Bob Dole draws fire
from banana producers

20,000 protest letters sent off to the US Senator after he
threathens to dismantle banana trade agreements with the region

United States Presidential candidate Senator Bob Dole drew heavy criticism from St Vincent and the Grenadines after he made a campaigne promise to strike down the US/Caribbean banana trade agreement if he wins in his bid for the White house. The anti-Dole campaign, organized by the banana exporters and the local media, culminated at the end of February when more than 20,000 protest letters were sent off to the United States Presidential candidate. The protest was triggered by a campaign speech in New Hampshire when Senator Dole said that if elected, one of his main targets will be the preferential treatment being given to the Caribbean Basin. The preferential treatment, he said, threatens US jobs and investments in Latin America.

"Whether Senator Dole wins the Presidential race in the United States or not, it is important that by every means, we send a clear message of the importance of the banana industry to every sector of our economies," says Prime Minister James Mitchell of St Vincent. The Prime Minister made the comment after the Government's successful purchase of the Geest banana business and the conclusion of a nationwide anti-Dole Campaign last month. He added that with the Geest purchase finalised, the country must now turn its attention towards the United States and "its continuing hostility towards the Windward Islands Market Regime in Europe." In commending the campaign organizers, Mitchell said the country's protest was a far healthier exercise than the "ridiculous subversion of the banana trade that is being promoted by elements outside of St Vincent and the Grenadines."

A radio announcer at the state owned National Broadcasting Corporation (NBC) , Glenn Jackson, started the campaign on the station's "Come Alive" morning show. The show sought to sensitize Vincentians about what he termed "the banana crisis" being faced by the Windward Islands, particularly St Lucia. The controversy started when the St Lucia farmers threatened strike action earlier in the year if they were not allowed to sell their bananas to Chiquita, an American based banana distribution company. The farmers claimed that Chiquita's agents were offering more attractive prices for their bananas than the traditional Government backed distributor the Windward Islands Banana Development Company (WIBDECO).

Mitchell linked the Dole campaign statements and the Chiquita issue as part of a plan by foreign banana producers to undermine the Windward islands' industry. The 20,000 letters urging Senator Dole to "get his hands off Windward Islands Bananas" were presented to St Vincent's Foreign Affairs Minister, Alpian Allen for delivery to the St Vincent Ambassador to the US, Kingsley Layne. "We're not interfering with American politics," says Prime Minister Mitchell,"we're simply protecting our interests." This position was also supported by former St Lucia Prime Minister John Compton.

Chiquita was quick to deny the accusations made by the two Prime Ministers. Chiquita's Executive Vice President for European business, Mike O'Brian said that contrary to what the leaders may think, his firm is only interested in developing a long term business relationship with the farmers. "I am very sorry to hear that the Prime Minister would suggest that we're trying to undermine the Windward Islands producers. I might also point out that we have not made any offers to individual growers, we spoke directly to the organizations that they belong, so nobody could suggest that we are hiding our intentions," he said. According to O'Brian, Chiquita has continued, as it has done over the years, to express interest in marketing any or all of the Windward Island's production. He said when Geest recently made its decision to get out of the banana business, Chiquita saw this as "another logical opportunity to re-express that interest" to the various Governments and the Banana Growers Associations.

Nevertheless, Chiquita Brands has launched a number of vigorous campaigns against the European Union's banana regime, stressing that the preferential treatment for ACP bananas puts their exports from Latin America at an unfair dis-advantage. In this context, O'Brian says he can understand the suspicion of their intentions by the St Lucia Government, since Chiquita has been regarded as the enemy over the years. He said that he understands the importance of the preferential access to the European market for the small islands, and, that was not the issue behind his company's campaign for its breakdown. He was also skeptical that Chiquita's proposal for preferential treatment would undermine the Island's Banana industry. "One question that should be asked is whether or not it is beneficial to create a little competition in an effort to improve the returns going back to the Island's growers. "When the Geest contract was renegotiated, we put forward a formal proposal on the table through the banana negotiating team." He stressed that because of Geest's decision to exit the business, Chiquita returned just to see if the proposals can create new opportunities for trade. It can also encourage the transfer of technology and provide a chance for the farmers to improve their quality, lower their cost and foster competition within the marketplace. He said there was no intention by Chiquita to create any unnecessary conflict. "The WI growers have proven that they can produce high quality products consistently, and we believe that people who work hard to maintain quality and consistency at a low cost will have a place in the markets of the future."

