Fresh Del Monte Produce has announced what is says was a difficult decision to cease operations on approximately 1,200 hectares of banana production in the Atlantic region of Costa Rica, impacting four banana farms and the lay off of more than 850 plantation workers.
The decision responds to a sustained and significant change in the country’s evolving environment, which has fundamentally altered the export agriculture economy.
In a relatively short period, the Costa Rican colón has strengthened, moving from around ₡700 per dollar in recent years to close to ₡450. For export producers, the impact is direct: revenue is generated in dollars, while most costs are incurred in colones. As the local currency strengthens, each dollar earned translates into fewer colones, at a time when production costs continue to rise.
The currency movement “fundamentally altered” agricultural exports in the country, said Jorge Pelaez, Vice President of Fresh Del Monte for Colombia, Brazil, Ecuador, and Central America. Meanwhile, “production costs continue to rise,” he added.
Banana producers face increased pressure from plant diseases, including Black Sigatoka and preventative measures against TR4, greater climate variability, and rising input costs such as fuel, logistics, and agricultural materials.
The company has repeatedly requested authorisation for new, more effective products for controlling Black Sigatoka and has emphasised the urgency of these approvals. These products are not only more effective but also more environmentally friendly, and their authorisation would also generate economic benefits thanks to their greater effectiveness and increased competition among the chemical products available on the market.
In a business with tight margins, dollar-denominated prices, and limited ability to adjust prices, the combination of these pressures has significantly increased production costs, creating a cumulative effect on margins that is becoming increasingly difficult to absorb. In practical terms, farms that were viable just a few years ago are now operating at a loss.
Although this decision is difficult, the company indicated that it is necessary to protect the long-term sustainability of its operations in Costa Rica.
The trade union Sindicato de Trabajadores de Plantaciones Agrícolas (SITRAP) that represents banana workers in Costa Rica put out the following statement to its members:
“Report on closures and redundancies at banana plantations (Guácimo and Pococí area)
We wish to inform you that a number of banana plantations are currently being closed, mainly in the area where work related to SITRAP is being carried out. The affected plantations are:
- Duacarí 01
- Duacarí 5
(in the Duacarí district of Guácimo)
In addition:
- Tortuguero Plantation
- Esterlina Plantation
(in the Cariari sector of Pococí)
To date, the total number of workers made redundant has not been precisely quantified, as the process is taking place gradually, as the fruit is harvested from the plantation.
However, it is known that on Monday 4th and Tuesday 5th, redundancy notices were handed out to several workers. It is estimated that, on average, each farm employs around 200 workers and approximately 25% of them have already been notified of their redundancy.
It has also been indicated that some workers may be transferred to other work sites within the same company, due to staff shortages at other plantations.
Social and labour impact
The situation is causing great concern among the affected families, as most workers in the region depend directly on this source of employment. Furthermore, many have no experience in other areas of work, which makes their reintegration difficult.
The banana industry remains one of the main sources of employment in the region, particularly as it has been taking over land that was previously
The banana industry remains one of the main sources of employment in the region, particularly as it has been taking over land that previously belonged to small-scale farmers engaged in other agricultural activities.
For the trade union organisation, this situation also represents a significant blow, both due to the loss of membership and the impact on plantations where there was a significant union base.
Climate of uncertainty
There is a palpable atmosphere of fear and uncertainty amongst workers. Indeed, people from other farms are choosing to resign as a precautionary measure, given the risk that their workplaces may face similar situations.
The company has indicated that there are other farms with problems, although so far only the four mentioned have been confirmed.
Harvest rescheduling (“chopeo”)
In addition, the company is implementing what is known as “chopeo” or harvest rescheduling. This process does not necessarily entail the total closure of a farm, but it does involve a significant reduction in production for approximately nine months, which leads to partial job losses.“
The Coordinating Body of Latin American Banana and Agro-industrial Unions (COLSIBA) has called upon the authorities of Costa Rica , social organisations and the international community to promote measures that protect employment, guarantee decent working conditions and prevent the burden of economic difficulties from falling on the workers.
Photo: Banana Link
