Page 45 - 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
Multinational corporations tend to use Ecuador as a buffer, sourcing bananas from Ecuador when there is a shortage from other sources (Human Rights Watch, 2002).
It is usual for export companies (local or MNCs) to obtain bananas through
a variety of contract arrangements with third-party producers, ranging from exclusive associate producer relationships to periodic contracts or purchases through the open spot market. Although banana exporters partly control production through contracts with suppliers or through direct ownership of banana plantations, their interventions stop at the border (Roquigny et al., 2008).
Prices paid to producers were determined by the exporters, who had tight control over farm management (e.g. input use, disease control), until Ecuador reformed its Banana Law in 2011 (see Section 4). Export companies also provide the suppliers with banana boxes, labels and palettization equipment, among others. Equipment costs are then deducted from the price of the boxes paid to the suppliers (Roquigny et al., 2008).
3.2.2 Other suppliers to the banana industry
In addition to producers and exporters, the banana supply chain is supported within Ecuador by stakeholders within the services sector, including those relating to cardboard manufacturing, ground transportation, plastic supplies, agricultural inputs and ocean shipping inspection, testing and certification, aerial fumigation, plant breeding and banking and insurance. Table 7 lists the value of gross sales by service providers for 2012.
3.3 Ocean shipping
Three significant innovations have made it possible to transport bananas over long distances: refrigeration, the containerization of shipments and the use of pallets. Refrigeration during transport was developed during the late 1960s
Cardboard box manufacturers (the banana sector absorbs 90 percent of the products) 260 Ground transportation (approximately 275 000 trips per year) 70
Ocean shipping
Plastics 130 Agricultural inputs (the banana sector’s share represents 60 percent) 600 Inspection, testing, certification and verification services
Aerial fumigation service providers 40 Plant breeders
Banks and financial companies, insurance
Table 7 Key supporting industries for banana and their market shares
Service industry
Annual sales
(million USD)
1.500
Source: Venzetti et al (2005)
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