Transforming the global banana industry

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Alistair Smith, Banana Link's International Coordinator and one of the co-founders of the new World Banana Forum, summarises nearly two decades of efforts to rid an industry of its reputation for unfair trade and current efforts by diverse stakeholders to transform the global industry.

'Green Gold'

Bananas and their close cousins plantains are vital to the basic diet of tens of million of households across the tropics, from Indonesia to Ecuador via most of Africa. They have also become the most internationally traded fruit in the world and are a consumer favourite from North America, the UK and the rest of Europe through to the Middle East, Japan and, most recently, South America and Russia. Some would say they are the ultimate cheap fast food.

But bananas are also a classic example of the inequalities that exist between producers and marketers, and of abuses of workers' and trade union rights.

In the 1980s, the big banana companies like Geest, Del Monte and Chiquita were profiting from what even they called ‘Green Gold'. But the ‘gold' was not shared fairly with those who did most of the work in the fields of the Caribbean islands or the plains of Latin America.

Thanks to the work of organisations as diverse as Christian Aid, the French CGT, the Swedish Society for Nature Conservation, Banana Link and the International Union of Food and Agricultural Workers, millions of people in consumer countries now have some awareness that these tropical commodity chains deliver most of the profits to the big national and global retailers - and not to workers in the fields and packhouses.

Plantation workers - Paying the price of the banana wars

The so-called ‘Banana Wars' - the long running trade dispute between the EU and Latin America over tariffs - are now officially over. But all that has really happened, at least in the UK and to a lesser extent in the USA and Europe, is their transferral to the world of retail.

At several points in the last ten years, banana prices to British consumers have fallen well below the cost of delivering them to Dover or Portsmouth. In the (mistaken) belief that it will bring more shoppers through their doors, supermarkets have followed each other down every time their competitor makes a consumer price cut. In late 2009, Aldi was selling at 35p a kilo when the cost of a kilo delivered to the port in the producer country was no less than 25p per kilo!

Even if it is retail margins that take the hit, the fact is that consumer prices are on average more than one third less than they were a decade ago. As the weakest link in the chain, plantation workers pay the price, with only their labour to sell and long queues of unemployed or migrant workers waiting to fill their shoes if they refuse lower and lower wages and daily violations of their human and labour rights.

Efforts to stall the race to the bottom

After making contact with Latin American plantation workers' unions and fair trade organisations in continental Europe, we convened the different interested parties in Europe and the European Banana Action Network was launched in 1994 to explore alternatives to unfair trade and to support a transformation of production systems that harmed workers, family farmers and their communities in 15 countries of Latin America and the Caribbean.

My next blog will deal with the concerted international efforts to reverse the race to the bottom in banana prices, in which small farmers - whose market share has more than halved in the same period - and plantation and packhouse workers end up paying for our supermarket wars. At last, some of the more responsible retailers have not only acknowledged the problem and that they are part of that problem, but have started to act to resolve it.

Even if nearly one banana in three sold in Britain is either Fairtrade-labelled or organic, a sustainable banana economy remains a distant goal. The good news is that this goal is now shared by most of the big players and a growing handful of governments - not just the trade unions and small famers themselves.

A "race to the top"?

In the Flemish Parliament in the heart of Brussels on April 30th 2005, the 250 assembled fruit companies, banana growers, trade unions, governments and UN agencies including the International Labour Organisation, retailers and civil society organisations - from four continents - declared their collective interest in the creation of a permanent multi-stakeholder forum. The idea of a global forum was to fill a void and facilitate much-needed dialogue and cooperation amongst the different players who rarely met each other face to face, let alone spend three days in the same room debating the hottest issues of price, wages, violations of basic labour rights, environmental damage and international trade rules.

Despite the extreme heat of the ongoing banana "trade wars" at that moment, a genuine political will emerged amongst the assembled players to work together to find practical solutions to the economic, social and environmental problems facing the entire banana chain. The theme of this second International Banana Conference - convened again by the broad South-North civil society coalition of trade unions, small farmers and NGOs - was "Reversing the Race to the Bottom". At the time, this title may have seemed vain or utopian to many participants, even for some of us organisers!

