Small farmers say they are hurting as cheap fruits flood the streets
Christopher Serju, Sunday Gleaner Writer
The agriculture ministry has dismissed a request from the All-Island Banana Growers' Association (AIBGA) for it to rein in Jamaica Producers, the largest local banana producer.
The AIBGA had written to the ministry alleging that Jamaica Producers has been flooding the market with ripe bananas and pushing prices below pre-Hurricane Sandy levels, making it unprofitable for small farmers who are unable to compete with its volume discounts.
Chairman of the AIBGA, Grethel Sessing, argued that despite the free-market environment, Jamaica Producers was engaged in unfair practices.
"It seems as though there is a deliberate effort by Jamaica Producers to drive all small banana farmers out of the marketplace. This is done through the process of price reduction and dumping," said Sessing in the letter to the ministry.
"Jamaica Producers has slashed the selling price of ripe bananas to below pre-Hurricane Sandy levels. This has created great cause for concern for the small farmers," added Sessing.
But permanent secretary in the agriculture ministry, Donovan Stanberry, told The Sunday Gleaner that the Government cannot interfere to influence prices.
He suggested that the AIBGA initiate dialogue with Jamaica Producers to resolve the issue.
That is a meeting that would be welcomed by Jeffrey Hall, chief executive officer of Jamaica Producers Group Limited.
"Our pricing policy is driven by only two considerations; one is to ensure an economic and sustainable return on the investment on the farm and the fair wage for people that we employ. So we wouldn't price below a certain level where it wouldn't make economic sense," Hall told The Sunday Gleaner.
The company, which is a member of the AIBGA, has about 50 per cent of the local market. It retails ripe bananas at about 20 cents each.
Good for Consumers
According to Hall, the availability of fresh, nutritious ripe bananas at an affordable price is a good thing for consumers, his company and the country.
"We want to make banana an economical nutrition option for every Jamaican. We want it to be a national fruit staple and carbohydrate staple, and so the policy of our company is to make the banana affordable all the time. So JP would not have spiked the price, nor would it have crashed the price. That is not the policy of our company."
Hall said that if the company's effort to provide a good-quality product, delivering pricing at good value, while guaranteeing economic returns for shareholders, had resulted in dislocation of other players in the market, this was an unintended consequence.
"We see ourselves as a responsible industry player and have always taken into account that duty in the way that we engage in the industry. For this reason, we are open to sitting with the AIBGA in terms of dialogue."
Wearing the distinct, green and yellow-coloured bibs with the 'Peel Healthy' prominently displayed, banana vendors are now a common sight at most Corporate Area and some Portmore traffic lights.
With two or three bags deftly held in each hand they shout prices, negotiate sales and make change - working with the traffic flow, as they flit from one side of the street to another; all this while keeping safe.
These vendors, who market the Jamaica Producers (JP) brand of ripe bananas, comprise a new breed of entrepreneurs, whose activities may seem to be ad hoc but are, in fact, members of a well coordinated team effort.
Neleta White, depot manager at the Retirement Road office of the Jamaica Producers Group, told The Sunday Gleaner that the company has 49 registered vendors who, on average, each recruit another three persons to help move the produce.
Building on the enthusiasm of people looking for alternative income generation, the company has since developed a cadre of young, eager businessmen and women.
What started with the company selling the fruit to vendors has since grown into a structured programme where they are assigned defined geographical locations - turfs and much more.
Chief Executive Officer Jeffery Hall explains how White's initiative has taken the transactions well beyond the exchange of merchandise and money.
"What Neleta has done particularly well is to help a young person who hasn't thought through very carefully what kind of margin they need to set for themselves if they are going to be engaged in business. What kind of stock level should they initially start out with, how do they manage their receivables and payables.
"And so what she has been able to do is put in place a framework in which a young person who doesn't have deep commercial experience can come to us, sit down with her, identify the market size in the geographic location and began a pattern of trading," added Hall.
With the company adjusting to meet the emerging challenges brought on by the success of this project, Jamaica Producers is also learning in the process, as Hall admits.
FORMAL AND ORGANISED
"What we found is that people want to be connected to something that is formal, that is organised, that's reliable, and at the same time there is value for our competitors themselves to connect with youth who are prepared to work.
"It's been exciting to see what Neleta has built because the average of the folk involved are young, and are out there creating all these opportunities for themselves and for the business," he noted.
With its catchy 'Peel Healthy' tag line and a number of billboards and newspaper advertisements extolling the nutritional value of ripe bananas which are rich in potassium, Jamaicans seem to be snacking more on the popular fruit, as reflected in the company's bottom line.
"What's been really positive for us is that sales in all channels have increased. We've been able to drive awareness of bananas and, as a result, sales in the supermarkets are growing and sales outside of the supermarket are growing at the same time.
"So that's been very exciting because we are able to use the engagement with the consumers to drive the product. Our core focus is to see if we can persuade the consumers to not so much just buy bananas elsewhere but to replace bananas in their diets for the imported fruit items, which form part of the US$900 million food bill."