Guatemala: Del Monte's "Banana Republic"
Talking to a reporter from Forbes recently, Del Monte's chairman Alfred Eames mused, banana trees "are like money trees. I wish we had more of them."' Unlikely as it may seem, eight short years...
...and "Hawaii Faces the Pacific," Pacific Research and World Empire Telegram, Jan.-Feb...
...And in 1973, close supporters of Arana in the Guatemalan congress took the unusual step of presenting a resolution to specifically exempt one of Moreira's business ventures from tax and import duty payments...
...union leadership, installed twenty years ago in a U.S.-engineered effort to undercut the then-progressive leadership...
...2 Work conditions on the plantation are also extremely difficult...
...Interview with grower in Bajio Valley, June, 1976...
...Report on Meeting with Del Monte Vice President, Public Affairs, April 20, 1976...
...Central America Report (Guatemala), November 24, 1975...
...There they are immediately loaded onto specially refrigerated ships which will transport them to US...
...It still operates as though it were above the law...
...But even more important, it affirmed that the government could not impose any kind of additional tax on the company until the contract expired in 1981...
...Thus, the independent producers system is one more mechanism the multinationals use to manipulate the world market...
...PLANTATION WORKFORCE Many of the workers at the Bandegua plantation were once peasant farmers from the neighboring provinces who were either forced off the land, or were unable to make a living by farming...
...When one of Del Monte's ships is in port, workers often do the backbreaking job of harvesting for 12 or 13 hours at a time - one man cutting down the banana stem with his machete, and another carrying the stem (which can weigh up to 150 pounds) in a sack slung across his back...
...The remaining 48,000 acres are grazed by 7,000 head of company cattle - not to produce meat, but, as a company official explained, as a tactic to keep squatters off the property, and to prevent the government from expropriating it as idle land...
...In May 1976, Del Monte was itself the target of a strike at its Costa Rican subsidiary, where workers were demanding higher wages, recognition of their union, and reinstatement of 54 fired workers.' 4 Like other corporations, Del Monte attempts to prevent worker discontent from bursting into open conflict by identifying and weeding out the most 28 outspoken and militant workers - a tactic one of the company's plantation supervisors admitted using...
...2. Del Monte Shield, October, 1974, p. 17...
...There is evidence that the company did more than propagandize...
...6. Ibid...
...3. For a comprehensive history of Guatemala, including U.S...
...and interview with ILWU officials in Honolulu...
...9. Williams, p. 222...
...Prior to 1959, the company's base was in Cuba, where it operated the Havana-Miami ferry service ? Since the attempts by the Arbenz government to nationalize United Fruit lands in 1952, there have been no serious challenges to the plantation systems the companies operate in Central America...
...and it was the leading force in pushing for the C.I.A.-engineered overthrow of the progressive government of Jacobo Arbenz in 1954...
...So the time passed away Which on earth was given me...
...Del Monte continues to run the plantations like an independent enclave within the Guatemalan state, where government officials are barely tolerated...
...Honolulu Advertiser, June 17, 1976...
...PART m - HAWAII AND THE PHILIPPINES 1. "Pineapples in Paradise," Fortune, November, 1930...
...By the estimate of one company official, the company made a "handsome net profit" on $38 million in sales in 1975...
...company, Taylor Enterprise of Guatemala...
...Far Eastern Economic Review, October 10, 1975...
...and Pacific Research and World Empire Telegaph, op...
...For the banana industry, however, a docile and cooperative labor force is a special imperative...
...It wasn't until 1975, when Del Monte became the subject of an investigation by the Securities and Exchange Commission, that the real story behind Del Monte's success was revealed...
...Interview with Del Monte plant workers, June, 1976...
...1 " The companies, of course, denied the charges, but they all proceeded to move against the UBEC countries...
...2 It is one of the three U.S.-based multinationals that dominate the world banana economy: Del Monte, Castle & Cooke, and United Brands together account for 70 percent of the world's $2.5 billion banana trade...
...it is allied with the most reactionary elements within the Guatemalan bourgeoisie...
...Although the policy of maintaining a relatively privileged workforce was originally pioneered by the United Fruit Co., today it has become an integral part of the strategy of all the multinational banana companies...
...The corporation also enjoys a special relationship with the government-run national railway, Ferrocarril de Guatemala (FEGUA...
...San Francisco Examiner, May 21, 1975...
...But, as he explained, cheap labor is key to the company's profits...
...Barely a year after the company took over the plantation, the major Latin American banana-exporting countries - Guatemala, Costa Rica, Panama, Honduras, Colombia, Nicaragua, and Ecuador - proposed formation of a producers' organization, the Union of Banana Exporting Countries (UBEC) modeled along the lines of OPEC...
...Journal, op...
...233-34...
...Don Watson, 'Teamsters-Canneries Connivance Destroys Rank and File Movement," l Macriado, Voice of the Farm Worker, July 31, 1974, p. 18...
