Banana Industry Decline No Sideshow
Aurelie Walker, guardian.co.uk, Tuesday 18 May 2010
Today, EU leaders and their counterparts from Colombia and Peru will strike lucrative trade agreements spanning financial services, industry and agriculture – the first between the EU and any Latin American nation since 2003. The EU's attention will then focus on securing similar deals with the mighty Latin American Mercosur bloc that includes Brazil and Argentina.
Another example of the power of globalisation to generate wealth? Maybe, but there is a less rosy side to the seemingly inevitable victory march of trade liberalisation.
As European business interests ready themselves for new markets, it should not be forgotten that breakthrough would never have materialised without selling the Caribbean banana industry down the river. Unlikely as it may seem, until last December, there was an impasse in closer trade ties between Europe and Latin America. It came in the form of the banana – the world's most exported fruit.
Since 1975, Europe protected Caribbean banana growers. But the largely American interests that controlled the vast banana plantations in Ecuador and Colombia, where workers' rights are at best an afterthought, persuaded the then fledgling Clinton administration, whose election they lavishly funded, to lodge a complaint with the World Trade Organisation demanding they overturn this perceived unjust support.
For 17 years, the banana wars raged. Then, five months ago, with one eye on huge trade deals between Colombia and Peru, Europe relented.
Compensation for banana farmers in a dozen Caribbean and African countries comes in the form of €190m fund. The money will be paid to Caribbean governments in the form of budget support. In other words, farmers won't see the cash.
The most serious challenge to agriculture in the Caribbean comes as islands face falls in tourism, foreign direct investment and financial services. This after the international community told the islands to pursue these paths.
The decline of the Caribbean banana industry may seem like a sideshow. But abandoned farms together with laid-off financial workers are a seedbed for enveloping the Caribbean economy and political system in a drug morass.
There is evidence of the spread of marijuana cultivation and trafficking, especially in St Vincent where a Marijuana Growers Association was publicly announced, despite the practice being illegal.
Strategically placed on the cocaine route from South to North America, the Caribbean used to be just a stopping-off point for traffickers. Now, say well-placed sources, drug barons are making connections with the marijuana trade and supplying them with guns and cocaine.
In a region where unemployment surpasses 30% in some countries, according to International Labour Organisation estimates, this is what happens when you lose a trade war. Farmers question whether it is worth tilling the soil against a shrinking export market, a lower return and a lack of credit.
Trade is not a cure-all for poverty reduction. Investment in infrastructure, technology and human capital are also prerequisites for development.
But the economies of vulnerable nations are being sacrificed to satisfy the interests of western corporations. The last rites are administered by global food giants who have and continue to diminish workers' rights to increase their profits.
The remaining Windward farmers are fighting back by shortening supply chains and investing in community and business developments. Backed by the better nature of UK consumers, who are choosing Fairtrade in increasing numbers, at least there is one way they can still receive a decent price for their crop in a market that has seen long-term real-terms price decline.
But the big, contradictory picture is at the very same time that Caribbean governments are fighting poverty, drugs and crime, the same curse of poverty, drugs and crime is being exacerbated – as a direct consequence of the European commission's trade policy.
Today, EU leaders and their counterparts from Colombia and Peru will strike lucrative trade agreements spanning financial services, industry and agriculture – the first between the EU and any Latin American nation since 2003. The EU's attention will then focus on securing similar deals with the mighty Latin American Mercosur bloc that includes Brazil and Argentina.
Another example of the power of globalisation to generate wealth? Maybe, but there is a less rosy side to the seemingly inevitable victory march of trade liberalisation.
As European business interests ready themselves for new markets, it should not be forgotten that breakthrough would never have materialised without selling the Caribbean banana industry down the river. Unlikely as it may seem, until last December, there was an impasse in closer trade ties between Europe and Latin America. It came in the form of the banana – the world's most exported fruit.
Since 1975, Europe protected Caribbean banana growers. But the largely American interests that controlled the vast banana plantations in Ecuador and Colombia, where workers' rights are at best an afterthought, persuaded the then fledgling Clinton administration, whose election they lavishly funded, to lodge a complaint with the World Trade Organisation demanding they overturn this perceived unjust support.
For 17 years, the banana wars raged. Then, five months ago, with one eye on huge trade deals between Colombia and Peru, Europe relented.
Compensation for banana farmers in a dozen Caribbean and African countries comes in the form of €190m fund. The money will be paid to Caribbean governments in the form of budget support. In other words, farmers won't see the cash.
The most serious challenge to agriculture in the Caribbean comes as islands face falls in tourism, foreign direct investment and financial services. This after the international community told the islands to pursue these paths.
The decline of the Caribbean banana industry may seem like a sideshow. But abandoned farms together with laid-off financial workers are a seedbed for enveloping the Caribbean economy and political system in a drug morass.
There is evidence of the spread of marijuana cultivation and trafficking, especially in St Vincent where a Marijuana Growers Association was publicly announced, despite the practice being illegal.
Strategically placed on the cocaine route from South to North America, the Caribbean used to be just a stopping-off point for traffickers. Now, say well-placed sources, drug barons are making connections with the marijuana trade and supplying them with guns and cocaine.
In a region where unemployment surpasses 30% in some countries, according to International Labour Organisation estimates, this is what happens when you lose a trade war. Farmers question whether it is worth tilling the soil against a shrinking export market, a lower return and a lack of credit.
Trade is not a cure-all for poverty reduction. Investment in infrastructure, technology and human capital are also prerequisites for development.
But the economies of vulnerable nations are being sacrificed to satisfy the interests of western corporations. The last rites are administered by global food giants who have and continue to diminish workers' rights to increase their profits.
The remaining Windward farmers are fighting back by shortening supply chains and investing in community and business developments. Backed by the better nature of UK consumers, who are choosing Fairtrade in increasing numbers, at least there is one way they can still receive a decent price for their crop in a market that has seen long-term real-terms price decline.
But the big, contradictory picture is at the very same time that Caribbean governments are fighting poverty, drugs and crime, the same curse of poverty, drugs and crime is being exacerbated – as a direct consequence of the European commission's trade policy.
posted by Karl Eklund at 10:38 AM
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