GIs and Rural Development: a Case of Bananas

Machine Translation: English
  • Name: Corporacion Bananera Nacional Corbana S. A
  • Country / Territory: Costa Rica
  • IP right(s): Geographical Indications and Appellations of Origin
  • Date of publication: October 2, 2012
  • Last update: January 14, 2015

Corporación Bananera Nacional Corbana S.A., Costa Rica

The Corporación Bananera Nacional Corbana, S.A. (CORBANA) – the national banana corporation – was established in 1971 in Zapote, San Jose, the Republic of Costa Rica (Costa Rica). Partly owned and managed by the banana producers themselves, CORBANA is a public entity organized as a stock company (a business owned by shareholders: farmers, the Government and nationalized banks, in this case) that supports banana growers in Costa Rica.

The banana tree and its nutritious fruit has been a regular feature of the Costa Rican physical, economic and culinary landscape for generations (Photo: Flickr/Ed Suominen)

By developing banana marketing and commercialization strategies, the company has been able to exploit new branding methods and open new markets for the country's farmers. Moreover, CORBANA carries out state of the art research and provides technical advice and support services that have improved producers' farming skill, enhanced farming practices and developed environmentally friendly agricultural processes. Furthermore, the company acts as a lobbyist on behalf of banana farmers in negotiations with government, fruit vendors and with industry partners in the international community.

Due in large part to CORBANA's many activities, the socio-economic status of Costa Rican banana producers is improving, banana yields are increasing and the country's rich environment and banana growing culture is being sustained.

Research and development, partnerships and financing

Although bananas provide sustenance for millions and employment for many hundreds of thousands of Costa Ricans, the value of bananas in the market has often been undermined due to a number of factors including price fluctuations in the international market, adverse weather and crop disease.

In order to manage these challenges whilst developing the country's banana industry, Costa Rican banana producers have relied on CORBANA's research and development (R&D) and other support strategies. Indeed, the farmer-owned company – previously (until 1990) known as the National Banana Association (ASBANA) – has played a leading role in reviving agriculture and improving economic competitiveness in the country.

To achieve its many aims, CORBANA has worked with several partners including banana growers; government departments (such as the Ministry of Agriculture – MOA); and academia (including the University of Costa Rica – UCR).The company's partners also include members of industry, such as the Institute of National Innovation and Transfer of Agricultural Technology (INTA), and international agencies including Rainforest Alliance and the Brazilian Agricultural Research Corporation.

With the help of such partners, CORBANA's R&D department offers scientific laboratory services and centralizes and disseminates state of the art information about the industry to producers and other stakeholders.The company's main research unit – known as the Directorate of Investigations (DoI) – is divided into four specialized sections. The Section of Soils and Drains, for instance, coordinates a wide range of research such as studies on the optimal use of fertilizers and organic chemicals on farms.

Other departments of the DoI include the Section of Environmental Protection and Entomology (which analyzes the environmental impact of pesticides and pests); the Section of Plant Pathology (which diagnoses plant disease and develops systems for its management); and, the Section of Plant Physiology (which carries out studies to improve plant varieties and increase banana fruit yields).

One of the main functions of the DoI is to help disseminate information from the R&D sections to the producer via conferences, publications, press releases and the media. Another method for facilitating information and technology transfer is through the Technical Assistance Division (TAD) of CORBANA.

Created in 2003, TAD's primary role has been to transfer technology from the DoI via teams of agricultural engineers to middle-managers of banana farms. The division manages out-reach programs which provide training seminars for farmers (involving technical presentations and practical demonstrations of farm management methods) and compiles post-training evaluations and reports.

Such training programs have included ways to improve banana productivity; how to refurbish farm land; and presentations on agricultural diversification. The information gathered from these seminars has been permanently made available to producers via CORBANA's centrally held database – the Center for Documentation and Information.

Workers at a CORBANA packaging plant cut the "hands" of the banana at the stalk and place the fruit in cold running water for cleaning (Photo: CORBANA)

The company, moreover, facilitates technical-scientific international conferences where producers and experts in banana cultivation gather in order to exchange the latest ideas in the industry.

For instance, 25 speakers from 10 countries participated in a five day meeting at the 4th International Banana Conference (IBC) – an event (held every two years) that was convened by CORBANA in 2012, in San Jose, Costa Rica. With approximately 600 people in attendance, the IBC conference covered a wide range of topics including ethical means of banana production (which respect the environment and the rights of workers) and the latest developments in banana plant disease control.

