1

An Assessment of a Proposal for

Strengthening the SVG Banana Industry by
Consolidating existing Production Units into
larger, more efficient Production Units

By: Ashley R. Cain

ADPIU
OCTOBER 2005
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TABLE OF CONTENTS

Background...............................................................................................................................................3
The current industry situations (Pertinent issues....................................................................................3
The Current State of Play in the Banana Industry.................................................................................6
Assessment of situation needs and recommendation for grower support and or consolidation
strategies....................................................................................................................................................7
- Richmond to Spring.......................................................................................................................................7
-Vermont Valley................................................................................................................................................7
- Dauphine to Pilgrim Hill...............................................................................................................................8
- Belmont to Argyle..........................................................................................................................................8
- Marriaqua Valley...........................................................................................................................................8
- Spring, Biabou, New Prospect.......................................................................................................................8
- Cedars to Mt. Grennan..................................................................................................................................8
- Greggs to Lauders.........................................................................................................................................9
-Chapmans to Diamond...................................................................................................................................9
-Mt Grennan , South Rivers, Park Hill Ferguson, Byrea Valley, Calonaire.................................................9
- Congo Valley.................................................................................................................................................10
- Grand Sable, Dickson, Langley Park..........................................................................................................10
- Orange Hill...................................................................................................................................................10
TABLE – Organisational Options for consideration by District...........................................................11
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Background

The following analysis was motivated by a request during a high level meeting of local banana
officials at the Ministry of Agriculture, Forestry and Fisheries of St Vincent and the Grenadines in
October 2005 The concern of the meeting was, the strengthening of the local banana industry by
consolidating existing production units into larger production units as a strategy for achieving:

• Greater productivity;
• Improved fruit quality control;
• Enhanced compliance with international standards;
• Development of stronger local institutional arrangements; and
• Better organization of the banana industry.
It was proposed, for example, that an area such as Langley Park, with low levels of production and
productivity, under-utilised irrigation facilities and small production units, be brought under a Single
Management Unit (SMU) in order to achieve the objectives outlined above.

Such a strategy, however, is fraught with difficulties. It is unlikely that such a consolidation strategy
can be implemented in time to meet the current imperatives facing the industry. I therefore propose an
alternative strategy, which combines elements of consolidation, where feasible, but focuses on targeted
investment for farmers who have the potential to adjust quickly to the requirements of the current
market and industry situation.

The Current Industry Situation (Pertinent issues)

There were 1700 codes or farmers who sold bananas to the Association in 2005. This reflects the
continuing trend of reduced acreages, production and exports and declining labour and farmer
involvement in the banana industry. Many farmers, who are now in production, cite three major
problems which threaten their banana business:
(i) Poor quality and unavailability of labour for production.
(ii) Unavailability of inputs on a timely basis to take full advantage of production
conditions.
(iii) Fear and despondency that despite our best efforts the banana industry cannot and will
not survive the demanding and competitive market conditions it now faces.
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Modern industries are driven and under-pinned by systems which facilitate timely access to financing,
including credit facilities. Inputs are often unavailable to banana farmers since financial institutions are
unwilling or unable to provide financing at reasonable rates to sustain production at the desired levels.

The proposed consolidation and centralized management of banana farms, which are contiguous, may
help to address the first two issues of labour availability and quality, and financing, provided that the
farmers concerned agree to the use of fully trained and competent personnel for production operations.
This strategy may also help to engender confidence in the future of the industry if it can be
demonstrated that bananas of high quality can be grown profitably under well managed production
environments.

The major problem with the farm consolidation strategy, whether of contiguous units or through a
Centralized Management System (CMS) for non-contiguous farms, is the development and
implementation of a suitable social and organizational model that will enable farmers to give over
control of their farms and assets to a centralized control agency.

Several other alternative approaches to achieving consistent production, investments and consistent
quality of exported product may be advanced:
(i) For farms in production zones with good physical and other attributes for banana
production, the desired objectives may be achieved by developing, implementing and monitoring
customized production plans and investment strategies for individual farms. This may be done
through a farm management programme and process which includes consistent support from
highly trained production and farm management advisers. These advisers may be paid by the
state or paid a percentage of the profits based on productivity gains achieved by the farmers as a
consequence of the technical and management support provided. (Good technical advisers and
support staff will therefore be rewarded financially based on the quality of the technical support
provided). This could be achieved by the development, establishment or emergence of
competent banana production and management support service providers.

