World trade in a food commodity

How many bananas were traded in 2017?

• 22.7 million tonnes of bananas (excluding plantains)

• The value of this trade was 11 billion USD, which is higher than any other exported fruit

Where is the largest producer of bananas?

• Asia is the largest banana producing region

• Latin America and the Caribbean are the largest exporters (80% of global exports)

How many jobs are provided by the banana industry in Africa?

70 million jobs

How are bananas grown?

• Bananas grow from a bulb, and take 9-12 months to mature

• Bananas can grow all year round

What climatic and physical conditions are needed to grow bananas?

• Avg temp 27 degrees celsius

• Rainfall between 200-250 cm/year

• Rich, fertile soils with good drainage

Why are bananas an important crop for developing countries?

• Bananas are a cash crop

• They are the most consumed fruit in North America and Europe

How is the banana trade unfair?

• The banana economy is concentrated in multinational corporations

• The majority of bananas are sold by the EU’s top ten biggest retailers

How are agrochemicals a challenge of the banana trade?

• The banana industry consumes more agrochemicals than any other

• This pollutes water, contaminates soil and negatively impacts worker health

How is the banana trade in developing countries challenged by multinational corportations?

• Supermarkets and multinational companies dominate the banana trade

• Supermarkets can pay unsustainably low prices to fruit companies

How much of the total value of bananas do workers earn compared to companies?

• Workers earn 4-9% of the total banana price

• Supermarkets earn 40-50% of the total banana price

What is the ‘race to the bottom’ in terms of banana production?

• Companies and supermarkets are taking huge cost cutting actions as they relocate in search of cheaper labour

• This has increased unfair trading practices and temporary labour

What is fair trade?

• A way of trading products that ensures small producers secure livelihood and receive a fair price.

• It mainly appplies to goods produced for the international export market

What are the five principles of fair trade?

• Payment of a fair price to disadvantaged farmers

• Respect for women and children’s rights

• Safe working conditions

• Respect for the environment

• Transparency of relationships and accountability

In what way is the banana trade not sustainable?

Sustainability standards and certificates are voluntary.

What is the organisation Rainforest Alliance?

• An organisation which certifies farms/tourism ventures/forests as sustainable according to the Rainforest Alliance Sustainable Agriculture Standard (RASAS).

• Certified businesses are audited regularly to verify that they meet the Standard’s requirements.

What are the banana wars?

• A trade dispute between the EU and the US over an EU scheme giving banana producers from former colonies in the Caribbean special access to EU markets.

• The US filed a complaint about this with the WTO and the EU had to shut down the scheme.

What was the EU’s deal with the Caribbean regarding banana trade?

• Beginning in 1975, each Caribbean country had a quota of bananas which they could sell to the EU.

• This protected banana farmers in the Caribbean from large companies and promoted development.

Why was the US concerned about this deal between the EU and the Caribbean?

• The US was concerned about it’s trade deficit, and felt that it couldn’t afford to allow any EU protectionism.

• They also felt threatened by the emerging power of US-based multinationals in the banana trade, such as Chiquita Brands.

How will the banana wars affect the developing world?

• The Caribbean economy could collapse without international aid, and many people would be forced below the poverty line.

• Other former colonies are unlikely to be able to enter into preferential trade agreements with the EU in the future, leaving them to compete with TNCs/the US.

What do the banana wars potentially mean for free trade moving forwards?

Some experts say that the banana wars could cause protectionism and retaliatory tariffs to increase, threatening free trade and causing global financial instability.