...To further assure '"law and order" there is a Guatemalan Army post in the middle of the plantation, staffed by armed Guatemalan soldiers...
...8. Inforpress, Nos...
...In contrast to the luxurious quarters of the company compound, the workers' housing is spartan and barely adequate...
...149-66...
...Still, as one Del Monte official in Guatemala expressed it, "we never know what to expect next...
...PART IV - GUATEMALA 1. Forbes, December 15, 1970...
...Del Monte Shield...
...It was only as a result of the massive repression unleashed against the labor movement after the 1954 coup - when banana union leaders were especially targeted to be jailed, killed or exiled - that the militancy of banana workers was quelled in Guatemala...
...California Packing Corporation,Annual Report, 1947...
...Yet they are totally dependent on a world economy structured to benefit the dominant capitalist countries...
...While the government initially upheld Del Monte's legal position, the moderate opposition raised serious questions about the legality of transferring United Fruit's contract and concessions to Del Monte...
...In 1960, a tractor cost three tons of bananas, and in 1970 the same tractor cost eleven tons of bananas...
...Not only would the plantations there double the company's banana production...
...Ibid...
...Interview in Baiio Valley, June, 1976...
...While this gives the banana workers the possibility of earning more, it also means a higher level of exploitation...
...and Guatemala and Central America Report, October, 1972, and July, 1975 (American Friends of Guatemala, Box 2283, Station A, Berkeley, Ca...
...Del Monte Shield, Winter, 1973, p. 20...
...When some members of the Congress introduced a bill to impose a 29 Town of Bananera banana export tax, a congressional commission headed by a member of the MLN ruled that congress could not authorize the tax because it violated Del Monte's contract...
...Information from unpublished study on the Central American banana trade...
...Beginning with a charge of 354 a box, the tax will rise progressively until it reaches 500 in 1978...
...Box 226, Berkeley, California 94701 9. See Guatemala, op...
...For Del Monte, Guatemala was the ideal place for expansion...
...In this context, it is possible to understand why Del Monte is willing to pay its dockworkers, who hold the key to the whole marketing process, up to $600 a month on a piece-rate basis...
...New York Times, May 21, 1975...
...The main device the company uses to extract maximum value from the workers' labor is payment on a piece-rate basis...
...By the end of 1970, the two companies had agreed that Del Monte would purchase United Fruit's holdings in Guatemala for about $10 million, provided the Guatemala government approved...
...And once again, there were widespread rumors that Del Monte resorted to bribery...
...It is the country's largest single private employer, and totally monopolizes the country's banana exports, one of its top three to five sources of foreign exchange...
...PART I - MEXICO 1. Interview with Del Monte Group Vice President, Inter- national Division, July, 1976...
...But the truth of the matter is that Del Monte was carefully covering its tracks...
...Quoted in McWilliams, p. 215...
...Liberation News Service, June 22, 1974...
...Export sales of bananas remained firm, and the companies themselves benefited more from the price increases than did the UBEC countries...
...93, 101...
...As Guatemala's largest landowner and major investor, United Fruit had dominated the country's economy and pilfered its natural resources, it had exploited workers and consistently opposed organized labor...
...Please send me a copy of NACLA's literature list...
...60, 64, and 151...
...Del Monte Shield...
...The world market price of bananas has remained nearly unchanged for twenty years, while the cost of manufactured imports has skyrocketed...
...cit., p. 11...
...The banana companies have also used the independent producers concept to improve their public image by claiming the system provides opportunities for small farmers...
...Because of this dominance, the companies also exercise considerable influence on the economic life of the banana producing countries, many of which depend on banana exports as a principal source of foreign exchange...
...Castle & Cooke's subsidiary, Standard Fruit, took the lead in the campaign of intimidation...
...He also recalled the original reason for the Army post: in the late 1960's, guerrillas were active in the area, and a United Fruit pilot was killed...
...2. Hank Frundt, "American Agribusiness and US...
...M I came to the cities in a time of disorder When hunger ruled...
...NACLA interview with Del Monte executive, Guatemala...
...Information from an unpublished study on the Central American banana trade...
...cit., p. 75...
...This gave the companies a spectacular profit of 904 a box, as compared to the 204 company spokespeople usually call "reasonable...
...But in reality, the companies have a strong vested interest in maintaining direct control over their plantations, which greatly limits their flexibility...
...NACLA-West: P.O...
...Costa Rica levied a tax of 354, later raised to 454...
...Manuel Mejido, Interview with Fernando Carmona, Excelor, November 17, 1972...
...United States Department of Labor, p. 113...
...The Bandegua union has cooperative relations with the American Institute for Free Labor Development (AIFLD), an organization funded by AID, supported by the AFL-CIO and U.S...
...First developed by the United Fruit Co...
...During the year of political maneuvering that followed, the company found its strongest allies in the Guatemalan right-wing, particularly among members of the Movimiento de Liberaci6n Nacional, the MLN party...
