Case Study - Food Commodity: Bananas

5th...

most traded agricultural commodity, primarily from Latin America & Caribbean.

4th...

most important product for least developed countries.

Tonnes traded annually?

23.3 million

Revenue generated per year?

internationally traded - £15 billion

Top producers:

India, China, Indonesia, Brazil

How is a banana grown?

harvested, cut down by hand (when green), washed & latex removed, preservatives added to stem, packaged in boxes, sent to consumers, leaves left on the ground to decompose and provide rich nutrients for daughter plant/soil

Banana plantations cost to environment:

deforestation, soil fertility decreases due to use of contaminants e.g. chemicals like insecticides, loss of biodiversity esp. aquatic life as pollutants run into the water

Banana worth in $...

worth 1 US$, but plantation workers only see $0.04, the plantation owner gets $0.12, $0.40 goes to the (super)markets

Pattern of Exporters vs Importers

Exporters - often small/medium scale growers on family farms/co-operatives, developing regions, exporting low-value primary product to more developed countries/largest importers are EU and USA, around 85% of price paid by consumers for bananas stays in developed country.

Race to the bottom:

banana producing countries compete to attract multinational companies by offering lower costs, but this comes at the expense of the workers - long shifts in unbearable heat and many don't earn enough to cover their basic needs, this competition can lead to a downward spiral of conditions, and is exacerbated by the power of supermarkets to demand low prices, which then puts pressure on producers to cut costs.

Trade Wars:

conflict primarily over EU tariffs on banana imports, seen as favouring bananas from the Caribbean and Africa over Latin America - trade war between USA & EU, compromise eventually reached in 2009 with EU agreeing to gradually reduce tariffs on Latin America bananas from 2012 onwards

Fair Trade and organic bananas:

There has been a steady growth in sales of 'sustainable' bananas which includes fair trade and organic, but is still an issue, in 2014 ASDA still weren't selling fair trade bananas, and the process of introducing fair trade bananas is slow and depends on country/shop

Disease:

TR1 - fungus which affects Cavendish Cultivar - most popular variety of banana. A new disease TR4 is also spreading through SE Asia, Australia and Africa, proven to be resistant to fungicides, and could spread to Latin America. As bananas have no seeds they can't be hybridised.