April 11, 2021

the banana sector struggles to sell below production costs and win over the banana


Madrid

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New episode in the competition between the Canarian banana against the banana, the Canarian David against the Goliath of powerful multinationals, which produce in third countries. The reform of the Food Chain Law is approaching its final phase in the Congress of Deputies and the 8,000 Spanish producers, grouped around Asprocan (Canarian Banana Producers Organizations), are fighting so that the obligation to sell above production costs is not applied to them. Nueva Canarias (NC), through its only deputy Pedro Quevedo, has submitted an amendment to the draft Law to reform the Food Chain Law in this regard.

[Consulta el documento completo aquí]

The modification is currently being negotiated – the deadline to present amendments has just been extended, for the umpteenth time, until March 10 – and would have the complicity of political groups such as the PP, Citizens or Canary Coalition. Popular sources have almost taken for granted the support for proposals that go along these lines. The ball remains on the roof of the PSOE, which governs the archipelago in coalition and that, in the Senate, he has already rejected a similar amendment in December in a last minute twist.

Specifically, the proposal adds a new “Seventh Additional Provision” in which it is specified that «to the relations between the operators of the Canarian Banana food chain (PGI for bananas grown in the archipelago of the Canary Islands), Articles 9.1 c) and j) and 12 ter of the present Law ». That is, the reference to the coverage of the cost of production or effective cost of production certain contractual information has been incurred, as well as that the risks derived from commercial policy are not passed on to the immediately preceding link in the food chain.

In the background, the “Cold War” against the banana, produced in tropical and African countries by authentic business conglomerates. “The costs of the large multinationals are much lower. It is a fight of David against Goliath: this is a Law that we do not ask for, which is the complete opposite of what we propose, ”he specified.

15,000 families pending Congress

The Spanish banana sector is far from resembling a gigantic multinational and is the only one of these characteristics that has managed to function under a single Protected Geographical Indication (PGI) “Canarian banana”, which gives it an important degree of protection against third countries and, currently, employs about 8,000 producers that generates between 10,000 and 12,000 direct and 4,500 indirect jobs on which the fate of 15,000 families of the archipelago depends. It also has a 96% penetration in the national market and its direct contribution is 430 million euros. One million tons are exported daily from the islands to the Peninsula, generating a total production of about 420,000 tons per year.

For the president of Asprocan (Canary Islands Banana Producers Organizations) Domingo Martín, if it is not made more flexible in some way «by implying a minimum price, this forces us to leave between 10% and 30% of production in the Canary Islands ». Specifically, based on the volume and prices of bananas in 2016, 2017, 2018 and 2029, a minimum price “in green” (freshly harvested) is estimated at 0.69 euros / kg and a direct economic impact of the regulation of 259 million euros in four years after withdrawing up to a third of the production. “We would leave a gap in the market, which would be immediately filled by the production of the competition – the banana – and this would ensure the death of the sector, since market share would be lost,” he pointed out.

In addition, the head of the Canary Islands banana producer associations recalled that “the Food Chain Law it does not apply to foreign products ”in reference to bananas, where the costs are much lower. In his opinion, although he has praised the objectives of the regulation that is being processed in the Congress of Deputies, he has shown his fear that it will have the perverse effect of “punishing the national product and promoting foreign imports.”

Martín added that setting a minimum price on the production side is “very early”, because the real value of the product in his opinion is known after transportation “in two or three weeks »depending on the kg available in every moment. “For us this is tremendously inappropriate, because it blocks commercialization,” he explained.

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