...investors, providing the kind of "stable" political climate Del Monte demands wherever it operates...
...In an apparent bid to take over the food processing company, United Fruit purchased a large chunk of Del Monte's stock...
...The associate system also gives the companies an important economic advantage in the market...
...Ibid...
...El Grafico, July 25, 1975...
...See also Davis, Skaggs & Co., Inc., Basic Report: Del Monte Corporation, April 27, 1976...
...Ironically, the original impetus for Del Monte's entry into the banana business in 1968 came from the United Fruit Company itself...
...In a full page ad in Guatemalan newspapers, Del Monte conceded the right of the government to levy a tax, but insisted it would not apply to Bandegua unless both the company and the government agreed to abrogate the contract...
...Senate Committee on Multinationals allege that the three companies met in Costa Rica in early 1974 to coordinate a strategy for confronting the UBEC challenge...
...The company-owned housing camps are conveniently clustered around the banana farms where the men work, along the edges of the railway line...
...Dissertation, Rutgers University, 1975...
...But it took Del Monte nearly two years to consummate the deal...
...The evident poverty of Bananera, which exists mainly as an adjunct to the plantation, belies Del Monte's claim that its presence has a beneficial effect on the surrounding economy...
...For Del Monte, the Guatemala acquisition assured its position as a major force in the world banana trade...
...E7 Grafico, Feb...
...7. Interview in Guatemala...
...Sure, Some Comments on Employer Organizations and Collective Bargaining in Northern California since 1934...
...Banana production is highly labor intensive, and requires continual painstaking work of weeding, trimming, tagging and spraying...
...Though no longer the major representative of monopoly capital in Guatemala, Del Monte is still a formidable economic and political power...
...They drive themselves to the limit, often with disastrous long-range consequences for their health...
...In an open threat, Del Monte declared that if the tax were passed, the company would reconsider expansion plans or even cut back operations...
...As one of the U.S...
...See also Del Monte Shield, April, 1 9 6 8, p. 4. 13...
...The company responded with a public campaign aimed at intimidating the government...
...Given this desire to retain direct control over their vast plantation systems, Del Monte and the banana multinationals will remain a highly conservative force in the Third World, in spite of their image of flexibility...
...8 26 Arana has been a key force in the institutionalization of right-wing terror in Guatemala...
...executives on the plantation told NACLA, "It's backbreaking work, and you couldn't get a single person in California to do it, especially for $2.80 a day .. . I wouldn't do it for any money...
...2. UNCTAD, The Marketing and Distribution System for Bananes, December 24, 1974...
...He is a well-known backer of conservative political forces in Guatemala, and most significant, he has close business and personal ties with Arana...
...6. See Wall St...
...Some sources in the Guatemalan bourgeoisie even claim to have personal knowledge of the transaction...
...The plantation workers, most of whom earn between $2.80 and $4 a day, are not nearly so well off...
...It wasn't long before these high pressure tactics began to take effect and weaken the UBEC common front...
...4. Frederick Simpich, Jr., Dynasty in the Pacific (New York: McGraw Hill, 1974...
...Interview conducted by Corinne Gtlb, Institute of Industrial Relations, Berkeley, 1957...
...The banana business proved highly profitable, and Del Monte began looking for ways to expand its Central American holdings...
...4. Wall Street Journal, July 14, 1975...
...But the truth is that because of the economies of scale in banana production, and the need for a large capital investment and carefully controlled application of sophisticated agricultural techniques, in reality many associate producers are relatively large landholders...
...1975...
...In theory, the associate producers give the companies a long-range hedge against nationalization...
...and European markets...
...Not to be deterred by the Guatemalan constitution, Del Monte simply dipped deep enough into its corporate coffers to change the Guatemalan government's decision...
...They now read BANDEGUA, for Banana Development Corporation of Guatemala, the subsidiary that runs Del Monte's operations there...
...In spite of Moreira's disclaimers that no bribery was involved, in Guatemala the universally accepted assumption is that Moreira handed over a good-sized chunk of his "fee" to then-President Arana...
...Within one day, the bananas are cut, washed, packed, and sent by train to the nearby port...
...La Nacion, May 23, 1974;Inforpress, Nos...
...In spite of visits by Del Monte executives to President Carlos Arana Osorio and several cabinet officers, in late 1971 the government denied permission for the purchase, insisting that United Fruit sell to Guatemalan nationals...
...Frederick F. Clairmonte, "Bananas: A Commodity Case History," in Cheryl Payer, ed., Commodity Trade of the Third World (New York: McGraw Hill, 1975...
...The company's strategy was to fall back on the privileged status it inherited, and in the long tradition of United Fruit, to claim that its contract...
...Like the United Fruit Company before, Del Monte reinforces economic underdevelopment and political reaction in Guatemala, and acts as a formidable obstacle to change...
...Del Monte may have lost the battle, but it didn't lose the war...
...CentralAmerica Renort (Guatemalal...
