Bananas

• Bananas background

  • 5th largest trade
  • one of most produced, traded and consumed food
  • 50million tonnes produed and 20million exported
  • 100billion bananas are eaten globally per year
  • have no growing season
  • quality is consistent regardless of brand
  • 90% of banana export if from central and South America and the Philippines
  • staple food for 400 million people
  • 99% of exports are Cavendish
  • one of 5 most eaten fruits worldwide
• Role of TNCs in bananas

  • used to own 80% of banana trade but as of 2002 only own 60%
  • TNCs have always dominated plantation monoculture
  • strong vertical and horizontal integration allowed economies of scale and secured market access
  • huge capital investment which only TNCs had was previously needed to develop a reliable harvest
  • transport technology was essential for chemical treating, shipping and processing
• loss leader

  product which is sold at or below cost of production to attract customers to a store
• Banana pros

  • production generates foriegn exchange earnings that governments depend on to improve health, education, infrastructure and social services
  • staple food and nutritional benefits - 60% of calories in Uganda
  • exports support economies
  • employment in distribution networks and supermarkets
  • 300,000 people are employed by industry in Phillippines
  • developed transport and communication infrastructure
  • low price for consumers
  • act as a cash crop
• Banana cons

  • many workers are on temporary contracts or hired daily so membership of independent trade unions has fallen
  • hash plantation conditions and many fail to earn a living wage
  • monoculture methods can destroy ecosystems
  • industry consumes the most agrochemicals
  • minimum wage for worker in Ecuador is $400 per month which is below poverty line
  • pesticides and herbicides affect human and wildlife health
  • plant waste decomposes in streams depleting oxygen levels
  • deforestation
  • child labour on plantations
  • artificial fertilisers can lead to eutrophication
• Fairtrade

  to raise awareness of trade injustices and imbalance of power in the conventional trade structures to advocate for change in policies to favour equitable trade
• Fairtrade aims

  
  

  • guaranteed minimum price for products
  • offer fair terms of trade
  • additional development premium for reinvestment in the local community
  • makes sure workers in developing countries receive a decent wage
  • ensures good working conditions
  • all adult workers
  • lowered impact on environment
  • better life for farmers and worker in developing world
• El Guabo Association of small banana producers

  • formed in 1997 south west Equador
  • one of worlds largest producers of Fairtrade bananas
  • export around 30,000 boxes a week to USA and Europe
• Effects of El Guabo

  • stablilised incomes
  • guarenteed fair wage and long term supply contract
  • direct acess to new and international markets
  • migrant labourers are helped such as assistance to buy own land
  • marginalised groups such as HIV/AIDs sufferers helped to find employment
  • improved education provision such as new school for children with special needs
  • producers raise capital for reinvestment such as tanks to wash bananas
  • health care benefits
  • provision of education and medical supplies
  • affiliation with social security system
  • support of poorest groups
• Fairtrade pros

  • farmers get paid more
  • promotes equality
  • extra money means farmers can buy masks/gloves to protect the farmers from pesticides
  • shoppers in HIC can be sure workers have been treated fairly
  • extra money can be spent on road building and education
  • logo clearly shows which products are Fairtrade
  • market price stays stable
  • gives women a voice in community and increases literacy rates
  • farmer have a better quality of life
• Fairtrade cons

  • farmers are reliant on shoppers in the UK being willing to pay higher prices
  • famers still work long hours
  • no investment in mechanisation or industrialisation to lift farmers out of poverty
  • farmers are stuck in primary sector
  • doesn't benefit all farmers in LICs only ones with Fairtrade deals
  • doesn't try to grow and expand farmers horizons
• EU banana wars

  • 6 year trade quarrel between US and EU
  • US complained that a EU scheme was giving banana producers from former Caribbean colonies special access to markets, breaking the free trade rules
  • EU was instructed to alter its rules
  • tariffs reached 100%
  • lasted 20 years
  • result was EU would gradually cut its import tariff on bananas from latin America
  • people were unhappy that banana prices in the EU rose by 40%
• why are banana prices so low

  • abundant supply
  • quick ripening so must be sold quickly
  • low wages where they are grown
  • retail chain buy directly from growers or ditrubutors
  • free trade deals cut import tax