Bananas: Unpeeling the Banana Trade - The Fairtrade Foundation

Unpeeling the banana tradeA Fairtrade Foundation Briefing PaperFebruary 2009

Banana facts• The banana is the most popular fruit in the world – shoppersspend more than £10 billion a year on the fruit globally 1• Fairtrade bananas now account for nearly 2% of the total worldtrade in fresh bananas• Bananas are the world’s fourth most important crop after rice,wheat and maize in terms of ensuring food security in dozensof countries in the developing world 2• Just 15% of bananas and plantains are traded on the worldmarket, the rest are used for domestic consumption 3• Production and trade in bananas is dominated by five companies– Chiquita, Dole, Del Monte, Noboa and Fyffes – which controlmore than 80% of global trade 4• The majority of banana plantation workers do not earn enoughto provide for their families – some earn less than £1 a day• Between 2002 and 2008, supermarket price wars saw the UKretail price of loose bananas slashed by up to 41%• In 2008, one in every four bananas sold in the UK was Fairtrade• In 2008, the value of the UK Fairtrade banana market was£150 million• The UK banana industry as a whole is worth £580million annually• Bananas are the third most valuable product sold in UKsupermarkets – only petrol and lottery tickets out sell them• Between 2000 and 2008, Fairtrade certified producer groupsand their communities received around $28 million in Fairtradepremiums just from the UK sales of Fairtrade bananas1Calculation by Banana Link on basis of FAO trade statistics 20052FAO figures3Ibid.4FAO/UNCTAD figures

Executive summaryThe banana: cheap, colourful and the UK’s firm favourite in the fruit department. But delve intothe reality behind the piles of yellow fruit on our supermarket shelves and the story is not always sosunny. This briefing sets out to explain why we all need to go further and make Fairtrade bananasthe norm in our shops and supermarkets. It explains why the situation for so many bananaproducers remains so precarious, describes the impact that Fairtrade has had in the bananasector so far and identifies what more can be done to support those at the bottom of the bananasupply chain.Nine years on from their launch, the success of Fairtrade bananas in the UK market isremarkable. With one banana in every four sold in the UK now carrying the FAIRTRADE Mark,they are rapidly becoming part of the nation’s everyday shop. With this growth has come positivechange to the lives of thousands of banana farmers and plantation workers. But the damagingtrends of production and trade that made the introduction of Fairtrade so vital still dominate theglobal banana industry.As bananas have become increasingly popular, retail prices have dropped significantly, forcingprices down across the entire supply chain in a race to the bottom. This pressure inevitably resultsin lower wages, longer hours and worsening working conditions for many plantation workers whoare often paid pittance wages – less than £1 a day in some cases – not enough to provide for theirfamilies. They are very often prevented from forming trade unions to protect their rights and improvetheir situation. The increasing use of casual and sub-contracted labour results in further abuses ofworkers’ rights.The picture for small-scale banana farmers is no better. New EU agreements in response to WTOrulings, coupled with devastating storms, have spelt disaster for small farmers in the Caribbean. Inthe Windward Islands more than 20,000 of 25,000 farmers have gone out of business since 1992and more farmers lose their livelihoods in Ecuador, Jamaica and other countries each time the pricethey receive for their bananas falls below the cost of production. Fairtrade has provided a lifeline forthese farmers – 85% of the surviving farmers in the Windwards are now certified Fairtrade – howeverongoing trade reforms remain a serious threat.The success of Fairtrade bananas can be attributed to UK consumers’ engagement with theproblems facing small-scale banana farmers and plantation workers, their corresponding pressureupon supermarkets to stock Fairtrade alternatives and their commitment to buying Fairtradebananas on a regular basis.But, just as bananas symbolise the success of the Fairtrade movement so far, they also clearlyillustrate the challenges that still lie ahead. Nine years of Fairtrade bananas in the UK have broughtbenefits to producers, but they are still vulnerable to food and fuel price rises, climate change andever more stringent demands from retailers. As well as scaling up the reach and impact of Fairtradein the banana industry we need to create an international economic system in which trade not onlyhelps to eliminate poverty but also empowers people to take their future into their own hands.page 1 Unpeeling the banana trade

1.The changing supplyof UK bananas21514610371164132019 18151217112981.1 The traditional playersBefore 1993, historical UK trading relationships meant thatmost Caribbean bananas were guaranteed a market inBritain. Most of Britain’s bananas came from St Lucia, StVincent, Dominica and Grenada (collectively the WindwardIslands), as well as Jamaica, Belize and Surinam.The advent of the Single European Market caused aradical shift in supply as the various national tradingarrangements were harmonised under a single importsystem. As the European market has become moreopen, retailers have started to source more directly fromproducers, inevitably choosing lower-cost suppliers,resulting in bananas from Latin American plantationsand now West Africa replacing higher-cost onesfrom traditional Caribbean smallholders.Between 1992 and 2007, UK banana imports increasedfrom 545,000 tonnes to 927,000 tonnes, a growth of41%. In the same period, imports from Caribbeancountries fell from 70% to less than 30% of imports.Cheaper Latin American ‘dollar’ bananas, almostinsignificant in 1992, now make up around half of UKimports, with Costa Rica the UK’s biggest banana supplieraccounting for 25% of total imports in 2007.Caribbean producers remain almost entirely dependent onUK sales and so their falling share of the UK market hashad a devastating effect. Dominica, St Vincent andSt Lucia have lost more than 20,000 of their 25,000small-scale banana growers since 1992. There are nowless than 4,000 small farmers remaining of which over3,500 are Fairtrade certified. 5Other countries1 Ecuador2 Philippines3 Costa Rica4 Colombia5 Guatemala6 Honduras7 Panama8 Brazil9 Peru10 Nicaragua240,000220,000200,000180,000160,000140,000120,000100,00080,00060,00040,00020,0000Volume(tonnes)19922007ACP11 Cameroon12 Ivory Coast13 Dominican Republic14 Belize15 Surinam16 Jamaica17 Ghana18 Windward IslandsUK banana imports by principal countries(1992 and 2007)DominicaSt LuciaSt VincentBelizeCameroonCountrySource: DEFRA 2008DominicanRepublicIvory CoastJamaicaSurinamGrenadaColombiaCosta RicaEcuadorEU19 Martinique20 Guadeloupe21 Canary IslandsGuatemalaHondurasPanamaVenezuelaFranceOther EUpage 2 Unpeeling the banana trade

