Freakonomics Radio - 375. The Most Interesting Fruit in the World

Episode Date: April 18, 2019

The banana used to be a luxury good. Now it’s the most popular fruit in the U.S. and elsewhere. But the production efficiencies that made it so cheap have also made it vulnerable to a deadly fungus that may wipe out the one variety most of us eat. Scientists do have a way to save it — but will Big Banana let them?

In 1876, the city of Philadelphia commemorated 100 years of American independence with a centennial exposition. Well, it was a big trade fair. It was like a world's fair. And there was a horticultural exhibit, and they had a banana plant with bananas growing on it. That's Virginia Scott Jenkins. She's a cultural historian and the author of Bananas, An American History. And they had to put a guard on it because people wanted to, you know, pick a leaf or poke at it because people hadn't seen one of these things. The banana plant, and yes, it's a plant technically, not a tree, and the banana is technically a berry.

Anyway, this banana plant had stiff competition for attention at the Centennial Expo. Also on display were the right arm and flame of the Statue of Liberty, which hadn't yet been erected in New York Harbor. There were the first public demonstrations of the typewriter and of Alexander Graham Bell's telephone, and an appearance by the President of the United States, Ulysses S. Grant, still, the humble banana plant caused a stir thanks to its novelty. They're not native to the Americas at all. And in North America, bananas weren't even possible.

Well, they take about 18 months from sprouting to fruit. And the climate in different ecological zones in the United States, you don't get frost free that long. The banana was one of the first fruits cultivated by humans. The earliest written accounts go back to 500 BCE in India. The Americas didn't get the banana until much later, although exactly when and how are, like much banana history, disputed facts. But it's safe to say that in 1876 in Philadelphia,

the banana was still exotic to most Americans. In the first two-thirds or three-quarters of the 19th century, bananas might come in to an East Coast port on a sailing ship, and then they'd be sold at the port. But they weren't generally commercially available anywhere. They were a luxury item. They were very expensive. I found some very interesting menus for very fancy occasions that might have bananas on the menu.

But they were something that most people had never seen. Most people had never tasted. Even though bananas were by then being grown in Latin America, sailing ships couldn't travel fast enough to reliably keep the fruit from over-ripening. But then came steamships and railroads. They would just put huge pieces of ice at each end of a freight car to try to keep the bananas cool. And by the 1920s, trains started getting mechanical refrigeration. In the 1930s came refrigerated trucks.

This new technology had a huge impact on food distribution generally. It made possible the modern meat industry, for instance. It also allowed for the bulk importation of bananas to the United States. The variety that Americans came to know and love was the Gros Michel, also known as Big Mike. And it was a large banana and it had thick skin, so it didn't bruise easily. There are more than a thousand banana varieties in the world, but, Jenkins says, a lot of other banana varieties don't travel well. Either they're small or they have thin skins, or for one reason or another, didn't grow well. In 1900, Americans were eating 15 million bunches

of bananas a year. Just a decade later, 40 million. So it was very bad news when a fungus emerged. Devastating the plantations in Latin America. This fungus came to be called Panama disease. It was first noticed in the late 1800s. By the 1950s, it was wiping out the Gros Michel. And so what the fruit companies did was they'd move on to another country and buy up a lot more land and grow bananas until the disease caught up with them and they had to move on. But the disease couldn't be outrun. The Gros Michel was doomed. So they changed to a variety called the Cavendish banana.

The Cavendish was not susceptible to the disease that wiped out the Gros Michel. So the Cavendish is the banana most of us eat today. It accounts for 99% of the banana export market. The last Gros Michels in the U.S. were sold in 1965. So our banana is not the same banana our elders ate. Well, I've never had a Gros Michel. I'm not old enough. So I'm not really sure how much difference there was. Some people who did eat the Gros Michel say it was more delicious than the Cavendish,

but the Cavendish has done very well, thank you. It is the most popular fruit in both the U.S. and Europe, even though the vast majority of them must be imported. The EU imports around 6 million tons of Cavendish bananas each year, or 110 bananas per person. The U.S., about 130 bananas per person. Canada beats us both with 150 bananas. So you can imagine there would be a lot of unhappy people if the banana we all eat were once again under existential threat. Well, the doomsday scenario is that it wipes out the international banana trade. That's right. Panama disease is back. And this time, it's come for the Cavendish.

