History of Banana Republics

References

Introduction

It started in early 1900s when agriculture was getting popular in Central and South America - with several plantations of bananas, sugar, etc.
Refrigerators arrived, so food could be stored for longer, and thus food trade could happen internationally
The biggest trade partner was the USA
There were three main companies in the area: United Fruit Co., Cuyamel Fruit Co., Vaccaro Bros.
They bought out smaller family owned plantations
They became their own competitions

In the 1800s captains from New Orleans and New England ventured to the Caribbean in search for coconuts and other goods
They liked the Gros Michel bananas from Afro-Caribbean farmers in Jamaica, Cuba and Honduras
They produced large bunches of thick skinned fruit
By the end of 1800s, bananas were a big hit in the US

As they became big business, US fruit companies wanted to grow there own bananas
In order to secure access to land, banana moguls lobbied and bribed government officials in Central America, and funded coups to ensure they had allies in power
By 1930, United Fruit dominated the region, and owned over 40% of Guatemala's arable land
They cleared rainforests in Costa Rica, Colombia, Guatemala, Honduras and Panama to build plantations, and railroads, ports and towns to house workers.

People migrated to banana zones to get high paying jobs
From Guatemala to Colombia, United Fruit grew exclusively Gros Michel bananas
These farms had low biological diversity, and was prone to epidemics
Because of the connected railroads, diseases were easy to spread from one farm to another
In 1910s, a fungus began to level Gros Michel plantations, by the same infrastructure that enabled quick profits - this was called the "Panama Disease"
Banana companies abandoned plantations in infected areas, and the workers were left jobless
The companies then fell extensive tracks of rainforests to establish new plantations
After running away from Panama Disease, United Fruits finally switched to Panama disease-resistant Cavendish bananas in the early 1960s.

1910: Cuyamel used to function mostly in Honduras
The president of Honduras gave land grants to Vaccaro Bros. in exchange for helping them build roads
This put Cuyamel at a disadvantage, as their competitor got more of their potential lands.
The owner of Cuyamel, Samuel Zemurray, enraged by this funded a mercenary army and gave them to the exiled former Honduran president Manuel Bonilla, and together they overthrew the Honduran government
Bonilla took control and gave big concessions to Cuyamel and United Fruit as thanks
When USA had concerns about this, Zemurray bribed them by striking a deal with them

Bonilla was backed by the future leader of the US organization formally known as United Fruit Co., and known throughout Latin America as El Pulpo, or "the octopus", signifying it's reach over the countries.
El Pulpo was a corporation trafficking in bananas

Since they were really funded by the government, their commerce did not benefit Honduras as a whole much
The national debt of Honduras got so bad that the government was not able to control it
So the three fruit countries claimed to help them, and decided to build the nation's entire infrastructure - roads, railways, shipping lines, telegraph lines, telephone lines, radio towers - and switched the whole country to using US dollars.
In effect, they had complete control over the infrastructure

Other countries followed suit - Guatamela, El Salvador, Nicaragua, Costa Rica
Hence the Banana republics were born
Fruit companies get tax breaks and land grants, in exchange for which they built infrastructure
So basically the direct shareholders got high profits, while the rest of the population had to work in farms for terrible wages
So, capitalism works, by spreading the illusion that if you are smart, you can be as rich as you want by honest labour - with a little bit of dirty play - which is okay because everyone does that, and only fools are nice - and we all know nice guys finish last

After a decade, Cuyamel was bought by United Fruit, but Zemurray became the owner of United later
Vacarro Bros. was renamed as Standard Fruit
After WW II, in 1944, Guatamela had a democratic revolution
The newly elected leader Juan Jose Arevalo was unhappy with the way the companies treated the people, so he implemented several reforms like minimum wage laws and universal suffrage
He tried to buy back land from the United Fruit company and give it to the poor
But while this helped the general population, more rights for people meant less profits for United Fruit
Then Guatamela got a new president, Jacobo Arbenz, who continued these reforms
He offered to pay prices based on tax records, where United Fruit had constantly under-reported the values
In 1953, United Fruit went to USA for help and they scared US president Eisenhower by mentioning how Jacobo is making them pay minimum wages, and how they are sharing their unused land to the poor, sharing resources, leading to collectivization, which is just communism
USA's CIA, citing fears of communism overthrew the democratically elected Arbenz government and Guatamela was ruled by a series of US-backed dictatorships from 1954-1966
This happened in many other places due to the fear of red (commies) and love for yellow (bananas)

In the present day
Standard Fruit changed to Dole Food Company in 1991
In 1976, the CEO of United Fruit jumped out of their office window due to pressure, and the company was acquired by someone else who renamed it to Chiquita Brands International

The political power is no longer the same with Chiquita Bananas
However, they require frequent application of pesticides which create hazards for farm workers and the ecosystem
Although they are resistant to the Panama disease, Cavendish farms too lack biological diversity and hence may wind up with another disease