In response to growing consumer demand for Fairtradeand/or organic bananas, countries such as the DominicanRepublic and Colombia, which have substantial volumesof both, have grown in importance as suppliers.The leading companies importing bananas into the UKinclude four multinationals: Chiquita, Dole/JP Fruit, Fyffes,and Del Monte; and three independents: SH Pratt, MackMultiples and Windwards Bananas. These samecompanies also ripen and distribute the fruit. Althoughmarket share figures change rapidly with changes in retailsupply chains, they all have a market share of between10% and 20%, except Windwards Bananas(approximately 6%). Together these companies controlover 98% of the UK market. 61.2 The new arrivalsIn 2006, around 81 million tonnes of bananas wereproduced around the world, of which 17 million tonneswere exported. 7 Traditional banana exporting countriesare facing further challenges in the form of major newproducing countries entering the market with the potentialto reshape the world banana economy. The world’s twolargest banana-producing countries – India and Brazil –together grow almost double the volume that is tradedworldwide but currently consume the majority of thisdomestically. In India, three state governments – Gujarat,Maharashtra and Kerala – are all actively encouragingfarmers to upgrade their technology and enter the exportmarket. At this stage, there have only been trial shipmentsto Middle Eastern markets, but if the Indian initiativesgo ahead, this will have a global impact. Indeed aspokesman for the Indian fruit exporter Tata Chemicalsrecently predicted that ‘India, in the next five to ten years,will [become the world’s] largest grape and bananaexporter so there is big potential in the business.’ 8Brazil’s exports to its Southern neighbours and toEurope have grown rapidly this millennium, reachingaround 250,000 tonnes a year.In Africa, the promise of zero tariff entry to the EU becauseof some countries’ Least Developed Country’ status hasattracted fruit company investment. In Ghana, Dolestarted exporting from new plantations in 2006, whileChiquita has tested new varieties in Côte d’Ivoire, withplanting of crops for export now underway. Chiquitatechnicians have also acquired land on the coastalplains of Angola, a country which has neverpreviously been involved in banana exports. 9The development of new banana companies with acapacity to move into other markets is also a challengeto the dominance of the established companies. JFC, thebiggest of the new Russian companies, not only importsEcuadorian bananas for the Russian market, but hasinvested in its own plantations, in shipping and in a retailchain, making it the world’s first fully ‘vertically integrated’fruit company, with ownership of the entire supply chain.1.3 Fairtrade in the UK marketFollowing several years of hard work to put Fairtradestructures in place, the Windward Islands shipped thefirst ever Fairtrade bananas to the UK in 2000. The overallmarket has grown from 5,500 tonnes that year to 158,000tonnes in 2007. Driven by the commitment of Sainsbury’sand Waitrose to convert to 100% Fairtrade bananas, salesare on track to reach 193,000 tonnes for 2008, an overallgrowth of 3,400%. To meet this growing demand, 63producer organisations from eight countries (Ghana,Ecuador, Peru, Colombia, Windward Islands, Costa Rica,Jamaica and the Dominican Republic) have now beencertified, with 42 of them supplying Fairtrade bananasto the UK.350300250200150100500Value(£000)Growth of the UK Fairtrade banana market (by value)(2000-2007)1999Year200020012002Sources: DEFRA and Fairtrade FoundationConventionalFairtradeThe initial success of Fairtrade bananas owes much todedicated Fairtrade companies like the Dutch pioneerAgrofair which imported the world’s first Fairtrade bananasinto Europe in 1996. It is co-owned by the farmers whogrow the fruit it imports and markets exclusively Fairtradefruit and juices, having now expanded into mangoes,citrus fruits and pineapples.200320042005200620075Communication from Windwards Bananas.6Information compiled by Banana Link from trade sources.7United Nations Food and Agriculture Organization.8Freshinfo News. Saturday 10 January 2009.9Communication from Banana Link.page 3 Unpeeling the banana trade

2.Banana trade warsThe European Union is a hugely significant player in theworld banana trade, importing about a third of all tradedbananas – about the same amount as North America –and more than three times that of Japan and Russia, thethird and fourth biggest importers. EU policies thereforehave a major impact on the world trade in bananas. Whilethe EU banana import system of quotas and tariffs hasbeen at the centre of global trade disputes, reformsintroduced on 1 January 2006 have drastically reducedthe level of market intervention.2.1 The story so farThe formation of the Single European Market in 1992meant that the European Union had to consolidate thevarious tariff and quota arrangements across Europeancountries for the importation of bananas. 10 Followinglengthy debates, a system of both quotas and tariffs wasadopted in July 1993.The EU arrangements however were non-compliant withWorld Trade Organization (WTO) rules which promotetrade liberalisation by removing trade barriers such asquotas, tariffs, and subsidies. Latin American bananaexporting countries and the USA lodged a series of legalchallenges at the WTO claiming that the EU regimediscriminated against Latin American producers andhampered the expansion of, mainly US, multinationalcompanies.In response, the EU agreed to end the quota systemand introduce a single tariff for all banana imports. As aninterim measure, the WTO agreed that the EU could waivethe single tariff and continue tariff-free entry for bananasfrom African, Caribbean and Pacific (ACP) countries inorder to honour long-term commitments that would endin 2008. 11The crux of the argument regarding the tariff was thatLatin American governments and companies wantedto ensure that the single tariff was set at a level theybelieved would be low enough to make it remunerativefor their businesses. However small farmers’organisations, plantation workers’ unions and manyNGOs argued that by simply removing quotas and usingtariffs, the market would be flooded with cheaperbananas, pushing import prices down, threateningmillions of livelihoods as multinational banana companiesabandoned higher-cost producing countries in searchof cheaper production. On top of that, if the tariff wasfixed too low, higher-cost producers like the smallfarmers of the Windward Islands were under threat ofbeing squeezed out of the market altogether.Following multiple rounds of consultation and debate theEU eventually implemented in 2006 a single tariff ofg176/tonne which in effect only applied to LatinAmerican imports as duty-free entry for ACP imports wasmaintained for a volume which effectively covered all theirEU exports. As predicted, since 2006 import volumesfrom both Latin America and West Africa have grownwhile prices inside the EU fell and, as feared, price-cuttingby major European retailers is further squeezing the payand conditions of plantation workers at the bottom of thebanana supply chain. 12However the matter didn’t end there. In 2007, Ecuadorand Colombia lodged complaints that the EU reformshad hit their EU banana sales and the US againcomplained that duty-free access for ACP countries wasdiscriminatory. The EU protested that the US action wouldonly damage ongoing talks with all parties, includingnegotiations with ACP governments to sign newEconomic Partnership Agreements (EPAs) that wouldresolve these issues.EU and Latin American ministers were on the verge ofsigning a historic breakthrough deal at the WTO DohaRound meeting in Geneva in July 2008 that would seeincremental cuts in the tariff. This could spell the end ofthe banana export industry for Caribbean growers, buthaving run out of options, the ACP group accepted thedeal on the understanding that it came with additionaldevelopment aid to restructure remaining industries andassist those forced out of business. However the deal fellthrough amidst the collapse of wider trade negotiationsto slash tariffs and subsidies for farm products.A prospective meeting for December 2008 failed tomaterialise so whether or not trade ministers can reachagreement on the Doha Round in 2009 – includingreviving the deal on bananas – now remains tobe seen.10Import tariffs are taxes imposed on internationally traded goods whilst quotas limit the volume of goods that can be imported.11ACP countries are the 46 African, Caribbean and Pacific countries that are signatories of the Cotonou agreement with the European Union.12According to EUROSTAT figures, imports of the big four Latin American exporting countries taken together rose by 9% from 2005 to 2006, although Ecuador’svolume fell; West African exports rose by over 15%.page 4 Unpeeling the banana trade