Today on Freakonomics Radio, sometimes a banana is just a banana. But in this case, it's also a symbol of commerce, of political discord, of scientific dilemmas, and, of course, personal taste. My preference is bananas as they are, or curiously enough, bananas on toast. From Stitcher and Dubner Productions, this is Freakonomics Radio, the podcast that explores the hidden side of everything. Here's your host, Stephen Dubner. Why are bananas so popular? Let us count the ways.

And full disclosure, I say this as someone who personally does not love bananas, but I do recognize how appealing they are. Sorry about that. But seriously, the peel, it's got to be part of it. First of all, it's bright yellow. It's basically an advertisement for itself. Also, Virginia Scott Jenkins notes that the banana first gained popularity around the time people were just starting to learn about germs and food hygiene.

One early banana importer called it a fruit-and-a-germ-proof wrapper. You know, this is something that you could eat on the street and not worry about getting sick from it. There was also a new awareness around food and nutrition. People were interested in calories, and this was a good way to get more nutrition and vitamins at the same time. Still, if you know even a little bit about economics, you'd have to think that price must also have something to do with the banana being the most popular fruit in America. And this is where it gets interesting.

Picture yourself in a grocery store. You see piles and piles of apples, all different varieties. About 95% of the apples eaten in the U.S. are grown in the U.S. The imports usually just plug a hole at the end of the growing season. Now check out the pile of bananas. First thing you notice, just the one variety, the Cavendish, and every one of them has been grown, picked, washed, and boxed in another country. Then they're shipped, still green, in a temperature-controlled environment.

At their destination, they're put in special ripening rooms that provide, among other amenities, the release of gases that trick the banana into thinking it's still back home in the tropics. At a temperature of 64 degrees, a banana can be ripened in as little as four days. At 58 degrees, it'll take seven days. Considering all this aftercare and the fact that they're all imported, you might expect a banana to be much more expensive than those very American apples, and yet they're not. Bananas are typically less than half the price of apples. In fact, they're among the cheapest fruits around.

How can this be? How did an imported luxury item become a cheap American staple? Well, let's start here. It's in part a story of economies of scale. That's the economist Douglas Southgate, an emeritus professor at Ohio State University. He started studying bananas because... Well, the short answer is that my wife is from Ecuador, which happens to be the leading exporter of bananas and has been for the last 65 years, even though the country is no larger than the state of Colorado.

Bananas are grown in many warm countries around the world, in the eastern and western hemispheres. Bananas are far and away the most widely traded fruit or vegetable. Basically, there are 135 countries that grow bananas, and there are 145 million tons of bananas produced every year. That's about 800 billion bananas. And that's Andrew Biles, who until recently worked at Chiquita, one of the world's largest banana companies. His title at Chiquita was CEO of Bananas and Pineapples.

Seriously, that's the title. As for the bananas... In the world, it's the fourth most important crop after rice, wheat, and corn. The economic value generated by the banana industry is some 52 billion, and there are some 400 million people that rely on bananas for a staple food or a staple source of income. There are many countries, they did not have bananas, they would go short of food. The Cavendish banana accounts for just under 50% of global banana production, but again, almost 100% of exported bananas. And Ecuador alone accounts for more than a quarter of all Cavendish exports. If you produce something in very, very large numbers, then you bring down the per unit or

average cost. For the early American banana companies, the transition from luxury fruit to mass import was a strategic move. I think the key to the strategy or to understanding the strategy was to realize that they made more money from having a smaller margin on a much larger volume than they would have had continuing to treat bananas as a luxury item. And how did they accomplish this? Consider the history of Chiquita. started way back in the 1800s and was a company that first went public, believe it or not, in 1903. Back then, it was known as the United Fruit Company. And United Fruit happened to have the largest fleet of ships in the Western Hemisphere. Only the U.S. Navy had a larger fleet of ships. In fact, the Navy would requisition some united ships during World War II.

