Australian Banana Industry 

The Australian Banana Industry is a paradox. When we think "banana production", a number of producing countries, brands and cliches immediately come to mind.  Panama, Ecuador, Philippines, the Caribean; Bonita, Chiquita, Dole, Del Monte, Turbana; banana republic - you name it.

What does not automatically turn up top of mind is Australia.  Yet, Australia is indeed a banana producer, taking care of its domestic consumption generally...just as long as there is no Cyclone with other ideas.

The global brands are not represented on the Australian banana plantations in Queensland and New South Wales. Chiquita had attempted an entrance in the nineties but its business model failed. Australia is a  G20 member and as such did not take kindly to US banana industry management techniques honed in the Central American banana wars of the 1930s. And although  the Australian Chiquita team was somewhat more considerate at the time, the gulf ended up being to wide to bridge.

The Australian banana supply situation can be feast or famine. At times of oversupply, bananas are being retailed below the cost of production. When the fruit is in short supply, retail prices of A $13.00+/ kg are not the fidget of someone's imagination but grim reality.

The Australian banana business differs in two aspects substantially from that of any other developed world banana market. Firstly, the fruit is produced on the same landmass where it is consumed. Secondly, the banana industry is protected from global competition as banana imports into Australia are prohibited.

Australian Banana Supply Chain

To put it in simple terms...Australian bananas do not travel by ship from the production area to the population centres. Anywhere else in the world, ships are a necessity. This means on one hand that the banana supply chain is easier to manage from either the grower or the retailer end. "All one needs" are long distance trucks and that is a system Australians have perfected for all sorts of reasons, not just bananas. They call them road trains.

On the other hand, the Australian Banana Industry had to develop its own supply chain model, as the standard model - from farm on truck to ship, etc - simply did not apply.

Protection

The Australian primary industries are today one of the last bastions of trade protection and not just in bananas.  New Zealand apples for example, come to mind.

Bananas cannot be imported into Australia and the Australian growers are therefore protected from foreign competition. As bananas are typically grown in developing rather than developed countries, the global banana companies such as Chiquita, Del Monte, Bonita and Dole are clearly at an advantage when it comes to labour costs and economies of scale. If the banana market were to be deregulated, the Australian industry would quite frankly struggle to survive.

As trade protection is a "no-no" these days, quarantine and biosecurity matters are typically cited as the reason for wishing to keep foreign produce at arms length. With the apple position having been ever so reluctantly conceded at Government level, the Australian Banana Industry is more or less the produce industry standard bearer of protectionism...and as banana growers can vote in State and Federal elections and are a fairly vocal lot, no change is anticipated in the foreseeable future.

A Closing Thought

Yes, we do live in  global economy these days, where everyone and everything is freely accessible...and as world trade does not revolve around bananas, the Australian Banana Industry is under the spotlight.

But - is it really such a bad thing for a country to say, "well, actually, we value our ability to be self-sufficient in producing certain crops right here in our country. We see food production as a basic human necessity and food security matters to us. So if we have to choose between letting foreign fruit in and watching our local industry collapse;and, keeping foreign fruit out and protecting our industry, we choose our industry, thank you very much." ?

That argument does have some merit, don't you think?

Bananas

Fruit Trade HQ

When Bananas Ruled The World