Banana wars: a timeline1992 Formation of a single European market1993 Harmonisation of banana import arrangements into the EU using a tariff and quotasystem which maintains preferential treatment for ACP countries1993 The US, Honduras, Guatemala, Ecuador, Panama and Mexico lodge complaint at GATT 13(predecessor of the WTO)2001 EU agrees to end preferential access arrangements and put in place single tariff by 2006which continues to deliver existing protection and market access until 20082004 EU announces tariff negotiations will begin at g230/tonne2005 EU finally agrees a single tariff of g176/tonne2006 New single tariff regime implemented2007 Ecuador and Colombia lodge complaints at WTO that new regime is discriminatory2008 (Jul) Breakthrough banana deal agreed which would see incremental cuts in tariff to g114/tonneby 2016 but WTO Doha Round negotiations in Geneva collapse along with banana deal2008 (Nov) WTO rejects EU appeal against its decision that EU banana regime is inconsistentwith global trade rules2.2 What role EPAs?In parallel talks starting in 2002, the EU and ACPgovernments have been negotiating regional EPAs toreplace the trade sections of the Cotonou and Loméagreements that date back to 1975 and which enshrinethe preferential treatment for ACP imports.The EPAs are intended to put in place new free tradedeals that are compatible with WTO rules from the outset.Under WTO rules, trade deals must open up ‘substantiallyall trade’ between partners but they also allow for thegradual opening up of markets for sensitive and emergingACP country industries.However, the EU has been accused by NGOs, civilsociety groups, think tanks and prominent academics ofusing bullying tactics to push through an aggressive tradestrategy with ACP countries that goes beyond WTOrequirements and forces them to open up their marketsin a way that could be disastrous for local economiesand the livelihoods of millions of people. So far only theCaribbean regional grouping has officially signeda ‘comprehensive’ EPA (covering goods and servicesand investment) but, with indications of a change ofnegotiating style on their part, the EU hopes to concludenegotiations with all ACP countries by the end of 2009.Nevertheless, significant concerns remain about the termsof the agreements currently on the table and who willbenefit most.13The General Agreement on Tariffs and Trade whose main objective was the reduction of barriers to trade.page 5 Unpeeling the banana trade

3.Banana price warsBananas occupy a unique position in the shopping basketof the British consumer. After petrol and National Lotterytickets, they are the third most valuable of all productssold by the major supermarkets. Like other staplessuch as bread, milk and baked beans, price-consciousconsumers are likely to know how much bananas costand to use them to judge the relative value for moneyoffered by the different supermarket chains for otherproducts. 14 This means that these products areparticularly vulnerable to being used in price-cuttingbattles between supermarkets in the competition to winthe hearts and purses of the UK shopper. In recent yearsshort-term price-cutting has been a regular feature ofspring marketing strategies designed to increase marketshare by enticing non-regular customers throughthe door. 15As a result of the series of price wars between the majorsupermarkets, the retail price of conventional loosebananas fell by a full 41%, from £1.10 a kilo to 64p,between 2002 and 2007 (although they had increasedto around 95p by the end of 2008). Recent reports haveindicated that the global financial crisis and higher fruit andshipping costs will increase the price of bananas to thesupermarkets, 16 however in January 2009 another leadingsupermarket had slashed prices again to 82p per kilo. 17Contrary to popular belief however, the evidence indicatesthat sales of bananas do not rise during price promotionsand seems to confirm that price cuts are not driven byconsumer demand for cheaper bananas.1.151.101.051.000.950.900.850.800.750.700.65Price(£/Kg)Average weekly UK retail price of bananas*(2000-2008)Jan-00Jan-01Jan-02Jan-03Year*The average weekly retail price of bananas at Tesco, Sainsbury’s, Somerfield, Morrisons, Safeway/ASDASource: FyffesJan-04Unless supermarkets absorb price cuts within their ownprofit margins (which they occasionally do), any drop inretail prices inevitably gets passed down the supply chain.This means that ultimately there is just not enough moneyreaching countries of origin to provide decent livelihoods,wages and working conditions. 18 The impacts of this raceto the bottom upon the banana producers and workersat the bottom of the supply chain are described in moredetail below.Jan-05Jan-06Jan-07Jan-084.The producersThere are two main models of banana production forinternational export: small-scale farms and plantations.Fairtrade labelling was set up in the late 1980s to increasemarket access for small-scale farmers (at the bottomof the supply chain) who were struggling to surviveamid tumbling prices and uncertainties related toliberalisation of agricultural commodities. Since thenFairtrade has been extended to commercial farmenterprises as a means of increasing the empowermentand well-being of their workers.4.1 Small farmers – surviving against the oddsSmallholders are independent family farmers who usemainly family labour. In the case of bananas, they generallyemploy one or two permanent workers and bring in casuallabour for the fortnightly harvest.The vast majority of family farmers who have survived inthe international banana trade are in the Caribbean. Theonly countries where family farms dominate the bananaexport economy are Dominica, St Vincent and St Luciain the Windward Islands. Small-scale farmers are alwaysat a disadvantage in terms of economies of scale, but withbananas this is exacerbated by the fruit’s highly perishablenature. Losing one consignment to hurricanes or diseasewon’t necessarily pose a risk to a large plantation, but canbe enough to knock a small farm out of business. Thisvulnerability also makes them less attractive to buyerswho need to ensure year-round consistency of supply.For farmers in the Caribbean, the geography of theirislands also works against them. Growing areas aremountainous, with poor soil conditions and low yields.14Banana Link. ‘Collateral Damage: How price wars between supermarkets helped to destroy livelihoods in the banana and pineapple supply chain.’ November 2006.15The Grocer.16Freshinfo News. Saturday 10 January 2009.17Daily Mirror. 14 January 2009.18Banana Link. ‘Collateral Damage: How price wars between supermarkets helped to destroy livelihoods in the banana and pineapple supply chain.’ November 2006.page 6 Unpeeling the banana trade

