Bananas Page 5
Another insecticide, Aldicarb, was introduced to the market in 1970 to control mites and nematodes. It was also applied by spraying and could be absorbed by the edible part of the fruit. Environmental Protection Agency staff recommended that the chemical be banned for banana use in 1989 when it was found to cause symptoms ranging from headache and stomach upset to blurred vision, disorientation, and seizures, but the agency never took action. In 1991 the EPA reported that a small percentage of imported bananas had been found tainted with Aldicarb and initiated a ninety-day testing program for all banana imports although there were no reports of illness due to eating bananas. The manufacturer, Rhone-Poulenc, promptly withdrew the product from the market for use on bananas. It had been withdrawn for use on potatoes the previous year after field tests showed excessive residue levels. It remains in use on citrus, soybeans, coffee beans, sweet potatoes, sugar beets, pecans, tobacco, cotton and alfalfa seeds.84
Pesticides and herbicides banned in the United States but used on banana plantations in Central America began to spark concern in the United States in the 1980s when a multimillion dollar law suit was filed against several U.S. companies in American courts on behalf of thousands of Costa Rican farm workers who claimed that they had been made sterile by exposure to DVCP. The suit was settled out of court in Texas in 1992.85
In 1993 World Watch reported that after the 1991 proposal of an international boycott of Costa Rican bananas, the Costa Rican government and multinational fruit growers finally had begun to act. The search for pest-resistant varieties of banana plants continues and on many plantations spraying is done on an as-needed basis rather than on a fixed schedule. Environment-friendly bananas are being promoted by the Banana Amigo Project, sponsored by the U.S.–based Rainforest Alliance as well as Fundacíon Ambio and Tsuli Tsuli/Audubon of Costa Rica. Some American activists claim that banana growers such as Chiquita Brands International have responded by hiring banana workers for six-month contracts instead of permanently so that the workers are let go before serious health problems related to pesticide and fungicide use can be detected.86
Both Del Monte and Standard Fruit took a considerable share of the banana market away from United Fruit during the 1970s. The low for United Fruit was reached with losses of $47 million in 1974 and a take-over by new owners in 1976.87 By 1983 United Fruit and Standard Fruit each claimed about one-third of the U.S. market and Del Monte and other small importers had the other third.88 Along with a decline in market share, United Fruit drastically reduced its plantations in Central America from about 54,000 hectares in 1954 to 15,000 in 1984.89
United Fruit became part of the larger conglomerate named United Brands in June 1970 when it merged with AMK Corporation. AMK, originally a producer of milk-bottle caps, managed to acquire the fourth largest meatpacker in the United States, John Morrell and Company, during the 1960s. In 1969 AMK acquired a majority share of United Fruit Company. After some negotiation with the Federal Trade Commission, concerned by the antitrust implications, the new United Brands was incorporated. In 1974 the Union de Paises Exportadores de Banano (UPEB) was formed by the banana-producing countries of Costa Rica, Guatemala, Honduras, and Panama. The UPEB was later joined by Colombia, Nicaragua, and the Dominican Republic. These countries agreed to levy large banana export taxes which were strongly opposed by the transnational fruit companies. This led to a brief so-called “banana war.”90 In the next few years, United Brands experienced the worst losses in its history. In addition to taxes, hurricane Fifi hit Central America in 1974, wiping out 70 percent of the company’s plantations in Honduras with losses of more than $20 million. Company chairman, Eli Black, committed suicide in February 1975.91
In April the Securities and Exchange Commission charged United Brands with paying a bribe of $1.25 million and agreeing to pay another $1.25 million to a Honduran official in exchange for a reduction in export taxes. Trade in United Brands stock was halted for almost a week, the president of Honduras was removed in a military coup on suspicion of participating in the bribe, and the government of Costa Rica threatened to cancel all contracts with United Brands. Finally a federal grand jury brought criminal charges against the company. In 1978 the company pleaded guilty to conspiring to pay $2.5 million to the former Honduran minister of the economy and was fined the maximum penalty of $15,000.92
