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Banana production in Ecuador

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History

Production of bananas began in Ecuador in 1910. However, the industry did not experience a boom until 1948, when the government of President Galo Plaza began issuing agricultural credits, tariffs, building ports and a highway on the coast, and making efforts towards pest control.

At its peak in the mid-1950s, Ecuador was the largest banana producer in the world. A decade later, there were 3,000 banana farms in the country, each averaging approximately 158 acres in size. As of 1960, bananas exported from Ecuador accounted for 25 percent of the world's production, out-producing all of the Central American countries.

Ecuador remained more independent from multinational companies, like the United Fruit Company and Standard Fruit Company, unlike the countries Central American neighbors. Most banana production was in the hands of medium-scale domestic producers. This resulted in reduced labor issues among banana producers. Ecuador was more intentional about who was allowed to purchase land, who received exporting privileges, and who controlled labor. However, the country went through a cocoa crisis in the 1920s. Cocoa was a primary export at the time, and Ecuador needed to find a new crop to export. Ecuadorian Congress passed a law that opened up an opportunity for multinational companies to come in and help produce and export bananas, and promoted this new law by implementing tax exemptions for the first two years of production. A man by the name of Clarence L. Chester arrived advertising that he would help local banana producers with exporting their crops for a cheap price. He had experience with working with Latin American countries, specifically Peru. He promised that the company that he represented had no intention of monopolizing their services, however he did not disclose which company he represented. Due to the growing fears among the Ecuadorian public that their country would be treated how United Fruit treated Central American countries, there was a lot of public push back regarding the potential deal with Chester. This push back resulted in the revelation that Chester was the vice president of Pacific Fruit Company, located in New York. One of the directors of the company was the Ecuadorian Senator Manuel Navarro. This revelation elicited more information about the potential deal with Chester, the contract was much more generous and would have allowed the Pacific Fruit Company to have much more influence on banana production than just export transportation. Due to public and Congressional opposition to the contract deal, the deal fell throughand was abandoned in 1933.

In the late 1950s, a fungal disease called Panama disease caused huge losses to the banana crop. During the 1960s agrarian reform caused fragmentation of land holdings and multinational companies closed down due to labour trouble. Large landholders lost the advantage and as a result very large numbers of smaller non union plantations came to be established under local producers. During this period Central American countries introduced a new variety known as Cavendish bananas, which was a setback to Ecuador as its banana production was affected. However, Dole ensured that Ecuador's export share in the world market did not fall below 15%.

In 1974, Ecuador became a member of the Union of Banana Exporting Countries in an attempt to bargain for better prices. The UEB proposal of an export tax did not succeed in Ecuador, however. In 1975 the UEB collapsed after what became known as "bananagate", bribery of the banana trade monopoly consisting of the three US companies (United Fruit, Standard Fruit, and the Del Monte Corporation).

Eventually, the Black sigatoka, a banana disease destroying much of banana production in Central American countries and Colombia, as well as a levy of export tax, and political unrest in Central America, came to Ecuador's advantage. The Standard Fruit Company and Del Monte Fresh Produce Company decided to make Ecuador the primary supplier of bananas in the 1970s. Some 147,909 hectares were dedicated to production, 99 percent of which were in the three provinces of Oro, Guayas, and Los Ríos in the lowlands of the Pacific coast, with a tropical climate and rich soil conditions.

During the 1980s and 1990s in Ecuador, the economic policy of foreign trade was modified to comply to the international trade regime. This boosted banana exports, accounting for 21.1 per cent of total exports and 64.7 per cent of all agricultural exports during the decade of the 1990s. In 1998, there were 4,941 banana planters employing a workforce of 98,000. In 1999 Dole established a new loading terminal at Bananapuerto in 1999.

In 2003 the Food and Agriculture Organization reported that the country's banana workers received lower wages than banana workers in all other Latin American banana-exporting nations. A study conducted three years earlier stated that the country's banana worker's average monthly wage was US$56.

In 2012, Ecuador reported losses of $600 million due to the Black sigatoka fungus, with 40% (85,000 hectares) of the country's banana plantations affected by it.

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