However, nearly six years later, the first signs of real transformation are visible, although for the majority of the million or so plantation workers and small growers these signs of hope may still seem elusive at ground level.

Governments as key players, economics on the menu

The much-heralded World Banana Forum - complete with a tag-line of "Working Together for Sustanable Banana Production and Trade" - was launched on 8th December 2009 by some 150 organisations, institutions and companies. Later the same week, when the world's eyes were more focused on a Northern European capital (Copenhagen) than on the headquarters of the UN's Food and Agriculture Organisation (FAO) in Rome, the governments assembled in FAO's Inter-Governmental Group approved the creation of the Forum and agreed that the UN agency should incorporate this unprecedented collective effort in its work programmes.

For the record, the motion of support was proposed by the Dominican Republic, 'capital' of organic banana production, and Uganda, the world's biggest per capita consumer of bananas, reflecting the Forum's scope that prioritises the international trade, but also recognising the critical importance for household food security of banana and plantation production in a broad band of tropical countries from Indonesia to Colombia and Pacific Islands. The support of the UK's Department for International Development to the international preparatory process and over the last twelve months has proved decisive. The grant not only meant that civil society from producing countries was present in force, but it has also permitted the creation of the World Banana Forum secretariat based in FAO's Trade and Markets Division to facilitate multi-stakeholder efforts (contact for more detailed information than is on the website).

Permanent Working Groups on the priority themes were launched: covering labour rights, the distribution of value along the chain, sustainable production and environmental impacts, certifications and reducing agrochemical use. A year or so down the road, highlights of the work in progress include:   

  • the two leading US-based fruit companies cooperating with scientists and small farmers on developing sustainable production practices, including pesticide reduction strategies and transfers of knowhow between regions and continents
  •  a global retailer, Latin American trade unions, the biggest fruit company, the government of the world's largest exporter and small-scale organic fair trade farmers launching pilot living wage initiatives in Latin America and West Africa and sharing information on costs of production and marketing
  •  global fruit companies, women trade union leaders, an African company and the UK's Ethical Trading Initiative developing a work plan to ensure trade union rights, free collective bargaining and gender discrimination in the workplace and in employment policies
  •  participant organisations aiming to fund at least one third of the functioning of the international secretariat and core Working Group programmes, with new governmental donors committing their support
  • the active support of the United Nations Conference on Trade and Development (UNCTAD) to the process

"Competitive solidarity" for a sustainable banana economy?

The Merkel plan for the EU economy announced in Madrid yesterday uses the term, at least in the French media, "competitive solidarity". This new formulation does not derive from an explicit vision of a transition of the regional or global economy towards a more sustainable model, but it does reflect the notion that Europe's future depends on tangible inter-governmental cooperation that is informed by the spirit of human solidarity. The very fact that this quasi-taboo word has entered the highest levels of political and economic dialogue should be seen as positive. It is similar to the spirit which drives the World Banana Forum and its mission and objectives.

Even repeated and much-vaunted calls for "South-South cooperation", a term also virtually banished from the international vocabulary after the infamous Cancun "New World Order" summit of 1980, are now being translated into new realities; the rise of "new" powers on the world stage like China, Brazil, India or South Africa - some of the biggest producers and consumers of bananas, mainly within their own borders - is opening new doors in the emerging multi-polar world.

It is such new realities of the globalised economy that are the backdrop to our hopes that the World Banana Forum can trace new paths for agricultural, agro-industrial and industrial product chains. Workers along the chain, producers and consumers all have a historic responsibility to turn these hopes into practice. If in five years time, the majority of plantation workers have not noticed the difference that the Forum is making, then we can we can conclude that a promising initiative has failed. If there are less and less small producers able to access the international market, if food insecurity has spread further in banana and plantain growing countries, and if consumers in many countries cannot find ethical bananas in their neighbourhood, then our efforts will have been in vain.