Higher shipping, distribution and labour costs allcontribute to a much higher overall production cost thanLatin American plantation production. Small farmers arealso less able to respond to increasing demands forstandardised fruit quality and large volumes. More andmore retailers also require technical quality standardssuch as GLOBALGAP 19 from all their suppliers and smallproducers have limited capital to invest in meeting theseneeds. Hurricanes and flooding are frequent in theCaribbean. For smallholders, losing a crop to the weathercan be disastrous and it can take several months beforeany fruit can be harvested again. Substantial outlay isrequired to buy more banana plants. Without other cropsto fall back on, or savings to shoulder the extra cost andfeed a family while business is poor, the situationis desperate. This too has knock-on effects on the localeconomy.Fairtrade is unique because at its heartlies the need of small-scale producersfor market access under fair tradingconditions. No other ethical trade initiativeaddresses the problems faced byfamily-based producers working at the farend of global supply chains over whichthey have virtually no influence, but inwhich decisions are made that can affecttheir whole lives.In Colombia and Ecuador small farmers are treated byexporters as a kind of buffer supply – their fruit is indemand when the market is in short supply; but when themarket is oversupplied they are forced to accept pricesbelow their costs of production or are simply unable tosell at all. The response of many small growers in SouthAmerica and the Caribbean has been to come togetherin associations and co-operatives (which enables them toshare costs, market information and technical support) inorder to supply higher value speciality markets such as theorganic and/or Fairtrade markets. This is a very positivedevelopment, but it has not prevented many thousands ofsmall-scale banana farmers from losing their livelihoods.In Ecuador, every time the price falls below the costs ofproduction (as it does for several months of the year),another raft of small producers goes out of bananaproduction. Whether in the Windwards or South America,there are often few alternatives for farmers to migrating tourban areas or to the rich countries where their bananasare consumed.After decades in which smallholders have beensqueezed out of markets by larger plantations, the worldis beginning to wake up to the damage this has causedsocially and environmentally. The Fairtrade modeldemonstrates that small-scale farmers can achievegreater productivity while preserving the naturalenvironment and the well-being of people working onthe land, as well as delivering high-quality products.For small-scale farmers to remain economically viable andbenefit from international trade they will need improvedaccess to credit, farm inputs and technical support.4.2 Plantation workers: bearing the costsof cheap bananasThe other main type of production takes place onmedium- and large-scale plantations that hire labour allyear round. A typical plantation is 250 hectares althoughthey can be as large as 5,000 hectares. They generallyemploy one worker per hectare of commercial bananasalthough in the most productive plantations, there maybe as little as one worker per 1.5 hectares. Comparedto other cash crops however, bananas remain a highlylabour-intensive crop and today over 90% of bananasentering world trade are produced on plantations wherelarge numbers of workers are present.Most of the Latin America industry is characterised bylarge-scale plantations, many owned by US companies(hence the name ‘dollar’ bananas), on flat coastal lands.In many countries the plantations are controlled either bythe big multinationals with ‘vertically integrated’ operations(from plantation ownership to importing and ripeningfacilities in the consumer countries), or by nationalcompanies that sell to the same multinationals.Fairtrade also has a wider ambition toassist all people who are disadvantaged byconventional trade, and landless labourersare among those in greatest need of ourmodel. We will ensure that our work withplantations complements other initiativesseeking to secure and enhance labourrights in the global South.Given that the vast majority of banana trade is suppliedby plantations and that it has been a very profitable cropfor fruit companies and retailers, it would be reasonableto expect that the benefits might be shared with the half amillion or so workers in the world’s banana plantations.19GLOBALGAP standards certify Good Agricultural Practice as required by European retailers.page 7 Unpeeling the banana trade

4.The producers continuedFor a period in the 1970s and early 1980s, it was indeedthe case that banana plantation jobs in many countrieswere seen as the best agricultural work. It was a sourceof pride to work in a plantation. Wages wereconsiderably higher than typical agricultural wages, andmany workers were covered by the benefits negotiated bythe independent trade unions they had struggled to formover previous decades. Today however, the situation isquite different as a result of the never-ending downwardpressure to cut prices and production costs all along thesupply chain. 20The effect on plantation workers in Latin America of thedrive to cut labour costs and increase productivity hasbeen dramatic and manifold: increasingly casualisedworking relationships; long hours and low wages;anti-trade union activity; intensive use of agrochemicals;poor health and safety standards; and lack of access toproper healthcare. These are described in more detailbelow. In Africa, where costs are lower, the medium- andlarge-scale plantations in Cameroon, Cote d’Ivoire andGhana tend to employ more workers per hectare than inLatin America and working conditions are not quite soharsh (although invariably they don’t receive a living wage):in general, working days are not as long and, becausefewer chemicals are applied for climatic reasons, workersare less exposed to pesticides. 214.3 Wages and working conditionsRather than increasing, banana workers’ wages haveactually fallen dramatically over the past 15 years. Themajority of banana plantation workers do not earn enoughto provide for their families – some still earn less than £1per day. 22 An eight-hour working day in Costa Rica in1993 would earn a monthly wage of $250. Four yearslater the equivalent was just $187, and by 2003 theminimum agricultural wage remained the same in dollars,while the cost of living had nearly doubled. 23 A studycommissioned by The Co-operative Group in 2004concluded that Costa Rican workers considered a basic‘living wage’ would be at least 50% higher than thetypical wage prevailing in plantations. 24 In Ecuador, thegovernment’s own figures show that the minimumagricultural wage of $160 a month (which is more thanmany workers receive) only buys about a third of the basichousehold food basket.There has also been a downward trend in the numberof permanent contracts available for workers and theincreasing use of casual labour and contractors. Thisprocess of hiring workers through other companies or ona short-term basis enables plantation owners to avoidresponsibility for workers rights. It also often preventsworkers from claiming their statutory employmentbenefits, or from joining a union, as in Ecuador. 25The situation for women workers, who are mainlyemployed in the packing-houses, is of particular concernin many producing countries. Many banana companies donot respect basic rights such as maternity leave andregular healthcare and there are no childcare facilities onthe plantations. 26 In fact employers have been employingfewer and fewer women so as to avoid theseresponsibilities. In addition, women are working in aculture that has not historically challenged sexualharassment in the workplace. 274.4 Trade union powerJoining and forming independent trade unions in order tofight for improved conditions is one of the most importantways that workers can secure their rights. While all thebanana exporting countries in Latin America have ratifiedthe main conventions of the International LabourOrganisation (ILO), including the freedom to join a union,these conventions are often not enforced on the ground.The regional coordinating body of banana workers’unions, COLSIBA, estimates that only about 10% of LatinAmerican workers are union members. Of these, wellover half have been able to negotiate collective bargainingagreements – labour contracts that outline the agreedoutcomes of collective bargaining negotiations on payand working conditions – with their employers.An ILO study of banana plantations in Costa Ricaconcluded that ‘trade union organisations are persecutedand repressed. Dismissed for their trade union activities,workers are placed on blacklists that circulate among theplantation owners. They will never find work again.’A more recent ILO report confirms that this situationpersists. 2820Gilberth Bermudez. ‘Working Conditions in Latin American Banana Plantations.’ IBC II. 2005.21Communication from Banana Link.22‘News from the Banana Front.’ Issue 11. Banana Link. January 2007.23Ibid 17.24‘The Real Wage Situation of Male and Female Workers in 11 Banana Plantations in Costa Rica, in Comparison to a Living Wage”, ASEPROLA, November 2004.25ITUC Annual Survey of Violations of Trade Union Rights 2008.26Preparatory documents for IBC II. 2005.27Ibid 13.28Report of ILO Mission to Costa Rica. 2007.page 8 Unpeeling the banana trade

