Bananas: Unpeeling the Banana Trade - The Fairtrade Foundation

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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
Page 1 and 2: Unpeeling the banana tradeA Fairtra
Page 3 and 4: Executive summaryThe banana: cheap,
Page 5 and 6: In response to growing consumer dem
Page 7 and 8: Banana wars: a timeline1992 Formati
Page 9 and 10: Higher shipping, distribution and l
Page 11: Since the 1990s, Latin American ban
Page 15 and 16: 6.Going furtherThere is no doubt th
Page 17 and 18: 8.Fairtrade: Tipping the BalanceAlt
Page 20: Fairtrade Foundation3rd Floor, Ibex

Bananas: Unpeeling the Banana Trade - The Fairtrade Foundation

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