But in peacetime… Well, they used those fleets to move bananas to the United States very, very efficiently. And as is always the case, or practically always the case, the major beneficiaries of this efficiency were, in fact, consumers. Prizes were slashed, and within a few years, bananas were no longer a luxury item. They were instead a fruit of poor people. The first food that a lot of poor babies ate after weaning were mashed bananas in the days before canned baby food. It would be hard to overstate here the role of the United Fruit Company. What we have here is a company that actually created a banana industry.

It was called the Octopus because it had a near monopoly on production. United Fruit definitely had its tentacles wrapped around this industry. Most of United's bananas were grown in the Spanish-speaking countries to our south. Costa Rica, Honduras, and other Central American nations happened to be an ideal setting for raising bananas for the U.S. market. Ideal because of the climate, yes, but also because land and labor were both very, very cheap. So, American consumers were winning. United Fruit was really winning. And what about those Central American countries? Keep in mind, they were largely

undeveloped at the time. Foreign companies led by United Fruit were willing to make the investment to clear land, put in infrastructure, and so forth to start producing bananas in a massive scale for the U.S. market, but only if they were awarded vast tracts of land and largely exempted from taxation. So that gave them the dominant position. That's what led to Banana Republics. Yes, before it was a clothing store, Banana Republic meant something very different. Essentially, a fragile country whose economy and often political leadership were propped up by an export crop.

And when a banana republic acted against the interests of their banana overlords, things could get ugly. Consider the case of Guatemala in the early 1950s. President Jacobo Arbenz, a former army colonel, was pursuing a land reform program that would have reclaimed property from the banana companies. And this angered United Fruit. United Fruit definitely wanted to see Arbenz go. United Fruit lobbied the U.S. Congress to act against Guatemala, and Arbenz was ultimately ousted in a coup led by the CIA. I think drawing a simple line of causation, United Fruit, U.S. government overthrow of

Guatemala doesn't capture all of what was going on. The U.S. government had other reasons why it was alarmed at some of what Arbenz was doing, apart from the land reform. Specifically, the American government was worried that Guatemala was sliding toward communism and an alliance with the Soviet Union. This was a common theme of the Cold War era. We're not talking only Guatemala here. In any case, the U.S. overthrow of Guatemala led to destabilization and decades of bloody civil war.

United Fruit, meanwhile, continued to tangle with governments in other banana republics and ultimately the U.S. government as well, which accused United Fruit of monopolistic behavior. They controlled production and also had an extensive deep network for distributing bananas from U.S. ports inland. So United Fruit was very much the banana business. In 1967, United Fruit agreed to reorganize and sell off some of its strategic assets. The octopus was shrinking. The next blow came from Ecuador. That was the most important development that ended the octopus's time. Ecuador does not fit at all into the standard banana republic narrative.

Land in Ecuador was owned by independent farmers, so it wasn't susceptible to the political and economic exploitation that had worked elsewhere. By the time the major companies were taking a serious look in Ecuador, most of the good farmland, the prime farmland, was already owned by Ecuadorians. That meant that there were never going to be any extensive concessions and grants of tax exemptions, all those sorts of things. In the late 1940s, Ecuador's president, Galo Plaza, invested heavily in infrastructure and pest control that benefited the local banana growers. Here was this important source of supply that came online in a very big way, very quickly after World War II. And it was

a source of supply that was impossible for United Fruit to control. We learn from Ecuador something that's more typical about the role of local entrepreneurs in agricultural trade and development, the contributions that they can make. Today, no one company comes close to dominating the international banana trade like United Fruit once did. The three biggest banana companies, Dole, Del Monte, and Chiquita, United's successor, they share around 40% of the global export market.

