Rescuing Pacific banana plantations

PANAMA. The multinational Del Monte will administer the banana plantations in the Pacific for a period of 25 years, after reaching an agreement with the government amounting to $54 million.

The company was awarded a lease for nearly 3,000 hectares of banana plantations located on government-owned territory in the Puerto Armuelles area, in Chiriqui.

The company will take over operations for Coosemupar (Puerto Armuelles’ Multiple Services Cooperative), the country’s largest banana producer and exporter on the Pacific coast, subsidized by the Panamanian government since 2008, after it went bankrupt.

Cultivation in the region has plummeted 91.3 percent since then. And 2009 figures issued by the National Banana Office project a similarly grim outlook for the near future.

In January and February, the country’s banana industry exported just 2.3 million boxes, representing an overall decline of 34.8 percent.

Plantations on the country’s Pacific coast registered the largest slide in production, shipping only 113,232 boxes (18.4 kilograms), a decline from the 304,513 boxes exported from the region during the same period last year.

The US multinational Chiquita Brands abandoned its monopoly over the Panamanian Pacific’s fruit commercialization in March 2008, transferring it to farm workers, who grouped under the Coosemupar cooperative.

The multinational maintains an exclusive purchase agreement with the banana plantations in the Panamanian Atlantic.

Del Monte’s proposal was chosen over that of three other companies: two European foundations and one headed by Panamanian businessman Anel “Bolo” Flores, all of which showed interest in reactivating banana production and growing other products.

According to declarations given by Nidia Medina, Coosemupar representative, to the Efe news agency, there was an offer for $77 million by a Spanish company, which would have covered, among other things, the existing debt and one year investments in the plantations, but the offer was rejected.

“This (Spanish) company was missing some documents, and did not guarantee sustainability for the company one year into the contract,” Medina told Efe.

There is much expectation from workers about the future of the Puerto Armuelles plantations, so Del Monte executives have been asked to meet with the cooperatives’ directors in the next week.

“We need to agree on the percentage that will correspond to Coosemupar workers for the banana sales, as well as how the installations will be maintained and the staff that will be used for it, among other things,” Medina claimed.

Production in the 12 Coosemupar plantations and its exports have been stalled for six months, leading to losses of over $20 million, due mostly to plagues.

Last week, the government approved a loan of $670,000 to cover payroll expenses for over 2,500 workers.

This debt is added to the more than $30 million the cooperative owes rs like the National Bank of Panama and the Social Security, money the government has been injecting into banana production since 2003.