Bananas are Ecuador’s second non-oil export. In 2022, fruit exports ended with 3.268 million dollars. But despite the importance of this product, its marketing is still regulated by a law that has been in force for 26 years, when the banana business had a different dynamic.

José Antonio Hidalgo, Executive Director of the Association of Ecuadorian Banana Exporters (AEBE), cites figures from 1994, three years before the Banana Law took effect. In the mid-nineties, around 68% of exports were handled by three export companies: Bananera Noboa (34.84%), Ubesa (17.16%) and Reybanpac (8.68%); the rest, 39.32% of the fruit, was shipped by 126 remaining companies.

Now there are more than 277 export companies.

Before, whoever steered the ship steered the business, the industry has changed, now it is much more divided in terms of diversification,” says Hidalgo, who adds that the structure of the market has also changed. In 1994, the largest percentage of the market was held by the United States (25.09%) and Europe (41.41%), but by 2022 this share had fallen to 9.37% and 25.88%, respectively.

Weather and high demand in destinations, due to the cold season, favored bananas in January with 5.41% higher exports

For Hidalgo and other players in the sector, the law is responsible for this loss of competitiveness. “Our neighboring countries like Colombia and Central America got a market for us; and that is precisely because of the excess regulatory framework that the banana sector had”, explains the executive director of AEBE.

However, the fact that the law has remained the same for almost three decades is not the result of a lack of proposals for its reform, but rather the political will to implement changes.

Only in the last six years, in Committee for Food Sovereignty and Development of the Agriculture and Fisheries Sector of the National Assembly There are five legislative proposals aimed at regulation, consolidation and reform of sector regulation.

In the parliamentary system, two of these projects, from 2017 and 2018, appear to be in process (distribution for second debate); one from 2019 is under revision in the Legislative Administrative Council (CAL); the second one from January 10, 2022 is under review in the Committee for the first discussion, as well as the last project presented on September 8 last year.

EL UNIVERSO newspaper consulted more details about these projects Vice President of the Commission, Lucía Placenciawho revealed that since 2017, several legislative proposals on placing bananas on the market have been consolidated and work has been done on a legislative proposal that has a report for the second debate, which the Commission confirmed in the previous period, in 2018, but that it has not been put on the agenda since then .

“This project had some red lines for the previous Government, such as the issue of lifting the ban on new planting of areas, where it was proposed that it be approved by the Assembly, before the request of the President of the Republic persisted. . This makes it a somewhat bureaucratic and inflexible process,” says Placencia, who explains that “since it is a law from a previous period, the current regulations of the Organic Law on the Legislative Function (LOFL) that determine the deadlines for the introduction in full “.

Banana exporter guilds are aware of these projects. Richard Salazar, Executive Director of the Ecuadorian Banana Marketing and Export Association (Acorbanec)indicates that in the last two (2022) the union has commented to the Commission that the regulations are not aligned with the reality of the commercialization of business.

Salazar reveals the underlying reason: 55% of banana export destinations are to buying markets stainswhich is a cash sale and the price closes every week, it can be high or low.

In 2023, for example, the price stains The average price, from the first to the ninth week, was $10.1 per box of bananas, well above the minimum support price ($6.50). This informal sale, because it does not appear in the Law that compels producers and exporters to conclude contracts for obtaining fruit, was more pronounced this year when most producers refused to sign contracts on sales at prices. stains.

Despite the deadlines for signing the contract, the sale of bananas at the spot price was imposed in 2023

“It is already being sold stainsbut it is sold informally and we want to formalize it,” says Salazar, who says that including the price stains This is one of the main reforms that the new Law must contain.

Hidalgo reinforces this need by ensuring that Ecuadorian exports have increased in other non-contract markets, which are more volatile, such as the Middle East and Russia, which are driven by prices stains.

Placencia is familiar with the demands of the banana unions regarding the type of contract.

Another aspect they are looking for, adds the vice-president of the Commission, is that the ban on planting bananas can only be lifted exceptionally if there is a pest affecting the fruit, e.g. Fusarium race 4; and exceptionally allowing areas for new planting that would give growers the opportunity to start with clean soil until the pest is eliminated from contaminated soil.

On the other hand, from the manufacturing sector, Franklin Torres, President of the Ecuadorian Banana Federation (Fenabe)assures that the Commission did not invite them to discuss any project to reform the Banana Law, but believes that it is not true that the Law is inapplicable.

“The problem is not the law, but the permanent disrespect of the economic sector and the disrespect of those on duty in the Ministry of Agriculture, who, except for the current ones, have all been blind so far. , deaf and dumb in the face of the permanent violation of the current Banana Law”, criticizes the presenter, who confirms that the Project 2018, presented by Carlos Falquez Batallas, was socialized and discussed in two debates, but it was still archived.

Placencia rules out the possibility of the Commission moving forward with the project approved for a second hearing in 2018. “Since then, five years have passed and many issues have changed and it would be wise to work on new regulations that fit the current circumstances,” advises the Vice President of the Commission.

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Salazar recalls that he discussed the possibility of this new regulation with former minister Bernardo Manzano, and hopes that the process will continue with the new Secretary of State, Eduardo Izaguirre.

“In fact, we talked with Minister Manzano about the possibility of reforming the Banana Law and the same with the current minister, because he was the deputy minister at the time, I think the communication continues the same,” says the head. from Acorbanec.