source: Fair Trade International and Fair Trade America
Twenty-five years ago, the first Fairtrade bananas appeared on supermarket shelves in Europe, imported by Fairtrade pioneer Agrofair, and grown on Volta River Estates in Ghana, which are still Fairtrade certified today. Since then, the Fairtrade banana sector has grown, as demonstrated by the now over 250 Fairtrade certified banana farms and plantations in 16 countries with more than 36,000 farmers and workers. Colombia, Dominican Republic, and Ecuador remained the top 3 largest suppliers of Fairtrade bananas for the United States in 2021.
Living Wages & Worker’s Rights
Fairtrade implemented a base wage on Fairtrade certified banana plantations in early 2021. The Fairtrade Base Wage is set at a minimum of 70% of the take-home pay needed for a living wage, which has been established by the Global Living Wage Coalition. Fairtrade is the first to put a base wage in place for fresh fruit and take a step towards achieving a living wage for banana workers. The changes mean wages will increase by up to 15% for thousands of workers in origins where workers were earning less than the Fairtrade Base Wage, such as West Africa and Mexico.
The Fairtrade Banana Market Landscape in the US
Today,companies operating in the banana sector are under increased pressure to address working conditions, human rights violations, and environmental costs in their supply chains against the backdrop of the COVID-19 pandemic and the Russia-Ukraine War. Moreover, supply chain transparency is increasingly moving from a voluntary commitment to a mandatory one, as several countries pass legislation requiring accountability from companies on human rights due diligence along their supply chains. Demand from consumers for products that do not harm people or the planet is also increasing, and it’s within this context that global banana companies have been looking for ways to reduce risks in their supply chains and increase their contribution to the UN Sustainable Development Goals (SDGs). Highlighted below are additional market indicators of the banana market landscape.
70% of consumers cite sustainability as their #1 or #2 priority when making a purchase according to The Packer.
Fairtrade shoppers are willing to pay 43% more per pound for bananas to ensure farmers and workers were paid a fair price.
71% of consumers indicated that traceability is very important to them and that they are willing to pay a premium for brands that provide it, according to IBM Research Insights.
US Sales Volumes & Premiums
The price wars in the US market, spiking production costs for packing materials and shipping due to the COVID-19 pandemic and Ukrainian Crisis, the fight against plant diseases like Fusarium TR4, and climate-related crop loss have all led to decreases in Fairtrade sourcing in 2020. As a result, after a record year in 2020, volume sales of Fairtrade bananas fell by 17% in 2021. Banana producers are coming under increasing financial pressure that is placing their livelihoods, sustainable farming practices, and food security at risk. Despite these challenges, it is estimated that Fairtrade banana farmers and workers received nearly $600,000 in Premiums generated through Fairtrade sales in the US alone. In addition, Fairtrade is conducting banana price reviews in 2022 interspersing two methodologies: full price research, which includes the data collection of cost of production, and the use of economic indicators (the exchange rate and the consumer price index). This data will be used to inform and implement an updated Fairtrade Minimum Price for bananas.
The Fairtrade Premium
The Fairtrade Premium sets Fairtrade apart from other certifications and sustainability programs. In addition to the price that farmers and workers receive for their produce or labor, they receive an extra sum of money to invest in improving the quality of their lives. The Fairtrade Premium is calculated as a percentage of the volume of products sold. The price is reviewed every two to three years to adjust to local inflation.
As part of the Fairtrade International network, farmers join with other farmers in local cooperatives. The Fairtrade Premium is paid at the cooperative level, so Fairtrade farmers’ democratically elected representatives vote on how the money is used to support business and community development. We believe that farmers are in a much better position to decide what investments will improve the quality of their lives and know best how to spend this money.
Benefits of Fairtrade, according to Farmers
From 2016 to 2018, we collected data from eight banana Producer Organizations to better understand how producers are gaining power in trade relationships and building sustainable livelihoods through Fairtrade.
