I view Bananas as a symbol of home. Bananas are the primary fruit export of the country I grew up in, Honduras. They are also the fruit that my father dedicated forty years of his life to, working first for Chiquita Banana and then as an independent banana producer. For this assignment, I selected Chiquita Brands International, (now privately owned by Safra Group and Cutrale 1) to prove the far reaching and direct impact of global warming on this corporation, and on agriculture in Latin America. I have also used my father’s banana farms as a proxy and a means to illustrate how global warming impacts an independent banana producer in Honduras and the ripple effect this creates in the food supply chain.
The main issue faced today by the agriculture industry because of the rise of global warming is due to higher incidences of the climatic event known as El Niño. As described by Columbia University’s Earth Institute, “El Niño is a phenomenon that disrupts normal weather patterns, bringing heavy rains and drought to different parts of the world.” 2 According to Nature.com the higher incidences of El Niño are a direct result of greenhouse gases.3 This phenomenon has ultimately resulted in warmer temperatures, and dramatic incidences of droughts over the past 8 years.
Calberto, Siles and Staver’s report on the Food and Agriculture Organization (FAO) of the United Nations, list bananas as the most widely consumed fruit in the world. The production of this fruit however, has become riskier due to some elements of its production process. The report states that, “unlike many other crops, which have crop cycles of 3-5 months, banana is a semi-perennial crop with a crop cycle nearly a year long under optimum conditions and even longer with lower temperatures or more erratic water supply.” 5 This timing production element presents a critical risk with a lot of variability and room to impact the yields of bananas.
The physical manifestation global warming has on bananas ultimately comes down to water. As explained by Jose Obregon, the droughts prevent irrigation systems from having sufficient water to pump throughout fields which then adversely impacts yields.6 This argument of output reduction is an academically contentious one in that in some areas of the world, the warmer weather increases suitable land to grow bananas by having “conditions more favorable for banana production in the subtropics and in tropical highlands”5. This argument however focuses specifically on the suitability of land itself and not the fact that per their own studies “water demand will increase by 12-15%”5. Additionally, Nature.com’s report points to hotter temperatures being associated with higher incidences of pests, which are far more destructive, and harmful in the long run to the banana. 3
Chiquita Banana is affected in other ways beyond productivity and lost yields. Per the Chiquita company website, the company sources bananas from tropical regions in the Americas, primarily Costa Rica, Guatemala, Honduras, Panama.7 Per the 2015 10-K, Chiquita either has self-owned banana farms or buys directly from independent banana producers in these regions. Chiquita has significant financial exposure in the event it fails to reach the output goals it sets for both itself and its producers. Additionally, and equally concerning is the impact of destructive pests to the long-term health of banana farms.
To address these effects, Chiquita employs several tactics to help mitigate some of the risks. This includes short term strategies such as honing in on their quality standards, focusing directly on pest reduction, in conjunction with long term strategies such as investing in infrastructure.6 Some of these investments in infrastructure include the creation of wells and large water reservoirs to insure against future droughts.
From a regulatory and industry perspective Chiquita, has also made strides to change its internal sustainability practices. For instance, they have partnered with the Rainforest Alliance pledging to help create “buffer zones” and promote biodiversity and sustainable agrarian practices.8 This is ultimately for the banana to continue to thrive in areas of high vegetation and access to natural sources of water, minimizing the use of agrochemicals and employing more biodegradable products as part of their production.
One suggestion for Chiquita’s future improvement is to focus on geographic diversification, as most of its farms are concentrated mainly in Central America. It would behoove them to have a footprint in more countries in South America, Africa and Asia to reduce their risk in the event their Central American operations are in any way affected. I also believe they need to heavily insure against widespread environmental disruption. For their long-term sustainability practices I recommend that Chiquita make additional investments in green technology, look for additional ways to enhance its partnership with the Rainforest Alliance, and continue to develop ways to make the banana production process more environmentally friendly.
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- Chiquita Agrees to Cutrale-Safra Buyout for $681 Million.” Bloomberg.com. Accessed November 4, 2016. http://www.bloomberg.com/news/articles/2014-10-27/cutrale-safra-agrees-to-buy-chiquita-for-681-million.
- “El Niño and Global Warming-What’s the Connection?” State of the Planet El Nio and Global WarmingWhats the Connection Comments. Accessed November 04, 2016. http://blogs.ei.columbia.edu/2016/02/02/el-nino-and-global-warming-whats-the-connection/.
- “Increasing Frequency of Extreme El Nino Events Due to …” Accessed November 4, 2016. http://www.nature.com/nclimate/journal/v4/n2/full/nclimate2100.html?message-global=remove.
- “Regional Climate Change – Honduras.” Berkeley Earth. 2015. Accessed November 4, 2016. http://berkeleyearth.lbl.gov/regions/honduras. Shows patterns in increasing temperature in Honduras
- “Climate Change and Food Systems: Global Assessments and Implications for Food Security and Trade.” Food and Agriculture Organization of the United Nations. Accessed November 04, 2016. http://www.wocan.org/resources/climate-change-and-food-systems-global-assessments-and-implications-food-security-and. – Chapter 9- An assessment of global banana production and suitability under climate change scenarios
- Obregon, Jose L. “Banana Industry – Threats & Risks in 2016.” Telephone interview by author. November 4, 2016.
- “Map of Banana Farms.” Where Do Chiquita® Bananas Grow? & Plantations. Accessed November 04, 2016. http://www.chiquitabananas.com/banana-information/find-banana-farm-map.aspx.
- Morgan, By Guy. “Chiquita and the Rainforest Alliance: A Fruitful Relationship.” Chiquita and the Rainforest Alliance: A Fruitful Relationship. Accessed November 04, 2016. http://ccc.bc.edu/index.cfm?pageId=1538.