San José, Costa Rica, since 1956

Pineapple Boom: A Mixed Blessing

(Part one in a two-part series on Costa Rica’s pineapple industry.)PINEAPPLE producers, workers’ unions and environmentalists are united in a common feeling about the vigorous upward climb of pineapple exports in the last five years: worry.Pineapple has wrestled with coffee for the number two spot on the list of export crops, and surpassed it in 2003. So far this year, exports have grown 34% over the same period last year. But such dynamism has producers both giddy and braced for a downswing in the market, and in an industry traditionally under heightened surveillance by social and environmental watchdogs, the upward spike sounded alarms heard all the way back in the capital.While the growers are squinting into a bright two- and three-year forecast, roads and ports are dilapidated, cargo ships are in short supply, and the consequences of overproduction and a drop in price in U.S. and European markets are looming.THE success, and its escort of concerns, was heralded by a sweet breed of pineapple that began shuffling the roster of Costa Rica’s agricultural exports around the year 2000.Pineapple exports grossed $121 million in 2000, $257 million in 2004, and $214.5 million in the first six months of this year alone, sealing Costa Rica’s rank as the number one fresh pineapple exporter in the world. With a 20% tank in banana exports after floods devastated plantations in the Caribbean in January, pineapples have nipped at bananas’ heels, narrowing the gap from a third of banana exports in 2002 to about half this year. Pineapple accounted for four percent of the country’s exports last year, compared to coffee at three percent and bananas at 8.6%.The international fruit giant Del Monte, one of the banana kings in Costa Rica, imported seeds and suckers – offshoots from the base of the fruit used for propagation – from Hawaii as far back as the late 1970s. It named a subsidiary, the Pineapple Development Corporation of Costa Rica (PINDECO), to head the operation and latched on to a tax break incentive scheme the government launched in the early 1980s to attract foreign capital.GROWING pineapple was PINDECO’s brainchild, while other companies transformed the export landscape, sneaking a cornucopia of oddball foods like cassava (yuca), heart of palm and processed fish onto tankers that previously hauled away mostly coffee and bananas. (Coffee and bananas made up more than half of all of Costa Rica’s exports in 1980, but now account for less than 12%.)The incentive “was the engine for changing Costa Rica from a traditional to a non-traditional product exporter,” PINDECO President Rodrigo Jiménez said. While its neighbors were oiling their rifles and hunkering down for the civil wars that marred the decade, Costa Rica was figuring out how to grow tons of pineapples, and Del Monte led the charge into the international market.“We were the only ones starting a big pineapple project in Costa Rica. We were almost the only ones exporting – nobody else compared to our growth,” Jiménez said.OTHER companies caught on in the 1990s, and when agronomists in Hawaii bred a near-perfect pineapple, the so-called dorada, as it’s known here, or golden pineapple, Costa Rican plantations sprang up with jaw-dropping quickness, beginning in earnest around the year 2000.The production engine began changing gears when PINDECO imported the now famous golden pineapple, officially called the MD-2, after Mary Dillard, the wife of a senior Del Monte executive in Hawaii. The yellower, sweeter and juicier version fascinated U.S. and European consumers and was hardier in the field than its predecessor, the white-meated Champaca variety.The incentives program expired at the end of the ’90s, and PINDECO responded to the potential loss of profits by successfully storming the market with its golden pineapples.“As you know, when you have a good pie, people want a piece of that pie,” Jiménez said. His company found itself giving up cuts of its pineapple cake to competitors who began clearing land in the Atlantic lowlands in the late 1990s.“We were in a very good position with almost no competition, but then they started to saturate the market,” he added.NOW, PINDECO has a weaker grasp on its throne, but has nonetheless expanded its holdings by 50%. Its southern Pacific coast piñeras encompass 4,000 hectares (nearly 9,900 acres) and its newer Atlantic plantations, which are actually contracted producers under PINDECO’s wing but not strictly in the company fold, are on 2,000 hectares (nearly 4,950 acres).PINDECO’s land accounts for 23% of the national land being used for growing pineapples, about 26,000 hectares (64,250 acres). Yet PINDECO is responsible for 42% of the export market, according to Abel Chaves, president of the National Chamber of Pineapple Producers and Exporters, followed by the other international fruit titan, Dole, which exports 23% of Costa Rica’s pineapples.“We’re looking very closely at the competition. We’re starting to get very concerned about how it will affect the market,” Jiménez said.GROWING pains pester the newly important industry. It bulges at the seams in its old clothes – highways are too narrow and full of potholes, and road blockages from landslides and accidents are not cleared soon enough for the increasing number of trucks carting pineapples to the ports. When the government doesn’t respond quickly enough, PINDECO is forced to send its own bulldozers ahead of its trucks to clear the highways after seasonal torrents dislodge earth on slopes above the roads.Since 2003, exporters have had trouble finding space on ships to move their fruit out to sea. The solution will probably be a consolidation of the exporters to negotiate more effectively with shipping companies, something Chaves projects for 2007.Five new tax bills are under consideration in the Legislative Assembly, all of which the producers oppose.“What the industry requires, instead of the government setting up new taxes (is) good ports, no congestion, competitive port rates, good roads, good customs procedures – here it’s like a bottleneck,” Jiménez said. “I’m a believer in development and businesses should pay for services – we pay land taxes, water, the municipality, everything, but if we get taxed… The nice, high pineapple prices will not stay that way. I’m not predicting anything good here.”Next: Environmentalists and humanitarians express their concerns about the booming industry.

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