No bananas, no homes, little hope

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THE LANDMARK water tower that casts its shadow over this small northern Honduran town says it all in large letters: Chiquita. This is the heart of Central America's banana country controlled by the big American corporations. Or at least it was. For now, the heart has stopped.

The Clapham Junction-like freight station in La Lima, which for decades pushed cartons of bananas to the Atlantic port of Cortes and on to the world, sits deserted. Railway bridges remain cut from the floods and landslides that followed Hurricane Mitch. And anyway, there are no bananas.

Mitch's floods, from the Ulua and Chamelecon rivers, buried the plantations, the station and the humble homes of the bananeros. Only now is it subsiding. The crop, Honduras' second most important export - coffee took over a couple of years ago - was 100 per cent ruined. New planting will take three years to get back to previous production levels.

The two big US corporations which control the industry were insured through an "Act of God" clause. The workers' jobs, homes and possessions were not. The corporations say they will not avoid their obligations, but not everyone believes them.

The Tela Railroad Company, a local subsidiary of Chiquita Brands International Inc, shocked banana workers last week when it said it was suspending 7,000 employees. They had expected to be kept on full pay to help with cleaning up and replanting. Instead, they were offered monthly interest- free loans of 1,120 lempiras (about pounds 50) a month. In normal times, they earn around pounds 4.80 a day.

The other big US company here, Standard Fruit, a subsidiary of the Dole corporation, said it would not lay off workers. Few were convinced.

"How can we survive on 1,120 lempiras and how am I going to save enough to pay it back?" said Rosa Barahona, a 26-year-old mother of three, and a plantation worker for the Tela Railroad Company. Her family lived in a tent on the highway for 10 days after Mitch, and returned to shovel thick, dark sludge from their home.

Others predicted social unrest when the Mitch mourning period ends and workers focus once more on their rights. "Suspension was just a facade. These workers are fired, period," said Allan Eris, a northern Honduran businessman. "Now, they'll have to steal to eat."

The big banana companies are at the centre of a Euro-American trade war, with the US supporting them to the point of threatening sanctions last week against a range of European products if the EU does not stop giving preference to banana growers in former Caribbean colonies.

The American corporations got into the profitable banana business here at the turn of the century, led by the renowned Sam "The Banana Man" Zemurray of the United Fruit Company, the precursor of Chiquita. He once said: "In Honduras, a mule costs more than a member of parliament."

That admission of corruption surprised no-one. Throughout this century, the big corporations have spread their influence into every area of Honduran life, including politics and the military, earning the nickname los pulpos (the octopuses, from the way they have spread their "tentacles"). They are said to have used Hondurans as their enforcers when things did not go their way. Those who did not play along were often found face down in the plantations.

"I knew the guy who ran the money for United Fruit, including the pay- off money to the unions," said a banana official, who said revealing his name could have him killed. "You shouldn't even be asking questions like this around here," he told me. "You could be rubbed out for $10, especially now when people need the money."

United Fruit backed the notorious 1954 coup in neighbouring Guatemala that overthrew the popular and progressive government of Jacobo Arbenz, an event that led to more than 30 years of unrest and civil war in that country. The company also lent its ships to CIA-backed Cuban exiles who tried in vain to overthrow Fidel Castro in the Bay of Pigs invasion of 1961.

Here in Honduras, the two banana corporations propelled General Oswaldo Lopez Arellano to power as a dictator in 1972. He was forced to step down after the notorious "Bananagate" scandal of 1975, named after the Nixon Watergate scandal of the previous year. His finance minister was found to have accepted a $1.2m from United Brands, the conglomerate that owned United Fruit. During the scandal, the president of United Brands fell from a New York skyscraper in an apparent suicide.

When the Del Monte fruit company tried to muscle in on the banana industry here in the 1980s, making deals with independent farmers, Honduran soldiers destroyed one of the farmer's packing plants. The other farmers fell back into line.

Fyffe's, the Irish-controlled company, tried to make inroads here a few years ago but also ran into problems.

A fundamental problem of the American corporations' influence is that their expansion and control, taking over huge swathes of the most fertile farmlands in the country, has stunted social development, forcing campesinos to move elsewhere, often in difficult mountain or forest terrain to grow subsistence crops.

But the American corporations, and many of their workers, argue that they are better off than most, with employers providing medical care, schools and other support.

The companies' defenders also point out that they were among the first to charter helicopters to rescue their workers and have been using their export vessels to ship in food.

"Without them, the rescue effort would never have got going so fast," said Juan Miguel Fonseca, a banana cutter in the Sula valley.

Past sins, it seems, are forgiven in the present crisis.

The Year of the Flood, Focus, page 26

The Independent and The Independent on Sunday have launched an appeal for the victims of Hurricane Mitch. More than pounds 150,000 has already been received in donations.