Steve Striffler is Associate Professor of Anthropology and Latin American Studies at the University of Arkansas and the author of In the Shadows of State and Capital: The United Fruit Company, Popular Struggle, and Agrarian Restructuring in Ecuador, 1900–1995 (Duke University Press), winner of the Labor Section of the Latin American Studies Association’s 2003 award for Best Book.

Mark Moberg is Professor of Anthropology at the University of South Alabama. He is the author of Myths of Ethnicity and Nation: Immigration, Work, and Identity in the Belize Banana Industry and Citrus, Strategy, and Class: The Politics of Development in Southern Belize.

Banana Wars

Power, Production, and History in the AmericasBy Steve Striffler

Duke University Press

Copyright © 2003 Steve Striffler
All right reserved.
ISBN: 9780822331599

Chapter One

LAURA T. RAYNOLDS

The Global Banana Trade

Bananas represent one of the most widely traded agricultural goods in the world with annual exports valued at roughly five billion dollars (FAO 2001). Though bananas are typically seen as an undifferentiated commodity, historically divergent patterns of trade regulation have defined two distinct commodity systems for this fruit: the dominant Dollar Banana system centered on the U.S. market and the smaller ACP Banana trade between Europe and its former African, Caribbean, and Pacific (ACP) colonies. Using a comparative commodity system approach, I examine the divergent trade geography, state sponsorship, corporate involvement, social relations of production, and environmental conditions characterizing each of these production systems in order to illuminate how Dollar and ACP Bananas have been socially defined as distinct commodities.

The banana trade has historically been forged through global and local forces that simultaneously connect and divide major Latin American and Caribbean sites of production and major North American and European sites of consumption. In recent decades there have been two regimes regulating the trade in bananas: Dollar Bananas have been regulated by “free market” conditions shaped by the oligopolistic power of key transnational corporations, while ACP Bananas have been regulated by preferential market agreements between nations. The conflict between the ACP and Dollar Banana regimes-the so-called banana wars-illuminates historical tensions between these two systems and the emergence of the World Trade Organization (WTO) as the new arbiter of the global market. In the most recent skirmish the United States and its transnational corporations appear to have won, undermining the future viability of the ACP Banana system. But this does not mean that trade conditions will necessarily be homogenized under the Dollar Banana system. Alternative trade systems are developing that could offer opportunities for the survival of displaced ACP Banana farmers and for building a more socially and environmentally sustainable system of banana production, trade, and consumption.

COMMODITY-SYSTEM ANALYSIS

A historically rooted commodity-system approach is well suited to analyzing how bananas have been transformed from a subsistence food in Latin America and the Caribbean into a favorite fruit purchased by consumers in North America and Europe. This approach traces the complex social, political, and economic relationships and institutions created in the movement of a particular commodity from the point of production to its consumption. Research focusing on key agro-export commodities has facilitated analysis of the configuration and reconfiguration of labor forces, production patterns, market ties, and political alliances in export-dependent Latin American and Caribbean countries. Extensive study of the region’s coffee economies, for example, has emphasized how the macrodynamics of the coffee trade have converged with local forces to forge strikingly different patterns of production organization (see Roseberry, Gudmundson, and Kutschbach 1995). Mintz (1985) brilliantly demonstrates the role of sugar in shaping social, political, and economic structures in both Caribbean production regions and Europe consumption regions (see also Tomich 1990). The commodity-system approach, however, has been less often applied to bananas (but see Trouillot 1988).

A commodity-system approach grows out of the complementary work of Friedland (1984) and Hopkins and Wallerstein (1986) who, from slightly different vantage points, advocate the analysis of the interconnected processes of raw material production, processing / packaging, shipping, marketing, and consumption that are embodied in a given commodity. One of the strengths of this approach is its ability to locate local production systems within larger networks that span economic sectors, geopolitical regions, and historical periods. As Gereffi (1994, 97) notes, commodity-system analysis focuses on the interlinking of products and services in a sequence of value-added activities; the nature and spatial configuration of enterprises that form production and marketing networks; and the power relations that determine how resources are allocated along the commodity chain. Recent studies in various commodity areas highlight the increasingly critical role of transnational corporations in organizing and transforming current global production systems (see, for example, Gereffi and Korzeniewicz 1994).

Much of the commodity-based literature focuses on production, though trade and consumption form equally important terrains for research. Consumption relations are particularly vital in shaping the networks that supply what we eat, since food is not only a human necessity but a key to cultural identity (Arce and Marsden 1993; Soluri herein). Whereas research on consumption highlights the importance of global, national, and local cultural forces in shaping commodity systems, investigations of agrofood trade often emphasize the importance of political forces operating in intersecting local and global arenas. Recent agrofood studies challenge economic models of comparative advantage, highlighting the importance of political factors in constructing market competitiveness and in regulating trade (McMichael 1997; Raynolds et al. 1993; Watts and Goodman 1997).

