Ecuadorian banana producers and exporters have expressed their disagreement over the new $ 6.40 price set by the Ministry of Agriculture (MAG) for the box of bananas. The exporting union had asked that the price of the banana box not increase, as it could affect the sector's competitiveness compared to other countries such as Guatemala, where the price of the fruit is up to 50% lower. In turn, the Association of Banana Producers asked for a price increase of a penny per pound, that is, by 0.50 dollars so that it amounts to 6.80 dollars.
The Banana Marketing and Export Association (Arcobanec) foresees a decrease in exports in 2020 to Europe and other destinations due to the increase in the price of the box.
On the other hand, as the increase raised by agricultural banana producers was not accepted, the union has requested a review of the measure taking into account the investment they will make to defend themselves from the Fusarium Tropical Race 4 fungus.
Support and rejection of tax reform
The increase in the box of bananas hasn't been the only factor of disagreement between banana exporters and producers. The export sector supports the tax reform included in the draft Economic Growth Law, which proposes the reduction and simplification of the single banana income tax.
Until now, banana growers paid according to the exported boxes, the minimum support price and the FOB value (value in port). The reform proposes that the tax be 3% of the turnover, without taking into account the minimum price of the fruit. "If the reform is completed, the increase in cash will be compensated and we could offer competitive prices," stated Salazar.
Paredes rejects this proposal, claiming that small producers should not pay any type of tax. According to him, the logical thing is that only farmers who sell more than 1,000 boxes pay a tax that ranges between 0.5% and 2%.
Meanwhile, the Minister of Agriculture, Xavier Lazo, stated that the single banana tax would combat informality in the banana sector and tax evasion.