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#511563 - 02/12/16 04:45 AM Fruta Bomba To Close: 251 Nortenos Will Be Left Jobless  
Joined: Oct 1999
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THE CLOSING COST OF "FRUTA BOMBA" PAPAYA INDUSTRY

The papaya industry had its origins with a project funded by the United States. With the assistance of USAID (United States Agency for International Development), a company called Belize Agribusiness Company (BABCO) was created in 1985.

BABCO was successful agronomically, but it was not able to set up a lasting marketing chain. In 1990, a former employee of BABCO who persisted was able to successfully grow the fruits in San Andres in Corozal. Marketing trials were carried out with J. R. Brooks, a marketing company based in Florida. Fruta Bomba was thus established as a subsidiary of Brooks Tropicals in Belize. Brooks Tropicals produce papaya in Mexico, Belize and Guatemala.

Since then, Belize became the second largest exporter of papaya to the USA and Canada, second only to Mexico, and ahead of Brazil. This is a leadership position in a rapidly growing segment of tropical fruits, in large-value markets with significant potential for long-term growth.

Papaya is the fourth most important traded fruit in the world behind banana, mango and pineapple. It only started getting popular over the last two decades, so it has much more to grow.

Unlike the Hawaiian papaya, Belize papaya is non-genetically modified, being more wholesome and preferred by consumers.

The declared value of papaya exports ranged between US$6.5 million currently to a peak of US$15 million in 2006, before hurricane Dean battered the industry. This accounts for around 3-4% of total exports. While small, relative to the total export value, it is not insignificant, especially in a country where exports are falling and imports exploding. Belize has bills to pay and it should be expanding exports, not closing them down.

The industry employed 500 to 1,000 persons directly and indirectly. This is around 1% of the total labour force. While small relative to the total employed, it is not insignificant, especially in a country where long-term unemployment is around 18%. Belize needs to be creating more jobs not destroying them.

2009 global exports of papaya was around US$197.2 million (FAOSTAT 2012b), with Belize controlling 11% of the global exports. This is a leadership position that should be developed upon, not squandered.

The principal investor was Brooks Tropicals of the U.S.A., a leader with established distribution tentacles in the lucrative North American market for a wide range of tropical fruits, many of which Belize can produce competitively, if the right policies were in place. They should be expanding here, not closing down. Their presence here should be inviting to more industries, not discouraging them.

The industry was located in the area between Orange Walk and Corozal Districts, an area already challenged economically. This area, particularly Corozal, needs more industries and jobs, not less.

The special-interest economy that prevails here is difficult for anyone to work and reap just rewards for their work. (The high tax on fuel, the high taxes on production inputs, the high cost of transportation, the high cost of port and shipping fees, the high political costs, the low investments in agricultural health and development, the low investments in industrial infrastructure). All of these are part and parcel of service to the status-quo, special interest economy, based on politically-driven, discretionary "development incentives" serving a small minority of persons and their shadow companies, compromising the long-term development of Belize.

Add to these the growing corruption and unfolding, increased risk of not being able to move capital freely due to tightening financial restrictions and this closing down of Fruta Bomba papaya industry is just the tip of the iceberg. Other industries are currently on life-support in the intensive-care-unit.

Where are the business organizations? the unions? the civil societies? the youth? Her Majesty's Loyal Opposition? Who loves Belize enough to stand up and demand the necessary changes?

- By Richard Harrison

#514653 - 06/16/16 01:56 PM Re: Fruta Bomba To Close: 251 Nortenos Will Be Left Jobless [Re: Marty]  
Joined: Oct 1999
Posts: 53,356
Marty Online happy
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Fruta Bomba closes operations

Fruta Bomba is winding down its operations in Belize. The Guardian Newspaper is reliably informed that the company is this week doing the final clearing up of its operations in Belize.

Earlier this year, in February, Brooks Tropicals the parent company for Fruta Bomba & Belize Food Packers Ltd., which was the sole papaya exporter from Belize, terminated the services of 123 employees. That was as part of the company winding down its operations in Belize. The company had over 250 employees and at the time explained that it would continue to shut down its operations during a period of 6 months. It apparently is doing so much earlier than that announcement.

As the company began to wind down it kept decreasing its staff. This week there will be only about 15 workers left to clear up what is left. We understand that in its winding down, the company will also plow down all its papaya trees which are currently in the fields.

Fruta Bomba and Belize Food Packers have been operating in Belize for 22 years but it met financial hard times after hurricane Dean in 2007 with the company being unable to rebound from losses it suffered during that storm.

During its operations in Belize the company enjoyed EPZ status as well as other fiscal incentives including tax incentives. Even though it enjoyed this status the company claimed that labor costs were a contributing factor to their exit from Belize. The company is sourcing fruit from Guatemala and are also investing in the Dominican Republic. Labor cost in the latter country is at .33U.S. cents while in Belize it is $1.65U.S. per hour.

The Guardian


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