THE HISTORICAL DIVERGENCE IN THE BANANA TRADE

Since the 1800s, bananas (along with sugar and coffee) have integrated Latin America and the Caribbean into the international division of labor, forging the region’s ties to the United States and Europe. Early mercantilist relationships and successor affiliations between countries of the north and south defined the parameters of the banana trade. The two hands of colonialism-the direct rule of European colonial powers and the indirect rule of the increasingly hegemonic United States and its corporations-created the two systems through which bananas are currently produced, traded, and consumed. As with other key agro-exports, the politics of bananas has been, and continues to be, central to the politics of national development as well as international trade.

The Creation of the Latin American / United States System

Until the late nineteenth century the international banana trade was highly decentralized, involving a number of U.S. and European trading companies that bought produce from independent growers in the Americas, Africa, and the Pacific. At the turn of the century the newly formed, U.S.-based United Fruit Company transformed the banana industry, linking the shipping and distribution of bananas-which characterized the earlier mercantilist trade-to major production enterprises. The vertically integrated United Fruit Company merged large banana operations in Latin America and the Caribbean, major railroad, port, and shipping facilities, and a substantial U.S. fruit distribution network (Davies 1990, 23-36, 96; Bucheli herein).

United Fruit continued to expand its holdings in the early 1900s, consolidating its control over the regional banana industry. In this era company plantations were relocated every ten to twenty years due to the onset of major diseases and the rapid depletion in soil fertility. Although only a small portion was ever planted at one time, United Fruit acquired over three million acres in Honduras, Costa Rica, Nicaragua, Guatemala, Panama, Colombia, Cuba, and Jamaica. By combining this productive base with expanding shipping, railroad, and port facilities, the company was able to take advantage of economies of both scale and scope. Guaranteeing regular supplies of high-quality produce, United Fruit drove most of its regional competitors out of business, acquiring 50 percent of the growing U.S. consumer market (Roche 1998, 37-41).

During the mid-1900s era of rising U.S. hegemony, United Fruit became a significant political as well as economic force in the hemisphere. The powerful banana company was involved in shaping domestic politics within producer nations increasingly dependent on banana revenues. At the same time, the company played an important role in guiding U.S. diplomatic relations toward a region increasingly defined as vital to American interests. In 1954 United Fruit played a critical role in orchestrating and gaining U.S. support for the overthrow of Guatemala’s president; in 1974 the company was again implicated, this time in bribing the president of Honduras. United Fruit exerted such influence over the economies and governments of Central America that these countries came to be referred to pejoratively as “banana republics.” Given its stranglehold on the region, United Fruit in turn came to be known locally as El Pulpo (the octopus) (Kepner 1936; Langley and Schoonover 1995).

United Fruit’s banana monopoly was challenged repeatedly under U.S. antitrust laws, resulting in the creation of two spin-off companies (Roche 1998, 41-49). Standard Fruit, spun off in 1909, became a major producer and shipper of Central American bananas and was purchased in 1964 by the U.S.-based Castle and Cooke, now known as Dole Food Corporation. A 1972 antitrust action against United Fruit precipitated the sale of banana lands to the smaller U.S.-based Del Monte Fresh Produce Company. Trying to shed some of its notoriety, the United Fruit Company was reorganized and renamed, first as United Brands, more recently as Chiquita Brands. Chiquita, Dole, and Del Monte have largely maintained their preeminence in the Latin American banana industry, despite two major recent challenges to their market dominance. One challenge has come from the rise of independent Ecuadorian and Colombian banana producers and exporters. Though Ecuador and Colombia have gained an important share of the banana trade, particularly in Asia, U.S. companies have maintained their market position by buying produce from these countries and expanding their own production in the Pacific (Glover and Larrea Maldonado 1991). The 1974 creation of the Union of Banana Exporting Countries (Union de Paises Exportadoras de Banano) raised a second potential threat to U.S.-based banana company domination, but this group’s impact has been largely limited to the imposition of a modest tax on corporate banana exports (ibid.).

