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...
...For 1975, the first year the export tax was payable, Bandegua's declared export figures were suspiciously low...
...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...
...2. Fortune, op...
...3. Quoted in McWilliams, p. 56...
...This system also makes the workers extremely productive...
...In Costa Rica, the company agreed to pay the tax under protest, but began judicial proceedings to challenge the government...
...McWilliams, pp...
...In an apparent bid to take over the food processing company, United Fruit purchased a large chunk of Del Monte's stock...
...They now read BANDEGUA, for Banana Development Corporation of Guatemala, the subsidiary that runs Del Monte's operations there...
...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...
...9. IDOC, op...
...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...
...But, as he explained, cheap labor is key to the company's profits...
...Inforpress, No...
...and 17 percent of the plantation families do not have an income adequate to obtain a minimum satisfactory diet...
...A plantation or port work stoppage of even a day can mean the loss of hundreds of thousands of dollars in overripe bananas...
...New Yorker, May 3, 1976;and Asia Yearbook, 1976 (Hong Kong: Far Eastern Economic Review...
...3. For a comprehensive history of Guatemala, including U.S...
...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...
...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...
...As he put it, "We can't deal with technical problems by phone from Miami...
...In 1960, a tractor cost three tons of bananas, and in 1970 the same tractor cost eleven tons of bananas...
...Del Monte may have lost the battle, but it didn't lose the war...
...Most of Del Monte's workers and their families live on the plantation itself, isolated even from the small town of Bananera...
...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...
...Sign of the 7Tmes, Manila, June 12, 1976...
...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...
...Diario La Hora, September 10, 1975...
...And once again, there were widespread rumors that Del Monte resorted to bribery...
...Ibid...
...cit., pp...
...NACLA 31 References: PART I - CALIFORNIA 1. Carey McWilliams, Factories in the Field, Peregrine Publishers, Inc., 3rd Ed., 1971, pp...
...80-81...
...UNCTAD, The Marketing and Distribution System for Bananas, December 24, 1974...
...Del Monte Shield, Winter, 1973, p. 20...
...2 Work conditions on the plantation are also extremely difficult...
...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...
...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...
...Under the hot tropical sun, crews of workers roam amongst the banana trees under the constant supervision of the Bandegua foremen...
...Just as important, fifteen years of U.S.-sponsored counterrevolution since 1954 had made the country safe for U.S...
...Historically, the banana workers in Guatemala have a strong tradition of struggle...
...shot up from $2.50 to $5.20, an increase way out of proportion to the tax...
...Arana and Moreira have also been publicly linked...
...One of the first actions taken by UBEC was to propose a $1 tax on each box of bananas exported...
...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 Nicaragua, he has a fishing operation in partnership with close associates of Somoza...
...Horst, pp...
...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...
...122-131 for an article on the United Fruit Company's changing strategy...
...IDOC,.op...
...it manipulates its workers to avoid labor unrest...
...For the multinationals, this buffer class serves several important functions...
...See Guatemala, op...
...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...
...6. "The Philippines: American Corporations, Martial Law and Underdevelopment," IDOC, November, 1973...
...The banana business proved highly profitable, and Del Monte began looking for ways to expand its Central American holdings...
...Throughout this period, Del Monte kept a relatively low profile, working quietly behind the scenes to protect its interests...
...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...
...Nicaragua," NACLA Report, February, 1976, p. 16...
...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...
...5. El Grafico, July 14, 1975...
...interviews in Guatemala...
...8. Inforpress, Nos...
...See also Davis, Skaggs & Co., Inc., Basic Report: Del Monte Corporation, April 27, 1976...
...La Nacion, April 18, 1974...
...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...
...United States Department of Labor, p. 94...
...2. UNCTAD, The Marketing and Distribution System for Bananes, December 24, 1974...
...Banana production is highly labor intensive, and requires continual painstaking work of weeding, trimming, tagging and spraying...
...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...
...Quoted in McWilliams, p. 215...
...Several purchase offers were put forward by Guatemalan nationals, including the United Fruit workers' union, and two Guatemalan businessmen...
...The company's claim that banana sales would drop off because of the tax were soon proven false...
...investors, providing the kind of "stable" political climate Del Monte demands wherever it operates...
...and Julian Presa, the principal independent banana grower under contract to Del Monte currently...
...They drive themselves to the limit, often with disastrous long-range consequences for their health...
...For the company, this productivity translates into a higher rate of profits, far out of proportion to the meager wage increases...
...grain, chicken, tourism, and perhaps meat...
...By 1975, Panama was the only country that had imposed the $1 tax...
...and Pahayag...