In order to fund such conferences and to meet its day-to-day costs, CORBANA relies on a voluntary, tax-free contribution (US$0.05 per box of exported bananas) from banana producers. Based on these contributions, the NGO has managed to increase investments in R&D from US$1 million in 1981 to US$12 million in 2006.

Between 2007 and 2009, moreover, CORBANA established two new research facilities including the Banana Molecular Biology Center (BMBC) in La Rita de Guapliles, the province of Limon, Costa Rica. Founded due to a US$1 million investment, BMBC has become a cutting edge facility producing industry-leading research on the interaction between the banana plant and the environment.

In addition, because CORBANA's banana producers own a 33% stake in the company's shares while having representatives on its Board of Directors, the farmers have been empowered to guide the agenda of the industry in Costa Rica. As of 2012, there were 126 Costa Rican farming communities who were members of CORBANA.

Traditional knowledge

The banana tree and its nutritious fruit has been a regular feature in the Costa Rican physical, economic and culinary landscape across three centuries. As early as the 1870s, banana plantations were springing up along newly built railway lines in Limon, on the country's Caribbean Sea coast. Indeed, a mixture of privately owned and communally managed plantations crisscrossed the country right up to the coast's edge. This has given rise to a long history of banana farming in the country.

Tradition and experience in Costa Rica dictate that banana plants have only one bunch per tree. The tree is cut down about midway along the stem and the fruit removed by a machete during harvests so that it can sprout fresh fruits – after nine months – for the following year. With between five and fourteen “hands” per bunch of bananas, the cut fruit is transported by workers (via conveyor belt in the modern way) to a processing plant.

Once at the plant, workers cut the “hands” of the banana at the stalk and place the fruit in cold running water for cleaning – this process removes dirt and the naturally sticky residue that emerges when the stalk is cut. In the modern process, bananas that do not meet the required standards are discarded and the rest are sprayed with fungicide to prevent disease. When the bananas are dry, they are placed in boxes (which are lined with plastic in contemporary processes) for packaging and shipping.

By 1880, the first banana exports from Costa Rica to the United States of America (USA) began. Thereafter (1889), The United Fruits Company – an American tropical fruits trading corporation that was based in New Orleans, the state of Louisiana, USA – was established as a leading importer of Costa Rican bananas. Subsequently, the fruit has become a mainstay of the national diet and a vital export crop for the country.

As of 2012, hundreds of banana plantations dotted the country's landscape and millions of cases of banana fruits were exported from Costa Rica annually. CORBANA has relied on the country's illustrious banana farming tradition in order to develop a distinct reputation for the fruit in the international market.

The company's R&D labs have created a bank of microorganisms and a 1.5 hectare plantation that it relies on to carry out experiments to improve a banana plant's resistance to pests (Photo: Flickr/CIAT)

Goods with specific geographical origin

Costa Rica stands on the Central American isthmus and borders the Caribbean Sea to the east and the Pacific Ocean to the west. In total, the country encompasses 51,100 square kilometers (km2) – including several islands, lakes, mountains and volcanoes and approximately 1,500 km of coastline.

The country, moreover, has an all-year-round tropical climate (based on two seasons: wet – May to November; and dry – December to April) that is divided into several microclimates depending on the elevation, rainfall and topography of each region. Humidity levels in the Central American state, for instance, vary greatly between the east coast (where it is high) and the west coast (where it is low). Average temperatures in the country, furthermore, alternate between the lowlands (approximately 27 °C) and the highlands (approximately 10 °C).

Costa Rica's temperate weather and specific geological heritage (including its seas and coastlines, volcanoes and specific soil quality) are distinctive factors that have made the country ideal for growing bananas. This terroir – the degree to which a product can be distinguished based on its geography and farming tradition – has been exploited by banana producers in Costa Rica in order to differentiate their products from those of others in the market.

Geographical indication

Geographical Indication (GI) is a useful intellectual property (IP) device that producers have relied on in order to link their products to a defined place of origin or farming tradition. In order to achieve a GI for Costa Rican bananas, CORBANA collaborated over a three-year period (beginning in 2008) with several stakeholders such as the government of Costa Rica (specifically the Ministry of Foreign Trade), members of academia (including UCR) and international partners (such as the European Union – EU). In this way, the NGO was able to produce a detailed study of banana cultivation history and practice in the country.

Based on the study, in 2010 “Banano de Costa Rica” became the first GI to be registered (#20230) in the country (and the first for a banana product in South America) via the Registro Nacional – the country's IP office. The following year, “Banano de Costa Rica”– Bananas of Costa Rica – was registered via the Lisbon System for the International Registration of Appellations of Origin managed by the World Intellectual Property Organization (WIPO).