...8, June, 1966, pp...
...United States Department of Labor, Labor Unionism in American Agriculture, Bulletin No...
...Department of Labor, pp...
...Fortune, November, 1938, p. 109...
...As Del Monte realizes, in spite of its "enlightened" labor policies designed to coopt the workers, there is always an underlying danger of labor unrest...
...and Nicaragua never joined...
...If you can pay a worker 354 an hour, why buy an $8000 tractor...
...In spite of the free benefits provided by the company, the salary of a banana worker is still not sufficient to sustain a family...
...It also inherited a position of privilege and influence that had long characterized United Fruit's operations...
...Ibid., January, 1 9 6 8,p...
...Del Monte declared exports of only 11.2 million boxes, as compared to 14.5 million the previous year - in spite of the fact the area of land under production remained the same, and there were no natural disasters to affect productivity.2 However, without an independent count of the number of boxes exported, the Guatemalan government had no way of knowing whether the company manipulated export figures to minimize the tax it paid...
...3. Quoted in McWilliams, p. 56...
...Inforpress, No...
...Foreign Agricultural Policy," Ph.D...
...It cut back on exports from Costa Rica and Honduras, destroyed 145,000 boxes of bananas rather than pay any tax and allegedly plotted to assassinate Gen...
...In fact, there is evidence that the multinationals took advantage of the new tax to raise prices even higher and boost their profits...
...Inforpress, No...
...The multinationals, because they control the marketing and distribution system, are always able to reap the lion's share of the profit and manipulate reform measures to their own advantage as long as the basic structure of the trade is not changed...
...5. Del Monte Shield, Special Issue on Del Monte in the Philippines, Winter, 1975...
...Fortune, November, 1938, p. 79...
...1 3 Recently, in other Central American countries, there have been renewed signs of rebellion among banana workers...
...In Panama, for instance, the government nationalized United Brands' plantations, but will rent the land back to the company...
...A plantation or port work stoppage of even a day can mean the loss of hundreds of thousands of dollars in overripe bananas...
...and 17 percent of the plantation families do not have an income adequate to obtain a minimum satisfactory diet...
...To further control its labor force, Del Monte relies on the Union itself - Sindicato de Trabajadores de Bandegua, or SITRABI - which is known in Guatemala as a "sindicato blanco," or a sell-out union...
...Presa and his family contract about 3,000 acres to Del Monte, partly through a joint venture with a Florida-based U.S...
...and Guatemala and Central America Report, (Berkeley), February, 1976...
...Honolulu Star Bulletin, June 16, 1976...
...9 It was in Guatemala, where the bulk of its banana exports originated, that Del Monte focused its efforts on squelching attempts to limit the company's operations...
...5. Del Monte Shield, 1974, pp...
...4. Ibid., pp...
...This estimate was made by a Dole official...
...Their leverage is also severely limited by the structure of the world economy and the banana trade...
...No company record was ever made of his name, and Del Monte promised never to reveal his identity...
...One of the first actions taken by UBEC was to propose a $1 tax on each box of bananas exported...
...In 1972, Arana personally attended the inauguration of one of Moreira's new business facilities...
...Meeting with Del Monte Vice-President, Public Affairs, April 20, 1976...
...9. IDOC, op...
...66-80...
...2. Fortune, op...
...IDOC,.op...
...See also National Commission on Food Marketing, The Structure of Food Manufacturing, Technical Study No...
...I came among men in a time of uprising And I revolted with them...
...Documents submitted to the U.S...
...8. Ibid...
...5. Del Monte Shield, October, 1959, p. 4 . 6. Fortune, November, 1938, pp...
...Historically, the banana workers in Guatemala have a strong tradition of struggle...
...By 1975, Panama was the only country that had imposed the $1 tax...
...Interview with Del Monte Group Vice President, International Division, July, 1976...
...Just after the UBEC tax was first imposed in 1974, the box price of bananas in the U.S...
...When Del Monte's port facilities at Puerto Barrios on the Atlantic were destroyed by the earthquake this year, the company was immediately able to relocate to choice facilities at the nearby government port of Santo Tomas...
...A company executive explained to NACLA interviewers that the soldiers take care of any disturbances that occur on the plantation...
...McWilliams, pp...
...Ibid...
...He soon proved his political clout...
...It is the company, not Guatemalan officials, that supplies official export statistics on bananas...
...J. Paul St...
...Following the advice of then-ambassador to Guatemala, Nathaniel Davis, to retain a local "consultant, in the summer of 1972 Del Monte hired Domingo Moreira, a Cuban-born Guatemalan businessman...
...McWilliams, pp...
...La Nacion, April 18, 1974...
...24 25 DEL MONTE - GOING BANANAS The Guatemala plantations Del Monte took over from United Fruit in 1972 are the most productive in Central America...
...While the company no longer dominates the country's key transportation networks as United Fruit once did, it still benefits from special privileges...