...Presa's links with the Taylor company go back to before the firm's business venture in Guatemala...
...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...
...cit., p. 37...
...The company's 1936 contract set a permanent tax of only 24 on each stem of bananas exported...
...For Del Monte, the Guatemala acquisition assured its position as a major force in the world banana trade...
...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...
...3. Ibid...
...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...
...UNCTAD, op...
...and Ligaya del Mundo, "Mindanao: Strife in the Land of Promise,"Bahayag, April, 1973...
...Ironically, the original impetus for Del Monte's entry into the banana business in 1968 came from the United Fruit Company itself...
...Far Eastern Economic Review, October 10, 1975...
...2. Del Monte Shield, October, 1974, p. 17...
...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...
...In fact, several of the workers interviewed by NACLA wondered whether the company had really changed ownership...
...1 " The companies, of course, denied the charges, but they all proceeded to move against the UBEC countries...
...Del Monte pays no tax on its lands, and has only 9,000 acres under cultivation...
...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...
...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...
...Moreira is a fast-dealing businessman whose holdings have expanded greatly since he came to Guatemala from Cuba...
...PART IV - GUATEMALA 1. Forbes, December 15, 1970...
...Castle & Cooke's subsidiary, Standard Fruit, took the lead in the campaign of intimidation...
...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...
...Interview in Baiio Valley, June, 1976...
...103-04...
...There they are immediately loaded onto specially refrigerated ships which will transport them to US...
...Frederick F. Clairmonte, "Bananas: A Commodity Case History," in Cheryl Payer, ed., Commodity Trade of the Third World (New York: McGraw Hill, 1975...
...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...
...8. Interview with Oskar Kuellar, Agricultural Technician in the Association of Small Strawberry Producers, June, 1976...
...Some sources in the Guatemalan bourgeoisie even claim to have personal knowledge of the transaction...
...During the Arbenz period (1944 to 1954), the United Fruit workers union was one of the most militant and progressive unions in Guatemala...
...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...
...Ecuador dropped out of UBEC...
...Yet they are totally dependent on a world economy structured to benefit the dominant capitalist countries...
...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...
...He soon proved his political clout...
...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...
...This gave the companies a spectacular profit of 904 a box, as compared to the 204 company spokespeople usually call "reasonable...
...With its own plantation lands in Guatemala the most productive in Central America, Del Monte would certainly fight any attempt to take them over...
...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...
...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...
...5. Del Monte Shield, 1974, pp...
...The associate system also gives the companies an important economic advantage in the market...
...By the estimate of one company official, the company made a "handsome net profit" on $38 million in sales in 1975...
...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...
...corporations, and often used by the CIA to undercut genuine, progressive unionism in Latin America...
...1-5, 30, 55...
...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...
...Vivian St...
...It is the company, not Guatemalan officials, that supplies official export statistics on bananas...
...It still operates as though it were above the law...
...To thwart the take-over attempt, Del Monte went out and bought a banana company - the one thing United Fruit could not acquire...
...Del Monte's associates are a prime example...
...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...
...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...
...4. Frederick Simpich, Jr., Dynasty in the Pacific (New York: McGraw Hill, 1974...
...October, 1968, p. 13...
...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...
...Far Eastern Economic Review, May 8, 1974...
...Unlikely as it may seem, eight short years ago Del Monte didn't own a single banana tree...
...Liberation News Service, June 22, 1974...
...The most notable change at the plantation since Del Monte's takeover are the new signs on company buildings...
...La Nacion, May 23, 1974;Inforpress, Nos...
...See Ernst Utrecht, "The Separationist Movement in the Southern Philippines," Race and Class, April, 1975...
...8. Ibid...
...Del Monte Shield...
...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...
...New York Times, May 21, 1975...
...94702...
...Thus, the independent producers system is one more mechanism the multinationals use to manipulate the world market...
...In fact, there is evidence that the multinationals took advantage of the new tax to raise prices even higher and boost their profits...
...In theory, the associate producers give the companies a long-range hedge against nationalization...
...And in fact, their relative privilege is more than anything a commentary on the miserable living conditions of the rest of the Guatemalan people...
...18-19...
...E7 Grafico, Feb...
...In contrast to the luxurious quarters of the company compound, the workers' housing is spartan and barely adequate...
...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...
...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...
...The company responded with a public campaign aimed at intimidating the government...
...836, Washington, D.C., 1945, pp...
...Ibid., January, 1 9 6 8,p...
...Information from unpublished study on the Central American banana trade...
...In spite of the free benefits provided by the company, the salary of a banana worker is still not sufficient to sustain a family...
...Within one day, the bananas are cut, washed, packed, and sent by train to the nearby port...