The Divergence of the Caribbean / European System

Though initially part of the Latin American trade, the Caribbean banana industry developed along a different trajectory due to the persistence of powerful European colonial administrative structures and mercantilist trade policies. At the turn of the century, the introduction of on-board cooling techniques opened up the transatlantic banana trade (Davies 1990, 74). Seizing this opportunity, the British and French made bananas a central vehicle for continued colonial rule in the region, forging a distinct banana circuit that linked the Caribbean to Europe. In contrast to the Latin American banana industry, the key players in this new Caribbean banana circuit were not large-scale producers, but state administrators and banana shippers.

In the early 1900s, British colonial policies transformed Jamaica-previously a minor source of U.S. and European bananas-into the major supplier of bananas to Britain, the largest market in Europe. Small-scale Jamaican producers were encouraged to grow bananas for export to Britain, where they were guaranteed a market. To counter United Fruit’s growing banana monopoly, the British government gave the company known today as Fyffes Limited control over banana shipping and distribution (Davies 1990, 86). Fyffes was guaranteed 75 percent of the British market and an exclusive contract over bananas from Jamaica and, later, Belize and Surinam (Thomson 1987, 80). Since Fyffes was not a banana producer, colonial administrators established an association of growers to coordinate banana production and shipping (Sealy and Hart 1984). After World War II, Britain sponsored the emergence of theWindward Islands as a major supplier of European bananas. Colonial administrators again created a decentralized banana industry, channeling peasant production into the export economy with the help of a powerful state-backed banana growers’ association (Thomson 1987, 13-44). Exclusive banana-exporting rights were granted to a major U.K. food company, Geest Corporation (Trouillot 1988, 127; Grossman herein; Slocum herein).

England’s colonies in the Caribbean won their independence, but their economies still hinge on the smallholder banana industry established by the British. The former colonies maintain their preferential access to the lucrative British market, with British-based companies continuing to ship most of the area’s bananas. Geest’s banana division was recently purchased by Fyffes, making Fyffes the largest shipper-distributor in the European banana circuit (Roche 1998, 143-46).

Colonial relationships similar to those of Britain configured other strands of the European banana circuit, creating a network of smallholder production systems in the former colonies that remain linked to the metropolitan centers through preferential trade. Martinique and Guadeloupe, formerly colonies and now departments of France, have traditionally provided the second-largest share of European bananas under a system that mirrors that in the neighboring Windward Islands. Like their British counterparts, French colonial administrators founded a smallholder banana export industry coordinated by a state-supported growers’ association. This decentralized banana industry remains critical to the economies of Martinique and Guadeloupe (Welch 1996). While the locus of the European banana circuit has always been the Caribbean, other former colonies in the Mediterranean and Africa also supply this system.

THE DOLLAR BANANA SYSTEM AND THE ACP BANANA SYSTEM

By the 1960s the political and economic ties between the United States and its Latin American neighbors and European countries and their former colonies had defined two opposing banana systems (see map, below). The Dollar Banana system centers on the U.S. market, long the largest market in the world, which currently absorbs 31 percent of total world exports (FAO 2001). Reflecting the historical sphere of influence of the U.S. government and U.S.-based corporations, Latin American exports-from Ecuador, Costa Rica, Colombia, Panama, Guatemala, and other countries-supply most of the U.S. market, as well as the smaller Canadian market. Dollar Bananas currently constitute about 80 percent of world trade. This “open market” trade remains largely in the hands of the big three banana companies.

The ACP system, which links former colonies and offshore territories in Africa, the Caribbean, and the Pacific with the European market, is the world’s second major banana circuit. The Lome agreement between the European Union (EU) and the ACP group of seventy former colonies has upheld the historically rooted preferential trade access and market share of ACP Bananas (Chambron 1995, 2; Sutton 1997, 11). The EU currently absorbs 33 percent of total world banana imports (FAO 2001). ACP countries-including St. Lucia, Dominica, St. Vincent, and Jamaica in the Caribbean, and Cameroon and the Ivory Coast in Africa-supply 18 percent of the EU banana market. European offshore territories-including Guadeloupe and Martinique in the Caribbean and Madeira and the Canary Islands in the Atlantic-supply an additional 21 percent (FAO 1999a).

DOLLAR AND ACP BANANA-PRODUCTION REGIMES

Bananas move through an intricate set of transnational production, processing, and marketing activities as they make their way from the fields to distant consumers. Distributors play the pivotal role in this commodity system since it is distributors that must guarantee that bananas reach their destination undamaged and ready to eat. To ensure that bananas are not bruised in transit and are delivered in amounts that will be sold before spoiling, distributors must tightly coordinate activities along the commodity chain. While the central tasks of cultivation, washing, packing, local transport, international shipping, ripening, and wholesaling must be smoothly linked, these activities may be carried out by distributors themselves or by associated firms.

Continues…
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