...Recognizing that the plantation system developed over the years by United Fruit serves its interests well, Del Monte has made few basic changes...
...Clair, "Foreign Agribusiness - An Area of Sensitivity," Mexican-American Chamber of Commerce Review, March, 1975, p. 47...
...The company's claim that banana sales would drop off because of the tax were soon proven false...
...Even before the Guatemalan government officially reversed its position, Del Monte received the go-ahead from the government to conclude the deal with United Brands...
...Omar Torrijos of Panama, one of UBEC's most militant promoters...
...One month later, in September 1972, Arana formally issued a decree approving the sale...
...Moreira is said to have made substantial contributions to Arana's 1970 presidential campaign, and to be in partnership with Arana's son Tito...
...Just as important, fifteen years of U.S.-sponsored counterrevolution since 1954 had made the country safe for U.S...
...On one side of the railroad tracks, behind fences and guard posts, is the company compound...
...In a pattern familiar in the U.S., the union performs the function of loyal opposition - it may oppose the company on bread-and-butter issues, but promotes an ideology of cooperation and common interest with the company, rather than one of anti-corporate class interest...
...But beneath this facade, the same basic dynamic of exploitation persisted...
...The $500,000 fee was paid through several of the company's Panamanian shipping subsidiaries, and charged to general and administrative expenses...
...Now supposedly retired to private life, Arana is still a powerful influence in a right-wing network that promotes their political and personal gain through Mafia-like tactics...
...As this article will show, Del Monte continues the old tradition of the United Fruit Company in Guatemala...
...Presa's links with the Taylor company go back to before the firm's business venture in Guatemala...
...In order to explain the political and economic dynamics of the banana companies in the Third World, this article will focus on Del Monte's operations in Guatemala, where it purchased the old United Fruit Company's plantations in 1972...
...cit., pp...
...103-04...
...Moreira agreed to help swing the deal in return for a half million dollar "consultant's fee...
...and along with the other banana companies, it has tried to torpedo efforts by Central American governments to gain greater control over their natural resources...
...1 5 The national bourgeoisie of the countries involved also recognized that virtually all the financial benefits of the lucrative banana trade went straight into the pockets of the banana companies...
...The final deadline for United Fruit's required divestiture was approaching, and the company still had no buyers when Del Monte approached United Brands with a purchase offer for its Guatemala plantations...
...When the Bandegua workers' union and a group of independent banana growers made public statements against the tax, officials in the Guatemalan government claimed that Del Monte had itself engineered these expressions of support...
...PLANTATION ENCLAVE The United Fruit plantations Del Monte took over lie in the hot tropical lowlands of northeastern Guatemala, not far from the Atlantic coast ports which face the markets of Europe and the U.S...
...banana market...
...8. Fortune, November, 1938, p. 81...
...the businessmen had even lined up bank loans to finance the purchase.*s * The two businessmen were Roberto Alejos Arzu, who has far-reaching business and financial interests in Guatemala, and whose farm was used in 1960-61 as a training base for the invasion of Cuba at the Bay of Pigs...
...For one thing, profit margins on their own plantations are significantly higher because they produce quality fruit so much more cheaply than the associates...
...3. Ibid...
...Guatemala, though it had signed the UBEC pact, had not yet levied any tax at all...
...California Packing Corporation, Annual Report, 1945...
...But for United Fruit, this meant the further erosion of the company's unchallenged dominance before the 1960's, when it controlled 75 percent of the world trade...
...The Costa Rican government's recent takeover of one of Castle & Cooke's largest plantations suited the company perfectly, since it did not want to make the major capital investments necessary in the wake of Hurricane Fifi in 1974.31 Significantly, Costa Rica has not moved at all against Del Monte's holdings, and in Guatemala, nationalization is a word that's hardly mentioned...
...By the time Del Monte entered the picture, United Fruit had lowered its political and economic profile in Guatemala and the rest of Central America as part of a sophisticated strategy to rationalize its operations and undercut nationalistic resentments...
...corporations, and often used by the CIA to undercut genuine, progressive unionism in Latin America...
...See Guatemala, op...
...And in fact, their relative privilege is more than anything a commentary on the miserable living conditions of the rest of the Guatemalan people...
...The company's 1936 contract set a permanent tax of only 24 on each stem of bananas exported...
...No one, neither workers, their families, nor company executives, is allowed to board the train without a special pass given out daily by a company office...
...Amidst country club surroundings, a few North American executives and a handful of Guatemalan aides oversee Del Monte's vast lands and its 4,500 person workforce...
...was above Guatemalan law...
...Vivian St...
...Most of Del Monte's workers and their families live on the plantation itself, isolated even from the small town of Bananera...
...The compound's manicured lawns, spacious tropical mansions, its pool and tennis courts, stand in sharp contrast to the dusty town on the other side of the rail tracks...
...interviews in Guatemala...
...In Central America, such business ties, though seldom a matter of public record, are often common knowledge in business circles...
