The six weeks in which the banana producers with contracts mowed their farms came to an end seven days ago. The market is back to normal after the producers cut their plants, week after week, and got two dollars for each plant they cut down.
Chile's demand for fruit, with little local produce due to the frosts, momentarily solved Ecuador's crisis. Chile has been a marginal market for lower quality fruit, the fruits are sent to Argentina from there.
Mowing consists of cutting the plants so the cluster isn’t produced, since external demand of the fruit was down. Between January and August of this year, Ecuador placed 1.68 million cases of 43 pounds into the international market, 3.36% less than in the same period the previous year, according to statistics of the Banana Exporters Association (AEBE).
However, if that number is compared to the figure in the year 2011, the fall is 25 million cases or 150 million dollars at the rate of six dollars per box, which is what the producer is paid. The situation may be worse in the coming months. During this period almost 72% of the fruit came through the port of Guayaquil.
The other 28% came through Puerto Bolívar (El Oro). Gustavo Maroun, of the Association of Banana Producers (Agroban) explained that the six weeks when they mowed their farms was critical because the farmers income didn’t outweigh the costs of inputs, aerial spraying against the black Sigatoka fungus, salaries and field work. Costs that are also higher due to the rigid system of paying the workers’ contributions through the Social Security Institute (IESS).
Maroun says that most farmers haven’t been able to pay their contributions because they had to cut their plants and because of the sector’s low profitability. There are about 30,000 workers (50% of the members of the sector) who did not receive their Social Security contributions. "The authorities are making decisions with the onset of coercive judgements, that involves blocking the producers’ accounts and taking the money from them," said the leader. "There will be a massive embargo that will put the sector, which provides about 150,000 direct jobs, in a serious situation." Therefore, he proposed a dialogue in which the Government intervenes to help find a solution, given the importance of the industry, the second generator of foreign exchange following oil. Between January and August the sector has generated 1.587 million dollars fob (on pier).
Source: Elexpreso