The registration defines a specific geographical area of banana production – “the entire territory of the Republic of Costa Rica”. Farmers from that region who also adhere to CORBANA's strict Code of Conduct (CoC) for producers have been permitted to use the “Banano de Costa Rica” label on their products.

Branding and commercialization

CORBANA has utilized the “Banano de Costa Rica” GI label in order to consolidate its market position and to break into new commercialization opportunities around the world. As the first Latin American state to receive a GI for bananas, Costa Rica has utilized the IP device as a means of providing the country's farmers a competitive advantage (especially in the EU, Costa Rica's main banana export destination and a market with a strong GI tradition) over regional rivals.

Moreover, in order to compete against low cost, high volume bananas from other countries, CORBANA has focused on creating a reputation for quality. Motivated by a desire to break into a competitive international market, the farmer-owned company has implemented internationally recognized quality and health and safety standards in its farms. For example, Global Good Agricultural Practice (Global G.A.P) – an international not-for-profit organization that promotes safe and sustainable food production – has worked closely with the company in order to improve farming practices.

Other established certification bodies that have collaborated with CORBANA are the International Organization for Standardization (ISO), a global non-governmental organization (NGO) that establishes standards for products and services, and Social Accountability Accreditation Services (SA), an independent body that certifies organizations which promote healthy work environments. SA-8000 certification, for instance, covers eight core principles such as working hours, child labor, discrimination and freedom of association.

Demonstration Projects allow farmers to implement good farming practices that improve quality (Photo: Flickr/AliEminov)

In 2012, virtually all of CORBANA's plantations had at least one international certification for safety or quality. By utilizing such certifications, the company is able to assure customers of its products' high standards and ecologically friendly status. In addition, CORBANA has been able to ensure good working conditions and fairness for its banana producers.

With modern and fair production practices at the heart of its development model, CORBANA has impressed its relatively affluent customers in the EU and North America and, as a result, the company has been able to charge premium prices for its products in the international market.

Having relied on the GI system and developed quality, value-added and certified banana crops, the farmer-owned company has implemented imaginative marketing strategies in order to boost commercialization. CORBANA has engaged in high profile product placement and advertising campaigns in some of its most lucrative markets in Europe such as the Kingdom of Norway (Norway).

The company was the official sponsor (and the only fruit vendor) of the 2008 marathon in Oslo, Norway. Over 42,000 of CORBANA's bananas and 27,000 of its brochures were distributed (over a two day period) to thousands of participants and fans who attended the event (including children who participated in a mini-marathon race).

The campaign not only allowed the company to raise awareness of the CORBANA brand (including via TV coverage of Norwegian celebrities enjoying the organization's fruit) and to emphasize the health benefits of bananas; it also presented an opportunity to highlight CORBANA's ethical and charitable credentials. Indeed, the company had a successful collaboration during the marathon period with Right to Play International (RPI) – a charity that promotes children's health in developing countries via sport, play, health and peace activities. 50% of money raised following the CORBANA-supported mini-marathon was donated to RPI projects.

The farmer-owned company, furthermore, has attracted young consumers to its products through fun and educational campaigns about the industry in collaboration with partners such as the Banana Institutional Council (CIB is the Spanish acronym) – an organization of the Costa Rican banana industry that coordinates collaborations with several partners including the media. Working with CIB, CORBANA created a specialized cultural and educational space at the Museo de los Niños (the Children's Museum) – an interactive center for children in San Jose, Costa Rica.

Known as the “Banana Room,” the space allows visiting young people to enjoy presentations about the industry via topics such as environmental conservation and pest control. Visitors to the museum also enjoy a cable-car ride that traces the route taken by a banana from planting in a plantation to packaging in a packing plant. Not only has this interactive display (and events such as the Oslo marathon) educated young adults about the banana industry in Costa Rica; it has introduced the company's products to a potentially lucrative future customer base – children.

The farmers-owned company, in addition, has further promoted its fruits internationally via partnerships with national and international entities including the Foreign Trade Corporation of Costa Rica (PROCOMER is the Spanish acronym) – the export promotion agency of the Costa Rican government.

In 2009, the company and PROCOMER marketed the country's bananas at a Costa Rican fresh produce booth at Fruit Logistica – one of the world's leading trade fairs for fruits and vegetables based in Berlin, the Federal Republic of Germany (Germany). Indeed, a key role of CORBANA has been to open new commercialization channels for Costa Rica's banana producers through product promotion activities on the international stage.

