Book Review: Globalized Fruit, Local Entrepreneurs

Globalized Fruit, Local Entrepreneurs

Book Review by John Sanbrailo

Written by Douglas Southgate and Lois Roberts

Reviewed by John Sanbrailo, Executive Director of PADF, former USAID Mission Director in Ecuador.

Many books and articles have been written about the banana business, which is hardly surprising in light of its sheer size.  As reported at the beginning of Globalized Fruit, Local Entrepreneurs, banana exports outstrip international shipments of every other fruit and vegetable.  The global banana trade is also more important than the global rice trade, since cross-border shipments of the staple grain are tiny relative to national harvests and domestic consumption in China, India, and other nations.

Another reason for all the books and articles about the banana industry is that no part of the food economy is associated more closely with large corporations headquartered in the United States.  The industry was largely the creation of the United Fruit Company, called the Octopus because of its near monopoly in the U.S. market as well as its control of supplies in the Caribbean Basin for many years after its founding in 1899.  And since the 1930s, the exploits and abuses of United Fruit (now Chiquita Brands International) and other firms in banana republics south of the U.S. border have been a recurring theme of the scholarly literature and writings intended for a general audience.

The book written by economist Douglas Southgate and historian Lois Roberts has a different focus.  Rather than hewing to the standard banana republic narrative, they are primarily interested in the contributions that homegrown entrepreneurs have made to tropical fruit development.  The importance of these contributions in Colombia since World War II is stressed by Marcelo Bucheli, a historian at the University of Illinois.  Southgate and Roberts’s book is mainly about Ecuador.

Ecuador is considerably smaller and poorer than Colombia, just to the north, so one might assume that the Octopus has dominated the country economically and politically.  Reinforcing the perception that Ecuador is just another banana republic is that it has been the world’s leading exporter of tropical fruit since 1953.  As is documented in Globalized Fruit, Local Entrepreneurs, United Fruit and other U.S. firms have left their mark on Ecuador’s banana industry.  However, Southgate and Roberts emphasize that the country became a fruit-exporting powerhouse without sacrificing its independence.

The two authors examine all factors underlying this accomplishment.  For one thing, western Ecuador, where banana production is concentrated, has various environmental advantages, not least fertile soils and a Caribbean climate minus the hurricanes.  Additionally, the national government has at times facilitated expansion of the tropical fruit sector, particularly during the presidency of Galo Plaza Lasso from 1948 to 1952.  But the key players in that expansion have been Ecuadorian entrepreneurs.  Those individuals, Southgate and Roberts contend, deserve much of the credit for the worldwide reach their country has achieved in the banana business – worldwide reach that helped bring down the Berlin Wall in 1989, as some German leaders and writers have maintained.

Individuals such as Juan X. Marcos, Luís Noboa, and Segundo Wong pursued their careers in Guayaquil:  a hub for export-oriented entrepreneurship for more than a century.  Thanks largely to venturesome merchants in the port city, Ecuador was the leading supplier of cacao to European and U.S. chocolate manufacturers during the late 1800s and early 1900s – as described in one of Roberts’s other books.  The cacao boom, which ended after World War I, left Guayaquil with a network of essential business services.  Ecuador’s commercial capital also possesses something not matched by any other banana exporter:  a national market worthy of the name, one in which hundreds of growers (the vast majority with modest holdings) sell their harvests to dozens of exporters and other buyers.  This market, which has not been fully replicated in any banana-exporting nation, is an ideal setting for entrepreneurship and is a fundamental reason why Ecuador has remained atop the global banana industry for decades.

Forgoing a reprise of the familiar narrative about the Octopus and its hold on banana republics, Southgate and Roberts instead set the record straight.  Dr. Joachim von Braun, formerly the director of the International Food Policy Research Institute and now a professor at the University of Bonn, observes that Globalized Fruit, Local Entrepreneurs “refreshingly corrects conventional wisdom about the banana industry.”  In particular, the book sheds light on something inconceivable for adherents of the banana republic narrative:  United Fruit’s old monopoly is gone, thanks largely to the efforts of Marcos, Noboa, Wong, and others like them.

What’s more, the Octopus no longer exists as an independent, U.S.-based industry.  In October 2014, Brazilian investors announced they would be buying Chiquita, “lock, stock, and bananas,” as Southgate and Roberts observe.  Generations of the company’s admirers and critics, they add, would be astonished.