...Del Monte's main scare tactic was to claim the tax "would not be good for Guatemala" - the company would have no incentive to increase exports, higher prices would cause a drop in international sales, and Guatemala would lose export revenues...
...Far Eastern Economic Review, July 8, 1974...
...Far Eastern Economic Review, May 8, 1974...
...Ibid...
...Del Monte pays no tax on its lands, and has only 9,000 acres under cultivation...
...Now, with their sole source of sustenance the salary they receive, the plantation workers have become part of the Guatemalan proletariat...
...9 This network lies behind Del Monte's "clean" facade...
...9. Ibid., p. 102...
...Don Watson, "Illegal Canner-IBT Pact Defies 1945 Vote," E Malcriado, September 4, 1974, p. 20...
...grain, chicken, tourism, and perhaps meat...
...As one of the instructors, a Colombian, explained, the purpose of the course was to train potential leaders in "social problem solving...
...For 1975, the first year the export tax was payable, Bandegua's declared export figures were suspiciously low...
...Thus, Del Monte managed to stay within the formal limits of the law by satisfying Securities and Exchange requirements that accurate records be kept, and that no secret slush funds be used to channel funds abroad...
...Given the potential for social unrest in the Guatemala countryside, Del Monte is not taking any chances...
...18-19...
...Del Monte also went to great lengths to conceal the transaction with Moreira...
...7. Interview with Del Monte's Head Agricultural Supervisor, in the Bajio Valley, June, 1976...
...Al Krebs, Del Monte Corporation, A Report of the Agribusiness Accountability Proect, December, 1973, p. 7 . 27...
...shot up from $2.50 to $5.20, an increase way out of proportion to the tax...
...Moreover, as one Del Monte official explained, constant company supervision and technological aid to associate producers is essential to guarantee the quality production needed for the international market...
...cit., p. 37...
...February 23...
...94702...
...Inforpress, No...
...10, 1972...
...Another attempt to pass the tax was defeated in Congress by MLN opposition, allegedly because Del Monte had paid off MLN party members to oppose the law.23 Finally, in November 1975 nationalistic pressure came to a head and the export tax was pushed through congress...
...With the purchase of the Miami-based West Indies Fruit Company and its Costa Rican subsidiary, the Banana Development Corporation (known as BANDECO), Del Monte was able to make its first inroads into the U.S...
...United Brands, it was later revealed, bribed Honduran government officials $1.25 million to reduce their tax, a scandal that eventually led to the suicide of the company's president, Eli Black, and the removal of Honduran president Lopez Arrellano...
...5. El Grafico, July 14, 1975...
...Manila Journal, July 13, 1975...
...IDOC, p. 43...
...Besides workers from the plantation, there were five Salvadoreans and twenty local peasant farmers recruited for the course...
...In Costa Rica, the company agreed to pay the tax under protest, but began judicial proceedings to challenge the government...
...and Pahayag...
...Many of these AIFLD graduates become union officials, or are given supervisory jobs on the plantation.* THE BANANA WAR The most direct challenge Del Monte has confronted in Guatemala stemmed from the attempts of banana-producing countries to assert greater control over their natural resources...
...United States Department of Labor, p. 94...
...Guatemala, op...
...Bertolt Brecht With profound gratitude for all that Harry Braverman gave us and a deep sorrow which we all feel on losing a comrade in the struggle...
...Presumably, if they lose direct control over land, associates could supply the bananas...
...IDOC, op...
...New Yorker, May 3, 1976;and Asia Yearbook, 1976 (Hong Kong: Far Eastern Economic Review...
...But today, the corporation owns or controls an estimated 38,000 acres of banana plantations in Costa Rica, Guatemala, and the Philippines...
...See also McWilliams, p. 228...
...By the fall of 1975, the Guatemalan government under General Kjell Laugerud announced that it would support the tax and renegotiate a new contract with Del Monte...
...Inforpress, No...
...October, 1974, p. 19...
...In Honduras, 18,000 workers at United Brands' subsidiary voted in 1975 to oust the conservative, pro-U.S...
...Since there are no roads going into the plantation, the only access to the outside world is the company operated rail wagon, which runs only twice daily - at the beginning and end of each work day...
...October, 1968, p. 13...
...836, Washington, D.C., 1945, pp...
...As he put it, "We can't deal with technical problems by phone from Miami...
...2 0 In the wake of the early 1975 scandal over the United Brands bribe in Honduras, and the revelations in the summer of 1975 about Del Monte's payment to Moreira, nationalistic pressures increased...
...The other course instructor was a Bandegua office employee, a graduate of AIFLD courses with extensive travel experience in Central America and the U.S...
...7 But more important than the question of the impropriety of the payment is what the Moreira connection reveals about Del Monte's ties with the most reactionary and corrupt elements of the Guatemalan bourgeoisie...
...Like other monopolistic corporations, they recognize their own self-interest in ensuring labor peace by paying high salaries - something their hefty profit rates allow them to do...
