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The History of the banana industry in Changuinola

Remembering historical events in Panama

The History of the banana industry in Changuinola

In 1821, after becoming independent from Spain, Panama decided to voluntarily join Colombia to avoid a reconquest. So Panama became a department of Greater Colombia. Therefore, Colombia had the last word and made decisions on matters that occurred in Panama. The Isthmus of Panama, the name by which Greater Colombia referred to that region of the country, always enjoyed a privileged geographical position. However , Gran Colombia did not appreciate the union that Panama had freely and voluntarily welcomed; rather, the needs of education, health, and others were not met for the citizens who lived in this region of the country, called the Isthmus of Panama .

During the period that Panama was united to Colombia, there were two attempts to sell the isthmus partially or completely, at a price between 25 to 50 million dollars, which at that time were counted in gold.

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But apparently not everyone saw the Isthmus of Panama the way Gran Colombia saw it. The United States, France and England were the potential buyers, because they showed their interest in building a road through Panama to link the two oceans.

Colombia had the intention of selling Panama to pay the foreign debt and build a railway that would connect Bogotá with the two coasts (Pacific and Caribbean). “They (Colombia) said that Panama would one day thank them… They said that Panamanians were unruly, and with all the problems we caused it was better to sell ourselves,” said the researcher in national history and member of the National Commission of Symbols. of the Nation, Vladimir Berrío-Lemm.

Meanwhile, in Bocas del Toro…

Other business opportunities

By 1890 Michael Theodore Snyder lived in a two-story wooden house in the city of Bocas del Toro, when Bocas was still inundated with sea and disease.

Maybe it was not the best place to live, but it was to do business. Snyder had founded, together with his brothers Charles Louis and Joseph Alfred, the Snyder Brothers Banana Company, which had its banana fields along the Chiriquí Lagoon, in Cricamola, Chiriquí Grande, Robalo, Uyama, Caucho and Monkey Cay.

Very soon they would no longer be alone. The Snyders decided to join forces with Minor C. Keith, who already had a banana empire in Costa Rica, to continue the production and sale of the fruit.

Crossroads goes bananas

The American businessman Minor Keith settled in Costa Rica in 1871 . At that time Costa Rica was a country with an almost exclusively agricultural economy , and Keith had begun his business activities by dedicating himself to the railroads , supporting the businesses of his uncle, the railroad businessman Henry Meiggs until his death in 1877 .
Keith noticed that the railroad business was not that profitable on its own, but it was profitable for transporting and exporting bananas to the US , significantly reducing its transportation cost, so in the 1880s he dedicated himself to the banana business. planting and exporting bananas, purchasing vast agricultural farms located on the sides of its railway line and creating the company “Tropical Trading and Transport Company” that years later would control a large part of the production of bananas as well as pineapple and plums in Costa Rica . Guatemala , Nicaragua , Panama and Honduras .

Minor Keith
foto: Wikipedia

In exchange for negotiating new payment conditions for Costa Rica ‘s foreign debt with bankers from Great Britain , Keith managed to get the government of that country, chaired by Próspero Fernández Oreamuno , to grant him a large concession of almost 800 hectares of arable land in 1884 . . Shortly after, Keith’s properties covered large areas of Central America and the Caribbean where the company was known as “Mamita Yunai” (note that “Yunay” is a Spanish distortion of the English term “United”). These fruits were sold in the United States and Europe .

Soon Keith expanded his businesses to El Salvador and Honduras , taking advantage of the fact that in the US market tropical fruits such as bananas reached high prices as they were considered exotic and high-cost goods for the public, while in 1890 the railway line to transport such products. However, Keith became indebted to the New York banks and suffered bankruptcy in 1899 and had to look for a partner with enough capital to sustain his business.

The UFCO

United Fruit Company

The United Fruit Company or UFCO was thus founded in 1899 , when Minor Keith had to merge his company “Tropical Trading and Transport Company” with an important competing company: the “Boston Fruit Company” of his compatriot Andrew W. Preston . And that same year, the UFC also bought the Snyder brothers’ company. This is how the activity of the American transnational company began in Panama.

In Panama, the company acquired large tracts of land in the province of Bocas del Toro, where Changuinola is located today, to grow plantains and bananas.

When UFCO arrived at the isthmus, it negotiated with the Colombian authorities the purchase of what was a valley. They paid half a million in gold, Panama had not yet adopted the North American currency, the dollar. That valley was Changuinola, which was not yet Changuinola. The district was founded in 1970, almost seven decades after UFCO arrived on those lands.

So UFCO bought a valley of about 40,000 hectares from Gran Colombia for half a million gold, which is what is known today as Changuinola.

Monopoly game

A mechanism widely used by the UFCO was to purchase large amounts of land in Central America at low prices . This was a tool to prevent competitors from emerging and thus maintain a monopoly on banana production , even preserving extensive agricultural areas uncultivated under the pretext that droughts or hurricanes forced it to keep large areas of unused land “in reserve.”

Route map of the “Great White Fleet” of the “United Fruit Company”, which had a monopoly on the transportation of cargo and people in many of the Latin American countries.

However, the company’s detractors maintained that the purpose of this massive purchase of land was to avoid overproduction capable of reducing banana prices and eliminating competitors from the market ; Another goal was to force the poorest farmers to abandon cultivation on small individual properties and become “pawns” of the UFCO, as very cheap labor due to the artificially low salaries paid by the UFCO.

Changuinola, today

The Changuinola District is located in the province of Bocas del Toro , Panama . It is the most important town in the province, given that banana activities are located there, which represent 50 – 60% of the sources of employment in the province. The district was created on April 17, 1970, by Cabinet Decree No. 81

The district of Changuinola is one of the many places in the entire republic that produces a large quantity and percentage in economic activities, since it has the most important place for banana cultivation in Panama, it has various businesses such as warehouses, stores, grocery stores, meals, craft stores, hotels, restaurants and others. Changuniola is the means by which tourists pass when crossing Costa Rica through the Guabito-Sixaola border, which reason makes it have high economic production.