DAVID RICHARDSON
DAVID RICHARDSON
A good climate and
cheap, plentiful labour
help Ecuadors farmers
make a living, but
boom and bust are a
way of life there
The second leg of the farmers weekly farm study tour to South America was to Ecuador. Named after the equator, which it straddles, Ecuador was the original banana republic. That disparaging nickname, now used to describe any country with economic volatility and corrupt or inept government, also reflects a significant proportion of Ecuadors agricultural production.
Although the country suffers the stigma of an unfortunate financial history, it is enjoying a period of relative stability. Inflation last year was a mere 20%, compared with triple digit figures in the past, and by the end of this year it could be as low as 14%. There is great concern among the population as to the outcome of the forthcoming presidential election. The current president, an ex-university professor with no "baggage", like needing to pay for past favours, has transformed the economy. It is not yet clear whether he will stand again or if any other successful candidate will be able to maintain the recovery.
Meanwhile, Ecuador provides a classic illustration of a country in which agriculture receives no support and for years has depended for much of its viability on the 30% of farm production that is exported. Of that part of the nations production consumed at home a large proportion takes place on subsistence farms and, therefore, never reaches a market. The rest is sold to town dwellers at prices that seemed low to the farmers weekly party, but which must leave a margin of some sort if the 4WD vehicles the bigger farmers drove was any guide.
As in Peru, the Ecuadorian climate helps and labour is cheap and plentiful. But boom and bust are a way of life. Many years ago farmers concluded that rubber trees were the most profitable crop. They planted millions of them. Then tyre makers and others discovered synthetic alternatives and the world rubber price collapsed. Next came coffee. Consumption was rising and there appeared to be scope for expansion. But tropical farmers around the world read the same predictions and also planted more coffee. Commodity markets for coffee beans have been bumping along at breakeven or loss making levels ever since.
One advantage of farming either side of the equator on deep volcanic soils and with plenty of rainfall plus irrigation from rivers flowing down the Andes is the wide choice of crop possibilities. So, when coffee failed many farmers turned to bananas. It goes without saying that they also turned sour, although production continues over a wide area. Limited exports make margins for banana growers; the rest are fed to cattle and pigs or sold cheaply to the domestic population.
One of the latest bandwagons is cut roses grown under plastic, but with no heat. The number of rose producers has increased over five years from 200 to 2000, all of whom deliver most of their carefully bunched blooms to the nearest airport for export to the USA, Russia and western Europe. Coincidentally most of those that come to Europe enter via Holland, where they immediately and miraculously become Dutch roses and are re-exported as such. Why is that story familiar?
A similar industry has built up for selected outdoor vegetables. After only a few years the area of Ecuador devoted to broccoli has risen from zero to 3600ha (8892 acres), all of it for export. As the president of Ecuadors equivalent of the NFU, but with 2m members, Rodrigo Lasso, told me when we visited his farm: "Ecuador exports more than 50 agricultural products all over the world. But we have to be careful that we do not overdo niche production and drive down prices by oversupply."
Somewhat predictably he added: "What we need is the abolition of all trading barriers and the immediate adoption of free trade through the WTO. Europe must stop subsidising its farmers."
He was a charming man and given the situation in his country such remarks were hardly surprising. But he appeared to have a blind spot so far as America is concerned. He seemed not to be aware of the massive increases in aid to US farmers being agreed even as we spoke. Perhaps it had something to do with the fact that America has military bases in Ecuador and that the country is hoping for further cash aid from President George W Bush.
Looking back over our visits to both Peru and Ecuador the lasting impression is of enormous contrast. Of high tech rose growers flying their produce thousands of miles to market, farming literally next door to chaps who still hand-milked dairy cows. Of vegetable growers exporting hundreds of tonnes of product all around the world alongside subsistence farmers feeding guinea pigs in their kitchens to provide the meat in their diet. Of conspicuous wealth alongside grinding poverty.
Such contrasts breed instability. In such an environment it is all too easy to sow the seeds of revolution. Discontent is only just below the surface. And the poor are learning every day how the rest of us live. For the one thing almost every pathetic hovel had sticking up from it was a TV aerial.