A series of chairmen and presidents managed to keep United Brands afloat until 1984, but profits slipped and net losses steadily increased. Carl Linder took over as chairman and shifted away from large, diversified operations toward a narrower focus throughout the company, selling off soft drinks, animal feeds, and international telecommunications. The company was renamed Chiquita Brands International and headquarters were moved from New York to Cincinnati.93
Frozen fruit pops were added to the Chiquita product line but the company lost $10 million in 1987. The company was more successful in using the Chiquita name to sell other fresh fruit. In the late 1980s Chiquita recaptured first place in the banana market from Dole which had taken the lead from Chiquita in the early 1970s. By 1990 the company had stabilized and appeared to be “at a higher level of financial and managerial operation than it has ever been before.”94
Standard Fruit became part of Castle and Cooke, and Del Monte was purchased by R.J. Reynolds in 1979.95 Bananas became just one part of the corporate interest, playing an ever-smaller role in corporate sales and earnings. Castle and Cooke was purchased by David Murdock in 1985 and renamed Dole Corporation.96 Dole sold more than a hundred kinds of fresh fruits and vegetables, packaged foods, juices, and nuts, with extensive real estate holdings in Hawaii and in California. Murdock put the food division up for sale in August 1990. He quickly pulled it off the market in December when the banana markets in Europe began to expand.97 That year a third of Dole’s sales and as much as 40 percent of the food division’s operating profits of $205 million came from bananas while pineapple made up less than 10 percent.98
In 1990 Chiquita Brands International controlled about 33 percent of the global market with Dole close behind with an estimated 22 percent share.99 The banana wars continued. In the mid-1990s, the United States, on behalf Chiquita Brands International and Dole Food Company, challenged the European Union through the World Trade Organization to block the Caribbean’s continued access to the European market for its banana exports. Leaders of former colonial nations in Africa, the Caribbean, and the Pacific, whose economies were heavily dependent on banana exports to Europe, maintained that any changes to the EU preferences would damage their banana-dependent economies, and that they could not compete against Latin American fruit in an open market.
Former senator Robert Dole lobbied the Clinton administration with great success, and the World Trade Organization ruled in support of a United States complaint that European Union preferences to its former colonies were discriminatory. Caribbean governments then warned that denying them access would cause economic, political, and social destabilization throughout the entire region since, in some countries, banana exports accounted for some 70 percent of total export earnings.100
In November 1998 the United States threatened to slap 100 percent tariffs on a list of European products unless the EU changed its preferential treatment for Caribbean, African, and Pacific producers.101 Europeans objected that “not a single American banana is involved, and not a single American job is at stake. To think that one interest group can create such a row.… This is a very extreme example when you have one narrow pressure group pushing the United States toward a trade war with Europe.”102 In April 1999 the World Trade Organization determined that American commercial interests had suffered losses of $191.4 million in each of the years the European Union regime had existed, for a total of more than $1 billion in harm.103 The European Union refused to bring its system into World Trade Organization conformity and the United States retaliated by slapping sanctions on European businesses not directly involved in the dispute. And the fight continues to this very day.
In Ma
y 1998 the Cincinnati Enquirer published a series of articles by two investigative reporters, Mike Gallagher and Cameron McWhirter, exposing a range of questionable business practices by the hometown company, Chiquita Brands International, Inc. These articles led to suits by stockholders against Chiquita charging that the company violated its duties by engaging in illegal acts, gross mismanagement, and abuse of corporate control in Colombia and Honduras.104 Chiquita Brands in turn sued the newspaper on the grounds that the reporters had used illegally obtained voice-mail tapes. The Enquirer fired the reporters, apologized to Chiquita Brands, and repudiated the series, but there was never any challenge to the facts that had been reported.
