The first fortnight of January of this year was completed and also the 15-day extension that the Ministry of Agriculture and Livestock (MAG) granted to exporters and banana producers to sign the contracts that allow the export of the fruit to the different international markets in the 2023.
However, the resistance of the producers to sign the contracts is maintained, whose ordinary term according to the Banana Law was fulfilled on December 29.
Richard Salazar, executive director of the Ecuadorian Banana Marketing and Export Association (Acorbanec), assured that only 35% of the contracts had been signed to date.
Signing of banana contracts: The banana law is showing that it is not valid at this time
“It stays the same, I don’t think they will rise above 35% of the contracted fruit. Producers definitely do not want to sign contracts to sell in spot. In fact last week it was for $10 a spots”, Salazar stated. This price is $3.50 more per box than the Minimum Support Price (PMS) that the MAG set for 2023, which was $6.50, despite the fact that this price was agreed between producers and exporters last September during the Banana Advisory Council.
“They only demand compliance with the law when the price spots It is low, but when they have to comply with the law by signing contracts, it simply does not matter, and the MAG authorities should make a decision in this regard,” added Salazar, who stated that “it is evident that the current law is out of date.”
Meanwhile, given the refusal of the producers to sign the contracts, the export sector approached the Minister of Agriculture and Livestock, Bernardo Manzano, with an approach.
Salazar revealed that the proposal of his sector is to export the fruit through the scheme spots, that is to say without contracts, but with the guarantee of a surety, that is to say that the export quota for what is not contracted is for the surety or guarantee that the exporter delivers for the purchase of bananas from the producer.
Banana export contracts remain uncertain. MAG would have given an extension until January 15
He explained that the surety is the guarantee that the MAG requests from the exporter to export fruit equivalent to one week of export. “For example, a bond for $650,000 allows me to export 100,000 boxes. Of these 100,000 I have contracts for 60,000 boxes, but because of the difference I don’t have contracts, that is, 40,000 boxes. So that this is allowed to be exported in spots taking into account the deposit that is deposited”, said Salazar.
And he added that “to export we need to sign contracts with producers and give a guarantee to support that weekly purchase. We have the surety, but not all the contracts. So, we are asking that, given the position of the producing sector of not signing contracts, they allow us to export what is not contracted in spots backed by surety.”
At first glance, the approach of the export sector to allow fruit that does not yet have contracts to be exported in spots It would be consistent with what its counterpart, the producing sector, has been asking for; however, Franklin Torres, president of the National Federation of Banana Growers of Ecuador (Fenabe), clarified that “producers are asking for exactly the opposite.”
Torres explained that his sector precisely requires compliance with the Banana Law so that the contracts have the guarantee from the MAG for their compliance; and that the lack of this guarantee is precisely the reason for his refusal to sign certain contracts that do not have the bonds in the Ministry, by revealing that supposedly the ‘managers’ of these companies, who are the ones who sign the contracts, are not really the owners of these companies, but lower-ranking employees (cleaning staff, helpers, etc.).
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“Those are part of the irregularities and illegalities that have not been corrected and that these vices continue in the current contracts. We have asked the MAG to publish the companies that can export and their contracting capacity to find out which are the illegal companies. We want transparency in the banana business,” said Torres, who assured that they have been asking the Ministry of Agriculture for concrete measures in this regard for two years and that the State portfolio can make the decision and carry out actions in a few days if it wanted to.
This newspaper consulted the MAG about the approach presented by the export sector and whether it was going to be taken into account. From the Ministry it was clarified that the bond becomes effective for non-compliance with the payment of the minimum support price, as long as the producers present the complaint before the MAG and have signed their contracts.
“Producers who do not have signed and registered contracts, this State portfolio will not be able to comply with the administrative processes to make the payment effective,” warned the MAG. (YO)
Source: Eluniverso
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