Financial Times
January 3, 2001
By James Wilson

Steamy Uraba, in a remote corner of Colombia's north-west, is famous for only two things: bananas and violence.

The plantations that stretch to the horizon have provided this region with both its livelihood -- 90 per cent of the local economy revolves around the fruit -- and its fearsome reputation for conflict. Thousands have been killed in the past two decades in complex turf wars, often over control of the powerful banana workers' union, between guerrilla groups and paramilitaries.

After exhausting itself in bloodshed, and with paramilitaries getting the upper hand against leftwing guerrillas, Uraba's banana-growing area is emerging into a relative but uneasy calm. But the region fears the consequences of a new blow: one delivered not from Colombia's fighting factions but from agriculture and trade officials in Brussels.

Colombia is worried that recently confirmed European Union plans to alter banana import rules will dramatically cut its market share and income. That could bring hard times to Uraba's economy, which many say could spark a fresh wave of violence in a country already steeped in political and economic crisis.

EU countries are ready to give Euros 200m-Euros 300m (Dollars 188m-Dollars 282m) to help Colombia try to end almost 40 years of civil conflict, during which Uraba has been one of the worst hit areas. However, banana industry representatives say the proposed new EU regime for imports will harm peace efforts by bringing more unemployment and social tension to the area.

"The banana means more socially than it does economically. What you are eating is much more than a banana," says Maria Isabel Patino, president of Augura, the country's largest banana growers' association. "We have to make sure the EU understands that."

All the big Latin American banana-producing countries apart from Ecuador share Colombia's concern at the EU's planned "first come, first served" import system, due to be implemented in April. They fear Ecuador, the biggest exporter, will further increase its market share at its neighbours' expense because of its low production costs.

Ms Patino says the EU recognises fruit prices are forecast to fall 17 per cent, a severe blow to producers already struggling on low margins. Colombia, the world's third largest exporter, believes it is the most vulnerable. Its market share was previously partly protected by a country quota.

In its frail economy, where one in six is jobless, the potential for economic despair to create further armed conflict is taken seriously. Uraba produces 70 per cent of Colombia's banana exports and has 65,000 jobs directly and indirectly related to the fruit.

Magdalena, Colombia's other banana-exporting region, also fears the worst. It is squarely in the grip of the country's armed conflict: some producers have not been to their land for years for fear of kidnapping.

"We are living what Uraba has lived," says one worried producer.

But Colombia has been unable to change minds in the EU, where officials and parliament members were fed up with three years of wrangling over imports.

The US imposed trade sanctions against the EU after a World Trade Organisation judgment against the previous banana regime, which was designed to give preferential access to many former European colonies among African, Caribbean and Pacific producers.

A switch to the system that Colombia feared was confirmed last month by EU agriculture ministers.

If jobs are lost as a result, says Jose Benitez, an official in the banana workers' union in Uraba, the effects could be serious.

"What will happen to the people who are left without jobs? We don't know, and that is where they could fall back into violence." For more reports see www.ft.com/globaleconomy