MUNZSSInlD - usaid

PROEXAG
Chiouita was asked to formulate a fixed price offer, which they did during a rece!
in the meeting. What they offered was a bit higher than fixed price purchase polic
in other countries of the Regiorr. On this basis PROEXAG recommended to the growe
that the offer be accepted, and it was.
1. Despite some production problems occasioned by lack of land leveling, and by high win,
on fields without windbreaks, production was successful. Chiquita was able to pi(
up additional uncommitted production in the area. Both CAAP and Chiquita providE
technical assistance in production and packing. At season's end some 130,000 boxE
of honeydews, with an estimated CIF value of circa $1,000,000 had been shipped.
8. In the 1989-90 season Chiquita expanded production in Costa Rica from 130 to 3t
hectares (700+ acres). In addition, Chiquita built a packing shed to be able to pac
and cool cantaloupe. A successful and profitable start-up is a much better'inducemer
to investment than a pretty feasibility study. Estimated sales for the 1989-90 seasc
are on the order of $2,500.000.
9. From PROEXAG's standpoint the Chiquita-Guanacaste melon grower deal is a model of mar
desirables:
a. PROEXAG and CAAP are now in a position to withdraw from agricultural extensic
work, with Chiquita taking on this function at farm level with its growers.
b. Enlightened self interest dictates that Chiquita will continue to provide pos
harvest handling and quality control, again freeing PROEXAG and CAAP resources
c. Chiquita's continued involvement in transportation opens new ports of entry
relieves congestion in South Florida, improves distribution, and does not adto
the demand of service from conference carriers.
d. Chiquita's activity creates viable medium sized farming enterprises which in turr
create a demand for services, inputs and labor locally. As such this mode o:
operation is an important adjunct in the strengthening and expansion of a rura
middle class. Therefore, it is in tune with one of PROEXAG's sub-objectivewhich
states "Where possible, enterprises should be encouraged to source part
of their production from small producers. Those companies doing so shoulc
receive greater support and attention from PROEXAG than enterprises engaging in
plantation agriculture".
10. The crucial factor in Chiquita's success, however, is its ability to sell the products
generated by its programs successfully. There are indications that in the 1988-39 and
1989-90 seasons Chiquita did not cope successfully with Increased volumes. This in
turn was reflected in lower prices or lesser returns to the producers who have begun
to come to PROEXAG AND CAAP (now CINDE/Divlsi6n Agricola) in search of marketing
alternatives.
11. Our response to this situation has been to generate for CINDE/Divisi6n Agricola a list
of 12 interested marketing companies. Expanded competition among marketers for
supplies and for good returns is a means of ensuring that the industry continues to
grow, and will also lead to the correction of problems in order to maintain cometitive
strength.
FILE:CHIQUITA. IF/ 'dar(xi I.
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