The article below by Alistair Smith (Banana Link International Coordinator) and Holly Woodward Davey (Banana Link Project Coordinator) orignally appeared in the Journal of Fair Trade.
The world’s favourite fruit
Bananas are the world’s most popular fruit: they are both the most consumed and most exported fruit globally (IISD, 2023). In 2022, over 19 million tonnes of bananas were traded internationally (FAO, 2022), yet this enormous figure represents less than 20 per cent of the total volume of bananas grown worldwide – with the majority of them sold instead on local markets or consumed by the small-scale farming families that grow them. In many parts of Latin America and the Caribbean – a region that accounts for 80 per cent of global banana exports (OECD-FAO, 2019) – bananas are consumed not only as a sweet snack, but also as a part of a savoury main meal: when cooked in its green, unripe state, the banana has a starchy, potato-like consistency. Bananas are an important source of nutrition, containing both potassium and vitamin A. Along with plantains, they represent the fourth most important staple crop worldwide, contributing to income and food security for up to 400 million workers and farmers worldwide (IISD, 2023).
Over 1,000 varieties of banana exist in the wild, but only one is widely commercialized. The Cavendish variety of bananas enjoyed in Europe and North America today is named after the Englishman William Cavendish, a Duke whose head gardener, Sir Joseph Paxton, cultivated them in the greenhouse of his Derbyshire home in the 1830s. However, it was not until the 1950s that the Cavendish came to dominate international trade. The slightly sweeter ‘Gros Michel’ was the banana our grandparents knew, before it was wiped out by a devastating fungal disease known as Fusarium wilt or ‘Panama Disease’.
A hell of a history
This article does not aim to provide a comprehensive account of how the history of commercial banana production unfolded in different banana-producing countries and regions, but rather to situate the current debate about fairly traded bananas within a historical context. This history is one of struggle and flashpoints of violence between workers and fruit companies, a struggle characterized by vast power inequalities with outcomes that at various times impacted the course of history in small Central American countries. It is precisely this history that led bananas to become the central focus of alternative and fair trade movements, which emerged in the 1980s, a hundred years later.
The international trade of bananas has its origins in the late 1800s, when businessmen from the United States arrived in Costa Rica to build railways. With cheap labour at their disposal and an abundance of land made available to them, the only thing missing was a profitable cargo for the new railway lines to haul: the first banana plantations were established to supply the US market around 1892. As the fruit gained popularity in the US, the banana monocultures expanded, first to Colombia and then Panama, supported by City of London finance (Chapman, 2007). In 1889, the first fruit multinational, the United Fruit Company, was formed: a company that owned not only plantations and railways but also its own fleet of ships (Bucheli, 2005).
Fruit multinationals soon came to dominate vast swathes of land along the Caribbean coast, ultimately absorbing entire regions of Central America where national governments had limited reach. The United Fruit Company earned the nickname ‘The Octopus’ (‘el Pulpo’) because of its numerous and far-reaching spheres of influence, while producer countries were coined ‘Banana Republics’ in reference to the dominance of the trade and its interests in national politics.
Early plantations were often established in remote and sparsely populated areas of jungle, with labour necessarily imported from elsewhere. Fruit companies setting up in these remote zones were obliged to provide housing, schools, stores and sanitation for workers and their families, leading to a relationship of dependency. Later, as Panama Disease spread and infected plantations were abandoned, new banana zones emerged, and workers were forced to migrate or face dismissal. Racism and xenophobia on the part of local populations were recurring problems (Wells, 2003).
The first private sector trade unions in Costa Rica, then Honduras and Guatemala, were born between the 1930s and early 1950s, often out of violent struggle (Aguilar Hernández, 2017). Many are familiar with the ‘banana massacre’: the murder of hundreds of striking banana workers by the Colombian military in 1928, who had been sent in to protect the interests of the employers, the United Fruit Company (Elias Caro & Vital Ortega, 2012). In the 1940s–1950s in Guatemala, the same company took a role in lobbying the US government to put an end to agrarian reforms that would break up their estates, which culminated in an invasion of Guatemala by 480 CIA-armed, trained and funded men, the bombing of Guatemala City and a naval blockade. The country was forced to cede to the leader of the US-trained force nine days later (Handy, 1994; Grandin, 2004).