Since the 1990s, Latin American banana companieshave increasingly relied on cheap migrant labour as a wayof bringing down labour costs. In Belize, owners haverecruited a largely migrant workforce from neighbouringcountries and use the threat of deportation wheneverworkers have tried to organise themselves to secureimprovements.In other countries, Colombia and Guatemala for example,the situation is even more serious with reports that tradeunion members and leaders have been systematicallymurdered by private security forces, paramilitaries orguerrilla groups as a means of deterring others frombecoming involved in union activities. 29Fairtrade standards aim to go further thanthe norms of ethical assurance and ourfocus on promoting sustainabledevelopment means that we make adifference by changing situations ratherthan simply certifying a status quo. Ourstandards endorse worker organisationthrough democratic and independenttrade unions as the best way of protectinglabour rights, and collective bargaining asthe best process for agreeing employmentconditions.laws are routinely violated. Indeed employers not onlyignore this legislation, but sometimes discipline workerswho fail to continue working during aerial spraying. Sincethe living quarters of workers (and their families) are ofteninside or adjacent to the plantations, their homes aresprayed and they consume chemical-coated plants fromtheir gardens, and drink or wash with contaminated water.Toxic chemical residues also abound in the soil, waterand sediment in areas adjacent to the plantations. Theintensive production of bananas places huge demandson the water courses and careless storage of chemicalsleads to regular pollution incidents, with drasticconsequences for aquatic life. Polluted water used inthe packing sheds to wash bananas is sometimes alsorecycled for use by workers and their families living on theplantations.The health impacts of this cocktail of pesticides includedepression, respiratory problems, damage to the eyes,skin infections, sterility and cancers. Women can eithermiscarry or give birth to children with birth defects. 30A study by the Health Research Institute at the NationalUniversity of Costa Rica found that women in thecountry’s banana packing plants suffered double theaverage rate of leukaemia and birth defects. 31 There areunlikely to be medical staff on the plantation and thedoctors who do treat workers are often employed by thecompanies and are therefore unwilling to identify exposureto chemicals or industrial injuries.4.5 Workers’ health and environmentBananas are susceptible to a host of diseases particularlyin monoculture production models such as plantations.As a result, banana farms have increasingly relied on theuse of pesticides and fungicides to produce the ‘perfect’fruit that buyers demand. These chemicals have had aseverely harmful effect on workers’ health and can causesignificant environmental damage when used intensivelyor improperly applied.Chemicals are both aerially sprayed and appliedmanually. It is estimated that a high proportion ofpesticides sprayed onto crops from planes fail to land onthe plants themselves, instead falling onto the soil andinto waterways, affecting workers on the plantations, andin their nearby homes. Some countries, including CostaRica, have passed legislation stating that workers shouldnot be in the fields when spraying takes place, but these29Information from Banana Link.30Yamileth Astorga. ‘The environmental impact of the banana industry.’ IBC II. 2005.31“Daño del ADN en trabajadoras bananeras expuestas a plaguicidas en Limón, Costa Rica”, Vanessa Ramírez and Patricia Cuenca,Instituto de Investigaciones en Salud (INISA). Universidad de Costa Rica. 2002.page 9 Unpeeling the banana trade

