Bananas and Business: The United Fruit Company in Colombia, 1899-2000

Abstract

Bananas and Business is an innovative blend of business and political history. On the one hand, Marcelo Bucheli delivers a much-needed business history of the United Fruit Company (Chiquita) during the twentieth century. Taking into account increasingly nationalist governments, growing labor movements, technical changes within the industry, and the ups and downs of foreign consumption patterns, Bucheli looks at the region’s most infamous corporation as a business enterprise. How did United Fruit’s business strategy change over the twentieth century? In what ways did shareholders influence company decisions?On the other hand, Bananas and Business is a political history of United Fruit in Colombia. Exploring political transformations on local, regional, and national levels, Bucheli narrates the history of United Fruit in Colombia, from the company’s entrance into Magdalena in 1899 until its departure from Urabá in 2004. How, for example, did the transfer of power from Liberals to Conservatives (and back again) shape the company’s operations? What impact did La Violencia have on banana-producing regions in Colombia? How did Chiquita and the Colombian government navigate the “banana wars” of the 1990s? It is this combination of business and political history that makes Bananas and Business both challenging and innovative.The story hinges on a transformation that has defined both the history of the United Fruit Company and the history of the global banana industry. With United Fruit leading the way, the banana industry came to be dominated by vertically integrated corporations during the first half of the twentieth century. In order to deliver large quantities of bananas to foreign markets, United Fruit coordinated the production process from beginning to end through a system of company-owned plantations, complete with health and housing infrastructure, as well as railways, ports, telegraph lines, and steamships. The emergence of this integrated system was due, in part, to the ability of foreign companies to acquire capital, install infrastructure, clear jungle, and move large quantities of fruit from farm to market. However, as Bucheli shows, this system also depended on a favorable political climate. United Fruit was able to establish its empire because Latin American governments were relatively compliant and labor organizations were just establishing a foothold in many parts of the region.After World War II, however, this vertically integrated system was increasingly difficult to sustain. Having investments in Latin America became risky for foreign corporations. Latin American governments were more independent and labor unions began to challenge foreign companies. Technical advances within the industry also made it less necessary for companies such as United Fruit to directly control or own every aspect of the production process. In short, foreign banana companies began to pull out of direct production and turned increasingly to contract farming.What Bucheli contributes to our understanding of this historical transformation is absolutely crucial. Illuminating both sides of the equation, Bucheli examines the relationship between the vertical disintegration of United Fruit after World War II and political changes within Latin America (while keeping a close eye on global markets and technical changes within the industry). In so doing, he first demonstrates that after 1961 United Fruit began selling off land and pulling out of direct production. It disinvested, going from a producer to a marketer of bananas. He then demonstrates that this transformation was less about profit and more about security. The company, it turns outs, was more profitable while it was vertically integrated. However, as Bucheli shows through an innovative use of Moody’s Investors Service, United Fruit’s investors were willing to sacrifice profit for long-term security.Bucheli also examines how this process — the withdrawal from direct production and the turn to contracting — played out in Colombia. After an interesting discussion of the 1928 massacre (made famous by Gabriel García Márquez’s One Hundred Years of Solitude), Bucheli does a superb job of tracing how United Fruit’s strategies and policies in Colombia were largely determined by political factors beyond the company’s control.Bucheli’s work will be of great interest to anyone interested in the history of United Fruit, U.S. – Latin American relations, Colombia, corporations, and bananas. What is perhaps most suggestive about Bananas and Business, however, is the implicit argument it makes for more fully integrating business history into our understandings of the Americas.

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