Tue, Jul 19, 2011 - Page 8 News List

Dealing with the banana surplus

By Liou Pei-pai 劉培柏

News reports often show just how out of touch some of our leaders are with the lives of ordinary people. It is bewildering and sometimes upsetting, but what can one do?

There has been a glut of bananas for a while now. The price of the fruit has fallen to such a low level that farmers can’t make enough to cover production costs. Under fire from discontented banana growers, the Agriculture and Food Agency announced on July 8 that it had set in motion its system for production and marketing adjustment. The agency said that 76 tonnes of bananas had already been sold to China and that the country could take 2,000 tonnes of the fruit this season. That might make the authorities feel good about themselves and it might stem the tide of complaints, but the problem remains that agricultural departments in Taiwan are incapable of managing domestic banana production and sales.

Some agriculture and marketing experts say that when Taiwan started selling bananas to China, it relied on luring Chinese consumers to buy Taiwanese bananas, but failed to get a proper understanding of the Chinese market. China itself produces plenty of bananas, as do several countries in Southeast Asia. Quite a lot of banana plantations in the Chinese provinces of Guangdong and Guangxi are managed by Taiwanese investors who plant Taiwanese varieties and employ Taiwanese know-how, so they produce bananas of the same quality as those grown here. That being the case, the sales potential for Taiwanese bananas in China is limited.

Bananas don’t keep well and if they are kept in cold storage, they will turn black in less than a week, in which case they are hard to sell. That is why Taiwan can’t really ship its bananas to Europe and the US. Japan is closer, but its market can only take so much fruit. From March onward each year, Japan doesn’t buy bananas from Taiwan. Considering these factors, the only way for Taiwan to deal with its banana glut at present seems to be selling them to China.

However, it has been reported that the novelty of eating Taiwanese fruit is gradually wearing off for Chinese consumers. Besides, Taiwanese bananas have to be shipped in cold storage, which is one of the reasons why their selling price in China is two to three times as high as that of Chinese-grown bananas. At that price, Taiwanese bananas have no competitive edge in China, so on what grounds is the agency claiming that we can sell 2,000 tonnes of bananas to China this season?

Agricultural agencies ought to have plentiful data at their disposal about how much land is being used to grow bananas, what yields are to be expected, what quantity is likely to be sold abroad and so on. Of course, banana prices will crash if, for example, farmers suddenly expand their plantations, or if weather conditions bring an early harvest, or export markets shrink unexpectedly. The odd thing is that the ones to suffer when these things happen are always the farmers who grow the fruit, while primary and secondary wholesalers and retailers still manage to make a profit. What the authorities should be working on is finding a way to ensure that banana farmers get a reasonable income.

Bananas are sold all year round and it is quite normal for prices to fluctuate according to the season and the size of the harvest. If, however, prices move abnormally, suddenly soaring or diving, the ones who suffer the most are banana-loving consumers on one end and banana farmers on the other, while the middlemen who have control over prices often make a windfall profit.

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