5.What difference hasFairtrade made?Fairtrade is increasingly important to producers andworkers who have been left vulnerable to market forcesthat have a negative impact on prices and workingconditions. Fairtrade offers a more profitable andsustainable way of trading through:•Guaranteeing fair and stable minimum priceswhich cover the costs of sustainable production• Providing an additional Fairtrade premium forinvestment in economic, social or environmentalimprovements 32• Long-term trading relationships to allow farmers toplan for the future• Safeguarding workers’ rights and securing progressto better pay and conditions• Ensuring respect for the environment by usingenvironmentally sound agricultural practices.Below are just a few of the stories from the thousandsof people who have benefited from sales of Fairtradebananas so far. What they have in common is thatFairtrade has supported their producer organisations todevelop their democracy, participation and empowermentalongside delivering significant economic benefits. 33In 1996 our plantation was on the verge ofcollapse and Solidaridad, the Dutch NGObehind the [Fairtrade company]Agrofair, stepped in and bought 25% ofthe company’s shares on behalf of theworkers. The cash was injected into theplantations and the company was revived.This is a remarkable thing that Fairtradehas done. Alex Yeboah-Afari, PersonnelManager, VREL5.1 Economic impactAs conventional banana prices have declined, Fairtradeprices to producers have remained stable. 34 This hasproved a lifeline for many small farmers who have feweconomic alternatives. As Arthur Bobb of the WindwardIslands Farmers’ Association (WINFA), has said: ‘If theWindward Islands had not made the switch to Fairtradewe may have been out of the market by now.’ Thesuccess of the banana industry also has a knock-oneffect on the economic activities of the wider communitybecause of the increased spending capacity in the localcommunity. Pension benefits are very rare in Dominicaso most farmers have no income once they retire.The Fairtrade premium has allowed a fund to beestablished to provide a lump sum payment on retirementwhich cushions the transition when farmers are too old towork on their farms.For workers such as those at Volta River Estates Limited(VREL) in Ghana, the plantation provides much neededjobs in an area with high unemployment and in a countrywith no social security system and which has only recentlyadopted a national healthcare system.In Ecuador, farmers and workers in and around thebanana growing communities of Tenguel, El Guabo andLa Libertad have significantly improved the incomesof around 2,000 rural families, in a country where ruralpoverty remains endemic, by developing their organisationthrough Fairtrade. These Fairtrade farmers generateincomes around double the average for small farmersin the area, and have created a model of how to buildproducers’ businesses by taking full control of themarketing of their bananas from farm to port throughtheir stake in the trading company Agrofair.Fairtrade can also provide the means to allow farmersto diversify into other livelihood opportunities. Farmersin the Windwards have for example moved into growingcoconuts for the export market. The Montaque Project,which is being funded by the Fairtrade premium,involves the purchase of an agro-processing facility byfarmers to enable new product development anddiversification through business development. A bananaripening centre is also under development in St Lucia totake advantage of potential new local market possibilitiesand provide additional income for the farmers.Fairtrade coconuts more than anythingare about hope. Now we are successfullybringing coconuts over, we can go aheadwith Fairtrade mangoes and maybe in thefuture we will have a whole cluster ofFairtrade produce in the UK market.Simeon Greene, Relations Director,Windwards Bananas32The Fairtrade premium on plantations is spent by the Joint Body which comprises democratically elected workers’ representatives, plus managementrepresentatives to provide support. For small farmers organisations, a Premium Committee manages projects agreed by its members.33The Fairtrade standards can be found at www.fairtrade.net34Fairtrade banana prices are country-specific taking into account both costs of production and the need to minimise pricecompetition between Fairtrade certified producers.page 10 Unpeeling the banana trade

5.2 EmpowermentEmpowerment is at the heart of Fairtrade with producerorganisations as well as individual farmers reaping thebenefit. The strengthening of small farmers’ organisationsis a key means of improving their position and bargainingpower in the supply chain.Fairtrade is empowering people tomanage their own affairs – thedevelopment of human capacity that isso vital for the future. With Fairtrade,small farmers have been transformed frommarginalised farmers into businessmen.Amos Wilshire, Fairtrade Coordinator,WINFA, DominicaIn the Windwards, Fairtrade is seen as empoweringfarmers who previously had almost no role indecision-making in their own industry. Even in the dayswhen banana prices were attractive enough to make agood living, they were essentially contract growers for anow defunct international company. Now though as ColinBorton, who works for Windwards Bananas in the UK,comments: ‘There is an enhanced sense of participationin the banana industry, an increased social awarenesswithin communities both by farmers and, as a knock-oneffect, by the community as a whole…. Fairtrade hasrekindled farmers’ hope and confidence, which was inserious decline. Farmers now have an unmistakable pridein their work, a concept seriously lacking before theintroduction of Fairtrade.’Similarly the right of workers to organise into unionsempowers them to secure their rights. On the VRELplantation as a result of Fairtrade, the management, innegotiation with the local branch of the GeneralAgricultural Workers Union (GAWU), has introducedbenefits almost unheard of in Ghana, including increasingwages to 30% above the national minimum. All employeesnow have permanent contracts and are entitled tomaternity, sick, compassionate and study leave.co-operative have invested in schools, sports, healthcareand production facilities, including a new wing of a schoolin Taitabon, a basketball and volleyball court in BateyAmina, and equipment for fire stations and healthcentres. Jose Peralta, the President of ASOBANU, hasnoted ‘We have really contributed to help the smallfarmers and communities to have a better life…In Taitabonwhich is very poor, we have built a new wing to a schoolto accommodate new students…We’ve donated acomputer to the public library and also photocopiers tosome primary schools so that they can do their copyingmore cheaply.’At El Guabo in Ecuador, Fairtrade premiums havefunded a development programme including over 450scholarships for workers’ children to cover school fees,books and uniforms; creation of a nursery and a specialneeds school; health and nutrition programmes atnurseries; plus health insurance for farmers and healthinsurance contributions for their workers.In the Windwards, the premium has contributed toprojects across the islands to support and develop thewider community including:• Improvement of roads• Support to pre-schools and primary schools• Provision of equipment to rural clinics• Provision of school transport and bus shelters.Without the Fairtrade premium, many social andcommunity projects would simply not have been possible.Fairtrade has contributed in no shortmeasure to the lives and livelihoods ofmany farming communities and theeconomic and social stability in the regionas a whole. Arthur Bobb, WINFA5.3 Social impact and well-beingThe unique Fairtrade premium is often invested inimprovements which benefit the wider community andwhich cover a range of local needs. For example, in theDominican Republic the farmers of the ASOBANUpage 11 Unpeeling the banana trade

5.What difference has Fairtrade made? continued5.4 Environmental improvements and betterfarming systemsFairtrade standards encourage environmentally soundagricultural practices and environmental improvements.Fairtrade has, in its relatively short period of operation inthe Windward Islands, led to far more environmentallyfriendly farming methods than those of the traditionalbanana industry. The Fairtrade premium has been used toinitiate environmental improvements such as:• Use of buffer zones to stop farm pollutionentering waterways• Creation of grass barriers to reduce soil erosion• Organised farm waste management collection.The famers and community in the Windwards have, as aresult, enjoyed significant environmental benefits.I see Fairtrade as the best action. Itprevented me from losing my life quicker.First, it protects me and my health by somerules: having to use a respirator, gloves,etc. Secondly, it makes me grow moreorganic food, use less pesticides, usemore organic manure. I think the Fairtrademeetings are interesting to attend and arereal improvements because we give to thecommunity. I would like to use the premiumfor the protection of rivers and will submitthis idea to my group. William Stapleton,banana farmer, St VincentIn 2001, VREL in Ghana, started the organic conversionprocess at three (out of five) sites as well as to Fairtradeproduction. Now even their two non-organic sites nolonger use herbicides and insecticides and the mostdangerous fungicides have been substituted for morebenign types.Without the premium price we would notbe farming still. Farmers here are gettingprices that do not cover their costs. We,however, have been able to cut fertiliseruse by half and have started using animalmanure. We have stopped usingherbicides and the groundcover betweenplants is attracting back the wildlife.Deris Ariza, Asoproban, Colombia5.5 Business improvementsFor many small farmers, Fairtrade premiums oftenprovide the only means by which they can improve theirbusinesses and position in the market. In the Windwards,farmers have been able to upgrade their pack houses andthis initiative has been critical in enabling them to meetGLOBALGAP standards. A similar initiative at ASOBANUhas built over 80 packing houses for farmers to preparetheir crop before export.Some farmers in the Windwards have had to carry boxesof bananas on their shoulders for two miles to the truckcollection point – all farmers located along these roadshave benefited from the improvement of feeder roadsand bridges to give farmers better access to their bananafields. A disaster fund to help Windwards farmers recoverfrom hurricane damage has also been established.At El Guabo in Ecuador, a rotating loan fund hasbeen established which can be used by farmers fortechnical investments such as irrigation and aerialcableways to transport bananas to the packing shed.There is also organisational support provided to the15 local farmers’ associations for improving theirbusiness activities.If we manage to harvest and to pack ourfruit, our negotiating position will improve,we will be more independent, and this willallow us to improve the situation of ourmembers by providing better services andoffering better commercial conditions.Valentin Ruiz, President, APPBOSA, Perupage 12 Unpeeling the banana trade