87% of Fairtrade banana farmers reported Fairtrade remains an important source of livelihood
71% of Fairtrade banana farmers reported the Fairtrade Premium and increased market access stand out as key benefits of Fairtrade
91% of Fairtrade banana farmers reported they received high levels of agricultural extension services through producer network support
Producer Highlight: COOBAFRIO
Cooperativa Bananera de Rio Frio (COOBAFRIO) is based in Magdalena, Colombia, and has offered Fairtrade certified bananas since 2011. Cooperative members produce around 4,000 tons of bananas a year and now sell two-thirds of that on Fairtrade terms, which include a Minimum Price that accounts for costs of production and an additional Fairtrade Premium of $1.00 a box.
Almost 100% of cooperative members report that their quality of life and economic situation has improved because of Fairtrade certification and that they have greater control over their futures and those of their families. All members said they now have greater freedom in growing their businesses and have received financial services, technical support, and access to fertilizers.
Members’ farms are part of the important mountain and lake ecosystems of Magdalena and members say that compliance with Fairtrade Standards, which require them to protect water sources and use water efficiently, implement reforestation programs and recycle waste, has had a positive impact on the environment.
Ending the use of herbicides and pesticides to protect the environment has also created more local jobs to manually maintain farms and care for the crops. Hired workers at COOBAFRIO, like all Fairtrade certified banana cooperatives, also benefit from higher wages, provision of personal protective equipment, and access to good quality health services.
COOBAFRIO farmers report that the most important and effective use of the Fairtrade Premium has been the distribution of subsidized fertilizers and the organization of training programs to improve farmers’ technical knowledge. In financial terms, members report an average 35% increase in incomes since their cooperative was Fairtrade certified.
FAIRTRADE PREMIUM USE BY SUSTAINABLE DEVELOPMENT GOALS
The Sustainable Development Goals (SDGs) are an ambitious set of 17 overarching global goals adopted by the UN General Assembly in 2015 to combat poverty and achieve sustainable development. The goals set the ambition of ending poverty “in all its forms, everywhere,” while leaving no one behind. They represent a powerful opportunity to improve the lives of the 1.3 billion small-scale farmers and agricultural workers the world depends on to produce our food and protect our planet.
But what does this look like on the ground? And how is Fairtrade playing a part in meeting these goals?
SDG2 (zero hunger) aims to end hunger, achieve food security and improve nutrition , and promote sustainable agriculture. Fifty-seven percent of Fairtrade Premium funds invested by producers contributed to this goal, primarily through services to members, such as cooperative administrative costs; export and packing facilities; training for farmers in productivity and quality improvement; and the provision of fertilizers.
Fifteen percent of Fairtrade Premium spending contributed to SDG8 (decent work and economic growth). This included contributions to building or renovating worker housing; services for workers and their families, and administration costs associated with running elected Fairtrade Premium Committees.
Eleven percent of Fairtrade Premium funds contributed to the achievement of SDG4 (quality education). This included the provision of scholarships and bursaries; school uniforms and books; loans for education and payment of school fees.
Beyond Certification: Fairtrade Producer Projects
Fairtrade develops innovative, impact-oriented projects, funded by donors and partners with governments, NGOs, and the private sector to develop projects in line with our mission to empower producers and promote fairer trading conditions. These projects are producer-led and time-limited, and the Sustainable Banana Program, which aims to improve producers’ resilience and promote leadership roles for women and young people, is just one example.
Sustainable Banana Program:
Fairtrade has launched a training program to support small-scale organic Fairtrade banana producers, in partnership with the French Development Agency, Carrefour, and the regional network of Fairtrade producers in Latin America (CLAC) to support ecological practices and the promotion of women in the organic Fairtrade banana sector. The objective of the program is to improve farmer incomes sustainably, promote leadership amongst women and youth, and increase farmers’ resilience to climate change. The program stands to benefit 10,000 producers from banana farming communities in Peru and the Dominican Republic.
The program activities include building organic fertilizer micro-factories and setting up diversification field schools. At the same time, women and young people will be trained through innovative teaching modules from Fairtrade’s Women’s School of Leadership. Module topics will include human rights, leadership, negotiation, and political participation.