PANAMA: Banana Growers Fear EU Tariffs May Spell End

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 PUERTO ARMUELLES, Panama - On an industrial dump outside town, one-time
banana worker Giovanni Morales climbs down into a toxic pit with a
blunt pickaxe in search of scrap metal.

Morales is one of about 9,000 former banana workers in Puerto
Armuelles, one of Panama's biggest banana-producing regions, who lost
their jobs when the industry took its latest downturn in 2003 due to a
disease that ruined the crop.

Now, he sells scrap metal foraged from rusting equipment used on
plantations decades ago. Almost all the scrap diggers here have
chemical burns from scrambling in and out of 6-foot deep pits and
tunnels among pools of old diesel fuel and piles of pesticide-ridden
bags once used to protect the fruit from plagues.

Tens of thousands of banana workers in Panama and across Latin America
fear they could also soon be thrown out of their jobs and forced into a
desperate fight for survival.

The European Union (EU) wants to increase import tariffs on Latin
American bananas from 75 euros per ton now to 230 euros per ton in
2006. Growers and exporters here say it could lead to the collapse of
their industry.

"The price that the EU is talking about would practically remove the
majority of Latin America from the market," said Domiciano Cardenas,
head of Cosemupar, the co-operative that grows bananas in the
Panamanian town of Puerto Armuelles.

The fight could revive the "banana wars" of the 1990s, when the World
Trade Organization (WTO) backed claims by the United States and Ecuador
that a complex EU system of quotas and import duties barred Latin
American fruit from European markets.

Across Latin America, producers say they could now be wiped out by the
EU tariffs, which replace the old system of quotas and duties and are
aimed at protecting growers in Europe's former colonies in Africa, the
Pacific, and the Caribbean.

Those farmers are also unhappy with the proposed new tariff -- they want it set even higher at 275 euros or more.

Fighting back, six Latin American producers recently asked the WTO to
rule whether the new tariffs will hit their exports unfairly.

The EU tariff changes are scheduled to go into effect on Jan. 1, 2006,
though implementation would be delayed if the WTO agrees to review the
Latam banana producers' petition.

If no deal is reached and Latin American nations hold firm, the dispute
could hamper negotiations at a crucial round of WTO trade talks late
this year in Hong Kong.

Panama's banana trade has shrunk by half in the last decade because of
fruit plagues. In 1994, 41 million boxes were exported; last year's
figure was a little over 20 million.


Some of Latin America's producer nations are classic "banana
republics", where international fruit firms once wielded great
political power.

With the help of the CIA, the United Fruit Company -- which later
became Chiquita Brands International -- backed a 1954 coup that toppled
Guatemala's president after he tried to push land reforms that would
have harmed the firm's holdings.

Even now, the banana industry is hugely important to social and economic stability.

In Baru, in Panama's southwest on the border with Costa Rica, there is
almost no work other than in bananas. Unemployment is over 40 percent
and all sides agree the EU's new tariffs would plunge thousands deeper
into poverty.

On the lush Potrero plantation, unemployed men steal metal from a
footbridge to sell as scrap, says Saleustiano de Gracia, general
secretary of the banana workers' union.

Those lucky enough to still have jobs are desperate for the plantation to be saved.

"This industry cannot fall, it cannot," said worker Julio Garcia
Sanchez, calling on the government to search "like an eagle" for a way
to save the sector. "I have two sons in college -- I have to fight to
support them," he added.

In Puerto Armuelles, pawnbrokers are thriving.

"We've been busy lately," said owner Joseph Castillo as he weighed thin
gold chains and small rings. "People are looking for any way they can
to make money. Normally there are 70 people (here) in a week. Now, that
many sometimes come in a day."

Union leaders say workers will bear the brunt of the decline because
international fruit firms will simply leave Central America and set up
shop in Africa, where growers would benefit from reduced competition
from Latin American farmers.

Already these firms are looking for land in Angola, Cameroon, and Ivory Coast, industry players say.

"If Europe applies this, it will hit Central American countries more
than the multinationals. They will just leave," said Cardenas, of the
worker's co-operative Cosemupar.

At the dump outside of Puerto Armuelles, life is bleak and accidents are common.

"Last year a young girl was buried up to her neck when the earth fell
on her," says Morales, the scrap digger, as sweat streams down his
face. "We rescued her but she broke her ribs and blood was pouring from
her mouth."


AMP Section Name:Food and Agriculture