But Chairman of the Windward Islands Banana Development Company, Arnhim Eustace, warned banana farmers against accepting any proposal by Chiquita to buy their fruits. "Chiquita's bottom line is to get their own bananas onto our market...Chiquita is not interested in our interests. Let us not fool ourselves about that," he says. "They are there to promote their own bananas and what they want is an introduction into the Windward Islands so they can have control over our processes. And, in the appropriate time they would let us go when they have the operation strictly under their control. With this in mind, any effort to accommodate them will be short sighted." He added the issue could also become a legal matter, as revised legislation passed in the Parliaments of each of the Windward Islands gives WIBDECO the sole authority over the sale of exportable bananas. He said instead of entertaining the threat of the Chiquita, farmers should concentrate on strengthening the Geest operation which was recently acquired by WIBDECO and FYFFES Plc (an Irish fruit and vegetable company.)

The Chairman considers this acquisition which was finalised in early January, to be one of the most important developments in the agricultural sector in the West Indies. Eustace said that while the banana industry has been battered by drought, hurricanes and many other problems over the years, the most important change was the move towards free trade. This development, he stressed, has lead to the marketing regime which governs their trade with Europe. Both WIBDECO and FYFFES have contributed 20 million pounds equity each. The balance of approximately 50-52 million pounds was financed by a none recourse loan secured on the assets of the venture. The deal included an investment of more than 147 million pounds. 55.3 million pounds is related to lease obligations associated with the two island class ships leaving 92.2 million for the buyout of the Geest banana business. Other aspects of the agreement include a "pre-emption clause" which would prohibit the sale of the joint venture shares by one party. There is also a provision for the Chairman to be selected from WIBDECO's directors. The joint venture would take control of six Geest distribution companies in Europe and Costa Rica, and about thirteen other subsidiaries including Geest West Indies Limited. According to Eustace, this will ensure that the local employees will be able to hold on to their jobs. The operation in the UK include the Green and Yellow Banana Company which ripens and distributes eight million cartoons of ACP fruits annually and also includes nine Ripening centres in the UK along with the associated equipment and refrigerated trucks.

The farmers on the other hand are wary and confused by the rhetoric coming from both sides, and have formed an association to negotiate with the wholesalers and Government on their behalf. Called the St Vincent and the Grenadines Banana Farmers Movement (SVGBFM), it plans to strengthen the political and corporate influence of the banana farmers. "So many organizations are doing things on our behalf and saying that their efforts would help the farmers, but they are not really farmers and they do not know what we are going through," says Frederick Ollivierre, head of an Interim Committee formed to lobby and protect the farmers interests. Members of the committee told journalists that farmers have been concerned about the recent developments and rapid changes which have been taking place within the industry. The movement plans to monitor the restructuring of the industry, particularly in the preparation and implementation of new legislation affecting the industry and to sensitize the public on the role and contributions made by the farming community.

"These developments have been confusing and we aim to find out the benefits of the new initiatives as well as the roles we will have to play in the industry. There are also many problems facing farmers and we intend to provide the leadership for farmers to face the challenges ahead," says Ollivierre. The new movement intends to mobilize the farmers into a cohesive force and provide a national forum whereby farmers can voice their opinion about developments in the industry in areas such as production, shipping and marketing of the fruit. High on the new movement's agenda is the new bonus-penalty system and grower certification system, as much of the details behind these new regimes are still confusing or attracting protests by the farming community. "What if a particular grower does not sign this contract? Will he/she be allowed to sell fruit to other companies?" asks Ollivierre. Other issues include the maintenance of top quality bananas, productivity techniques, cost control, the availability of inputs, the condition of access roads, the introduction of a more efficient system of harvesting, technical assistance and proper irrigation.

Date signed: January 6, 1996
Contribution WIBDECO 20 million pounds sterling
FYFFES Plc 20 million pounds sterling
Loan 52.2 million pounds sterling
Lease gain 55.3 million pounds sterling
Total Capital 147.5 million pounds sterling

Conditions:
A "pre-emption clause" prohibiting the sale of the joint venture shares by one party. Both parties will have equal representation on the Board The Chairman elected by the WIBDECO

Acquisitions:
Geest West Indies Limited
UK Green and Yellow Banana business. This includes nine ripening and distribution companies European Dollar banana business
The Geest Costa Rica banana farm.
This includes eleven separate banana estates The Geest BankHaul business operating four leased ships transporting non banana cargo through four chartered vessels from the UK.
And, two island classed ships: The Geest St Lucia and the Geest Dominica.

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