By Alexa Hornbeck
Photo courtesy of Steve Hopson.
The banana is a common, often comical fruit, with a tragic geopolitical history that is frequently overlooked. For centuries, wars have been fought over controversial issues regarding things such as territory, religious indifference, or a desired revolution. However, little has been spoken about the century-long trade war over this supermarket item.
The Banana Wars are the result of conflicting interests between the EU and US, who sought to monopolize the trade of bananas produced in Latin American and Caribbean regions. The US saw the opportunity to gain pre-access to the banana market, which at the time was unprotected by European tariffs. However, European countries, like Britain and France, similarly took the position that banana production was essential for both the economic health, and social well being of their former colonies.
The early 1900s was a period of independence for Latin America and the Caribbean, whose economies relied on the export of one, or at most two commodities. The reliance of Latin America on banana production during the first part of the 20th century marked the territories as “Banana Republics“, a term coined by an American fiction writer named O. Henry in 1904.
Most bananas at the time were grown on small family farms, despite the poor soil and hilly terrain of the landscape. Without any irrigation, and little to no mechanization systems, the trade production of bananas would have likely disappeared from the Latin America and Caribbean plantations.
The need for a more controlled system of product movement, scale economies, and regulation of costs along the supply chain, provided a strong incentive for internalization. US military granted itself the right to occupy Latin America and the Caribbean under two conditions: their governments were unstable and largely unfriendly to US trade interests.
The US occupied Nicaragua, Haiti, and the Dominican Republic all roughly around the same time between 1912-1930s. A rebellion against US occupation occurred in 1926-1933, led by Augusto Sandino, which forced the US occupation out of the regions. Still, US intervention had already paved the way for American corporations to establish banana companies in Latin America and the Caribbean. The approach to gain control over the banana market, among others, is an early example of America’s experiments in global in imperialism.
Latin America continues to play the most significant role in the international production of bananas, accounting for 80-85 percent of world exports (Ecuador, Costa Rica, and Colombia stand as the world’s chief exporters). In larger countries, like Ecuador or Columbia, bananas are not nearly as important a trading commodity as coffee or oil.
In smaller countries such as Costa Rica or Panama, bananas are a larger percentage of the GDP. But throughout the Caribbean and other island nations, the banana is typically the primary, if not the only, export. Such dependence is fairly common as all Latin American and Caribbean economies have historically relied on a handful of agricultural or mineral exports as a source of kind of revenue, in a way that neither European powers nor the US has ever had to.
Yet the fight for monopolization of the banana market didn’t end in the 1930s with the departure of the American occupation. For more than half of the 20th century, from the early 1900s until the late 1960s, the largest and most notorious private banana producer was an American corporation called the United Fruit Company. The UFCO developed a reputation in Latin America as “the octopus” for having their tentacles spread throughout the region, and attempting to gain greater access to the European market.
The United Fruit Company built a strong army within the Central American government, and purchased a great amount of land, some of which had been uninhabited, some of which dislocated native residents. The UFCO thus developed an extensive labor history of not treating producers fairly. By use of neocolonialism, the United Fruit Company attempted to control the entire chain of the banana market–from the plantations, all the way up to the super markets.
By the 1970s, bad business dealings and a plantation-leveling Hurricane Fifi had nearly squandered UFCO’s profits. Twenty years later, three other major multinational banana trade companies emerged, Fresh Del Monte, Dole, and the Irish corporation Fyffes. Each company shared the common interest of acquiring land to construct railways and port facilities within banana producing regions.
Steve Stiffler, a professor of Anthropology and Geography at the University of New Orleans, tells BTR why the limited amount of corporate players involved the banana trade was problematic.
“The merging of companies who were attempting to gain access into the European market is generally complicated by the desire for profit. When you have the consolidation of the industry in the hands of only a few companies, that is generally bad for the producers. They have less alternatives, for there is a pure monopoly that might not be good for consumers,” says Stiffler, a co-editor of the book Banana Wars: The Anatomy of a Trade Dispute.
Through the early 1990s, the company eventually merged with corporations uninvolved in the banana trade, such as A&W Root Beer and Baskin Robins. After a number of name changes reflecting a revolving door of management, UFCO eventually settled on the title of Chiquita Brand International, a company which continues to be the most reputable in the global market for banana buying and distribution.
While Chiquita’s new management implemented better coordination and corporate diversification, it contributed to an even bigger conflict for Latin American and Caribbean producers, forcing producers to accept the terms given to them by Chiquita for they had little to no alternative source of market.
In January 2001, Chiquita failed meet debt obligations, and a resolution to the Banana Wars was formed between all business interests involved.
It is true that the multinational trade war successfully opened up access to the European market, but it came at the cost of public policy for private profit. Today bananas are number four on the list of staple crops in the world and one of the biggest profit makers in supermarkets.
Peeling back the complex history of the Banana Wars reveals a severe need to globally innovate multinational acquisition. The business of bananas remodeled the way in which businesses could be created, and established new rules within the culture of corporation. Although bananas are not typically seen as a serious fruit, they have become a symbol of economic imperialism, injustices in trade marketing, and the globalization of agricultural economy.
The nearly century-old quest for mastery of the international banana trade is imperative for understanding the history of our corporate genealogy, America’s complex relationship with Caribbean and Latin American powers, and how economies evolve over time. Yet, despite the significant importance of the Banana Wars, the common consumer is unaware that the trade dispute ever occurred.
“My own sense is that when most people purchase a product, they don’t always think to themselves: ‘Where was this product produced?’” says Stiffler. “Capitalism is essentially being able to walk into a super market, and buy something with money. The money hides the history. Unless the consumer sees a dramatic rise in price, or bananas disappear from the grocery store, its possible to remain ignorant. This is not only true about bananas, but true about everything.”