The Problem With Bananas

Agrochemicals

The monoculture production methods used can destroy entire ecosystems. The banana industry consumes more agrochemicals than any other in the world, except cotton. Some of these chemicals are classified as hazardous by the World Health Organisation.

Agrochemical use pollutes water supplies, contaminates soils, and can have devastating impacts on worker health.

Corporate Power

Just a handful of multinational fruit companies dominate the international banana trade – Dole, Del Monte, Chiquita, and Fyffes – but it is supermarkets that are now the most powerful actors along the banana supply chain.

Supermarkets are able to make substantial profits by paying unsustainably low prices to the fruit companies that market bananas and / or own plantations. On average, workers only earn between 4 – 9% of the total value of bananas, whilst retailers keep are able to earn up to 40% of the price paid by consumers. In some countries retailers keep even more.

The ‘Race to the Bottom’

A ‘race to the bottom’ in the banana industry has been fuelled by the low prices paid by supermarkets and the cost cutting actions taken by fruit companies as they relocate in search of cheaper labour and weaker legislation in exporting regions.

This has also led to unfair trading practices (UTPs) being imposed on workers in the banana sector. A survey carried out in 2011 amongst food suppliers throughout Europe found that 96% of respondents had been subjected to at least one form of UTP and the majority were unlikely to pursue legal action. For example, employers have increasingly sub-contracted labour in a bid to reduce their responsibility for working conditions, the respect of core labour standards or payment of a living wage.

Plantation labour is increasingly casual with many workers on temporary contracts or hired on a daily basis. In several countries, membership of independent trade unions has fallen as a direct result.

Plantation conditions are harsh, for example, male and female workers can often work for up to 14 hours a day without overtime in unbearable heat, for up to 6 days a week. Many workers fail to earn a ‘living wage’ to cover their basic needs such as housing, food, clothing and education.

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Bananas are an important cash crop for developing countries and it is the most consumed fruit in North America and Europe. However, for many years, the banana economy has been a prime example of unfair trading practices and power concentration in multinational companies.

In late 2015, the Make Fruit Fair! campaign published a research report, produced by BASIC, exploring Banana Value Chains in Europe and the consequences of Unfair Trading Practices(UTPs) between fruit buyers in Europe and banana producers in exporting countries, their consequences on farmers and workers, and the relationship with the pressure on prices in European markets.

Banana producing countries are predominantly concentrated in South-East Asia, Latin America and the Caribbean, with Ecuador, Colombia, the Philippines, Costa Rice and Guatemala accounting for more than 80% of global exports. Although a handful of companies – Chiquita, Del Monte, Dole and Fyffes – traditionally dominated the market, their share of the trade in Europe dropped from 80% in the 1980s to 39% in 2013.

The EU is the biggest world importer of bananas, accounting for 28% of all imports, the majority being sold by the EU’s ten biggest retailers.

Retailer competition has led to the average consumer price of bananas being 25% lower than that of apples, despite the costs associated with being imported over thousands of kilometres. Moreover, the value breakdown of bananas reveals that an average of between 36 and 43% currently goes to the retailer, whereas workers are becoming more vulnerable to price wars and receive only 5-9% of the value of the crop.

Although, with the exception of the UK, consumer prices have remained relatively stable across the EU since 2001, the import price of bananas has dropped by 20% over the same period. This has negatively affected all major countries supplying bananas to the EU, where the cost of living has increased 107% on average since 2001.

As a result, farmers in exporting countries are being squeezed by price pressures from buyers and rising production/living costs. According to national consumer price indices, the cost of basic resources such as food, health, housing and education has increased since 2001 by 92% in Colombia, 129% in Ecuador, 218% in Costa Rica and 278% in Dominican Republic. In terms of production costs, inputs like fertiliser and pesticides now cost on average 195% more than they did in 2001, whilst shipping costs have increased by 233%.

The decreasing share of the value received by banana growers is having significant social and economic impacts on producing countries. Farmers are receiving lower incomes and are often forced to work longer hours to make a living. This carries serious implications for health and human rights in big plantations too, as production intensification and resource cuts limit workers’ protection against toxic agrochemicals.