6.Going furtherThere is no doubt that the impressive growth of Fairtradebanana sales has had positive benefits for the farmersand workers supplying them. The sustainability of thesechanges for the long-term development of the countriesand communities concerned is difficult to predict,especially when the farmers and plantations supplyingthe UK are so heavily dependent on both the continuingsupport of the banana buying public and the commercialinterest of traders and supermarkets.Supermarkets continue to be the most powerful players inthe international banana supply chain and in recent yearstheir bitter banana retail price wars have fuelled a ‘raceto the bottom’ in the industry, driving down social andenvironmental standards to ever lower levels. However,there is evidence that a commitment to Fairtrade hasenabled some supermarkets to begin to support a moresustainable banana trade that benefits farmers, workersand the environment.The Co-operative and Sainsbury’s were the first Britishretailers to commit to offering Fairtrade bananas in theirstores. The Co-operative also provides a comprehensiveeducation programme about Fairtrade to consumers.Sainsbury’s and Waitrose have now converted all of theirbananas to Fairtrade. By demonstrating that Fairtrade alsomakes commercial sense in the form of increased salesand an improved consumer perception, these retailers aretaking the opportunity to engage in a ‘race to the top’,with others following their example.There is also irrefutable evidence that the growth of theFairtrade market has attracted the serious interest ofthe fruit multinationals in the last decade. Initially the bigbanana companies saw Fairtrade as a direct threat to theirmarkets. Now however, they are responding to consumerdemand for improved social and environmental standards.While multinational involvement in Fairtrade is still far fromtransforming the way these big companies trade overall,the continuing success of Fairtrade is contributing to thepressure on conventional companies to address poorpractices in their supply chains.We decided to convert all bananasto Fairtrade as it became clear what amassive difference it would make to thecommunities where they were grown.It was a relatively easy decision as a thirdof all our customers were already buyingFairtrade bananas. We have alsocommitted to increase purchases fromsmall producers while increasing thelength of contracts to suppliers to threeyears. Matt North, Banana Buyer,Sainsbury’s7.The challenges that remainThe potential that exists to further engage mainstreambusinesses in Fairtrade in the future would undoubtedlyextend Fairtrade benefits to many millions more farmersand workers. But it also presents a number of challenges,as described below.7.1 Continuing to protect small farmersIt is vital for the survival of thousands of farmers andtheir communities that we continue to safeguard smallfarmers’ access to international trade. Currently 28 ofthe 63 Fairtrade certified banana producers are smallfarmer organisations. However, given that over 90% ofexport bananas are produced on plantations, as thedemand for Fairtrade increases we will continue to ensurethat expansion of Fairtrade certification into the plantationsector is not at the expense of small farmers. WhenSainsbury’s switched to 100% Fairtrade bananas, a vitalpart of the discussions was to secure a commitment tosourcing a substantial proportion of its purchases fromsmall farmers. This type of approach provides a modelwhich we can replicate to ensure that the benefits ofFairtrade can be channelled to those small producerswhose market access needs to be safeguarded.7.2 Commitment to workers’ rightsAs we have said, the banana industry is dominated byplantation production. As more and more plantationsare certified to meet the increasing demand for Fairtradebananas, it is vital that we continue to ensure thatplantation workers not only benefit from the Fairtradepage 13 Unpeeling the banana trade

7.Going further continuedpremium but are also empowered by their involvementin Fairtrade. In some cases this may be more difficult,for example in countries where trade unions are activelydiscouraged or repressed; or where employers may tryto use the existence of the Fairtrade Joint Body and theattraction of its financial resources to discourage workersfrom organising independently. The Fairtrade system iscommitted to working with local and international tradeunions to ensure that plantation owners are trulycommitted to workers’ empowerment and developmentand to this end has set up an international working groupspecifically to explore how core labour rights, especiallythe right to Freedom of Association, can be ensured onFairtrade certified plantations.7.3 Supporting migrant labourersThe ‘race to the bottom’ has substantially increased thesub-contracting of labour and the Fairtrade system willcontinue to evolve to ensure that all workers’ rights areupheld. One example of this is the policy that has beenadopted for Fairtrade certification in the DominicanRepublic to ensure that the rights of Haitian migrantworkers are protected despite changes in nationallegislation that cut the proportion of foreign workers toa maximum of 20% and resulted in a number of Haitianmigrants being sacked. Poor wages and the collapse ofthe banana industries in some countries, such asNicaragua, increasingly drive workers to migrate in searchof work – it is estimated that more than 50% of workerson Costa Rican plantations are Nicaraguan orPanamanian. If Fairtrade premiums are invested inprojects on the plantation site and in local communitieswe also need to consider how the Fairtrade labellingsystem can develop the flexibility to enable a transientlabour force to have the right, for example, to send ashare of the Fairtrade premiums back home totheir families.7.4 Sharing benefits with workers on small farmsIt is also important to ensure that the workersemployed by small-scale farms or by co-operatives areempowered and share in the benefits of Fairtrade. This isnot a straightforward process as although small farmersemploy a significant number of workers, many are likelyto be seasonal, temporary and migrant workers. Alsopoor farmers may earn so little themselves that they areunable to pay the legal minimum wage to the workersthey employ. While such workers will benefit fromcommunity-based investment using Fairtrade premiums,such as improved healthcare or education services, it is acritical challenge to identify how these hired workers canbe more involved in decision making on premium use, orcould benefit from additional training or support.7.5 Mainstreaming with integrityA key challenge facing Fairtrade is how to increase theinvolvement of multinational companies in the system,while keeping the needs of small, disadvantagedfarmers and poor workers at its core. There is no doubtthat scaling up Fairtrade through the multinationalretailers and companies can have life-changing impactfor the growers involved. But as more multinationals getinvolved with Fairtrade, we need to make certain that theFairtrade system is continuing to deliver true engagement,with partners fully committed to improving supply chainrelationships.7.6 Fairtrade in an unfair trading systemCurrent international trade rules are not designed tofavour trade based on fair prices and living wages, or todifferentiate products that respect international labour andenvironmental standards. When traded internationally, anorganic Fairtrade certified banana is treated exactly thesame as a banana from a plantation where labourstandards are violated and workers’ health and theirenvironment are damaged.Although the constitution of the WTO refers to promotingsustainable development, their trade rules, rather thansupporting high standards, in effect treat higher ethicaland environmental standards as an obstacle to the freemovement of goods. There is a long way to go before weget trade rules that genuinely reflect the rights andresponsibilities set by the ILO.Continuing to work towards just and fair trade rules, usingthe success of Fairtrade in the banana industry as justone powerful example, remains a key role of the Fairtrademovement as well as the wider campaigning communityof organisations including Banana Link, Oxfam and theTrade Justice Movement.page 14 Unpeeling the banana trade