By the 1970s, a small group of fruit multinationals – Dole, Fyffes, Del Monte and Chiquita (formerly the United Fruit Company) thrived and came to control over 80 per cent of the global trade.
Price wars and permanent pressure on workers
The commercial banana production system remains relatively rudimentary, with very limited scope for mechanization or other labour-saving measures. As a result, for exporters, labour costs account for the greatest single expense in the cost of production: in Ecuador, the world’s principal exporter of bananas – labour was estimated to account for between 40.2–48.5% of the total cost of production in 2016 (FAO, 2016).
Meanwhile, price wars between retailers in the Global North led to decades of stagnating prices. In 2022, Fresh Produce Journal reported that banana prices in the UK remained below 1987 levels (Searle, 2022), while the costs of production have continued to rise.
The aggressive price slashing by retailers was based on the logic that customers will choose where to shop based on the prices of staple products: these then become ‘loss leaders’, sold at artificially low prices (including below the cost of production, in some cases), and profits can be made on other items in the shopping basket (Fassler, 2019). These price wars, particularly in Europe’s two biggest banana markets – Germany and the UK – meant that the scope for investing in social and environmental improvements has, for decades, been extremely limited.
The result at the plantation level has been for producing companies to focus on driving down labour costs to remain financially viable. Maintaining low wages has been a key cost-saving activity, along with changes to the labour structure itself. Permanent workers have been displaced by those on temporary contracts, often hired by third-party contractors, who are generally entitled to fewer benefits and investments on the part of the employer. For the employee, this means losing out on benefits ranging from transportation allowance, maternity coverage, retirement schemes, health insurance, severance aid and clothing depending on the country (NewForesight, 2021, p. 14). The trend is well established: as far back as 2002, Human Rights Watch reported on the creation of ‘permanent temporary’ workforces in Ecuador (Human Rights Watch, 2002). Banana Link’s own research shows that this remains a fundamental labour issue today (Banana Link, 2024).
Other cost-saving tactics include the demand for exceptionally long working hours, as employers seek to get more bang for their buck on a smaller workforce instead of hiring the number of workers they really need. An ILO study found that a 72-hour working week was the norm for over one-fifth of the Costa Rican banana workforce (ILO, 2020, p. 16).
Workers organizing in defence of their labour rights have often been met with violent persecution. Guatemala, now the second largest exporting nation in the Americas, and the leading supplier to the United States market provides a clear example. ‘Guatemala has a long history of union repression, which has been very violent. Most banana farms are located in regions of the country where numerous labor activists have been killed’ (Anner, 2021, p. 20).
Less extreme measures to block workers organizing in independent trade unions include ‘dismissals and harassment of trade union affiliates and legal and bureaucratic obstacles’ (NewForesight, 2021, p. 19). The ‘casualization’ of the workforce itself acts to weaken the ability of independent trade union organizing (FAO, n.d.). Workers without permanent contracts fear being ‘blacklisted’ and being unable to find future employment in the industry.
Civil society responds: birth of fairly traded bananas in Europe
In response to the entrenched social and environmental costs, in 1994, Farmers’ Link, progeny of Banana Link, founded the European Banana Action Network EUROBAN. Our chosen focus was to explore the potential for a pan-European fair trade banana initiative, based on successful alternative trading experiences in Switzerland and Germany. Over the next couple of years, EUROBAN worked closely with trade unions in Latin America and a Costa Rican civil society coalition 1 that had campaigned against the country’s banana expansion of the late 1980s.
When it came to the large-scale industrial use of pesticides, of which the banana industry is one of the top global consumers, it did not seem possible to separate the social from the ecological impacts of banana production and therefore to generate standards relating to workers’ health without reference to the huge negative environmental impacts. EUROBAN’s insistence on environmental standards being inseparable from social standards and a minimum fair price for small farmers laid the ground for the Fairtrade organizations to incorporate both, and by 1996 EUROBAN and the emerging Fairtrade labelling organizations in the Netherlands, UK and Germany had developed the first-ever set of standards that included both social and environmental criteria. These standards were then adopted by the new Fairtrade Labelling Organisations International when it was created the following year.
