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Production Overview

PLANTATIONS OR SMALL FARMS?

The organisation of banana production for export has varied over time and from place to place. In most exporting countries, commercial banana-growing began on plantations of 1,000 hectares or more owned by the TNCs. Production and packaging required large numbers of people so the companies tried to keep wages as low as possible. Increasingly, however, small family farms of 10 hectares or less have been encouraged to become associated suppliers to the TNCs. They produce bananas under contract with banana plants, fertilisers and pesticides obtained from the TNCs. The large companies have moved towards contract farmers for three main reasons.

• By moving away from low-wage labour in plantations, the TNCs could be seen to be introducing greater opportunities for local farmers to share in the profits made possible because of the companies' controlling share of world markets



• In the 1950s governments of Guatemala and Ecuador, in an attempt to wrest away from the TNCs some control over the banana export industry, threatened to pass laws to force United Brands to sell some of their plantation land to local interests. Purchasing bananas from contract growers passed some control to local interests while maintaining company control over banana production on plantation land.



• In times of global over-production of bananas, fewer contracts can be renewed or issued to growers, thus providing some flexibility in production volumes.

Throughout these changes, the TNCs have tried to maximise profits which they earn mainly from shipping, ripening and distributing bananas to world markets. Thus it has been in their interests to minimise returns to banana growers in the producing countries either by paying low wages to workers on corporate banana plantations or by keeping contract prices as low as possible for associated small farmers.

The share of the average retail price of bananas in major markets such as the United States is shown in Figure 11.4. This shows that growers receive less than 12 per cent of the value of each tonne of bananas sold in final markets while about three-quarters of the value of banana exports went to overseas interests including the TNCs.