Excerpt from Banana Wars - the Price of Free Trade by Gordon Myers
The plight of the Caribbean following the EU-US deal cannot be reconciled with the commitment in the Fourth Lomé Convention, that under any common regime adopted for bananas no traditional ACP exporting state ‘would be placed as regards access to, and advantages in, the Community, in a less favourable position than in the past or at present’. But that Convention expired in February 2000.
Since that commitment was made in December 1989, a number of factors had affected the attitude of the EU on this issue. One was the enormous volume of work and disproportionate amount of time, energy and tension devoted to the banana dispute with such unsatisfactory results. This led to increasing ‘banana fatigue’ among both Commission and member states and a passionate wish that the problem would just disappear. They fervently hoped that the agreement reached after the seemingly endless negotiations with the USA had finally put an end to the saga.
A second factor was the diminishing influence in the EU of the sense of obligation to former colonial territories fostered by France, the UK and Italy. The more countries with no equivalent concern acceded, the less sympathy this could command. The scheduled expansion to twenty-five member states in May 2004 would decisively tilt the balance against them.
Third, and most important, was the change in the Treaty relationship between EU and the ACP. The Lomé Convention was superseded by the Cotonou Partnership Agreement (see Chapter 18), which stressed the need for EU support for the ACP to be compatible with WTO rules. It provided for the negotiation by 2008 of economic partnership agreements (EPAs), of which a key feature would be reciprocal, two-way (though not necessarily equal) concessions. For ACP countries unable to meet these requirements, other possibilities would be explored, but partnership and reciprocity would be the model, anything else an exception and almost certainly inferior.
For bananas Cotonou was far less specific than Lomé. Under the Banana Protocol, quoted in the preceding chapter, the Community only ‘agrees to examine and where necessary take measures aimed at ensuring the continued viability’ of the ACP banana export industries and to ensure a continuing outlet for ACP bananas on the EU market. This still implied responsibility to ensure the survival of the ACP banana export trade, including that of the Caribbean. For Cotonou, like Lomé, was an agreement between the EU and each signatory ACP state. But the European Commission maintained that it was fully meeting its commitments by providing a more attractive market than elsewhere through the operation of the regime. It argued that those who were not efficient enough to cope should take advantage of the aid being offered to improve their act or to divert into some other economic activity.
Lawyers may argue whether the Commission position was consistent with the Cotonou agreement, in the latter if not in the spirit. From the Community viewpoint it made sense in a shrinking and increasingly competitive world. But it raises a disturbing question. The Windward Islands, which are the most vulnerable of the ACP banana exporting countries, have very little current or potential alternative source of income apart from tourism. The problem is particularly acute in Dominica, which is the most dependent of all on bananas and has left the least alternative resources. Moreover, the banana industry is important to the economy of the Windward Islands not only for its substantial direct contribution to export earnings, but also because it alone renders economic the weekly shipping service on which other exports depend and which is also vital for imports. Diversification is therefore only feasible alongside a core banana export trade.
A Royal Commission drew attention in 1939 to the striking contrast between the beauty of the island and the great poverty which was largely eliminated by the successful development of the banana export trade to the UK under the benevolent protection of a regulated market. But if the banana trade cannot survive in the harsher conditions imposed by the WTO rulings and the way that the EU has applied them, that poverty could return.
Yet the trade involved is minuscule in world terms. The Windward Islands now export under 100,000 tonnes a year. This is only 0.9 per cent of world trade in bananas and 2.5 per cent of the EU market. Can it really be necessary to do so much damage to these small vulnerable economies rather then make special arrangements to cater for them? Is this really a necessary price to pay for free trade?
WHAT THE EU COULD DO
If the tariff quota regime is indeed to be brought to an end, it will be crucial that the single tariff that is to replace it as a sole protection for the ACP should be fixed at a level high enough to enable all he ACP banana-exporting countries to maintain their place in the market. But that will depend on the outcome of negotiations with interested parties under the GATT (Article XXVIII).
Failing agreement on an adequate tariff, it would seem morally incumbent on the EU to find other means of fulfilling its commitment under the Cotonou Agreement to ensure the continued viability of the ACP banana industry. But WTO rulings and the EU-US agreement of April 2001 leave very few options. One solution would be to retain an effective tariff quota beyond 2005 in spite of the EU-US agreement to end it.
That would require a more flexible attitude by the USA and Ecuador as well as the enlarged EU. But there have been signs that the depressed market conditions since the EU-US agreement have made not only all the ACP countries but even some of the larger trading corporations reluctant to see the EU market subjected to the risk of a free-for-all. The state to which the market has been reduced might just conceivably make the unthinkable more negotiable. But the WTO rulings would render this impossible without the agreement of all major parties.