In most areas of SVG, because of customs, traditions and other cultural considerations, farmers
are unlikely to surrender control of their farmers to a centralized management agency. They
may be more amenable to hiring, on a needs basis, well trained and certified teams to undertake
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key operations and services such as:

• weed control
• pest and disease management
• management of EUREP-GAP records and compliance requirements;
• harvesting, deflowering and sleeving
• business support services, such as: business planning and financial and
credit negotiation / facilitation services.
The unavailability of labour in many banana producing areas may result in this model emerging,
in the short-run, as the model of choice.

(ii) Loose aggregation of farmers with non-contiguous farms in a production area farms
through a grouping mechanism such as the Fairtrade Group, or the “Waitrosé Select” Producer
Group in a given zone. The unifying factor in such a group will be mandatory adherence to or
compliance with requisite standards. Membership and remuneration in this case will be linked
to compliance with group norms, for example, as in the current Fairtrade Group model.
The Fairtrade Group model in practice has had its own difficulties, which, if left unchecked can
lead to lack of confidence, capture of resources and benefits by group elites, and inequity in the
distribution of group entitlements. The effectiveness of such a strategy in the short-run will
depend on whether or not members retain their benefits and adhere to group standards because
there are substantial differences in overall welfare of group members as compared to non-
group members. If for some reason the differences between Fairtrade Group members and
non-members (as reflected in overall prices and benefits to growers) become small and almost
negligible, then members may abandon observance of requisite standards and norms.

(iii) Establishment of Producers’ Cooperatives.

The operations of cooperatives, as an institutional mechanism, are well known in SVG. Banana
Marketing Cooperatives were quite common and successful during the ¨wet pack¨ and boxing
plant era of the 1970’s -1980’s. These cooperatives were sustained primarily through the
payments received from the St. Vincent Banana Growers Association (SVBGA) for services
rendered. The technological shift to dry packing in the field led to the loss of revenue for these
cooperatives and their eventual demise. They had not evolved, as institutions or business
concerns, into longer term enterprises, since the key focus of these cooperatives was not on
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investment, growth and sustainability but on maximizing returns to growers / members. The
cooperative model may again be usefully developed, refined and advanced as a viable strategy
for achieving consolidation of production, standardization of practices, consistent delivery of
requisite support services through paid support staff and mobilization of financial resources to
offset / meet short-term production needs or the longer term investment needs of members.

(iv) Fairtrade Farmer Groups

In recent times, the emergence / existence of Fairtrade Groups has provided or exposed
Fairtrade banana farmers to the practical implications of group membership and group
dynamics over a sustained period of time. The activities and experiences which could have been
brought over from of the Banana Farmer Cooperatives would have helped to foster and
establish the pre-conditions necessary for moving such groups today from loose Fairtrade
arrangements to the more highly structured operations of a cooperative for production and
support services.

(v) Other organizational possibilities.

There is need to consider and research other organizational arrangements so as to derive
appropriate social technologies to fit the current banana industry situation. For example, the
District Assembly model is enshrined in the current legislation. How can this District Assembly
model be modified or improved to meet the industryś needs for better decision making and
overall industry management?

None of the models identified or proposed above can be implemented wholesale in the current banana
situation. The adjustment process of the last ten years has had its own consequences for and impact on
the feasibility of instituting these options in the various banana producing areas. In some areas the
individuals’ strategy stands the best chance of achieving the current industry needs and objectives. In
others, a Fairtrade driven model, linked to a conversion to a cooperative arrangement, may be the most
feasible strategy at this time.

The Current State of Play in the Banana Industry

Let me therefore present below my assessment of the state of play in the various banana districts and
my recommendations on possible organizational strategies and configurations to be pursued in the
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short-run (next six months) and the medium term (next 18 months).

