The ACP is the group of African, Caribbean and Pacific countries which signed the Lomé Convention with the European Union. The Lomé Convention was a trade and aid agreement that the European Union first signed in 1975 with 48 of its ex-colonies. The Convention's preferential trade arrangements permitted duty-free access for a range of commodities on which the economies of the ACP are extremely dependent. From July 1993 until February 2000, a dozen ACP countries which traditionally exported bananas to the EU market benefited from duty-free access to the EU market under the so-called "Banana Protocol" of the Lomé Convention. In June 2000, the EU and 77 ACP countries signed the Cotonou Agreement, which replaces Lomé and is scheduled to run until 2020. Traditional ACP banana exporting countries continued to have duty-free access for their bananas. This special arrangement for banana imports is currently scheduled to expire in December 2007.

The original 12 'traditional' ACP banana exporting countries were: Ivory Coast, Cameroon, St Lucia, Jamaica, Belize, St Vincent and the Grenadines, Dominica, Suriname, Grenada, Somalia, Cape Verde and Madagascar. The last three African countries have all ceased to export bananas to the EU during the 1990s. More recently the Dominican Republic joined the ACP and Ghana started exporting bananas for the first time. Both were regarded by the EU as 'non-traditional' banana exporters until 2001, but this distinction was abolished in the reform of 2001.

Bananas in St Lucia, St Vincent, Dominica, Grenada (the Windward Islands) and some parts of Jamaica are produced on small farms in hilly areas, usually owned and worked by local family farmers. The small plots often lie on steep and difficult terrain, unsuited to other crops. This type of farming has become less and less economically viable, as small farmers have had to compete with the more profitable large-scale farming methods adopted by many of the dollar producers.

Until the end of the 1990s bananas provided over half of all export earnings in the Windward Islands. This dependence goes back to the early 1950s, when the islands were British colonies. (See 'Exporting Regions' for more information on systems of production).

In Cameroon, Ivory Coast and Belize almost all exportable bananas are produced on large-scale plantations similar to Latin America. These economies of scale, coupled with low labour costs, have permitted these ACP exporting countries to gain market share at the expense of the Windward Islands and Jamaica, especially since individual ACP country quotas were abandoned in the reform of 1999.

The Dominican Republic has gained a significant place in the EU market by focusing on the production and export of organic bananas, mainly produced on medium and small-scale farms.