Page 35 - Ecuador's Banana Sector under Climate Change

chapter 2: economic and policy analysis of the banana sector in ecuador and implications for social and environmental sustainability
global value chain from inception. In addition, the high perishability of the fruit requires close coordination from the plantation to the consumer, thus significantly favouring a vertically integrated supply chain that is dominated by multinational corporations (MNC). Until the 1990s, MNCs controlled all key stages of the supply chain - from production and transport to the sale to retailers. In addition, they adopted clear supply strategies that were based on minimizing risk, diversifying the supply base and keeping production costs to a minimum, particularly by maintaining low wages. The dynamics of economics, political stability and disease were key factors in the selection by MNCs of which country to invest in and from which to withdraw. In Ecuador, the agrarian reforms of the 1960s - which limited direct land ownership by MNCs - encouraged the MNCs to leave the country. The exception to this was Dole Food Company, which has maintained its production and supply of banana (Human Rights Watch, 2002) in Ecuador. During the 1970s, nevertheless, MNCs returned to Ecuador (i) in response to the outbreak of BS in Central America and Colombia; (ii) in reaction to the imposition by these countries of export taxes on bananas and (iii) in reaction to the increased organization of unions, resulting in higher workers’ wages (Human Rights Watch, 2002).
2.3 Geography and the farm structure with regard to the banana industry
2.3.1 Geographic locations
Ecuador has nearly 12 million ha of land under agriculture, of which over
11 percent is occupied by permanent crops, notably bananas, sugar cane and oil palm. According to the Ministry of Agriculture and Livestock (MAGAP), banana cultivation accounts for 10 percent of the total agricultural area in the country and occupies over 165 000 ha (MAGAP, 2013).
Nearly all the bananas produced in Ecuador are located in three provinces
in the lowlands of the Pacific coast – El Oro, Guayas, and Los Ríos. These are characterized by a humid, tropical climate and rich soils - ideal conditions for banana growing (Human Rights Watch, 2002). The province leading banana production is El Oro, located along the southwestern coast. The area is mainly flat, with a few low mountains, and is dry. Average temperature is 23°C and
the rainfall range is from 200-1 500 mm annually. Guayas is the second
largest province in agricultural land area (810 000 ha) and is dominated by two permanent crops: bananas and sugar cane. Bananas are planted on 41 700 ha, with an annual average production of approximately 1.6 million metric tonnes for the 2009-2012 period (MAGAP). The banana production by province in recent years is shown in Table 1.
2.3.2 Farm size
The Ecuadorian banana industry is highly diverse in terms of farm size, multiplicity of exporting firms, and supporting industry. The banana plantation structure in Ecuador is characterized by a large number of small and medium-size producers (Table 2). Approximately 79 percent of all producers nationwide have farms that do not exceed 30 ha; however, they only own 25 percent of the total area planted
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