Bananas: Unpeeling the Banana Trade - The Fairtrade Foundation

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