8.Fairtrade: Tipping the BalanceAlthough Fairtrade has so far made a significant impact on the world banana trade and the lives ofmany of those most disadvantaged by it, there is still a great deal more to do if Fairtrade benefitsare to reach more of the people who need them most. This is why a key priority of the FairtradeFoundation’s strategy is to propel Fairtrade sales to a new level – reaching 50% of the UK bananamarket by 2012. 35 We estimate that if together we – the Fairtrade movement, companies,supermarkets and consumers – can achieve this ambitious target, over $20 million annually inFairtrade premiums alone will go to farmers and workers to help them invest in the development oftheir businesses, communities and the future of their families. When the other benefits of Fairtradecertification are also considered it is clear that by tipping the balance we can support small farmersand workers to also be better equipped to deal with the new and emerging threats to theirlivelihoods which exist: EU reform which could push the Caribbean banana industry out ofbusiness altogether; climate change which affects the poorest disproportionately and could have acatastrophic effect on conditions for banana growing; and the emergence of new suppliers affectingtraditional banana producers.Nine years on, individual consumers, civil society, institutions and mainstream companies havetaken up the challenge of Fairtrade and contributed to this astonishing social transformation.Fairtrade bananas have started to challenge the status quo of a global industry that needs a seriousoverhaul. But a huge amount remains to be done. Just as the banana symbolises the success ofthe Fairtrade movement so far, it also clearly illustrates the challenges which the rapid growth of theFairtrade model has to resolve if the vision of a fair and sustainable banana economy is to becomereality. Nobody is under the illusion that Fairtrade alone is the answer to all the problems facingsmall producers and plantation workers dependent on the world banana trade.However, it is clear from the description of the impacts outlined above that a guaranteed minimumprice, coupled with high social and environmental standards and fair trading relationships acrossthe supply chain, can start to reverse the damage of decades of unfair trade. To make real, lastingchanges to the banana industry for the benefit of the most disadvantaged in the supply chain, thereare ways for everyone, from farmers to consumers, to do their bit.35Tipping the Balance. The Fairtrade Foundation’s vision for Transforming Trade 2008-2012. The Fairtrade Foundation. 2008.page 15 Unpeeling the banana trade

8.Fairtrade: Tipping the balance continued8.1 Our action planKeep buying and asking for Fairtrade: The impressiveprogress made in the UK banana market must beextended. Consumer demand drives shop managers,cafés, and our work places to stock certain products –so let them know, loud and clear, that nothing but 100%Fairtrade is good enough.Support small farmers: To consolidate the Fairtradebenefits currently being directed at small farmers,retailers and importers should make specific, long-termcommitments to small-scale producers by, for example,reserving a minimum percentage of their supply for suchgroups. We also urge the EU to respond favourablyto ACP requests that tariff reductions be reducedincrementally to the level enshrined in the stalled WTOGeneva agreement on bananas and to ensure a packageof development assistance that allows ACP bananaproducers to adjust to the new trade regime.Work harder for workers: As Fairtrade develops,plantation workers will increasingly become beneficiariesof the model. Independent trade unions have a wealth ofexperience in securing improved wages and conditionsfor workers and this knowledge will be harnessed by theFairtrade movement for all workers on plantations.Ban the banana battles: The regular rounds of bananaprice wars waged by UK retailers threaten to undo theprogress made by Fairtrade in the last nine years. We callon retailers to recognise the vulnerable position ofgrowers and workers and not to use bananas as weaponsin their price wars unless they can demonstrate that theyare bearing the costs themselves and not passing themdown through the supply chain.Change trade rules: Banana producers who respect highsocial and environmental standards are often penalised bythe market because they pay decent wages, provide morebenefits or have invested in less environmentally damagingproduction systems. We urge DfID to commissionfurther research into how the ‘non-discrimination’principles enshrined in the WTO’s rules can be revised toensure trade works for poverty alleviation and sustainabledevelopment.Keep talking: An increasingly unregulated banana markettends towards overproduction and therefore unsustainablylow prices for producers. The Fairtrade Foundation urgescompanies and governments to facilitate theestablishment of a permanent international multistakeholderbanana forum to explore the feasibility ofa new type of International Banana Agreement thatincludes social and environmental chapters.Establish an ombudsman: The Competition CommissionInquiry into the Groceries Market found that buying powerconcentrated into a few hands has lead to abuses of thispower and the transfer of excessive risks and unexpectedcosts to suppliers. Banana farmers and plantationworkers have paid the price. The Fairtrade Foundationsupports those in business and civil society calling for aUK retail ombudsman with statutory and proactive powersto investigate all abuses of buying power in internationalsupply chains. 3636For further information on the Competition Commission Inquiry into the Groceries Market see www.competition-commission.org.ukAcknowledgementsThis report was compiled and written by Alistair Smithand the Fairtrade Foundation. We would like to thankJacqui MacKay (Banana Link), Hella Lipper (WindwardsBananas), Bert Schouwenberg (GMB) and Rachel Woodfor their help and input.page 16 Unpeeling the banana trade

Fairtrade Foundation3rd Floor, Ibex House42-47 MinoriesLondon, EC3N 1DYTel: 020 7405 5942 Fax: 020 7405 5943Registered charity number 1043886fairtrade.org.uk