Bananas are a major staple and an important cash crop in developing countries. In May 2017, Basic (The Bureau for the Appraisal of Societal Impacts and Costs) released ‘The Big Squeeze’, a report commissioned by Fairtrade New Zealand, to investigate banana production in Ecuador and the Philippines - the two main sources of bananas in New Zealand.
The report highlights that over the last decade the growing power of retailers and increased competition between large fruit companies to remain "preferred suppliers" has led to growing pressure on small banana farmers and workers. These farmers have seen the dollar value of each box of bananas sold in New Zealand remain relatively flat, whilst their living costs have risen by 75%. As a result of this unsustainable trade, banana growers and plantation owners are forced to cut corners, which has significant negative social and environmental consequences, such as cancerous pesticide exposure for workers, price manipulation, environmental degradation and suppression of workers’ rights.
The report shows how Fairtrade supports banana farmers and workers and contributes to a sustainable banana industry, helping to reverse this negative market trend. It concludes that New Zealand retailers could be doing more to address issues in their banana supply chains through sustainable sourcing policies and increasing their commitment to stocking Fairtrade certified bananas.
Fairtrade is unique in addressing the issues raised in the report:
- Fairtrade standards empower farmers and workers to make decisions about their own futures (through being members of cooperatives and joint workers bodies).
- A fair price. The guaranteed Fairtrade Minimum Price acts as a safety net for banana farmers when prices are low, while a Fairtrade Premium of $1 per box can be invested in community or business initiatives. Fairtrade provides prices between 20% - 60% (for Fairtrade organic) higher than the legislated Ecuador government price. In 2016 banana farmers invested 42% of Fairtrade premiums in farmer initiatives - training, agricultural inputs, additional payments, 47% to strengthen their organisations' capacity and facilities and 9% on community initiatives.
- Fairtrade supports smallholder farmers. Currently all Ecuadorian Fairtrade bananas in NZ and 86% of total Fairtrade bananas grown in Ecuador come from small farmer organisations.
- End to end traceability. Independent certification from the banana farmer through to the retailer.
- Fairtrade works in ways beyond the label to further support banana farmers. Fairtrade has recently launched a program to support banana farmers (including in Ecuador) to help them manage soil health and manage soil fertility using recycled organic inputs, increasing farm efficiency (though lowered costs) and productivity (by up to 30%) while also protecting the environment.
- Fairtrade actively supports workers rights. With less than 1% unionisation on banana plantations in Ecuador, Fairtrade promotes freedom of association, and makes efforts to safeguard workers' rights and achieve democratic representation for workers.
- Fairtrade requires that there are Health and Safety practices and policies in place that include; safe working conditions, use of protective equipment and proper training where required. Fairtrade standards are based on ILO conventions. Health and Safety measures are at times circumvented in Ecuador, compromising workers health and safety.
- Fairtrade prohibits hazardous pesticides, those classed by the World Health Organisation as 1a+1b compounds, from production. By 2018, the number of chemicals banned from use will increase by two thirds to 207.
- Fairtrade is committed to and has requirements on living wages for workers on plantations. Fairtrade requires that companies increase wages annually above regional levels and work towards a living wage. This is agreed in consultation with worker representatives.