John Myers Jr., Business Reporter

Downed banana trees at the St Mary Banana Estate following the passage of Hurricane Dean in August. The Government has said it will guarantee financing for Jamaica Producers under a field resuscitation plan to save some 800 banana jobs. - File

The Jamaican Government is to guarantee a US$4.2 million ($300.3 million) loan from the Development Bank of Jamaica (DBJ) under a rescue plan for banana jobs and to preserve the fruit's export market to the European Union, its main buyer.

The Golding administration is also to foot the insurance bill for the banana industry should it be affected by hurricanes at anytime throughout the life of the loan.

It gave that assurance to Jamaica Producers Group (JP), the island's largest banana farmer, on the understanding that JP would secure employment of some 800 workers at the Eastern Banana Estates Limited in St. Thomas and St. Mary Banana Estates Limited in Annotto Bay.

The workers are on JP's payroll but were laid off in August after Hurricane Dean decimated field crops.

Hurricanes

"Jamaica Producers indicated that they were not prepared to go back into exporting banana without some assistance from the Government having sustained losses over three consecutive years - first (Hurricanes) Ivan, then Emily and Dennis in 2005, and now Dean," said Permanent Secretary in the Ministry of Agriculture and Lands, Donovan Stanberry.

Stanberry was unable to estimate the insurance costs, but said JP would be taking out a loan to re-establish the banana fields "not only for themselves, but the entire export banana fraternity."

Producers is the country's largest commercial producer of bananas, dominating both the local and export markets.

Its banana operations generate about US$15 million in revenues for the company, which also produces a wide variety of snacks and comfort foods.

Its CEO, Jeffrey Marshall had signalled after Hurricane Dean that the company's future in banana exports was uncertain as it was not prepared to spend the estimated $400 million to resuscitate the large acreages of banana that was ravaged.

And the company in a stock exchange filing of its third quarter earnings report said it would be looking at more profitable and less risk to bananas over time.

In August, Hall said the rebuilding of its banana fields would occur only if the company found a way to share the risk and expense of resuscitation, but that JP would continue to produce bananas for local consumption.

Loan

"What they asked the Govern-ment for was to absorb whatever losses might occur due to hurricanes before they pay off this loan so the Government has acceded (and) DBJ is going to provide a loan of US$4.2 million," Stanberry said.

Jamaica, through the Banana Export Company, exported about 30,000 tonnes of bananas last year. This generated some US$20 million for the country, making bananas the second largest agriculture export behind sugar.

The sector has been severely impacted from successive hurricanes in the last three years. In 2004 Hurricane Ivan wiped out the entire industry. Sixty per cent of that which was resuscitated was destroyed by Hurricanes Emily and Dennis in 2005 and the destruction continued this year when Hurricane Dean completely ravaged the industry in August.

john.myers@gleanerjm.com