...Nicaragua," NACLA Report, February, 1976, p. 16...
...For the $20.5 million Del Monte finally paid to United Brands in 1972, the company acquired 55,000 acres of prime agricultural land, plus an agro-industrial complex that stretches from plantation to port...
...UNCTAD, op...
...With its own plantation lands in Guatemala the most productive in Central America, Del Monte would certainly fight any attempt to take them over...
...Throughout this period, Del Monte kept a relatively low profile, working quietly behind the scenes to protect its interests...
...Carlos Figueroa Ibarra, El Proletariado Rural en el Agro Guatemalteco (Guatemala: Instituto de Investigaciones Economicas y Sociales de la Universidad de San Carlos, 1976), p. 187...
...Ibid...
...Diario La Hora, September 10, 1975...
...Moreira is a fast-dealing businessman whose holdings have expanded greatly since he came to Guatemala from Cuba...
...UNCTAD, The Marketing and Distribution System for Bananas, December 24, 1974...
...imperialism in Central America, particularly in Guatemala...
...Interview with Del Monte's Head Agricultural Supervisor in the Bajio...
...A 1958 anti-trust ruling had found United Fruit guilty of monopolizing the banana trade, and in fact the company was under court orders to sell off about 10 percent of its banana operations...
...When demand is strong, the companies can rely on associates for additional supply...
...1-5, 30, 55...
...101-32...
...Thus, the major aim of the UBEC countries was to increase their share of the profits and coodinate strategies to confront the multinationals...
...Wall Street Journal...
...Estimated acreage in UNCTAD, op...
...Only 11.5 percent of the banana dollar remains in the producing countries.'" For the multination* When NACLA researchers visited Bandegua, the union office was being used for a three-month course sponsored by the International Federation of Plantation, Agricultural and Allied Workers, an international secretariat that has worked in the past with the CIA, according to Philip Agee...
...For most of these countries, banana exports constitute a major source of foreign exchange...
...Several purchase offers were put forward by Guatemalan nationals, including the United Fruit workers' union, and two Guatemalan businessmen...
...Interviews with UFW organizers and farm workers...
...This system also makes the workers extremely productive...
...and Ligaya del Mundo, "Mindanao: Strife in the Land of Promise,"Bahayag, April, 1973...
...Then as president, representing the right-wing parties, he generalized his counter-insurgency methods, putting the entire country under a four-year reign of terror...
...DelMonte Shield, May, 1965...
...Ibid...
...Again, United Fruit provided the opportunity...
...259-0...
...Pacific Basin Reports, October, 1972 and September, 1973...
...3. Ibid., p. 18...
...political and corporate involvement, see Guatemala (Berkeley: NACLA, 1974...
...They are likely to oppose even mildly progressive land reforms - and they will certainly be a major obstacle to the socialist revolution necessary to meet people's needs in the Third World...
...2 9 In Guatemala, where United Fruit never set up an associate program, the company obtains nearly all of its contract production from one business group, headed by a Spanish-born businessman named Julian Presa...
...1976...
...Stock Reports, Del Monte," March 20,1975...
...6 Del Monte, of course, claims that there was no bribe involved since the corporation did not make any direct payment to a government official...
...Sign of the 7Tmes, Manila, June 12, 1976...
...Finally, whatever economic benefits producer countries do obtain are not likely to benefit the majority of the people, but rather the ruling class groups that control the government...
...The first thing that strikes a visitor to the town of Bananera, where the plantation headquarters are located, is the highly stratified social system typical of plantations everywhere...
...1 7 In mid-1974, Costa Rican Foreign Minister Gonzalo Facio charged that the companies had set up a secret fund to "destabilize" the UBEC member governments in order to prevent them from levying the banana tax...
...4. Simon Williams, Agricultural Credit for Small Farmers-Case Histories from Mexico, Coordinacion Rural A.C., Mexico City, p. 224...
...April 11, 1974...
...cit., p. 24...
...Bananas are a highly perishable commodity, and time is critical in the marketing process...
...First, as a colonel, he led the 1966-68 anti-guerrilla campaign, which caused the death of thousands of peasants...
...Even the recent series of "expropriations" did not threaten their basic interests, and in fact accommodated their needs...
...One of the mechanisms the banana companies have used to deal with the threat of nationalism is the associate producers program...
...als, which get the largest chunk of the banana dollar, the key to their profits is marketing and distribution...
...In Costa Rica, about two-thirds of Del Monte's bananas come from the company's 13 associate producers, each of whom has an average plantation of 612 acres...
...6. "The Philippines: American Corporations, Martial Law and Underdevelopment," IDOC, November, 1973...
...Del Monte recently gave FEGUA a loan of several hundred thousand dollars, and also repairs the company's rail cars at its plantation machine shop...
...Honolulu, July, 1976...
...Standard & Poor's Corporation, "Standard N.Y.S.E...
...80-81...
...19-21...
