The Miami Herald
September 16, 2001

Banana workers strike

Transnational fruit companies feeling the squeeze from a protracted trade war with Europe pass on the financial suffering to farm workers.


 PUERTO ARMUELLES, Panama -- On a recent sunny afternoon, banana picker Roberto Chacón Sánchez hung out in a veranda in western Panama, playing dominoes and lamenting the future of the industry that has fed his family for 20 years.

 He had the time: He and more than 3,000 banana workers here were on strike, protesting cost-cutting measures by Puerto Armuelles Fruit Co., a subsidiary of Chiquita Brands International.

 ``More work, less money,'' Chacón complained, demonstrating all the extra assignments his job now requires. ``I have been doing this all my life -- I will die here -- and all my life the big banana companies have been saying they are not making money and will leave. They haven't left yet.

 ``If you believe them, in 20 years they haven't made a dime.''

 But Chacón shouldn't be too confident. All across Central America, farmers are feeling the pinch of a worldwide glut of bananas. Huge transnational fruit companies are feeling the squeeze from a protracted trade war with Europe -- and are passing it on to the farm workers they employ and independent farmers they purchase crops from.

 In the name of efficiency and global competition, people like Chacón are being asked to streamline. It's all part of strategies by big companies like Chiquita that are being forced to change the way they do business in order to survive. The glory days of the so-called ``banana republics,'' it seems, are over.

 ``The bonanza years, the victorious years, ended,'' said Enoc Rugama, president of the Independent Banana Cooperative of Costa Rica. ``The big companies pay little and demand too much. For three or four years now, we've been having serious problems.''

 A drawn-out trade war between the U.S. and Europe hurt the Central American industry badly. In 1993, Europe drastically reduced the number of bananas it would import from Latin America, leaving Chiquita in particular reeling. While the tariffs and quotas were later deemed illegal and lifted, companies are still trying to recover from the financial havoc they wreaked.

 At the same time, U.S. transnationals suddenly began facing competition like never before. Ecuador, a low-cost producer, took Costa Rica's spot as the world's biggest banana grower.

 So companies such as Puerto Armuelles Fruit Co. are closing small farms and making workers adapt to new ways of doing business, including combining several jobs into one. Roberto Chacón now has to deflower banana patches and take the extra step of tying up stray branches, jobs that were once done by others.

 ``If they want to modernize, why don't they just buy a modern machine so a man can work?'' Chacón asked.

 He argued that ``cost-cutting'' really means ``wage-slashing'' because the companies usually pay employees by volume: adding more responsibilities designed to improve fruit quality slows down their production and pay. In Puerto Armuelles, the decision to shut three farms and move hundreds of workers to another several miles away caused a 10-day strike, a loss of about $2 million, the union said.

 ``There is tremendous oversupply, that's the real problem,'' said Cameron Forsythe, head of the Puerto Armuelles Fruit Co. ``When you have an oversupply, you have to have a proper product. We're trying to get our unions to understand that. We can't be in a business where you are losing money.

 ``We are not competitive here.''

 The numbers show the changes: In the past 10 years, Ecuador doubled its production -- now accounting for 40 percent of the bananas out of Latin America.

 ``I would say during the period of quotas in Europe there was a crisis -- an extended crisis,'' said Jeff Zalla, vice president of corporate communications for Chiquita. ``We appear to be emerging from it. I would not say it has ended. There remains enormous pressure to be cost efficient.''

 Countries with high-cost operations are left scrambling to keep up.

 Central America has already seen its market share slip: Panama, for example, once had 15 percent of the Latin American banana market; now it's only 7 percent. A 1998 hurricane wiped out at least half of Honduras' plantations, leaving the country with just 7 percent of the market.

 In Panama, Chiquita warned that if unions did not accept cost-cutting moves, the company would be forced to shut its operations. The strike ended, but the negotiations continue.

 The strike crippled the economy here: The city feared that without tax revenue, it would not be able to meet payroll.

 "The era of the hen with the golden egg is over,'' said Franklin Valdes, mayor of Puerto Armuelles, where he said at least 15,000 people depend on the company's 3,300 jobs. "Now we have to compete in Ecuador, Costa Rica and other countries with cheaper labor. This is a crisis. The banana situation is hurting.''

 Nonetheless, the companies foresee a brighter future. The European Union has agreed to adjust quotas on Central American bananas, and lift them in 2006.

 "The future isn't bleak,'' Forsythe said. "There's always going to be people eating bananas.''

                                    © 2001