Hurricane Mitch devastated Honduras, Nicaragua, and Guatemala in November 1998, destroying 90 percent of the entire banana industry in Honduras. At the time Honduras was the fourth largest banana producer, exporting six billion bananas a year. The storm threw thousands of people out of work on banana plantations and was expected to wipe out $255 million in annual banana exports over the next two years before the industry might begin to recover.105 Chiquita laid off all of its 7,400 workers while mapping out a reconstruction plan. The company promised to keep schools open, to continue to provide workers and their families with medical insurance, housing, and utility service, and to provide employees with two months of financial assistance. After that employees would be eligible for interest-free loans.106 Dole began shipping food, medicine, and other supplies to Puerto Cortes in Honduras. The hardest hit were small farmers who sold their own crops to the major companies and had no resources or support to rebuild.
In 1990 the world ate an estimated 16 billion pounds or about 42 billion bananas. In a little over one hundred years, the banana business developed from ship captains with occasional cargoes of bananas enjoyed as luxury items in North American port cities to multinational corporations with worldwide markets dealing in billions of pounds and billions of dollars worth of fruit, enjoying the protection of the federal government. Would Captain Baker and Charles Frank be amazed or would they feel vindicated?
3
TRANSPORTING
BananaS
BANANAS DID NOT FIGURE AS A plantation or export crop during the colonial era in the Caribbean and Central America, mainly because of the difficulty of transporting them to distant markets. Although bananas found a ready market in schooner days, they remained a luxury item until the introduction of steamships, the extension of the railroad throughout the United States, and the availability of refrigeration. These innovations made it possible to cut the time in transit and to keep the fruit at a constant temperature to slow the ripening process.
Bananas entered North American markets and became important in the culture and diet of the United States partly as a result of the transportation revolution that began in the latter part of the nineteenth century. Beginning with the railroads and quickly followed by steamships and then trucking, and eventually an interstate road system, Americans spread out across an immense continent while remaining connected with the cities and ports on the East and West coasts. Mail-order catalogs and a growing wholesale and retail network meant that the goods enjoyed in one area of the country were soon available to all.
The first official banana importation was recorded in the United States in 1804 when the schooner Reynard brought thirty stalks of red bananas to New York from Cuba.1 Banana importing was a risky business for sailing vessels. Contrary winds or calm seas might extend the length of the voyage, and the fruit would ripen and rot before reaching East Coast ports such as Philadelphia, New York, and Boston. Ship captains and crews sometimes brought a few stalks on board for themselves and if any of the remaining bananas reached port in salable condition, they might make a nice profit. Usually they did not.
Sporadic attempts at banana importing during the mid-nineteenth century by American entrepreneurs brought small quantities of produce from independent growers in the Caribbean and Central America. In 1830 Capt. John Pearsall included fifteen hundred stalks of bananas in the cargo of the Harriet Smith.2 Pearsall is credited with being the first to risk bringing a full cargo of bananas to the port of New York. It is possible that these are the bananas that James Fenimore Cooper referred to when he reported that “bannanas” could be found in the New York market.3
It was not until 1843 that official port records first listed bananas. That year a commission merchant imported three hundred bunches of Cuban reds and sold the lot at twenty-five cents a finger, over two dollars apiece in today’s money.4 Some years later, the merchant was forced to declare bankruptcy when a shipment of three thousand bunches reached port too ripe to sell.5
By 1850 cargoes of Cuban bananas were being delivered to New York, Philadelphia, and Baltimore.6 Pushcart peddlers, waiting at the dock, bought a few bunches at a time first come, first served. But other than these occasional small shipments to East Coast ports, bananas were virtually unknown in the United States before the Civil War.