So there's more competition than there used to be, which economists will tell you helps keep prices down. But there's an even more powerful explanation for why bananas are so cheap. Standardization. So the advantage of having the Cabernet is that it is really a monoculture, that you can actually grow it consistently. Andrew Biles again, formerly of Chiquita.

You know that it's going to take eight to nine months to come to fruition, and you know how that banana is going to function when it's transported in refrigerated cargo, you know how it's going to perform in the ripening rooms in the country of destination, and you know how it's going to perform and hold up on the retail shelf. And it's not just that nearly every banana grown for export is a Cavendish. It's that every Cavendish banana is genetically the same as the next Cavendish. From a business perspective, that's ideal, the ultimate in quality control. From an agricultural perspective, however…

There's no diversity. So there's, you know, each plant is the same. Each plant has the same resistance to disease as it spreads. As you'll recall, the Gros Michel banana was wiped out years ago by Panama disease, or technically fusarium wilt. It's caused by a fungus that infects the plant's roots and eventually kills the whole plant and leaves the soil unfit for future banana growth. The strain of Panama disease that killed off the Gros Michel was known as TR1 or Tropical Race 1. Now there's a strain called TR4 that's attacking the Cavendish.

So indeed, it's fallen victim to almost the same disease as the Gros Michel. So, what we see is TR4 start, apparently, in Indonesia, spread into the Philippines. It's devastated crops there. As farmers move to the Mekong Delta or to Myanmar. And the banana industry is very worried that TR4 will make it to Latin America. If you look at the map, it's a disease that seems to be spreading west. Coming up after the break, the banana industry's race to save itself. There really isn't anything else on the horizon that could now go and replace Cavendish.

But what about science? That, of course, is not so acceptable societally. That's coming up right after this. It may sound like a made-up name, but Humpty Doo is a real place, a small town in the northern territory of Australia. It's hot, wet, and fairly rugged. When we first went onto the plantation, the plantation manager said, you've got to be a bit careful working around here. A girl was taken by a crocodile a couple of months ago.

We also have a real problem with wild buffalo, but we've managed to work there without losing any of our staff. That's James Dale. He's a plant scientist. I work at Queensland University of Technology in Brisbane in Australia. I work at Queensland University of Technology in Brisbane in Australia. I work on bananas. Dale's first job out of grad school was working on a banana disease. It was a disease called Bunchy Top and it had a long history in Australia. Bunchy Top was caused by a virus that scientists couldn't find a way to control.

And so when the concept of genetic modification came along, and that was sort of the late 80s, we said, wow, this is going to be absolutely perfect for bananas. And the reason for that is that the bananas that we eat are primarily sterile. Wild banana seeds are very hard. And so the Cavendish, like other banana varieties that people eat, has essentially been bred into a seedless, sterile condition. So crops that don't have any seeds are extremely difficult to breed conventionally.

So the idea of being able to genetically modify them, and that is to add additional genes to Cavendish, for instance, which we're interested in, seem really, really attractive. Attractive and, for the global banana trade, important, because the Cavendish, like the Gros Michel before it, has rare attributes. They're robust, so they travel long distances, and there really isn't anything else on the horizon that could now go and replace Cavendish. There's nothing that you could pull out and say, this is going to do what Cavendish did after the last outbreak. The new strain of Panama disease emerged in the 1990s. And around about 2000, we decided that this disease,

Tropical Race 4, was going to be a huge problem. And so we set out to look for genes to provide resistance to the disease. As part of this research, Dale had a former PhD student out collecting wild bananas. And the scientist was in Malaysia and happened to see this patch of bananas, which were growing where everything else had died from Tropical Race 4. So she and her colleagues collected seeds of those bananas and they sent them back to Australia. James Dale and his team began studying these bananas.

And so we said, OK, let's go and look in the DNA of those resistant ones and see if we can find the gene that would provide resistance. And we came up with a number of candidates, genes that seem to be working in the resistant seedlings, but not in the susceptible seedlings. And one of those looked really promising to us. So we took that gene and by a process known as agrobacterium-mediated transformation. We put it into another terminology, embryogenic cells or embryogenic cell suspensions. And these are, we make these cells from Cavendish.

