Statement on Latest Developments in the Banana Industry - October 06, 2000

Fellow St. Lucians,

I crave your indulgence as I take some of your time to make two announcements and to address some issues of importance to the banana industry in particular and the nation in general.

First of all, I am pleased to announce that Government is now able to temporarily finance Leaf Spot Control Activities over the remaining four months of the wet season. By this, I mean a combination of aerial and ground spraying.

This has been made possible by a generous grant of EC$1.1 million that we were able to negotiate with the European Union to help meet the cost of Leaf Sport Control. This sum, together with the three cents levy, will allow all banana farmers, irrespective of what company they do business with, to have their bananas sprayed.

As you know, one of the problems associated with the Leaf Spot Control Programme of late has been insufficiency of funds. That’s because, after the Government pays to the SLBC 2.5 cents per pound for aerial spraying out of the 3 cents being collected from banana farmer, the half-a-cent per pound left is insufficient to cover the cost of ground spraying for everyone. It is estimated that it will cost between 0.85 and 1.25 cents per pound for universal ground spraying.

You will recall that despite this shortage of funds, Government has refused outright to make any further deductions from the banana farmers, particularly in this period of depressed market prices. That is why, last August when I met the Head of the European Commission Delegation in Barbados, Mr John Caloghirou, I asked him to consider providing financial support to our farmers for Leaf Spot Control.

It is therefore expected that this assistance from the European Union, together with the remaining proceeds of the three cents levy, will be enough to ensure all farmers’ fields can be sprayed throughout the island, irrespective of which banana marketing company the farmer may belong to.

I also wish to announce that through government’s intervention, the cost of banana cartons will now be one dollar less.

Most St. Lucians would by now be aware, that the banana industry is in a serious cash crunch due to the drastic fall in the market price for bananas. This situation is worsened by the depreciation of the Pound Sterling against the US dollar, to which our currency (the EC Dollar) is fixed. Moreover, escalating oil prices are also driving up fuel and transportation costs. All of these factors have reduced the net return to our farmers.

Under the circumstances, Government has been exploring various options that would help to lower the cost of production locally, and thus reduce the painful effects of the depressed market.

Over the last two weeks, therefore, we have not only negotiated the EU Grant I just described, but also secured a temporary reduction in box prices from WINERA. We have agreed with WINERA a price reduction of approximately $1.00 per carton. On an average price of $3.71 per carton, this represents a 27% decrease in the cost of the single most expensive post-production input.

Government will sustain this special price arrangement for four months: that is, from October through January 31, 2000. As Government of St. Lucia is a shareholder in WINERA, the company has agreed to absorb the financing costs of this arrangement. Government will meet the net reduction costs.

I would like to take this opportunity to thank all those who have been working behind the scenes to broker these two remedies and to especially thank the Directors and fellow shareholders of WINERA for coming to the aid of the Industry. The company has also agreed that there will be no price increase as usually happens during the winter production months.

Having made these two announcements which, I am sure, are welcome to all, let me also make this special appeal to all banana farmers to remain committed to the industry.

I know that we have been seeing some hard times, but let me repeat my encouragement to you to hold on. I know that others are telling you that doomsday is just around the corner. I know you are being told there’s no more hope for bananas. But I repeat my earlier appeal to farmers to have faith because, among other things, prices are expected to improve in the winter.

We in Government, and our friends in the European Community, are continuing to explore avenues even as we take measures that will bear fruit in the months ahead. In the same was that this appeal to the European Union last August has borne fruit in October, we are confident that other measures and decisions taken in the recent past will similarly bear fruit.

I also want to make a special appeal to the banana marketing companies to stop the bickering and work together to increase production and maintain quality scores. As others have said before me, we must all be part of the solution and stop blaming others for what we ourselves have the capacity to remedy. We cannot hope to continue to attract assistance from others if we maintain a state of warfare here at home. When things come to a halt and we cannot make progress on such important issues as Leaf Spot Control simply because the four companies cannot agree on a formula, then we are simply not helping ourselves. Government may accept a leadership responsibility in the industry. But we will not encourage an ongoing immaturity and senseless posturing by people who should know better. Similarly, when people are entrusted with public or private property, they must not betray that trust.

It is in this spirit that I urge all farmers to exercise restraint, to be patient, to hold on and to accept these incremental improvements. At the same time, I want you to encourage your respective marketing companies to submerge their petty differences, to work together among themselves, to cooperate with the Government and to do all that they can to provide the services and support to banana farmers that they were established for.

These are but a few of the things that need to be done to ensure safe recovery of the industry. Changes have been made, changes are being made and there are yet more changes to be made. Some will be painful, but I am sure that we can bear the strain as we hold hand together with the assurance that together, as farmers and as a nation, we can fix it.

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