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business & economy
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Chiquita banana buying cuts pose a problem for the government by Eric Jackson, from other media Citing a saturation of the European market, Chiquita Brands gave independent banana growers in Bocas del Toro province 24 hours' notice earlier this month that for the third time in four weeks it would stop buying their fruit. It might have been just a business setback rather than a catastrophe, but for the fact that Chiquita has an exclusive marketing contract that doesn't allow the independents to sell their produce to any other buyer. With the new buying freeze came renewed threats of militant action by the independent farmers and their workers, coupled with a demand that the Panamanian government declare the exclusive contract null and void as illegally monopolistic and against the national interest. The Torrijos administration, however, has steadfastly sided with Chiquita on this point, both in Bocas and with respect to a similar arrangement with the cooperative that took over Chiquita's farms in the Puerto Armuelles area of Chiriqui province. If push comes to shove like it sometimes has, the protesting banana workers would attempt to block the export of fruit from plantations that Chiquita still directly owns and operates. In order to head off any such thing the Ministry of Commerce and Industry sent in Vice Minister Manuel José Paredes to calm the situation, and he declared the 24-hour advance notice inadequate but otherwise didn't accede to the independent growers' demand. Blockades were avoided for the time being. The growers say that they can find European buyers, but meanwhile that market is unstable because after years of litigation and fruitless negotiations, the European Union and a group of Latin American countries that includes Panama are still far from an agreement on EU banana import duties. The Europeans are currently offering a duty $176 per box, while Panama and its allies are insisting that they'd never accept more than half of that amount. As the woes of Panama's banana industry go on without a solution in sight, there are persistent rumors that there will emerge a new Panamanian fruit company, headed by prominent members of rabiblanco families; that the government will liquidate failing cooperatives in Puerto Armuelles and Bocas and cancel their agreements with Chiquita; and that the new company will then pick up the pieces. That, however, presupposes that Europe, which has companies willing to buy Panamanian fruit, would allow such a new enterprise access to its market while its businesses are excluded; or the unlikely event that the United States would allow the loss of US-based Chiquita's prerogatives and let a new company that grabs them into the American market; or that a new niche might be found in the Asian market. The Puerto Armuelles situation is not going to continue as it has indefinitely, because the government is subsidizing the cooperative's losses and has said that it will only do so in the short term. Chiquita is legendary for its power over Latin American governments, particularly the more corrupt ones. Hence the epithet "banana republic." Still, it's hard to see how it can maintain its dibs on a big part of this country's fruit production without actually buying the bananas at something approximating world prices. One likely exit from the dilemma would be the closure of a lot of Panama's banana plantations, which would entail bankruptcies, families left destitute and driven toward the cities in search of work and a permanent downsizing of this part of our national economy. In that case Chiquita's buying rights would die a natural death, but not without having first protected the company from Panamanian competition.
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