Reproduced with permission of Zed Books. Copies available at £12.95 free of post and packing. To order contact Zed Books on
DEL MONTE READY TO RIPEN
The man from Del Monte would certainly approve of the company’s new Lincolnshire ripening facility.
The Boston depot opened at the end of June this year and is supplying bananas to Asda and the National Fruit and Vegetables for Schools Scheme for Del Monte Fresh Produce.
Chris Armstrong, the site’s operations manager, says: “At the moment, we’re probably running at just under two thirds of our capacity.
“We’re predominantly supplying Asda from this depot, but we’re considering supplying other retailers from here as well.”
Construction began on the facility last November, says Armstrong. “Del Monte looked at where they were delivering and realised a fair amount was coming up to this end of the country.
“They had the spare land here so they built this place from scratch. A week after we opened up, the first bananas were being delivered to Asda’s Bedford depot.”
The £5.6 million facility occupies around 70,000 square metres and has 21 ripening rooms.
“The rooms give us capacity for 840 pallets, 14 of the rooms hold 36 pallets and seven rooms hold 48 each. Overall, on a five-day ripening cycle we can be processing around 1,176 pallets of bananas.
“I don’t think it will be too long before we are working to our full capacity,” he adds.
The ripening rooms, says Armstrong, are state-of-the-art, allowing pallets to stored three stories high. “We’re able to compartmentalise them so we can isolate sections of the rooms. That means we don’t have to completely fill the rooms if we’re using them, although we do have to ensure they are at least half full to run efficiently.”
While the Boston location has its challenges with a high water table capable of creating damp difficulties, Armstrong says it has proved there has been no problem securing a reliable workforce.
“We have around 40 people working on site, including management, supervisors and the day to day staff.
“The majority of the staff are from the local area, and we have a large number of Lithuanian and Portuguese staff working for us. Boston being essentially a port, it means there’s a lot of foreign labour here.”
He says the fact there are a multitude of other packhouse operations in the area is also an advantage: “Certainly some of the people have perhaps come from another operation nearby and have a good idea of what the job involves, although they might not have worked on bananas before.”
To aid the new staff and ensure the facility was up and running at full speed and efficiency, Armstrong brought a number of staff over with him from Del Monte’s Paddock Wood operation: “I moved over from Paddock Wood myself and we had a ripener and four or five packers move up as well. We also had a QA supervisor come over from Swindon.
“Essentially we had a nucleus of people who had done it before and could help bring our new staff up to speed,” he says.
The depot is also set to open a second packing line, which will also enhance efficiency on the site.
At the moment, the product going out of the depot includes Asda’s children’s range, Garden Gang, as well as Fairtrade and organic bananas, on top of the more mainstream loose product.
“Around 65 per cent of our product is loose bananas, and 25 per cent is Garden Gang. The remainder is made up from organic and Fairtrade fruit.”
He says with just one line, it means having to switch over to each different product, so a second line will speed up operations and efficiency, allowing him to run two teams during the day.
As part of the new packing line, he says Del Monte will be testing some new labelling equipment. “At the moment, we’re putting labels on by hand but will be automating the system and have a machine which will blow the labels onto the fruit as it goes through the line.”
As well as being trialled at the Boston depot, if successful the system will be rolled out into Del Monte’s other depots.
As well as ample storage space, the factory also has six external bays for container storage, with the appropriate power hook up points, says Armstrong, although at the moment, space is far from an issue for the new facility.
“We have the space to double the number of ripening rooms in here, so there’s plenty of room to expand our capacity.”
Extra capacity could well be needed as the fruit for schools scheme expands its horizons and retail contracts change hands. Armstrong concludes. “Volume throughput is growing considerably. We were doing around 700 cases, we’re now doing around 5,000 a week.”
BANANAS GET TAST FOR XTEND
StePac claims to produce the only Modified Atmosphere Packaging (MAP) for the retail banana industry. The primary benefits of StePac’s Xtend® packaging technology have always been seen as quality preservation and prolonging shelf life, but Tommy Leighton talks to Asaf Shachnai, director of sales and technical support, about research findings that illustrated the additional effects of the packaging on both the taste and aroma of the fruit.
Xtend® MA and modified humidity packaging is used on a commercial scale by the banana industry, and as well as extending shelf-life in-store by as much as 100 per cent on conventional packaging methods, StePac was receiving regular comments on the enhanced taste and aroma characteristics of fruit shipped in its bags and bulk liners.