Although EUROBAN’s original intention had been to build a pan-European alternative trade model, Dutch NGO Solidaridad (at the time a small player) and Max Havelaar Netherlands secured funding to reproduce the successful launch of Fairtrade coffee for bananas. EUROBAN supported this effort and, in November 1996, the first-ever shipment of Fairtrade labelled bananas destined for large-scale retail arrived in Rotterdam from Ghana.
The rest is history, as they say, with Fairtrade labelled bananas becoming the largest product category for the labelling and marketing organizations. The collateral impact, though, was that the historic pioneers of alternative bananas in Switzerland, an organization led by women, 2 decided to stop its alternative banana trading activity when Max Havelaar launched bananas on the Swiss market in 1997. In Germany, Banafair e.V. has nonetheless been able to continue supplying world shops and smaller regional retailers through their alternative trade model.
Fairtrade reaching limits?
By 2023, Fairtrade labelled bananas had reached sales of around 750,000 tonnes per year, reaching a market share of close to 10% within the EU (including the UK) and 4 per cent worldwide. In some markets like the UK and Switzerland, where years of awareness-raising by NGOs had secured a market that broke quickly out of the classic ‘niche’, market share rose to around 25% in the UK and close to half the total market in Switzerland.
Banana Link’s observation of these 30 years is that nearly all small farmer associations and cooperatives remaining in the world market depend on their Fairtrade certification for their survival. This in itself is indeed a laudable achievement for the labelling movement. However, the increasing competition from certified large-scale plantations in several countries, with their much larger volumes, has changed the picture. Large national companies in Ecuador, Colombia, the Dominican Republic and Mexico have achieved certification, but do not always meet the labour standards that would be expected of certified producers. With notable exceptions in Colombia, where trade union representatives are involved in managing the distribution of Premium to workers, the plantations have set up workers’ committees that are rarely independent of management and are not legally empowered to bargain on behalf of the workforce.
This growing volume of certified fruit from plantations led to Fairtrade’s decision to close certification to all new entrants in the banana industry for two years from April 2024– March 2026. 3 The backdrop is that Fairtrade banana sales have reached a plateau in several major markets, with cheap bananas on supermarket shelves making it much harder to convince consumers of the need to pay a fair price.
Living wages for banana workers finally and firmly on the agenda of big retailers in Europe
On 14th December 2024, the EU agreed new corporate due diligence rules designed to protect human rights and the environment along international supply chains. The Corporate Sustainability Due Diligence Directive (CSDDD) obliges large companies and those in high-risk sectors – including agriculture – to integrate due diligence into their policies and risk-management. 4 The directive aims to tackle trade union rights violations and labour exploitation, as well as environmental abuses. Despite renewed attempts to water down the directive, 5 it has already reframed the conversation on global trade relationships, acting to normalize the role of countries at the profitable end of supply chains in taking responsibility for the impact of their business activities – and those of their suppliers – on people and the environment.
The development of the CSDDD directive sent ripples throughout the banana industry, no doubt galvanizing retailers to move on to implementing living wages in banana supply chains. Germany, Britain, the Netherlands and Belgium were the first to make public commitments with a deadline to implement them, with Norway, Sweden and Denmark scheduled to follow suit.
At the fourth World Banana Forum conference in Rome in March 2024, the topic of living wages was central and over four days, multiple panel presentations, questions from the floor, lunch time meetings and casual corridor chats, a consensus was established: while bonuses and premiums paid by retailers to plantation suppliers on top of their normal banana price may be of practical use in bringing wages up to living wage levels in the short-term (and by the deadline that retailers have set themselves), but the only sustainable route to living wages is through collective bargaining on the part of independent workers’ unions.
The same week, the ILO governing body gave the tripartite UN body its first-ever mandate to work to achieve living wages. 6 The significance of this mandate that clearly places social dialogue and collective bargaining at the centre of locally rooted processes to achieve living wages cannot be underestimated.
