Plant epidemic

Event: Panama disease outbreak, 1950s
Location: Latin America

Economic cost: Estimated losses across Latin America were around $400m ($2.3bn today) although this figure does not include any of the economic losses caused by unemployment, abandoned villages and unrealised income in the affected region.

Description: The Fusarium oxysporum cubense fungus was first diagnosed in Panama but quickly travelled across Central America.

Damage: The disease wiped out the Gros Michel banana, the principal cultivar at the time, from plantations across the region. Between 1940 and 1960, around 30,000 hectares of Gros Michel plantations were lost in the Ulua Valley of Honduras, and in a decade 10,000 hectares were lost in Suriname and the Quepos area of Costa Rica.

Insight: Gros Michel was replaced in the 1960s by Cavendish, a variety thought to be resistant to the disease. However, a new strain of the pathogen was found to be attacking Cavendish plantations in Southeast Asia in the early 1990s. It has since spread, destroying tens of thousands of hectares across Indonesia and Malaysia, and costing more than $400m in the Philippines alone. There is concern that it could reach Central America and destroy up to 85% of the world’s banana crop. Solutions to contain the disease could include increasing genetic diversity among banana cultivars and developing hybrid varieties with stronger resistance.

Insurance solutions: The Lloyd's market offers cover in relation to Plant epidemic. Examples of this include but are not limited to: Product recall and contamination, business interruption and contingent business interruption (with disease trigger wordings), trade credit insurance, contract frustration and political risk.

Image: Bananas for sale in Ecuador around 1950. The Gros Michel cultivar dominated the market in Latin America until the Fusarium pathogen wiped it out in the 1950s and 1960s (Getty Images)

Sources: International Society for Horticultural Science; R.C. Ploetz: Panama Disease: a Classic and Destructive Disease of Banana (2000); Royal Netherlands Academy of Arts and Sciences; “FAO Urges Countries to Step Up Action against Destructive Banana Disease,” fao.org (2014)

The spread of Fusarium wilt banana disease could have a significant impact on growers, traders and families who depend on the banana industry. Countries need to act now if we are to avoid the worst-case scenario, which is massive destruction of much of the world’s banana crop.

Fazil Dusunceli, Plant Pathologist,
UN Food and Agriculture Organisation, 2014

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