As the banana trade increased, fruit import companies were formed to purchase bananas by the shipload. In the Caribbean islands, company representatives sent messengers to interior farms telling growers that a ship would reach a certain coastal site on a given day prepared to select and purchase bananas. The bananas were transported to the coast from the interior by river, canals, railroad, “or, when these are not available, on the heads of women” and were left to accumulate until the steamer arrived.7
At first there were few harbors in the banana-growing areas. Ships anchored offshore and the fruit was loaded onto small boats by men, women, and children who waded out to them carrying each stem of bananas overhead to avoid the salt water. The full boats were poled beyond the breakers to the anchored ship and the bananas were taken up by rope nets.8 Because of the perishability of the fruit, the growers were always in a hurry to sell and the American merchants were able to keep prices low. The merchants in turn faced risks of heavy losses during the voyage to North American ports and also fierce competition with each other.
United Fruit was the first to achieve a constant, year-round flow of bananas to North American cities.9 The company created a refrigerated distribution network comparable to that of meatpackers and produced a truly national market. A 1904 United Fruit Company booklet noted that “the secret of success lies in having the fruit properly grown, cut at the right time, handled without bruising, bringing it into the Northern markets before the green fruit begins to color, and then distributing it immediately to consumers with every item of expense kept at the lowest point”10—more easily said than done.
United Fruit was so successful that it was accused of monopolistic practices by the American Banana Company, and an investigation was launched by the Committee on Interstate Commerce of the United States Senate in 1908. In its defense, United Fruit noted that
the only advantage which one person engaged in the trade can have over another is the extent and perfection of its equipment and organization. These … are substantial advantages, and, when in addition one person or corporation can own its own plantations and adopt improved methods of planting, cultivation, and handling, this gives such person a very great advantage as he is thus enabled to produce fruit of superior quality at little additional cost.11
“Conveying Fruit from Cars to Steamship, Story of the Banana, United Fruit, Boston, 1921, 36.
The report concluded that “the operations of the United Fruit Company have so increased the market for bananas at all points, and have so organized the trade, that any one introducing bananas at the seaboard finds a large independent market not at all bound to the United Fruit Company, and which is open to anyone who can deliver proper bananas at competitive prices.”12 The committee accepted this argument, and serious charges of monopolistic practices were not again faced until the 1950s.
In the beginning, banana ships were unloaded by workers who carried each of the 100- to 150-pound stems of fruit out of the holds. A cargo of 35,000 stems took 400 laborers seven to eight hours to move fro
m the ship to waiting railroad freight cars.13 The men stood in a long line extending from the ship’s interior to the waiting freight cars on the dock, and each stalk would be handed from man to man until it reached the appropriate car.14
In 1903 the first unloading machine was introduced in Mobile and then in New Orleans. A circular chain dipped canvas buckets into the hold where longshoremen placed one stem in each bucket to be lifted to the deck. The buckets could move 2,500 stems an hour, far faster than any number of men could carry the fruit, with big savings for the fruit companies.15 An electrically driven conveyor system was put into operation in Galveston, Texas, and was described as follows:
Ranged along the fruit wharf are a number of odd looking pyramidal houses each with a sort of an elephant trunk protruding from their sides. These are the electrically operated fruit conveyors. As soon as the ship is laid alongside, the trunk swings out and drops a long conveyor belt down through the hatches into the hold. Then the wheels begin to turn and the canvas pockets travel in an endless succession from the hold to the wharf. Down in the hold the men lay the bunches of bananas onto the conveyor, placing a single bunch in each pocket as it presents itself. As the bunches reach the wharf end they are taken by men who hurry them off to the various railroad cars on nearby tracks. The wharf appears then to be swarming with moving bunches of bananas set on two legs.16
One of the problems with this new machine was that it was too fast for human workers and could only be run for forty minutes every hour. By 1920 the conveyors were extended to a dockside monorail trolley system to reach the waiting freight cars, and the fruit was transferred almost without human handling. The new system saved three hours per ship and displaced at least 400 jobs at a cost savings of 2.5 cents a stalk. It was estimated that the total “annual saving will not greatly miss the million mark.”17