Bananas

• Bananas are 1 of the 5 most consumed fruits on the planet. They are the 6th most traded agricultural commodity and the 4th most important food product in the world.
• In 2013, a record of 16.5 million tonnes of bananas were exported.
• India is the largest producer of bananas and exports to Asia and the Philippines, though they are mostly consumed domestically.
• The main commercially-produced bananas are grown in Central America and the Caribbean. Some of these regions are heavily dependent on banana exports.
• Almost all bananas are treated with chemicals throughout the production cycle. Large TNC-owned plantations apply 30kg of chemicals per hectare per year, as well as fertilisers and disinfectants. The banana industry has the second largest agrochemical input into the environment after cotton.
• Environmental costs of banana production include:

  • chemicals (production)
  • deforestation
  • waste
  • soil fertility (monoculture)
  • loss of biodiversity
  • pollutants
  • machinery and transport emissions
• The banana is often referred to as the 'chemical fruit' in Latin America.
• Banana workers have poor working conditions and low wages due to their dependence on large multinationals who control prices and supply chains.
• Many banana workers live in poverty and lack access to healthcare or education.
• Fairtrade certification schemes aim to improve the lives of small farmers through fairer trading practices.
• There have also been cases of forced labour and exploitation of migrant workers in the banana industry.
• Some NGOs and activists argue that the banana industry perpetuates inequality by benefiting wealthy corporations at the expense of local communities and workers.
• Fairtrade aims to ensure that producers receive a fair price, which covers the cost of sustainable farming methods and provides an additional premium for community development projects.
• Fairtrade also promotes direct trade between producers and consumers, reducing intermediaries and increasing transparency.
• The Fairtrade Foundation is an organization that promotes fair trade principles, including fair pay, safe working conditions, and environmental sustainability.
• Fairtrade products are sold with a premium price that goes directly to producers, helping them invest in community development projects such as schools, health clinics, and clean water systems.
• Banana exports are dominated by the ACP group (Africa, Caribbean and Pacific) and the 'dollar producers' of Central American republics (e.g. Colombia and Ecuador) which are controlled by TNCs.
• Latin America and the Caribbean make up 80% of global banana exports.

  The Philippines exports 17% of all bananas.

  Africa exports less than 3%.
• The largest banana importers are the EU and the USA, each importing roughly 27% of all banana produce each (equivalent to 4.5 million tonnes each).

  90% of the price paid by the end consumer in these nations stays there.
• In 2019, the UK imported over 600,000 tonnes of bananas from Latin America alone.
• In the past, 80% of the banana trade was dominated by five TNCs:

  • Chiquita
  • Dole
  • Del Monte
  • Fyffes
  • Noboa

  These companies were integrated vertically up the chain so gained large profits from the US and EU, which they repatriated. However, there has been a recent shift in power to grocery retailers in importing nations.
• Chiquita, Dole and Del Monte are US-based TNCs.
• Fyffes is an Irish-owned TNC.
• Noboa is an Ecuador-owned TNC.
• Banana TNCs' presence in the market has fallen from 80% (2002) to 45% (2013).
• 𝙏𝙍𝘼𝘿𝙀 𝙒𝘼𝙍𝙎:

  EU countries negotiated an agreement with former European colonies called the Lome Convention. It involved 71 ACP countries, giving them special & differential treatment and tariff-free imports to help them compete with Latin America and develop.

  However, the reigning US TNCs were unhappy with this despite still maintaining a hold of 75% of the market. They took the issue to the World Trade Organisation, which ruled against it, and the Geneva Banana Agreement was formed in 2009 instead. This reduced EU tariffs on Latin American imports.
• 𝙍𝘼𝘾𝙀 𝙏𝙊 𝙏𝙃𝙀 𝘽𝙊𝙏𝙏𝙊𝙈:

  Product quality and rational economic decisions are sacrificed to gain a competitive advantage in the market.

  This involves relocating plantations to areas of lower labour costs and weaker legislation, where labour is subcontracted but in extreme conditions. Workers are exploited as they cannot work in these conditions and so do not get paid.
• 𝙁𝘼𝙄𝙍𝙏𝙍𝘼𝘿𝙀:

  More ethical and sustainable markets are slowly growing in wealthy nations, benefitting small-scale producers and helping to stop the deterioration of conditions (race to the bottom).

  This also has environmental benefits as no chemicals are used on the produce.
• On average, bananas are cheaper than apples in the UK. Supermarkets often use them as loss leaders to lure in customers. The huge buying power of supermarkets means that they can easily negotiate prices to keep them low, squeezing profits out of those lower down the supply chain.

  However, a shift in consumer awareness has increased sales of certified Fairtrade bananas despite being more expensive and a tough economic climate for shoppers. This demonstrates the appeal for food traded on fairer terms.
• Fairtrade was originally a grass-roots movement of NGOs, but now is commonplace on supermarket shelves - the UK fairtrade market doubles every two years.
• Over the last 40 years, the prices paid to farmers have halved for many products. Fairtrade aims to pay farmers a guaranteed minimum price, offer fair terms of trade and offer additional premiums for reinvestment.
• Today there are 1210 Fairtrade-certified producers in 74 countries, benefitting around 6 million people.
• Banana TNCs achieve total domination of plantation monoculture as a huge capital investment is always needed to develop a reliable harvest. They also tend to have strong vertical and horizontal integration in the supply chain, so big companies like Chiquita and Dole have the marketing power to bring bananas from tropical plantations to consumers all over the world.
• Banana republics were created mostly in the 19th century when shipping and railroad magnates manipulated Central American governments for the cheap purchase of huge swathes of land. Their method of operating in these countries - being entirely export-oriented - gave rise to the term 'banana republics' (a country whose economy is dependent on one commodity).
• The El Guabo association was formed in 1997 in Ecuador. Today it is one of the largest producers of Fairtrade bananas and exports 30,000 boxes a week to the USA and Europe.
• Economic benefits of the El Guabo association for farmers:

  • stable incomes
  • guaranteed fair wages
  • direct access to markets
  • extra reinvestment for local area
  • help for migrant labourers
  • long-term supply contracts
• Social benefits of the El Guabo association for farmers:

  • healthcare benefits
  • educational and medical supplies
  • social security systems
  • support for the poorest groups
  • education provision
  • employment for marginalised groups
• Fairtrade products were first sold in the US in the 1940s and the EU in the 1950s.
• Fairtrade also lends seed money (start-up money) to disadvantaged producers.
• Fairtrade aims to link organisations in the economic N and S.