The human cost of cheap bananas

New report shows how increasing market power and Unfair Trading Practices of European supermarkets affect banana small farmers and plantation workers

Banana workers and small farmers in developing countries are exposed to toxic agro-chemicals, earn poverty level wages and work in a climate of fear, reveals the report “Banana value chains in Europe and the consequences of Unfair Trading Practices” published today by Banana Link and the Fair Trade Advocacy Office FTAO. The report also shows how European supermarkets contribute to this situation by engaging in Unfair Trading Practices. (UTPs).

The banana supply chain has long been a symbol of injustices in the global trade market. For instance, since 2001 banana wholesale prices have fallen by almost 25%, whilst retailers have increased their share of the banana value to around 40%.The same period has seen significant increases in both production and living costs. Food, health, education and other living costs have rocketed, for example, by as much as 278% in the Dominican Republic.

“Around 40% of the profits on bananas are kept by the retailer, whilst workers receive only 0.7 to 1%. This barely meets the costs of subsistence. It is certainly not a living wage, nor decent work, as defined by the International Labour Organization (ILO)”, says Iris Munguia, Representative of COLSIBA (Coordinating Body of Latin American Banana and Agro-industrial Unions).

“The imbalance of power in the banana supply chain and Unfair Trading Practices of supermarkets come at a high price”, says Jacqui Mackay, UK National Coordinator of Make Fruit Fair! from Banana Link. “This generates and amplifies significant negative social and environmental impacts in most banana producing countries, including the denial of basic human rights, gender discrimination, a failure to earn living wages, and long working hours.”

For decades a few multinational companies have dominated the banana market, negatively affecting the lives of workers and farmers. Now, the power has shifted to the supermarkets. “Concentration in the European retail market has rapidly increased in recent years and this will continue. In Germany only four supermarket chains dominate 85 per cent of the market.”, says Franziska Humbert, Policy Advisor Labour Rights and CSR at Oxfam Deutschland. “Supermarkets use their growing buying power to push prices down below sustainable levels.”

Photo: Costa Rica, September 2015. http://feedbackglobal.org/

The European Commission already acknowledged the prevalence of UTPs and will decide at the end of this year whether to propose stronger regulation or not. “There is now a window of opportunity in the European Union policy process to tackle Unfair Trading Practices in the food supply chains”, says Sergi Corbalán, Executive Director of the Fair Trade Advocacy Office FTAO.50.000 European citizens have signed the Make Fruit Fair! petition urging the Commissioner Bieńkowska to make a legislative proposal.

The report is based on interviews of more than sixty actors from the banana industry in several Latin American countries and a survey conducted in Costa Rica in August 2015. It reveals several UTPs like one-sided clauses in contracts with producers and exporters that lead to cancellations and rejections of orders on dubious grounds.

It documents market data both at European level but also focuses on the specific markets of the United Kingdom, Portugal, Malta, Italy, France, Germany, Austria, Czech Republic, Hungary, Poland, Latvia and Romania.

The report Banana value chains in Europe and the consequences of Unfair Trading Practices sets out the main findings of research commissioned by the Make Fruit Fair campaign that investigated how banana value chains in Europe operate. The research also looks at UTPs between fruit buyers in Europe and banana producers in exporting countries, their consequences on farmers, workers and consumers, and the relationship with pressure on prices in European markets. It is available to download at:
http://www.makefruitfair.org/wp-content/uploads/2015/11/banana_value_chain_research_FINAL_WEB.pdf