...See also Del Monte Shield, April, 1 9 6 8, p. 4. 13...
...Don Watson, "Illegal Canner-IBT Pact Defies 1945 Vote," E Malcriado, September 4, 1974, p. 20...
...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...
...Still, as one Del Monte official in Guatemala expressed it, "we never know what to expect next...
...9. Williams, p. 222...
...it is allied with the most reactionary elements within the Guatemalan bourgeoisie...
...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...
...Report on Meeting with Del Monte Vice President, Public Affairs, April 20, 1976...
...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...
...In Panama, for instance, the government nationalized United Brands' plantations, but will rent the land back to the company...
...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...
...As one of the U.S...
...and Guatemala and Central America Report, (Berkeley), February, 1976...
...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...
...Interview conducted by Corinne Gtlb, Institute of Industrial Relations, Berkeley, 1957...
...Far Eastern Economic Review, May 8, 1974...
...101-32...
...In Central America, such business ties, though seldom a matter of public record, are often common knowledge in business circles...
...Far Eastern Economic Review, July 8, 1974...
...PART m - HAWAII AND THE PHILIPPINES 1. "Pineapples in Paradise," Fortune, November, 1930...
...Moreira agreed to help swing the deal in return for a half million dollar "consultant's fee...
...Interview at Julian Presa company offices, Guatemala, June, 1976...
...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...
...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...
...Ibid...
...For Del Monte, Guatemala was the ideal place for expansion...
...IDOC, op...
...5. Del Monte Shield, October, 1959, p. 4 . 6. Fortune, November, 1938, pp...
...For most of these countries, banana exports constitute a major source of foreign exchange...
...Sure, Some Comments on Employer Organizations and Collective Bargaining in Northern California since 1934...
...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...
...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...
...Ibid...
...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...
...But the truth of the matter is that Del Monte was carefully covering its tracks...
...and Pacific Research and World Empire Telegaph, op...
...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...
...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...
...1976...
...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...
...Thus, harvesting at Bandegua's plantation is carefully timed to coincide with the arrival of 27 Del Monte's ships at Puerto Barrios...
...66-80...
...Please send me a copy of NACLA's literature list...
...A company executive explained to NACLA interviewers that the soldiers take care of any disturbances that occur on the plantation...
...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...
...7. California Packing Corporation, Annual Report, 1946...
...banana market...
...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...
...J. Paul St...
...On one side of the railroad tracks, behind fences and guard posts, is the company compound...
...and Diario la Tarde, July 16, 1975...
...But today, the corporation owns or controls an estimated 38,000 acres of banana plantations in Costa Rica, Guatemala, and the Philippines...
...Though no longer the major representative of monopoly capital in Guatemala, Del Monte is still a formidable economic and political power...
...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...
...Del Monte, United Brands, and Castle & Cooke saw their common interest in undercutting the UBEC...
...One month later, in September 1972, Arana formally issued a decree approving the sale...
...I came among men in a time of uprising And I revolted with them...
...Thus, the major aim of the UBEC countries was to increase their share of the profits and coodinate strategies to confront the multinationals...
...Interviews with UFW organizers and farm workers...
...There is evidence that the company did more than propagandize...
...Bananas are a highly perishable commodity, and time is critical in the marketing process...
...NACLA-West: P.O...
...April 11, 1974...
...Inforpress, No...
...6. See Wall St...
...Central America Report (Guatemala), November 24, 1975...
...8. Fortune, November, 1938, p. 81...
...Honduras had dropped its export tax to 254...
...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...
...1975...
...El Grafico, July 25, 1975...
...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...
...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...
...4. Ibid., pp...
...The corporation also enjoys a special relationship with the government-run national railway, Ferrocarril de Guatemala (FEGUA...
...For the banana industry, however, a docile and cooperative labor force is a special imperative...
...and it was the leading force in pushing for the C.I.A.-engineered overthrow of the progressive government of Jacobo Arbenz in 1954...
...Ibid., p. 16...
...political and corporate involvement, see Guatemala (Berkeley: NACLA, 1974...
...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...
...No company record was ever made of his name, and Del Monte promised never to reveal his identity...
...M I came to the cities in a time of disorder When hunger ruled...
...Presa and his family contract about 3,000 acres to Del Monte, partly through a joint venture with a Florida-based U.S...
...When demand is strong, the companies can rely on associates for additional supply...
...First, as a colonel, he led the 1966-68 anti-guerrilla campaign, which caused the death of thousands of peasants...
...Export sales of bananas remained firm, and the companies themselves benefited more from the price increases than did the UBEC countries...
...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...