It is likely that the best options for the industry will not be clear or obvious until March 2006, when
there should be a better indication of the eventual regime to be put in place for bananas entering the
EU. No attempt is made here to gauge the potential impact of a ¨tariff only¨ regime at the €187 per
metric tonne proposal nor the maintenance of a tariff quota regime using existing quotas nor a return to
individual country quotas. Because of the low level of production and productivity in the Windward
Islands and the continuing industry adjustments, we do not stand to achieve significant new gains, in
the medium term, from the various market arrangements which are now on the table. It is also
assumed, in this analysis, that the UK Multiples will continue to set the pace on quality and prices on
offer and the eventual profitability of banana production in SVG.

Our target during the next six months should therefore be to stabilize production through a targeted
production support programme, focusing on farms with larger acreages, a consistent record of higher
productivity and low susceptibility to dry conditions during the dry season and even the latter half of
2005. Every effort must be made to ensure there is adequate fertilization of fields. (e.g. a minimum of
two fertiliser applications before January 15th 2006). This tried and tested practice will also help to
ensure that there is no need for massive and widespread replanting of fields during mid 2006 as a
consequence of fields being overstressed during late 2005 and the dry season of 2006.

Assessment of the Current Situation - Needs and Recommendations for Grower Support and or
Farm Consolidation Strategies in Various Banana Growing Districts
• Richmond to Spring
Here the labour constraint for production is the primary concern as a consequence of the relatively low
population available for banana / agricultural production in this zone. A targeted strategy for key
growers and a strengthening of Fairtrade Group support is proposed as the ideal strategy for the next 18
months.
• Vermont Valley
Good conditions exist for production. Some targeted support for growers such a Grafton Isaacs is
suggested. Efforts should be made to interest farmers in re-entering production using the “Richard
Yudin Strategy” – where its cheaper, easier and more effective to replant and set up a EUREP-GAP
compliant farm properly, from scratch, than trying to make a non- compliant farm compliant.
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• Dauphine to Pilgrim Hill

Production in this area is limited. A targeted farmer strategy is recommended. Infrastructural support,
for improvement of farm access roads, must form part of an overall investment and support programme
to support production in this zone.

• Belmont to Argyle
The recommendation for this area is for providing some individual support, where conditions are
suitable, to persons who are interested in banana production. This is not likely to be a significant
producing area in the near future.

• Marriaqua Valley
Conditions are still very good for production. Most fields, however, are performing below potential.
Labour availability remains a severe problem. The construction of the La Croix Palletisaton Centre
will stimulate some replanting in Marriaqua. A mixed strategy is recommended for Marriaqua as
follows:
(i) A targeted grower strategy for larger producers
(ii) A Fairtrade Group Consolidation strategy, especially in Richland Park, La Croix, Mt
Pleasant
(iii) Development or establishment of Growers’ Cooperatives. The Fairtrade Groups may be
developed and assisted to acquire the expertise required for providing high quality
services to banana farmers.

• Spring, Biabou, New Prospect

The strategy recommended here is the creation or establishment of well trained farm management
teams to provide labour and other services to larger farmers especially in the Spring, Nicholls or Darlo
areas. The strategy is recommended based on the small population base from which to draw labour, the
nature of the terrain, the farm size distribution and current ownership configuration of the farmlands in
this area. The presence of some experienced farmers in this area is also an advantage for pursuing such
a strategy.
• Cedars to Mt. Grennan
This area has experienced a marked reduction in acreage under banana production. This decline has
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been driven by a combination of dryness, inadequate labour supply, the nature of land ownership and
shifting land use to housing and other activities. These trends are likely to persist even though there are
some farms with reasonable sizes. The area can benefit from some infrastructural improvements, e.g.
road improvement in the South Union area as a means to further production. The recommended
strategy for this area is one of providing targeted credit and financing support for key farmers . The
creation of labour and farm management support teams to meet the labour needs of farms is also
recommended. Efforts may be made to attract experienced banana workers in the Greggs, Lauders area
to provide such services. The skills of these workers can be enhanced by a specialized training
programme for workers so recruited.

• Greggs to Lauders
This district has recorded the largest overall decline in banana production since 1993. Lands have
shifted into production of dasheen and other short crops. Although Fairtrade Groups have been active
in this area, there is little indication that farmers in this district are willing to return to significant levels
of production. There also appears to be little interest among young persons in planting banana. The
recommended strategy is for a strengthening of existing Fairtrade production units to improve their
overall productivity and net farm income. If farmers in this district decide to return to banana
production then, there is sufficient understanding and resident knowledge of banana production to
provide a foundation and framework for re-establishing banana farms in line with modern industry
requirements.