World Banana Forum members also expressed a widely repeated frustration with the sheer number of certification standards that producers – large and small – are now expected to meet, with associated costs and paperwork even harder for the smaller producers to manage. Dominican Republic, a country characterized by organic and Fairtrade production by predominantly small producers, has lost 500 producers in the last few years; 7 most of them are likely to be smaller farmers that can no longer afford to export, as prices paid are simply not enough to cover the increasing demands made on them. Many choose to sell up, and large plantations are replacing smaller ones in a trend that is hard to reverse.
Small farmers under intolerable pressures
It was on 11th March 2024 that the news broke that Fairtrade had decided to close the route to new certification for banana producers not already certified Fairtrade, on the grounds that twice as many Fairtrade certified bananas were being produced as sold. The Fairtrade vision had been to support small, ‘disadvantaged’ farmers producing under ethical conditions in the developing world. But since the launch of Fairtrade bananas in 1996, smallholder banana organizations have had to compete with more and more large plantations being certified.
Without the Fairtrade certification to differentiate smallholders, they are outcompeted by large producers on every front: they lack economies of scale, and retailers and fruit multinationals have a preference for buying from larger farms. For a big buyer, due diligence and quality traceability are much easier with a single company than with an organization that can have hundreds of members. Smallholders are particularly burdened with the requirements of various overlapping certifications and standards. Now they are worried that new CSDDD standards and living wage initiatives could again disadvantage them: the big buyer focuses on plantations and therefore waged workers, Fairtrade or not, means that the issue of living incomes has been marginalized, despite lip-service to small farmers in public statements announcing the retailers’ commitments.
To make matters worse, appropriate technology is often not available for small players in an industry focused on large-scale monoculture, and they lack access to credit. There are also issues relating to land tenure, huge power imbalances between them and their buyers, certifiers and competitors; to boot, many are facing the external challenges of climate change and political instability.
In Peru, a small farmers’ co-operative actively pursuing a transition to agroecology is already producing fruit to Fairtrade standards, yet certification has remained inaccessible to them. Decertified because they had not sold bananas in the international market for long enough, by the time they had a long enough track record, new certifications had been suspended.
In Ecuador, the world’s foremost banana exporting nation, a state of emergency and ‘internal warfare’ was declared in early 2024 by the recently elected President Noboa – the son of a banana magnate – as the authorities struggled to regain control from criminal gangs. Homicide rates exploded, along with kidnappings and extortion. Banana containers on vessels heading to Europe are used to transport cocaine from the port of Guayaquil, the country’s second largest city, which is surrounded by banana plantations and farms of all sizes. Smallholders who were already struggling to make ends meet are now being faced with extortion and the fear that criminals may plant drugs in their banana shipments, a problem which accrues in a total loss for which there is no compensation. On occasion, prices have dropped from the legal minimum of USD 6.25 to as little as USD 1.20–1.50 per box, leading to a significant number of bankruptcies of small producers selling on spot markets. 8
In the Philippines, smallholders are battling TR4 – a debilitating soil-borne fungal disease that ruins banana crops and lives in the soil for decades. Agroecological trials have provided encouraging results, but smallholders are battling on other fronts. In the 1990s, workers on banana plantations in Mindanao owned by Dole successfully fought for agrarian reform, eventually radically altering their labour conditions as they transitioned from hired labourers to collective smallholder owners of the plantations where they once worked (Bacon, 2020). Now these lands are in jeopardy due to individual titling laws encouraged by the World Bank SPLIT programme, 9 which would see collective lands split up into individual parcels. Low prices have pushed many small farmers there into poverty and spurred their desire to sell up. Once sold, the farmland can be converted into urban or commercial properties. The loss of viable rural employment threatens the stability of Mindanao, a region with a history of insurgency. Biodiversity, local knowledge and relationships and food security are all threatened.
Back at the World Banana Forum conference in Rome, we heard repeatedly that the push for living wages must come hand in hand with responsible purchasing practices. There has always been a rub when it comes to living wage and small producers, because the profits made on small farms are often insufficient for farmers to pay themselves a living wage, while they are required to do so for hired labour. Fruit prices must be high enough for all those who work, including smallholders, to be paid a living wage or earn a living income. Retailers need to consider how they can support the inclusion of smallholders in their supply chains.