...Even the recent series of "expropriations" did not threaten their basic interests, and in fact accommodated their needs...
...Interview with Del Monte Group Vice President, International Division, July, 1976...
...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...
...Meeting with Del Monte Vice-President, Public Affairs, April 20, 1976...
...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...
...and interview with ILWU officials in Honolulu...
...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...
...If you can pay a worker 354 an hour, why buy an $8000 tractor...
...Ibid...
...Foreign Agricultural Policy," Ph.D...
...Guatemala, though it had signed the UBEC pact, had not yet levied any tax at all...
...October, 1974, p. 19...
...Honolulu Advertiser, June 17, 1976...
...60, 64, and 151...
...Clair, "Foreign Agribusiness - An Area of Sensitivity," Mexican-American Chamber of Commerce Review, March, 1975, p. 47...
...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...
...Their leverage is also severely limited by the structure of the world economy and the banana trade...
...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...
...Stock Reports, Del Monte," March 20,1975...
...149-66...
...Del Monte also went to great lengths to conceal the transaction with Moreira...
...In an open threat, Del Monte declared that if the tax were passed, the company would reconsider expansion plans or even cut back operations...
...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...
...7. Interview in Guatemala...
...The main device the company uses to extract maximum value from the workers' labor is payment on a piece-rate basis...
...The banana companies have also used the independent producers concept to improve their public image by claiming the system provides opportunities for small farmers...
...als, which get the largest chunk of the banana dollar, the key to their profits is marketing and distribution...
...8, June, 1966, pp...
...February 23...
...233-34...
...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...
...Again, United Fruit provided the opportunity...
...Ibid...
...It wasn't long before these high pressure tactics began to take effect and weaken the UBEC common front...
...cit., p. 11...
...Box 226, Berkeley, California 94701 9. See Guatemala, op...
...Fortune, November, 1938, p. 109...
...CentralAmerica Renort (Guatemalal...
...19-21...
...Estimated acreage in UNCTAD, op...
...California Packing Corporation, Annual Report, 1945...
...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...
...Presumably, if they lose direct control over land, associates could supply the bananas...
...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...
...While this gives the banana workers the possibility of earning more, it also means a higher level of exploitation...
...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...
...and European markets...
...Interview with Del Monte plant workers, June, 1976...
...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...
...To further assure '"law and order" there is a Guatemalan Army post in the middle of the plantation, staffed by armed Guatemalan soldiers...
...Not only would the plantations there double the company's banana production...
...California Packing Corporation,Annual Report, 1947...
...9. Ibid., p. 102...
...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...
...The $500,000 fee was paid through several of the company's Panamanian shipping subsidiaries, and charged to general and administrative expenses...
...See also National Commission on Food Marketing, The Structure of Food Manufacturing, Technical Study No...
...He is a well-known backer of conservative political forces in Guatemala, and most significant, he has close business and personal ties with Arana...
...and Guatemala and Central America Report, October, 1972, and July, 1975 (American Friends of Guatemala, Box 2283, Station A, Berkeley, Ca...
...Omar Torrijos of Panama, one of UBEC's most militant promoters...
...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...
...In 1972, Arana personally attended the inauguration of one of Moreira's new business facilities...
...One of the mechanisms the banana companies have used to deal with the threat of nationalism is the associate producers program...
...PART I - MEXICO 1. Interview with Del Monte Group Vice President, Inter- national Division, July, 1976...
...In Honduras, 18,000 workers at United Brands' subsidiary voted in 1975 to oust the conservative, pro-U.S...
...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...
...8 26 Arana has been a key force in the institutionalization of right-wing terror in Guatemala...
...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...
...Fortune, November, 1938, p. 79...
...Department of Labor, pp...
...While the company no longer dominates the country's key transportation networks as United Fruit once did, it still benefits from special privileges...
...4. Simon Williams, Agricultural Credit for Small Farmers-Case Histories from Mexico, Coordinacion Rural A.C., Mexico City, p. 224...
...United States Department of Labor, p. 113...
...2. Hank Frundt, "American Agribusiness and US...
...imperialism in Central America, particularly in Guatemala...
...Moreira is said to have made substantial contributions to Arana's 1970 presidential campaign, and to be in partnership with Arana's son Tito...
...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...
...Ibid...
...The world market price of bananas has remained nearly unchanged for twenty years, while the cost of manufactured imports has skyrocketed...
...6. Ibid...
...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...
...But it took Del Monte nearly two years to consummate the deal...
...Honolulu Star Bulletin, June 16, 1976...
...For one thing, profit margins on their own plantations are significantly higher because they produce quality fruit so much more cheaply than the associates...
...The whole process must be regulated like clockwork, and delays avoided at any cost...
