Fairtrade banana crisis brewing in Colombia

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Reefer Trends reports on the crisis in the Colombian industry,

In the last few weeks the crisis has started to bite and producers have had to choose between paying workers their full wages and benefits or applying inputs.’

This is the stark assessment made by NGO Banana Link in describing the situation of the banana industry in Colombia. Despite being at the top end of the scale in terms of compliance with core ethical standards such as freedom of association, living wages, stable employment contracts and decent working conditions and despite enjoying the best industrial relations in the Latin America banana sector the industry in crisis. This is because producers sell their fruit in US dollars and pay nearly all their costs in Colombian pesos. The report says that an ‘uncompensated 6.5% rise in the peso’s value against the dollar over the last 12 months, coupled with serious climatic disruption at the end of 2011 and into 2012, has meant increased costs to all producers.’ This has created a highly volatile situation in one of the world’s most violent regions. A letter dated 25th November 2012 from Fairtrade (FT) producers (who export 6 million boxes per year and employ over 2200 workers) states that some growers have already gone out of business in recent weeks. Other growers, non-FT certified and FT certified alike, have had to cease payments to the social security institutions (therefore leaving workers uncovered for their public healthcare). As a source, Colombia has risen from almost zero two decades ago to become since 2011 the UK’s biggest source of bananas. About one third of all Colombian banana imports are Fairtrade certified.

Source: Reefer Trends