The hypothesis was that this may be a result of the lower respiration rates of bananas stored in Xtend MA/MH, which reduces the oxidative breakdown process and increases the post-shipment sugar content of the fruit. In order to prove the initial theory though, a study was undertaken to investigate the effects of Xtend packaging on the carbohydrate metabolism in the banana pulp and its potential implications on the taste.
“What we had already achieved was allowing our customers to deliver bananas to market at colour stage 3.5, with six days of additional supermarket shelf-life,” says Shachnai. “That’s an established story with Fairtrade and Caribbean bananas going into the UK market. But we were getting a lot of comment on the other attributes of the bananas and we decided to back that up with some scientific evidence.”
StePac collaborated in trials with Rahan Marystem, one of the largest producers of banana plants for tissue cultures, based in a kibbutz in northern Israel. Cavendish bananas harvested in a commercial plantation near the Lebanese border were immediately treated with 1,500ppm ethylene for 48 hours. After ethylene treatment, three replicates of 1kg of bananas at colour stage III was placed in Xtend packaging and stored at 20°C along with three control samples of equal weights.
At designated periods, measurements were made of oxygen and carbon dioxide levels, sucrose, fructose and reducing sugar content, starch concentration, fruit firmness and any volatile compounds in the headspace.
“Our partners in these trials are very sophisticated and biochemically astute and they have carried out a lot of research on bananas in general, as they develop new varieties. Bananas, we already knew, contain a lot of starch, and the ripening process triggers the metabolisation of starch into two major pathways - respiration and sugar conversion,” says Shachnai.
The Xtend packaging was shown to extend the yellow phase of the bananas, increase the content of the all-important reducing sugars and fructose, maintain the same firmness levels, increase shelf-life potential and improve flavour. The conclusions taken were that Xtend packaging prolongs shelf life and preserves the quality of bananas and there was real proof to back up the consistent reports that the packaging was also enhancing the fruit’s taste.
“The faster the banana ripens, more of its starch content is ‘burnt’ in the respiration cycle and less is left for sugar formation. But when we succeeded in slowing down the ripening process with our packaging technology, a greater proportion of the carbohydrates were moving towards sugar formation. The major sugars are sucrose, glucose and fructose. But fructose is four times as sweet as glucose and we found that using Xtend packaging positively affected the carbohydrate partitioning in that it created significantly more fructose and delivered a sweeter and better-flavoured banana to the end customer.”
The carbohydrate partitioning analysis was carried out by Dr Eli Kahat, who also found that the same applies to bananas shipped from central America and the Caribbean. Shachnai adds: “We have done this research to illustrate how we are adding value to our UK customers, but we recognise that it is difficult to translate the findings into a consumer-oriented message. To take it to that next stage would require qualitative and quantitative consumer research and I don’t think this is something any retailer would be prepared to carry out with a product that has become a commodity.
“But what we are hoping to achieve is to create a greater degree of confidence in the end product that goes on the retail shelves.”
StePac has developed both retail and bulk bags that are being used to pack bananas at source and enable the ripening process to take place during transit to their destination. “The retail bags act similarly to a normal post-ripening bag, but the big thing is that we have found a way to extend both the green and yellow life of bananas shipped in bulk bags,” says Shachnai.
“That has always been a very difficult proposition. There is a lot of biomass, respiration and heat extraction that goes on during the shipment in bulk bags, but our technologists have created MA bags that reduce the rate of respiration and also control the formation of heat within the bins.
“Fruit that does not reach the shelf as quickly as it might have been planned therefore will be far more durable and there are significant shelf-life extension possibilities. Fruit can be maintained in perfect condition for far more than the two to three days it normally takes to develop sugar spot, which is even more significant. “We are conducting large-scale commercial trials with customers in a number of markets and the results so far have been extremely good,” he says.
Shachnai adds that although Xtend is at the higher end of the market in terms of unit price, it is value for money and return on investment that customers should be looking for when working with StePac. “We have invested a lot in the overall service package we offer our customers and positioned ourselves as a company that is selling far more than MA bags. We always analyse the potential of any prospective customer and whether our products are compatible with their overall infrastructure and what they are intending to achieve and we will turn down business if the fit is not right. And because we are actively present in so many countries around the world, we have a network that often proves very beneficial for clients we can bring together in relevant areas,” he says.
“Our research and development team in Israel is constantly developing new products and we have technical as well as plastics and engineering specialists. All of this means we cannot be the cheapest packaging option in the market, but our customers will get a very good return on their investment.”
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