...Arana and Moreira have also been publicly linked...
...In fact, several of the workers interviewed by NACLA wondered whether the company had really changed ownership...
...However, with salaries averaging about $870 a year, and with benefits such as free housing, water, electricity and medical facilities, Del Monte's employees are better off than the bulk of the Guatemalan working class...
...in the early 1960's, the program has effectively created a new local bourgeoisie of banana farmers who contract their production to the companies...
...it manipulates its workers to avoid labor unrest...
...Ecuador dropped out of UBEC...
...International Longshoremen's and Warehousemen's Union, "ILWU and the Pineapple Worker...
...The whole process must be regulated like clockwork, and delays avoided at any cost...
...Moreover, Del Monte's profit margin for 1974 was probably larger than that of the other companies, since it paid no tax on its Guatemalan exports...
...and Julian Presa, the principal independent banana grower under contract to Del Monte currently...
...Horst, pp...
...The most notable change at the plantation since Del Monte's takeover are the new signs on company buildings...
...4 In fact, any other decision would have been in violation of the Guatemalan constitution, which prohibits the sale of border lands (such as those held by United Fruit along the Honduran frontier) to foreign interests...
...According to a recent study in Guatemala, the workers and their families spend an average of 64 percent of their income on food, clothing, and fuel...
...Every year a handful of chosen Bandegua workers spend months at AIFLD-sponsored courses in Guatemala City learning U.S.-style unionism, and some are sent to AIFLD schools in Honduras and Colombia...
...NACLA 31 References: PART I - CALIFORNIA 1. Carey McWilliams, Factories in the Field, Peregrine Publishers, Inc., 3rd Ed., 1971, pp...
...For the multinationals, this buffer class serves several important functions...
...Under the hot tropical sun, crews of workers roam amongst the banana trees under the constant supervision of the Bandegua foremen...
...Del Monte's associates are a prime example...
...Within Guatemala, there was strong sentiment in support of a banana export tax...
...See Ernst Utrecht, "The Separationist Movement in the Southern Philippines," Race and Class, April, 1975...
...Far Eastern Economic Review, May 8, 1974...
...For the company, this productivity translates into a higher rate of profits, far out of proportion to the meager wage increases...
...7. California Packing Corporation, Annual Report, 1946...
...122-131 for an article on the United Fruit Company's changing strategy...
...To thwart the take-over attempt, Del Monte went out and bought a banana company - the one thing United Fruit could not acquire...
...and Diario la Tarde, July 16, 1975...
...In Nicaragua, he has a fishing operation in partnership with close associates of Somoza...
...Ibid...
...To supplement their income, wives and children of the banana workers are usually forced to find jobs, often in the banana packing sheds, where salaries are the lowest on the plantation...
...Ibid., p. 16...
...and in Nicaragua, he is linked in business with the dictator Somoza.* * Moreira's business operations in Guatemala include fishing and fish processing (Pesca, S.A...
...on the other hand, when there is danger of oversupply (and lower prices), the companies simply purchase less fruit from the associates by raising their quality requirements...
...Interview at Julian Presa company offices, Guatemala, June, 1976...
...7. Thomas Horst, At Home Abroad: A Study of the Domestic and Foreign Operations of the American Food-Procesita Indstry, Ballinger Publishing Company, 1974, pp...
...8. Interview with Oskar Kuellar, Agricultural Technician in the Association of Small Strawberry Producers, June, 1976...
...It allows them to reduce their profile as direct exploiters of the land, and it also creates a national pressure group that will promote the interests of the companies without their direct involvement (as occurred when independent producers in Guatemala publicly argued against the UBEC tax on Del Monte's behalf...
...Honduras had dropped its export tax to 254...
...Del Monte, United Brands, and Castle & Cooke saw their common interest in undercutting the UBEC...
...ASSOCIATE PRODUCERS Although Del Monte and the other companies can adjust to the problems posed by UBEC-style nationalism, a more serious worry is the possibility that they will one day lose control of their plantation lands...
...When Del Monte took over from United Fruit, it was stepping into the shoes of a company that had long been the symbol of U.S...
...Unlikely as it may seem, eight short years ago Del Monte didn't own a single banana tree...
...The Guatemalan Minister of the Economy predicts that Del Monte will 30 recuperate its entire investment in Guatemala within three years.26 The outcome of the UBEC effort to confront the multinationals points up the limits of this kind of nationalism...
...Thus, harvesting at Bandegua's plantation is carefully timed to coincide with the arrival of 27 Del Monte's ships at Puerto Barrios...
...When Del Monte bought out United Fruit, it also assumed all the concessions and rights granted the company in its original contract with the Guatemalan government...
...Not only are the bourgeois national govern- ments restricted in their ability to challenge the corporations because of their own ties with foreign capital...
...During the Arbenz period (1944 to 1954), the United Fruit workers union was one of the most militant and progressive unions in Guatemala...
Vol. 10 • September 1976 • No. 7