Parallel to its commercialization and marketing strategies, CORBANA has expanded its producers' capacity and market access by facilitating price negotiations with stakeholders (including vendors), providing market information and credit to farmers and commercializing bananas via the company's own fruit vending subsidiaries. The International Banana Company, SA (Finca San Pablo), for instance, is a CORBANA subsidiary that was established in 1968. Finca San Pablo has employed over 200 people and exported approximately 690,000 boxes of the company's bananas annually.

As CORBANA's international reputation for value-added quality products has grown, it has been able to expand into new regions and markets. To this end, in 2009 the company took part (for the first time) in the Eurofruit Congress Middle East – a leading fresh produce conference held in Dubai, the United Arab Emirates. Having the fifth largest banana imports market in the world, the Middle East represents a growing and potentially lucrative commercialization opportunity for Costa Rican banana producers.

As of 2012, CORBANA produced and commercialized bananas within Costa Rica and exported the fruit to Europe, the USA, and, increasingly, to the Arabian Gulf region.

Environment, public health and food security

Costa Rica has been endowed with an impressive environment with rich flora & fauna. The Central American nation comprises just 0.03 percent of the Earth's surface area but holds 5 percent of the planet's biodiversity. Although Costa Rica enjoys a splendid and temperate climate and environment that is conducive to banana crop cultivation, the country has had to endure occasional but devastating environmental disasters and challenges – extreme rains, floods and winds, pests, crop disease and artificial pollutants.

To reduce its carbon footprint, CORBANA has secured vast carbon sinks in collaboration with local, regional and international partners (Photo: Flickr/The LEAF Project)

The upshot for many of the country's farmers – including banana producers – has been crop destruction, poor yields, food insecurity, financial ruin and poverty – as well as poor health. As a member of Comisión Ambiental Bananera (CAB), the Environmental Banana Commission, a body whose remit includes developing Costa Rica's good GI reputation for bananas, the environment and, by extension, food security and producers' health has become a priority for CORBANA.

The company's research laboratory at BMBC, for example, has created a bank of microorganisms and a 1.5 hectare plantation (with 150 varieties of banana plants) that it relies on to carry out experiments for improving a banana plant's resistance to pests. The laboratory has investigated and created remedies against a number of crop-destroying organisms including the banana-root nematode (radophulus similis) – a roundworm which attacks the roots of a plant and thereby makes it vulnerable to toppling over in heavy rain or wind. Damage caused by this organism has led to a reduction in banana yields.

BMBC, moreover, has carried out tests that have increased a banana plant's resistance to disease such as black sigatoka – a fungus infection that affects the leaves of a banana plant and disrupts its ability to photosynthesize and thus reduces yields by approximately 50%. Because fighting black sigatoka costs the country US$ 12 million annually, while increasing the use of pesticides to fight the fungus pollutes the environment increasingly, reducing pesticide usage while cost-effectively fighting crop disease is a main goal for the company and the country.

Not only are the frequent uses of pesticides (including insecticides, nematicides, and bactericides) on farms a financial strain for Costa Rican farmers; as such chemicals run off farmlands, they have also oftentimes polluted the surrounding environment (including farm soil, ground water, rivers and streams). These pollutants, moreover, can cause harm to plant, human and animal health (including marine life).

To reduce incidents of such pollution, CORBANA and its partners have developed strategies to reduce pesticide-based contamination by 50% under a scheme called Reducing Pesticide Run-off to the Caribbean Sea (REPCar). REPCar began in 2005 as a multi-national project involving countries around the Gulf of Mexico. The project consists of several plantations where data on pesticide usage is collected and analyzed and the surrounding environment is monitored for key factors in plantation pollution such as rainfall, soil loss and water run-off into the sea.

A second component of the program is the Demonstration Project (DP). DPs are farms that have been set aside so that producers and managers can be given practical instructions on good farming practices (such as tips on best uses of pesticides). In addition to the REPCar and DP initiatives, CORBANA has implemented supplementary environmental strategies to help the industry's goals in Costa Rica of being carbon-neutral.

To this end the company has secured vast areas of forest cover (also known as carbon sinks) in collaboration with local and international partners including Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ, formerly GTZ) – an international development agency based in Eschborn, the Federal Republic of Germany.

Since 2010, CORBANA and its partners, including GIZ, developed the Sixaola Agro Forest (SAF) reserve – a wooded area of approximately 1,250 hectares located in Cordillera de Talamanca, a mountain range between San Jose and the border with the Republic of Panama. Via this initiative, over 25,000 trees were planted in the area and environmental education was promoted in the schools within the Sixaola-Changuinola border community.

