BANANA VALUE CHAINS IN CENTRAL AMERICA - OPTIONS FOR SMALLHOLDERS ON DOMESTIC AND REGIONAL MARKETS
The dessert banana sector in Central America is divided into two main production and marketing systems, with large-scale producers of Cavendish (AAA) bananas supplying export markets, and smallholders producing mainly Gros Michel (AAA) interplanted in coffee plantations for local and national markets. This study presents an overview of banana value chains for smallholders in Nicaragua and Honduras, analyzing profits for farmers and options for upgrading. The Gros Michel value chains in Nicaragua and Honduras differ primarily in that Nicaraguan value chains concentrate on national markets, while Honduran trade includes regional value chains to Guatemala and El Salvador. Two main types of national value chains were identified in Nicaragua: (i) a local chain, where farmers transport small amounts of bananas and sell them directly to wholesalers in the district capital where they are sold locally, and (ii) a longer chain with intermediaries buying at farm gate, followed by bulking, transport, ripening businesses, wholesalers, retailers directed to consumers in the countrys capital. Although in the longer chain, the share of the final price received by the farmers is lower, farmer profits are slightly higher due to a higher consumer price and lower farmer investments in transport. In Honduras, farmers usually sell at the farm gate. Depending on farm accessibility, bananas are sold to intermediaries or directly to traders who export them to Guatemala or El Salvador, with only 25% of the production sold on national markets. Several options for upgrading were identified in both countries. Process upgrading for improved fruit quality and efficient organization of transport is a basic option for all sites. Upgrading through improved coordination with traditional buyers and intermediaries who expressed their willingness to deal directly with farmers and pay higher prices for higher quality fruits might be feasible in the short term. In the longer term, options include contracts with supermarkets, possibly combined with branding of the bananas based on consumer preferences for traditionally produced Gros Michel. In general, transport is a major limitation for receiving higher prices due to remoteness of the farms in coffee-growing highland areas. For the more formal contract-based market chains, requirements of minimum quantities and timing of supply imply that substantial investments in farmer organization will be necessary.
Garming, H., Castellon, N., Rajala, S., Grote, U. and Staver, C. (2013). BANANA VALUE CHAINS IN CENTRAL AMERICA - OPTIONS FOR SMALLHOLDERS ON DOMESTIC AND REGIONAL MARKETS. Acta Hortic. 986, 331-338
banana agroforestry systems, Honduras, market chains, Nicaragua, value chain upgrading