In August 2018, four banana unions of Ecuador - the Association of Banana Exporters of Ecuador (AEBE), the Association of Banana Marketing and Exportation (Acorbanec), the Regional Corporation of Ecuadorian Bananas (Agroban), and the Chamber of Agriculture of the Second Zone - began the process of forming the Ecuadorian banana cluster TO strengthen the sector and shield it from the country's political ups and downs. Currently, the cluster is in the methodological consolidation phase, with the advice of the Monterrey Institute of Technology.
The Ecuadorian banana industry is currently facing multiple challenges: excessive regulation, tax pressure, high tariffs in foreign markets, greater labor and environmental demands in the European Union, disadvantage against competitors due to the lack of free trade agreements, and loss of markets.
In addition, the global coronavirus pandemic has complicated the arrival of the fruit in Middle Eastern countries, a market where Ecuador sends almost 15% of its bananas. Furthermore, the expansion of the disease in countries in Europe, such as Italy, or in Asia, such as Korea, has forced local governments to implement greater controls, which will lead to a decrease on exports and, in turn, to a saturation of the market due to an excess supply that will lower prices and cause losses for the sector.
The private sector needs help to meet all these challenges. The public sector needs greater flexibility and tax incentives to provide liquidity to the sector, simplification of customs procedures, and that public banks provide credit lines for banana producers.
However, the solution requires more than the public sector. That's why the Ecuadorian banana sector is working on the formation of a cluster that will consolidate a joint strategic vision of all participants in the banana value chain focused on competitiveness, sustainability in social and environmental aspects, working to have a greater incidence in the generation of public policies that seek foreign exchange growth, job generation, and the development of people in rural areas.
The only possible way that the sector can become more competitive in a complex economic situation like the one Ecuador is facing, is by working together. Teamwork is mandatory, not optional.