Irrigation Management Unit
St Lucian bananas:
a slimmed-down industry limbers up
Bananas account for around 96 per cent of St Lucia’s agricultural exports
and 60 per cent of total domestic exports. Many farmers remain
dependent on the fruit, which for the past half century has provided a
steady income that reaches all parts of the country.
In the words of one banana company manager: “The
industry puts money into the economy to make things happen.” Over the past few years “restructuring” and “recovery”
have been the industry watchwords in an effort to improve the
quality of bananas. This is necessary in order to face the
onslaught of more open competition in the international market that has already taken its toll on St Lucia’s exports. The
European Union has come to the government’s assistance with
a range of financial instruments to increase ouput and efficiency and soften the social blow.
This is because another “r” – for redundancies – has been the
downside. According to the latest statistics there are currently
just 2,333 certified farmers in St Lucia. As a result of the current
international situation in the sector and the restructuring
process others are expected to leave the industry, with a domino effect on other areas of the economy.
Shaping up for keener competition
The creation of a single market in the European Union in
1992 opened the doors to competition from Latin America. But
the African, Caribbean and EU countries successfully defended the duty-free quota for ACP bananas – enshrined in successive Lomé and Cotonou protocols – at the World Trade
Organisation (WTO).
Nevertheless tariffs and quotas will be replaced by tariffs
only after 2006, although the current Cotonou Agreement does
give a commitment to keep the same level of imports from
ACP banana suppliers for a further two years until 2008. But
for Windward banana farmers it is an uncertain scenario.
EU aid is already given under Stabex funds, which offset lost
export receipts on fresh bananas, and under various parts of
the European Development Fund (EDF). This is now is being
complemented by a Special Framework of Assistance (SFA).
Dr John Ferguson, an agronomist working closely with the
EU’s delegation for Barbados and Eastern Caribbean States,
says the new aid will aim to improve production of a high
quality, “niche” product, to diversify the economy and to provide safety nets for social fall-out from the industry.
The previous EU funding has already improved quality.
Over eighty per cent of the Windwards’ exports are to the
United Kingdom’s big five supermarkets at premium prices.
This is in the face of a shrinking EU banana market.
Management of the market
To date, St Lucia has gone further down the restructuring road
than its Windward neighbours, St Vincent and the Grenadines
and Dominica. In 1998, St Lucia’s Banana Act was dissolved.
This led to the formation of four banana companies out of the
embers of the government-subsidised St Lucia Banana Growers’
Association (SLBGA). The companies provide services to the
farmers, while the Windward Islands Banana Development and
Export Company (WIBDECO), owned by Windward governments and farmers, does the marketing.
In the interests of a seamless operation to improve efficiency
and productivity in St Lucia’s banana industry, the prime minister
and other interested parties approved, in July last year, a blueprint
for the future. They agreed on WIBDECO’s proposal for at least
one private banana company per island in which farmers own
shares, and defined the responsibilities of all those involved. A
contract between the company and individual growers would
ensure that volumes and quantities were met.
When we visited St Lucia in February/March we canvassed
the views of farmers, government, companies and WIBDECO
on all the changes in their industry and on their anxieties and
may-june 2002 the Courier ACP-EU
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_St Lucia
hopes for the future.
2001 – a terrible year
2001 could not have been
worse for the St Lucian banana
industry, and this was only in
part due to the industry’s internal shake-up. Throughout the
Windwards production fell to
82,000 tons from nearer
140,000 the previous year.
St Lucia was hardest hit, falling
to just 34,000 tons from over
70,000.
Many reasons are advanced
to explain why St Lucia, the
largest of the islands’ exporters,
suffered so badly. WIBDECO’s
business development director,
Heraldine Rock, banana farmer. “Farmers
Donal Pierse, says that things
are now subsidising the industy”
started to go wrong in the second half of 2000 because of EU licence fraud involving
Ecuadorian fruit. This led to surplus bananas on the EU market
and depressed prices. As a result banana companies were unable
to provide credit facilities for inputs. This was compounded in
2001 by the worst drought in the country for 40 years.
The farmer
Most of the farmers we met, especially those working smaller plots, said it was hard work to meet certified standards. They
said they paid too much for inputs like fertilisers and they complained about getting hold of inputs and a lack of credit to
finance them.
Heraldine Rock, who was the country’s first woman minister
and is a long time banana grower and industry watcher, echoed
the view that prices are too low and overheads too high. She
says inputs now have to be paid for in full whereas previously
they were subsidised by the SLBGA. “The banana turned sour a
long time ago”, she told us. Mrs Rock feels it is the farmers who
are now subsidising the business.
But if there is so much hardship, why do so many farmers
stay in the industry? Those we spoke to cited a lack of alternatives. The banana crop also offers some security in that it is not
seasonal, and replanting is speedy. Then there is still the
dependable weekly shipping link to the United Kingdom.
The companies
The companies formed out of the former SLBGA have their
own problems.
“The industry is in a mess right now”, says the managing
director of Top Quality Fruit Limited, Peter Serieux. He feels that
not enough is being done to promote a “Windward” brand or to
help with irrigation and drainage. Prices fell as low as
40 cents per pound in 2001 (from 60 cents the previous year).
“There was disorderly liberalisation and the EU assistance came
too late”, he says.
He is critical of the relationship with the marketing body,
WIBDECO, and also draws attention to the high level of debt
that currently restricts the companies’ activities. He is in no
doubt, however, about the demand for Windward fruit. Taking
advantage of the market is a problem.
SLBC’s managing director, Fremont Lawrence, traces the current discord back to February 1999 when the formation of various companies out of the former SLBGA was not done in an
organised way and people had scores to settle. Mr Lawrence
looks to the future and says he is very aware of the market-led
nature of the industry. He predicts a better 2002: “We are better
prepared this year and have had rain in the dry season.”
WIBDECO
The marketing body, WIBDECO, is also more upbeat about
prospects for the industry this year. Donal Pierse estimates that
the multiple supermarket business can sustain 115,000 tons
annually. He acknowledges that it is difficult to compete headon with Latin America but says that WIBDECO has had “a brilliant working relationship” with the supermarkets for the past
three years.
For Dr Fletcher privatisation is working out “much as
expected.” He feels, however, that that St Lucian banana companies have missed a golden opportunity in failing to offer different services to farmers and in competing for the same
ground.
The three-year SFA is an extra boost to the previous funding.
All aid to the industry is now channelled through the Banana
Industry Trust, set up by the government to manage all funds
to the industry. Monies earmarked for 1999 (€8.54 million)
and 2000 (€8.75 m.), will focus on making the industry more
competitive and enhancing its management capacity. Among
other things, money will also go to agricultural and economic
diversification, human resource development, adult education
and a farmers’ pension scheme.
■
The Mabouya Valley Development Project is jointly funded
by the EDF and the St Lucian government. Its objective has
been high productivity on a model farm of some 150 farming families, using tissue culture and irrigation. Programme
Officer, Ezechiel Joseph, says that some farmers have seen
production climb from six to eighteen tons per acre. Now in
Phase II (€796,000), the project is funding the construction
of four workshops, which can be rented by farmers or, for
example, school leavers for businesses like electronics or
plumbing. Phase II is also financing agro-processing ventures and the development of eco-tourism.
Ezechiel Joseph (left), with National Authorising Officer Wilfred Pierre (centre)
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the Courier ACP-EU may-june 2002