Challenges and opportunities for the Fairtrade of today
Apart from the obvious challenge of competing with low-priced conventional and organic bananas from large-scale plantations with lower social and environmental standards, Fairtrade has to face a range of issues that derive from the nature and the history of the banana production and trade system: these include the challenge of ensuring respect for trade union rights for plantation workers, the payment of living wages for all, the access of migrant workers to equal rights to social protection and the huge issue of a transition to non-monoculture systems of production that are not only resilient to climate change but also protect biodiversity.
The certification of hundreds of plantations that receive the same minimum price as small farmers’ organizations has a lot to do with these multiple challenges that led Fairtrade to close the door to new entrants for at least two years. But it should be possible to imagine a Fairtrade system that effectively supports both small producers and hired workers on large farms, as both share a disadvantaged position when it comes to earning sustainable livelihoods. The question of compliance with Fairtrade standards in some of the certified plantations has to be addressed, as does the question of undifferentiated minimum prices for plantations and small farmers.
The workers’ committees that Fairtrade requires to be in place to decide how the Fairtrade Premium is spent have, in practice, not increased the voice of worker beneficiaries with their employers. And trade unions have not been able to take on their legitimate role in organizing, representing and bargaining for workers in many of these plantations. Fairtrade’s own recent impact report notes that there has been insufficient focus on Fairtrade’s impact on Freedom of Association to determine any positive influence, stating that ‘… Fairtrade’s effect on labour rights, particularly Freedom of Association, Gender Equality and Social Inclusion, remains weak. Economic indicators show higher confidence for farmers than for workers, reflecting both limited research and limited progress with labour organisations’ (Jodrell & de Bruin, 2025, p. 11). The inability to create enabling conditions for social dialogue and collective bargaining through independent trade unions is a failure that the Fairtrade system must address.
Although Fairtrade has been active in setting standards and developing programmes that favour bargaining between trade unions and management for living wages, in practice the failure to address the transformation of the workers’ committees that many certified plantations have installed into trade unions or union branches means that there are no examples of collective bargaining for living wages to which the system can point. In some countries where trade unions have emerged in the time since plantations were first certified, the historical legacy of workers’ committees can easily become a block to trade unions and collective bargaining.
Without independent workers’ organizations, the question of how Fairtrade will be able to deliver on its commitment to living wages that can be sustained for all workers in certified plantations is unanswered. In a country like the Dominican Republic, where migrant workers form the vast majority of plantation labourers, internal and external migration to better-paid or easier jobs after the initial successful programme of regularization (supported by Fairtrade) has led to a situation where once again, the majority of migrants do not enjoy the same legal rights as their national counterparts. This represents another reputational risk to the Fairtrade model in a country that is losing market share within the market for Fairtrade.
On the issue of the production system, some critics argue that paying fair prices for monoculture production, albeit organic certified, gives no incentive for producers to invest in more diversified and therefore more resilient agroecological systems. As long as there is no extra Premium in the market for bananas produced in non-monoculture systems, there is indeed little incentive to experiment, especially given that almost all agronomists offering technical support are uniquely focused on productivity within a monoculture model.
At a time when many conventional players are pushing the Fairtrade minimum price setting model as the best practice in the industry, 10 and using the costs of sustainable production calculation as the basis for minimum prices (regardless of certification), it is essential that the system deals with the issues cited above in order to remain ahead of the field and on target to deliver a genuinely transformative agenda.
Footnotes
1. See https://galeriadeluchas-socialescr.fcs.ucr.ac.cr/foro-emaus/
2. See https://www.gebana.com/ch-fr/25-ans-gebana
7. As reported in Dominican press on 10th June 2025: https://hoy.com.do/pld-denuncia-colapso-del-sector-bananero/#:~:text=En%20los%20últimos%20tres%20años%20las%20exportaciones%20de%20banano%20han,más%20de%2030%20mil%20empleos
8. https://www.fao.org/3/cc6952en/cc6952en.pdf, p. 1.
References
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