Banana Dispute Hits Nicaragua

Nicaragua's Sandinista government and Castle & Cooke have settled last month's banana controversy. The San Franciso-based food and shipping conglomerate - whose Standard Fruit subsidiary controls 100% of Nicaragua's banana exports - stopped buying Nicaraguan bananas for more than two weeks in late December and early January.

Nearly 10% of the bananas Castle & Cooke markets are grown in Nicaragua on 16 plantations which employ 3,800 workers.

Castle & Cooke's employees earn 34-50 cents an hour and live in squalid housing compounds on the plantations. "You have to see it to believe it," says Francisco d'Escoto, minister-counselor at the Nicaraguan embassy in Washington and one of the negotiators of the final accord.

Castle & Cooke's purchasing boycott came in response to a Nicaraguan government decree of last December 20 mandating an increase in government intervention in the nation's banana industry which provides Nicaragua's 5th largest source of foreign exchange. But the firm's alarm was based on a "misunderstanding", according to d'Escoto. "The decree said `regulate'; they understood `confiscate.' "

To clear up the confusion, a Nicaraguan delegation went to San Francisco to meet with top Castle & Cooke officials.

On January 10, a settlement was announced in San Francisco. The agreement provided for improvements in the standard of living and working conditions of Nicaraguan banana workers - one of the government's prime goals in discussions with Standard Fruit about the future of the nation's banana industry, which had gone on for more than 18 months.

The agreement also stipulated a 33% increase in price for bananas exported from Nicaragua - from U.S. $3.30 to $4.30 per 40-1b. box - and established that the Nicaraguan government will buy out Standard Fruit's roughly $13 million investments in Nicaraguan plantations and equipment over a five-year period, according to Managua reports.

Stated Castle & Cooke president D.J. Kirchoff, "As a result of the discussions which have taken place, we at Castle & Cooke have a better understanding of the needs and interests of the Nicaraguan nation and the Nicaraguan government has a better understanding of the significant problems we face in competing successfully in the global banana industry."

In a sense, Nicaragua's d'Escoto agreed." Castle & Cooke was sensitive enough to see that they can do business with a revolutionary government whose priority is the oppressed," he said.