of
caution “There is a problem that, if you
live in a company-owned home, then you are
tied to the job,’’ he says. ‘‘I have had an
experience where we were tied to a house
through a job and when the job went, so did
the house.
“I have been working with different
authorities to provide these houses for the
workers, which includes a government grant
so they can own and run a grocery store and
build their own community. I donated the
land, so I don’t own it, and let the workers
form an alliance to take it up. I feel that
I owe the labourers something: they work
hard, so if I can help them I will.”
There is little doubt that Corbana and the
banana industry are tackling a number of
issues admirably on several fronts and are
harnessing the natural unity of a country
that gained independence in 1821 and has had
little conflict since. This has put it near
the forefront of the world market, a
position Ruiz believes it will retain
through the recession. “The banana industry
is down around 10 per cent, but we are
confident it will return,’’ he says. ‘‘We
were growing at a rate of 16 per cent in
exports before the crisis and we can
continue this in the future. I have seen
that many companies have recognised their
most important asset is the workers and we
have seen very few redundancies
(unemployment is around 4.5 per cent)
through the crisis, although there has been
some reduction in the working week. We
continue to face the struggle on banana
exports as the EU clearly favours the ACP
states, but we believe that the issue can
and will be resolved in the next year and we
can be the cleanest and most attractive
banana-growing country in Latin America.”
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