• Chapmans to Diamond
This is also a low production area with little new investment in banana production taking place.
Availability of good quality labour is also a problem. As is the case for Greggs to Lauders, the most
feasible strategy at this time is targeting of improved productivity through the Fairtrade group
mechanisms, coupled with establishment / promotion of specialised labour and management teams for
providing services to existing farmers.

• Mt Grennan, South Rivers, Park Hill, Ferguson, Byrea Valley, Colonaire

This area has significant banana production that seems likely to be sustained for the next 6-18 months.
There is a predominance of small farm operators. Availability of labour is not as acute as in other
areas. The major challenge here is one of raising the productivity of farm labour. A mixed strategy is
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suggested as follows:
• Specialised training of support teams that can work with farmers at all levels
• Consolidation of production through loose production and technical support arrangements
• Strengthening of Fairtrade Groups and their conversion into Cooperatives

• Congo Valley
This is a highly productive area, dominated by some larger sized and more experienced banana
growers. The prime strategy proposed is one of specific grower targeting supported by the
establishment and deployment of well trained production and managements teams. Because of the
relatively high rainfall experienced in these areas, efforts must be made to ensure timely application of
fertilizer and other essential inputs during the next six months. This valley area performs well during
the drier months. The key farmers in this area already have well developed systems for meeting and
delivering on the requisite market standards whether as Fair Trade, Waitrose or other specialized
products.
• Grand Sable, Dickson, Langley Park and Bower
Performance at Grand Sable is mixed but these soils have shown a tremendous capacity to sustain high
yields under good management and irrigation. The first target is to put all Grande Sable farmers under
the same technical management and supervision to exploit the natural potential of this area. Langley
Park continues to present challenges. Farms are small in size and many operators have not yet learnt
the skills for sustained high production and productivity on these irrigated farms. The first strategy
proposed is for targeted input and technology support for the better banana farmers on the estate. The
second strategy for Langley Park is, working through the existing Fairtrade farmers to begin the
process of consolidation of farming units into a common management and technical support
arrangements for interested farmers. This could then be expanded as necessary into the consolidation
of contiguous units into a Farmer Cooperative that will manage the delivery of services while
inexperienced banana farmers and workers learn the business of producing banana for a more
competitive marketing environment. In the case of Bower the major need is for stabilising the access
roads to the farms. Once this is addressed, then the recommended strategy is for targeted input and
technical support programmes for farmers in Bower.
• Orange Hill
Orange Hill has extensive banana production, although efforts are under way to also increase
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production of arrowroot and other enterprises. Most of Orange Hill is irrigated. Farms are reasonably
sized compared to Langley Park. The main constraint is the distance of farms from homes of farmers.
The recommended strategy is for an initial support programme to provide production inputs where
needed, and deployment of technical production and farm management teams to help banana farmers
streamline their existing production. Thereafter, efforts should be directed towards the establishment of
a Farmer’s Cooperative to drive the continued development of banana production in this area.

The various options proposed above are summarized in the following table.
Table 1 – Organisational Options for consideration by District

Technical
Consolidation Consolidations Individual Fairtrade
No. Area Contiguous Non- Targeting Group Cooperatives
Units Contiguous
Units

1. Richmond – Spring ü ü ü ü
2. Vermont ü
3. Dauphine ü
4. Marriaqua ü ü ü ü ü
5. Spring – Darlo ü ü ü
6. Simon – Biabou ü ü
7. Cedars – Mt. Grennan ü ü ü
8. Greggs – Lauders ü ü
9. Chapmans – Diamonds ü ü
Mt.Grennan – Ferguson
10. ü ü ü ü ü
Byrea
11. Colonaire Estate ü ü ü ü ü
12. Congo Valley ü ü ü
Grande Sable –
13. ü ü ü ü
Langley Park
14. Orange Hill ü ü ü ü ü

No attempt is made in this initial analysis to estimate the costs of the various strategies or to estimate

their potential impact during the next 6 months and the following 3 years. If the proposed strategies are

agreed to then such projections can be generated in a subsequent analysis.