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