Banana case study Flashcards
Fair trade
A global movement that aims to improve the lives of farmers and workers in developing countries by ensuring that they have access to export markets and are paid a fair price for their products
Are bananas the MOST important food product in LDCS?
Bananas are the 4th most important food
Staple food for around 500 million people
What revenue do bananas generate a year through trade?
15 BILLION PER YEAR
Most internationally traded commodity
Why are bananas so popular?
- They contain large quantities of energy and are rich in vitimans, fibre and protein
- A single banana provides more than an adults daily potassium requirment
Are they the most traded?
5th most traded agricultural commodity
Where are most of their exports?
Latin America and the Carribbean
Estimated at 23.3 million tonnes
Key info ?
- Important cash crop
- 80% of bananas are for local and national consumption
Where are bananas grown?
Hot, Rainy lowlands of tropical regions
What was the global production of bananas in 2019
120 million tonnes
What are the top four producers AND consumers ?
India China Indonesia and Brazil
What are the main regions for export commercially?
Latin America and Caribbean
Educador, Costa rica, guatemala
Where do the phillipines export?
Have become increasingly important
Export to Japan, East Asia and Middle east
Why do banana crops need to be treated with chemicals?
Banaa varieties are susceptible to diseases and almost all bananas treated with chemicals
TNCS apply 30kg of active ingredients per hectare
Fungicides, insectisides and herbicides
Fertilisers applied regularly and fruit is washed with disinfectant afterwards
LARGEST AGROCHEMICAL INPUT TO ENVIROMENT
What are the costs to the enviroment of banana plantations?
- Deforestation
- Soil fertility
- Loss of biodiversity
What is the global banana trade dominated by?
ACP, DP
ACP group - african carbibean and pacific (small-medium sized producers on family farms)
Dollar producers - of latin america (educador and colombia) controlled by large US TNCS
What are monocultures?
Refers to the cultivation or growth of a single crop or organisam (banana plantation)
Who are banana production controlled by in caribbean
Small and medium scale growers on family farms and co-operatives
Africa and Phillipines similar but increasing tnc involvement
Who are the exports dominated by?
Latin america and caribbean - produced 17 million tonnes of bananas for the export market in 2018
E,CR,C,GM
Who are the leading producers?
COUNTRIES
Educador, Costa rica, Colombia and Guatemala
Where are exporting rates increasing at a rapid rate?
Smaller countries in Central america such as Panama
Asia produces 17% of export market main commerical producer is phillipines while in africs the two main producers are Cote dlvoire and cameroon
Who are the largest importers?
EU AND USA
How much of the price paid by consumers stays in developed?
Around 85% and never reaches producer
Where are most bananas consumed?
Most major growing regions consuming their own production e.g. india
Who dominates banana trade?
TNCS
FOUR LARGE TNCS:
Chiquita
Dole
Del monte (us based)
Fyffes (ireland based)
Noboa (Educador)
VERTICALLY INTEGRATED IN SUPPLY CHAIN
What do tncs have?
- Own or contract out plantations to other producers
- Have their own sea transport and ripening facilities
- Own distribution networks in consuimh countries
What is the organisation of banana trade?
2002- big five companies controlled 70%
Share fell to less than 45% by 2017
What have the big companies done in supply chain?
Freed themselves from direct ownership of the plantations in favour of guranteed supply contracts with medium to large scale producers
Increasing number of national growing companies based in educador costa rica and colombia sell their produce to TNCS to distribute or directly to retailors such as TESCO OR WALMART - given retailors signifcant part in the supply chain
Why are suppliers at risk?
- Reduced market share
- Have to accept low prices, discounts and delayed payments to remain on supplier list
What are the trade wars within bananas?
Longest trade disputes in history lasting 20 years from 1992 until the 2009 Geneva Banana agreement was reached coming into effect in 2012
When did the dispute start?Why did it start?
Started in 1975 when EU countries negotiated a trade agreement with former colonies
Agreement was the Lome convention and was made with 71 ACP countries
What were the countries in the TA given?
Special and differential treatment (SDT) with preferential tariff free import quotas to supply EU markets
intention was to enable these former european colonies to develop independently without having to use international aid
Who was the agreement extened to?
C,DR,B,IC,J,G,S,WWI
List of suppliers including:
Cameroon, Dominican republic, Belize, Ivory coast Jamacia Ghana surinam and the windward isles
Who did this protect?
Smaller family run farms in caribbean and Africa from competition in large latin american producers (more cheapr and mechanised)
AT THE TIME what % did us tncs control compared to ACP ?
US TNCS - 75%
ACP - 7%
What did wto do ?
1992 TNCS filed a complaint to GATT (now wto) that the practice constituted unfair conditions
1997 - wto ruled against the eu and ordered the eu to cease the discirmintion
What were the outcomes of the 2009 Geneva compromise?
- eu agreed to gradually reduce tariffs on Latin American bananas from 2012 onwards
- Tariffs down from 170 to 75 per tonnebetween 2012 and 2018
Why are belize, dominican republic and windward isles competing succesfull?
Focus on organic and fair trade bananas meeting needs of sustainably produced food in richer eu countries
What is the race to the bottom?
Low prices paid to suppliers by supermakrets, many larger companies are relocating plantations to west africa in search for low labour costs and weak legislation
Racing to the bottom of social and enviromental standards
What is the work like at plantations?
Sub contratced casual labour
Long shifts in unbearable heat and many workers fail to earn enough to cover their basic needs
What are sustainable bananas
Fair trade and organic produce
Helps smaller scale producers in the caribbean and in parts of africa and will partially counter the deterioration of conditions in banana production
Why is the sales of sustainable bananas increasing?
growing market segment of ethical consumers in richer nations who are becoming aware of the shortcomings in the supply chain and are willing to pay a higher price for a certified product
What % do cavendish cultivar make up of the banana trade?
47% of bananas grown and 99% of global trade
Why is the cultivar growing comerciallY?
resistant to tropical race 1 (TR1) (fungus which previously extinct gros michel
What is the new disease?
TR4 - spreading through cavendish banana productions axross south east asia, Australia and to Africa
Lies dormant in soil and resistant to fungicides
When did fairtrade make a change?
In 1971 when courageous workers werent accepting their unfair working conditions anymore e.g. coobana banana - through fair trade able to sell in teh Coop
