As
Fairtrade launches its new offer to commercial partners in banana
supply chains, Fairtrade International’s senior advisor for bananas
Silvia Campos explains why sustainable prices are the key to a
sustainable future.
To paraphrase Bill Clinton’s famous election slogan, “It’s the price,
stupid!” The price we pay for bananas at the supermarket checkout has a
ripple effect all the way up the supply chain to the workers and
farmers who grow them. As the saying goes, price is everything.
If the price of bananas in our local supermarket seems too good to be
true, then it probably is. Across Europe, bananas sell for as little as
one euro per kilo. It’s a similar story in the USA, where a pound of
bananas will cost you around 58 cents.
Despite the cost of living crisis making a slight dent in sales in
2022, the EU and US still account for around ten million tonnes of
banana imports each year. We’re talking big business here - the value of
the global banana market is forecast to grow from $140 billion in 2023
to $145bn by 2028. But - and it’s a big but - who benefits? And just how
sustainable is the current banana supply chain in the long term?
Loss leaders
The eye-catching bright yellow fruit are often the first thing we see
when we walk into a supermarket. They’re frequently priced as ‘loss
leaders’ - deliberately sold at cost or even at a loss in order to
entice us into the store. With retail prices regularly well below the
real cost of production, it’s no surprise that the farmers and workers
who actually grow them - often in difficult conditions - say their lives
and their businesses are unsustainable.
Sustainability isn’t just about the environment. It also covers
things like prices, profit margins, labour conditions and available work
force. Without fair prices, decent wages and regard for human rights,
the banana industry faces long-term decline. Add the climate,
biodiversity and migration crisis into the mix, and you really have got a
recipe for disaster.
More than 35,000 Fairtrade banana workers and producers rely for
their livelihoods on 265 producer organisations around the world, but
particularly in Latin America and the Caribbean and West Africa. They
range from tiny family farms to large plantations, and although they are
mostly better off than their conventional counterparts, they are by no
means immune to these pressures.
They enjoy a degree of protection through the Fairtrade Minimum Price
and the Fairtrade Premium - the extra sum of money earned for every box
of bananas sold on Fairtrade terms. In 2021 we launched the Fairtrade
Base Wage set at 70 per cent of the living wage benchmark - the minimum
wage that a worker will receive in a Fairtrade banana plantation. Since
2015, farmers participating in our Productivity Improvement Programme
have achieved an average 36 per cent of yield increase through improved
farm practices. However, the Covid-19 pandemic and subsequent global
economic slowdown have wiped out some of these gains.
A sustainable offer
That’s why Fairtrade has launched a new, sustainable offer
to achieve living wages, living incomes and resilient banana supply
chains. At the core of our new offer are three elements which play a
crucial role in the trading of bananas - a newly-updated Fairtrade
Minimum Price, a Living Wage Reference Price, and a brand-new Fairtrade
Living Wage Differential. Together, they’re designed to make both living
wages and resilient banana supply chains a reality.
We’re also offering our commercial partners a package of reporting
and monitoring tools and continuously updated technical data. They’ll be
able to measure how their commitment to pay a fair price is helping
workers earn a living wage, and farmers and plantation owners to pay for
sustainable practices on their farms.
Uniquely among global standards, Fairtrade workers decide for
themselves, through democratically elected Premium Committees, how to
spend the additional funds they get from selling on Fairtrade terms.
Since 2015, €266 million Premium has been generated from banana sales, a
proportion of which is used to top up plantation workers’ wages to the
living wage benchmark.
Sustainable prices are the key to sustainable production. Banana
growers must be confident they can sell enough volume at sufficient
price in order to pay decent wages, invest in their farms, boost
productivity and be resilient in the face of climate change. They need
commitments from global traders - who currently hold the whip hand in
negotiations - that they will pay a sustainable price over the long-term
in order to cushion the impacts of volatile market fluctuations and to
help them plan for the future.
Fairtrade’s new offer builds on more than 25 years of work to achieve
justice for banana workers and producers. I’m confident it will prove
to be a game-changer for workers, producers, traders and retailers - but
we need many more commercial partners to buy into our vision of a
fairer, more sustainable banana industry. There’s still a long way to
go, but workers and producers on Fairtrade certified banana plantations
can now look forward to a more secure future.
This article was originally published on Fruitnet.
