News & Events 2004 / 2005
The Weather extremes:
For over 6 months, between beginning October 2004 to April 2005 we experienced extreme drought, not a drop of rain! Then an abrupt change occurred; from May until December continues cloud-cover, high humidity and intensive rainfalls, our year average is 520mm and we received 1,030 mm.
On the positive side is that for the first time since many years the water reservoirs in the mountains are full to the brim and that we could economize in the use of the extreme expensive Diesel for our irrigation pumps.
We also where very fortunate to have been spared of the many violent hurricanes which hit the whole Caribbean area this year with the exemption of Hurricane “Alfa” whose eastern edge grazed us and destroyed 30 % of the mature Banana plants, they will need 4 months to be recover in to production.
The unusual high moisture resulted in very high fungus development, mainly the “ Yellow Sigatocka” a leaf spot fungus which reduces the photosynthesis reducing harvestable fruits by 40% especially in the months of December to January.
A different fungus is “Crown-rot”, prevalent in the period between August and November, these are invisible mold-spores, which penetrate the freshly cut crowns and make the fruit prematurely ripe at arrival in the European port. Financial losses from “Crown-rot” are very high, as in addition to the cost of the fruit one has to add the packing material, transport, custom-duties, and disposal of damaged fruit.
Thanks to the application of Biodynamic practices our plantations are somewhat more resistant, but when the pressure from airborne spores from neighboring fields are to high we are affected as well.
A worldwide concern of banana producers is that the entire export market relies on the “Cavendish” variety, at this time the only banana with good taste and quality to survive the 10-20 Days overseas shipping time. This variety is already over 30 years old, always propagated vegetatively through rootstock propagation, and is increasingly susceptible to diseases. This same factor produced the big “potato famines” of in the 19th century!
Plants renew their vigor through the process of flowering and seed formation and weaken over time if only propagated vegetatively.
There are reasonable fears that the entire world production of bananas could collapse if no new varieties are developed.
We are increasingly hurt by lower revenues and increased costs, which we have not been able to pass on to our clients. This is caused by high inflation, especially fuel prices (transport and irrigation), taxes and higher salaries to workers. We experience increased competition from cheaper Bananas from Central America where workers are paid considerably less (60% of “costs” in banana production is labor) which decreased our volumes and margins. The outlook for the future is not good as the European Union is forced by the WTO to reduce its preference for ACP countries, making it even more difficult to compete.
The acquisition of a small school bus to transport the children and the completion of the construction of a co-workers house on the Finca, made it possible for the expanded Kindergarten to move in to the first floor with 24 Children.
The growth of the Kindergarten has been possible by the considerable financial support from the wholesale distributor Weiling with the “Bio-laden *Fair” sales of bananas which contributes to our Foundation EUR 0.015 for each Banana!
In fall 2004 our son Kaspar decided to return to the USA, after having worked with us for three years, he experienced burn-out, partly from the strain of working in the extreme hot climate and having a hard time being surrounded by economic and cultural poverty.
His younger brother Sebastian (a professional farmer as well) decided to take his place and find out if he is able to make it work (he has over the years worked intermittently with us). The fact that our area has excellent all year round paragliding conditions has certainly been an important factor in his decision!
My wife and I have been again fortunate to spend August / September in Europe traveling in our camper, allowing us to avoid the hottest season, visiting customers, friends and family as well as paragliding and hiking in the mountains.
As we both are past 60 years old we see this as a gradual retirement, hoping to expand our stay away time in the next years to come. We are very fortunate to have a reliable team of associates and coworkers who can handle the day to day management without my constant presence, and through our modern communication technology I am always reachable when necessary!
Production and Consumption:
The country suffers from marked income inequality; the poorest half of the population receives less than one-fifth of GNP, while the richest 10% enjoy nearly 40% of national income.
Between 2000 and 2004 a populist government created havoc, with increased levels of corruption, mismanagement and several crashes of major banks. The currency was devalued from 17RD$ up to a peak of 60RD$ to the US$, with the new authorities in charge and interventions of the FMI it has now been brought back to 34RD$. Consequently many businesses went bankrupt, resulting in loss of jobs and purchase-power of the population. Recently we experienced a good recovery and hope this will last beyond the next elections!
Criminality has increased tremendously, so many young men without job opportunities and high expectations! The Dominican Republic has lately also become a major bridge in the international drug traffic reinforcing the corruption of authorities.
Although there is a strong exodus of Dominicans, especially in small boats to Puerto Rico (with regular reports of shipwrecks) it does not compensate the population increase from (illegal) immigrants escaping the misery of Haiti.
The outlook is not good, we are now forced to enter in to “Free-trade agreements” which will eventually destroy local farming which can not compete with world market prices and therefore increase the exodus to the misery belts around the cities. Consumer prices will not come down, as there is not much free competition and intermediaries will simply try to increase their margins.