Forming part of the Talamanca Biological Corridor of the Caribbean (a 1.5 million acre strip of preserved forest), the SAF, which was an area previously used for banana and coffee plantations, has preserved the habitation of several species of plants, animals (such as pumas, jaguars and macaws) and human inhabitants – including many of Costa Rica's indigenous people. An added benefit of the SAF is to offset the annual carbon dioxide (CO2) emissions from CORBANA's production process (which was 848 tons in 2010) by sequestering 1,044 tons of CO2 from the air annually.

CORBANA affiliated companies have erected community centers and recreational facilities which also cater for the children of employees - pictured (Photo: CORBANA)

Furthermore, CORBANA has worked with local communities in the country in order to improve its members' capacity to resist environmental disaster, to recover from crop loss in its aftermath, and to live financially stable and healthy lives. Following devastating deluges in the country in 2008 and 2009 (which led to a 10% fall in banana exports), for example, the company established a fund (US$8 million in loans) that farmers could rely on in order to offset their financial loses.

CORBANA has also developed capacity building programs intended to enhance the educational opportunity and health of its farmers and their families. One of the company's subsidiaries, Finca País S.A (Finca País), developed (between 2006 and 2009) a “Comprehensive Plan of Salvation” (CPS) initiative intended to improve workers' professional and domestic lives.

Part of the CPS involved upgrading 39 homes of the subsidiary's workers, erecting a community center where employees could receive job training, and creating a space where employees could enjoy recreational activities (these catered for workers' children, too). The initiative also established a primary school for employees' children.

Other CORBANA affiliated plantations have provided improved housing and healthcare to members. Indeed, one of CORBANA's main priorities is the improvement of its members' health. Working with CAB and others including the Ministry of Health in Costa Rica, the company has developed several health programs such as United Against Dengue (UAD) – an educational initiative involving 8,000 school children and their families. UAD programs have trained primary school children in the country on environmental issues including methods of eradicating and protecting against mosquitoes – a carrier of the potentially life threatening dengue fever virus.

Having trained over 57,000 students and improved the health prospects of over 300,000 Costa Ricans, these programs have been successfully implemented in over 100 schools in Pococí, Guácimo and Matina, in Limon province, Costa Rica.

CORBANA's comprehensive strategy of investment in environmental and human resources has ensured that the company's banana products are high in quality. These GI labeled products, in turn, have earned a premium price in the market and provided key funds that have allowed CORBANA to continue supporting the socio-economic condition and health of its members and their families.

Business results

CORBANA has managed an impressive transformation in banana cultivation in Costa Rica and in the life and prospects of banana producers in the country. In large part due to the company's efforts, the Central American state ranks third in the world in banana exports and first in the world in terms of productivity per area (averaging around 2,500 boxes per hectare). In 2011, Costa Rica produced more than 106.5 million boxes of Banano de Costa Rica GI labeled products totaling US$ 804.9 million (which represented 5 million more boxes than in the previous year).

Due to the company's environmental initiatives, the already high level of environmental activity and ecological consciousness in Costa Rica is being raised and sustained. Not only is the country a trailblazer in the region because it has reversed deforestation (forest cover in Costa Rica increased from 21% in 1986 to 51% in 2010); CORBANA's forest reserves and zero-carbon strategies have raised the bar of conservation excellence for banana producers throughout the world. Indeed, the company's plantations recycle 100% of its organic waste and 97% of its plastics (including the protective covers used to wrap bananas during cultivation).

As banana yields and exports have increased in the country and the environment has been sustained, the rural, banana-growing population in Costa Rica has benefited financially. In 2012, the industry employed over 45,000 workers directly with another 100,000 indirectly working in banana production. These producers, furthermore, enjoyed higher than average wages (about US$16 per day) and better social services and working conditions compared to others employed in similar professions in the region (who earn approximately US$12 per day).

CORBANA's efforts have led to increased productivity, a rise in income, and access to community, recreational, and educational facilities for employees, their communities, and children (Photo: Flickr/Ram Reddy)

The appeal of bananas

CORBANA was established in order to empower farmers, open market access for their products, and improve their communities and environment. By developing a comprehensive R&D and commercialization strategy, and by relying on IP assets and value-added banana products, the farmer-owned company increased competitiveness, consolidated its market position and entered new commercialization opportunities internationally.

As a result, Costa Rican banana farmers have seen their productivity and incomes rise while their rich natural environment and traditional source of income has been modernized and preserved for future generations.

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