They have the ability to regenerate an entire plant from a single cell. And this leads us back to Humpty Doo, Australia, which had been a fertile site for banana production. But because of the Tropical Race 4, it's been wiped out. Which made Humpty Doo the perfect place to hold the world's first experiment to see whether genetically

modified Cavendish bananas could survive Panama disease. Remember, once Panama disease has struck, the soil remains contaminated with the fungus. So we put this gene into these single cells and grew bananas back. In 2012, they began field trials that would last a few years, planting both genetically modified and non-GM bananas in the Humpty Doo soil. What did they find?

So what we found is, and we found a number of things, we found that the non-GM bananas were between 100% and about two-thirds of them were either dead or infected after three years. So the disease was having a pretty big impact. Okay, that's important to know, that Panama disease was still in the soil, which meant if a genetically modified plant survived, Okay, that's important to know, that Panama disease was still in the soil, which meant if a genetically modified plant survived, it was surviving Panama disease. So how did the genetically modified plants do?

Dale and his team planted six different lines of GM Cavendish plants. One of those, line three, the gene we put in is RGA2. So RGA2 line 3 appeared to be completely immune. At the end of three years, none of the plants were infected at all. So essentially what we've done is we've taken a gene from a wild banana that is resistant to tropical race 4, and we've taken that one banana gene and we've gone to put it into Cavendish. And by doing that, we've generated resistance to the disease. This was amazing banana news. RGA2, line 3, was a clear winner.

Some of the other genetic modifications did well too. Three of the other lines had relatively high levels of resistance where there was 20% or less plants either infected or dead, which was, to us, an incredible outcome. Rarely do you get that sort of percentage success in the sorts of things that we do. So we were pretty excited about that. And there was something else to be excited about.

The other really important thing we found was that the gene that we put in, this RGA2 gene, not only occurs in these wild bananas, but it also occurs in Cavendish. It just doesn't work very well. And so that's actually really, really important because there's a new technology known as gene editing. It's different to gene modification. So gene editing is where you can go into the DNA and just tweak genes that are already there. So it's very, very close to sort of natural processes. And so that's where we're now starting to figure out

how we can tweak the gene in Cavendish to make them resistant without actually adding any new genes at all. This type of gene editing is made possible by something known as CRISPR, which, as I'm sure you know, stands for Clustered Regularly Interspaced Short Palindromic Repeats. We spoke with one of CRISPR's inventors, the biochemist Jennifer Doudna, back in 2017 for an episode called Evolution Accelerated. It's episode number 291, if you want to hear it. At its core, the CRISPR gene editing technology is now giving human beings the opportunity to change the course of evolution.

And, you know, human beings have been affecting evolution for a long time, right? But now there's a technology that allows very specific changes to be made to DNA that gives us a new level of control. CRISPR is terrific. And so, yes, we are using CRISPR at the moment. So this would seem to be super amazing banana news. There are potentially two ways to save the Cavendish from Panama disease, by using CRISPR to tweak its genetic code, or by introducing new resistant genes from other bananas. Either way, the banana industry must be thrilled by the solutions that James Dale is proposing, right? We asked Andrew Biles, former CEO of Bananas and Pineapples at Chiquita.

James Dale, he is working on more of a GM approach. Okay, that of course is not so acceptable societally. So some people will say, yes, I don't mind genetic modification. Others will say they do. Indeed, a sizable fraction of consumers in the U.S. and especially in Europe consider genetically modified crops to be risky, despite assurances to the contrary from scientists like James Dale. And I think that's where we failed. We really haven't got the message across. This is one of the most incredibly highly regulated technologies in the world. So the sorts of things that we go through to demonstrate safety is amazing. The objection to GMO crops is also curious in light of the fact that traditional plant breeding, without which many, many fewer of us would be alive,

is itself a form of genetic modification. Jennifer Doudna again. I think it's important for people to appreciate that, first of all, that humans have been modifying plants for a long time, you know, genetically. And, you know, for literally thousands of years. Exactly. Thank goodness. And you realize, wow, I'm glad there's plant breeding. But, you know, the way that that's