...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...
...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...
...Del Monte Shield...
...Just after the UBEC tax was first imposed in 1974, the box price of bananas in the U.S...
...9 This network lies behind Del Monte's "clean" facade...
...McWilliams, pp...
...IDOC, p. 43...
...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...
...DelMonte Shield, May, 1965...
...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...
...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...
...and "Hawaii Faces the Pacific," Pacific Research and World Empire Telegram, Jan.-Feb...
...5. Del Monte Shield, Special Issue on Del Monte in the Philippines, Winter, 1975...
...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...
...San Francisco Examiner, May 21, 1975...
...Information from an unpublished study on the Central American banana trade...
...International Longshoremen's and Warehousemen's Union, "ILWU and the Pineapple Worker...
...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...
...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...
...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...
...Pacific Basin Reports, October, 1972 and September, 1973...
...259-0...
...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...
...and Nicaragua never joined...
...in the early 1960's, the program has effectively created a new local bourgeoisie of banana farmers who contract their production to the companies...
...But beneath this facade, the same basic dynamic of exploitation persisted...
...1 3 Recently, in other Central American countries, there have been renewed signs of rebellion among banana workers...
...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...
...Beginning with a charge of 354 a box, the tax will rise progressively until it reaches 500 in 1978...
...See also McWilliams, p. 228...
...It also inherited a position of privilege and influence that had long characterized United Fruit's operations...
...93, 101...
...Journal, op...
...company, Taylor Enterprise of Guatemala...
...4. Wall Street Journal, July 14, 1975...
...Interview with Del Monte's Head Agricultural Supervisor in the Bajio...
...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...
...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...
...As one of the instructors, a Colombian, explained, the purpose of the course was to train potential leaders in "social problem solving...
...Not only are the bourgeois national govern- ments restricted in their ability to challenge the corporations because of their own ties with foreign capital...
...Standard & Poor's Corporation, "Standard N.Y.S.E...
...As this article will show, Del Monte continues the old tradition of the United Fruit Company in Guatemala...
...Dissertation, Rutgers University, 1975...
...The plantation workers, most of whom earn between $2.80 and $4 a day, are not nearly so well off...
...Documents submitted to the U.S...
...Besides workers from the plantation, there were five Salvadoreans and twenty local peasant farmers recruited for the course...
...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...
...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...
...cit., p. 75...
...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...
...Ibid...
...NACLA interview with Del Monte executive, Guatemala...
...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...
...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...
...So the time passed away Which on earth was given me...
...Guatemala, op...
...Al Krebs, Del Monte Corporation, A Report of the Agribusiness Accountability Proect, December, 1973, p. 7 . 27...
...7. Interview with Del Monte's Head Agricultural Supervisor, in the Bajio Valley, June, 1976...
...Costa Rica levied a tax of 354, later raised to 454...
...Inforpress, No...
...Manuel Mejido, Interview with Fernando Carmona, Excelor, November 17, 1972...
...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...
...Within Guatemala, there was strong sentiment in support of a banana export tax...
...Interview with grower in Bajio Valley, June, 1976...
...Like the United Fruit Company before, Del Monte reinforces economic underdevelopment and political reaction in Guatemala, and acts as a formidable obstacle to change...
...10, 1972...
...Recognizing that the plantation system developed over the years by United Fruit serves its interests well, Del Monte has made few basic changes...
...Given the potential for social unrest in the Guatemala countryside, Del Monte is not taking any chances...
...Don Watson, 'Teamsters-Canneries Connivance Destroys Rank and File Movement," l Macriado, Voice of the Farm Worker, July 31, 1974, p. 18...
...3. Ibid., p. 18...
...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...
...was above Guatemalan law...
...Now, with their sole source of sustenance the salary they receive, the plantation workers have become part of the Guatemalan proletariat...
...Inforpress, No...
...Manila Journal, July 13, 1975...
...But in reality, the companies have a strong vested interest in maintaining direct control over their plantations, which greatly limits their flexibility...
...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...
...cit., p. 24...
...Honolulu, July, 1976...
...Wall Street Journal...
...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...
...Del Monte continues to run the plantations like an independent enclave within the Guatemalan state, where government officials are barely tolerated...
...This estimate was made by a Dole official...
...The company-owned housing camps are conveniently clustered around the banana farms where the men work, along the edges of the railway line...
...First developed by the United Fruit Co...
...United States Department of Labor, Labor Unionism in American Agriculture, Bulletin No...
...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...
...union leadership, installed twenty years ago in a U.S.-engineered effort to undercut the then-progressive leadership...
Vol. 10 • September 1976 • No. 7
