CASTRIES, St. Lucia – Agriculture Minister Alfred Prospere Monday said St. Lucia is now exporting bananas to Trinidad and Tobago after trade with the United Kingdom was suspended earlier this month.
Agriculture Minister Alfred ProspereProspere, speaking to reporters ahead of the weekly Cabinet meeting, dismissed suggestions that the Phillip Pierre administration had been responsible for killing of the industry.
“But they never said the important part of my statement, which was as soon as this decision was taken, the very same quantity of bananas was diverted to Trinidad and Tobago,” Prospere said, adding that the UK trade suspension did not negatively impact local farmers.
“We are still exporting those 1000 boxes to Trinidad,” Prospere said, adding that the local authorities are working with a supplier in Trinidad & Tobago to ship 3,000 additional boxes of local bananas to the twin-Island Republic.
“The point I am making is that we are not in a situation where the thousand boxes that were going to the UK are at a halt because our farmers would be in a position where their fruits would be hanging. Their fruits are still being harvested and they are being exported,
“So I want to make it clear to the public that the situation that existed where we had to suspend exports to the UK, those fruits are now being exported to Trinidad and Tobago,” he added.
Prospere announcing the UK banana trade suspension, said that when the Pierre administration came to office in July last year it found a banana industry that had collapsed.
“Banana trade with the UK was halted for two years. The critical infrastructure required to efficiently operate the industry was dismantled. The main banana exporting company WIBDECO/Winfresh ltd went into administration.
Prospere said that key assets such as the ripening facility at Stanstead in the UK and Winfresh’s stake in the Geest shipping line were sold off to third parties to meet debt payments. He said this meant that the main components of the banana exporting company such as shipping, marketing, and logistics were lost.
“The local producer base/farmer’s organization, the NFTO was facing financial losses and technical challenges. They had to immediately assume responsibility for the commercial arm of the trade although they did not have the resources and expertise to adequately perform that role. The situation at the time seems rather bleak.”
Prospere said the government in recognition of the socio-economic consequences and the critical role of the banana trade in rural communities, found it necessary to intervene for the sake of maintaining social peace and economic mobility in rural communities.
“In the national interest, we saw it prudent to inject the necessary financial and technical support required to recommence trade with the UK supermarkets. A loan facility was established to inject EC$3.8 million (One EC dollar=US$0.37 cents) into the NFTO.
“To further emphasize the commitment of the government to our farmers and the people of St Lucia, a government lead delegation travelled to the UK to meet with the supermarket representatives to ascertain how best to proceed with the trade and finalize contractual relations with our farmers. As the trade evolved, I demonstrated the interest of the government of St Lucia in the banana trade by keeping in direct contact with our farmers, the NFTO, and our UK supermarket partners.”
He said in May this year, a technical delegation from the UK, visited St Lucia to determine the state of readiness prior to the commencement of trade. Prospere said the technical field visit was deemed satisfactory and trade with the UK commenced immediately on May 15.
He said during the period of trade, the government continued to provide support to the banana farmers by subsidizing inputs such as oils and fertilizer to farmers.
“In addition, we have actively pursued other regional markets with a view of providing further opportunities for our farmers. We were successful for a certain period, whilst we tried to rebuild the banana industry. Unfortunately, the long-term impact of COVID-19 on the supply chain and the ongoing war in Ukraine have presented some major challenges that threaten the economic viability of the trade at this time.”
He said the high shipping and fuel cost associated with a container of bananas is stated at US$8,200 per container “and rising” and although 50 per cent of the shipping cost was subsidized by the supermarket chain, it was difficult to sustain once fuel prices keep rising.
“The costs of key inputs such as fertilizer, oil, bags, and other inputs are rising daily. The extended journey time to reach the UK is proving uncompetitive as compared to other suppliers.”
Prospere said that the Geest shipping line has a monopoly over the route and they have shown no interest to modernize the container units that transport our bananas”.
He argued that had the previous government “not sold off our stake in the shipping business, we might be able to subsidize our shipping cost and modernize the containers to our requirements and select a shorter travel route that would give our bananas a competitive advantage as was previously done when we once owned shares in the Geest line.
“Today we are now being haunted by this critical decision to sell our stake in the shipping business.
The ongoing challenges required a review of the trade to evaluate the business case and ascertain whether the parties are making the monies that they had anticipated prior to the commencement of the trade.”
Prospere said that the contracting parties, NFTO, and the UK supermarket chain have informed the government that they have mutually decided to suspend the trade as they monitor the current situations impacting the trade both in the Caribbean and the UK.
“The cost-of-living crisis and rising energy costs over the next few months have created major uncertainties for everyone. As soon as both parties are satisfied that it is profitable to proceed then the trade will be activated.
“Fortunately for our farmers, the efforts that we have employed in pursuing the regional markets are showing signs of progress and growth. The consignment of bananas originally assigned to the UK market will now be diverted to the regional market and the weekly trade will be maintained.”
Prospere said that the NFTO along with government support are currently following up on additional inquiries within the region and shortly they will be able to increase our regional market presence and volumes.
“We continue to encourage our farmers to maintain the highest quality that is associated with our bananas as we look forward to expanding the regional trade.”
Prospere told reporters that he had spoken with a buyer in St. Thomas who is interested in bananas and plantains, avocadoes, citrus, and other crops.
“We are doing well so far,” Prospere told reporters.