been done traditionally is to use chemicals or even radiation to introduce genetic changes into seeds. And then plant breeders will select for plants that have traits that they want. The opportunity here with gene editing in plants is to be able to make changes precisely, not to drag along traits that you don't want. Really, the difference between what we're doing and conventional breeding is that they move thousands of genes at one time from one banana to another. We're just moving one or two. It's worth noting that nearly every technological advance is greeted with skepticism by at least a small segment of any population. And such skepticism may be magnified

when it comes to something you're going to put in your mouth. A great example for me is pasteurized milk. The economist Douglas Southgate again. In the United States and other countries, lots of kids used to die from drinking raw milk, raw milk that had been exposed to flies or whatever. Pasteurization came along. That entire source of mortality went away. And yet there were people who swore up and down that they were never going to consume pasteurized milk. They claimed it didn't have the same nutritional properties, didn't taste the same.

It was, in one way or another, undesirable. There are still some raw milk advocates, but most people, Southgate says, Most people ended up drinking pasteurized milk. And I just have a hunch that if we produce a substitute for the Cavendish, or if we improve the Cavendish by moving in a gene from some other banana, people will have a tough time telling the difference and the product will win acceptance. But big companies like Chiquita, or to be fair, most big companies in any industry, period, they're pretty risk-averse. Honestly, they can't afford to not be. But there's another reason James Dale is not surprised at Chiquita's resistance to his banana proposals. The big banana companies, unfortunately, have had a history of not being terribly innovative. They're much more reactive. They

don't run big research and development divisions. Yeah, we talk to them. They take more of a, let's just see what's going to happen, reaction. So how does Chiquita see a path forward for the endangered Cavendish banana? We believe the path towards this way, the plant breeding route. And James Dale's response to that? There are some exceptionally good breeding programs going on in the world, but you don't end up with Cavendish. You end up with something different to Cavendish.

And so if we want to replace Cavendish with something probably very, very different, we'll probably get that from the conventional breeding programs. So if you want to have the Cavendish in the future? If you want to have Cavendish in 20 years' time, they're probably going to be genetically modified, or they're probably going to be gene-edited. That makes it sound as if the Cavendish as we know it may well be headed for extinction, depending on the banana company's decisions and the public's response to genetic modification. So for the billions of people who eat trillions of bananas,

a great many of them Cavendish, how panicked should they be? We in the industry would say there's no need to panic. The world is not going to run out of bananas. But what about the Cavendish banana? Okay, what I think we're going to have to probably confront is actually having more varieties of bananas available in the future.

As we protect the farming of bananas, we're going to have to get used to how we can actually grow and commercialize and do the logistics for different bananas. The prospect of exporting several different kinds of bananas would be an adjustment for the industry, of course. For consumers, less standardization might mean higher prices, but the prospect of finding several varieties of banana in a grocery store would hardly be unsettling, considering how many varieties of apples and grapes and citrus fruits are available. But in a world with so many options in most realms, there has been something nice, something

unifying about all of us eating the same banana, no matter how you eat it, straight out of the peel, cut up on cereal, if you're feeling a little bit more ambitious. As you'll recall, the banana historian Virginia Scott Jenkins told us about researching earlier banana recipes. I found some very interesting menus for very fancy occasions that might have bananas on the menu. Jenkins has a rather interesting banana recipe of her own passed on from her mother. You take a peeled banana, you put mustard on it, you wrap it in a slice of ham, and then you bake it in a cream sauce.

I've tried it on two husbands and neither of them could eat it. I thought that was just nasty. Freakonomics Radio is produced by Stitcher and Dubner Productions. This episode was produced by Greg Rosalski and Matt Hickey. Our staff also includes Allison Craiglow, Greg Rippin, Harry Huggins, Zach Lipinski, and Corinne Wallace. Our theme song is Mr. Fortune by the Hitchhikers. All the other music was composed by Luis Guerra.

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