Bananas

Question 1

Importance of bananas globally

Answer 1

4th most important food product within least developed countries- staple food for around 400 million
5th most traded agricultural commodity

Question 2

How many tonnes of bananas were exported in 2013?
Where from?

Answer 2

16.5 million tonnes
Latin America and the Caribbean

Question 3

Conditions for banana growth

Answer 3

Bananas are grown predominantly in hot, rainy lowlands of tropical regions - average temperature 27°C and annual rainfall 2000-2500mm.

Question 4

Where are bananas produced but mainly consumed domestically?

Answer 4

In some countries – India, Brazil, much of Africa, large quantities are produced, but are mostly consumed domestically.

Question 5

Which county is the Largest producer of bananas?
Where does it export?

Answer 5

India is the largest producer and exports to the Middle East and other parts of Asia.

Question 6

Where are the main commercial producing regions for bananas?

Answer 6

The main commercial producing-regions for export are geographically concentrated in
Central America and the Caribbean.

Question 7

Environmental impacts of banana production

Answer 7

-commercial plantations operated by TNCS apply around 30kg of fungicides/herbicides/pesticides per hectare
-banana production has the 2nd largest agrochemical input into the environment
-loss of biodiversity
-deforestation
-waste (2 tonnes per 1 tonne bananas)

Question 8

Which groups of producers dominate banana world trade?

Answer 8

-ACP group -> Africa, Caribbean, Pacific
- ‘dollar producers’ of Central American republic -> Ecuador and Colombia controlled by large US TNCs

Question 9

What pattern of world trade does banana trade follow?

Answer 9

Developing regions exporting low value primary products to more developed countries

Question 10

Which is the main exporting country ?

Answer 10

Ecuador

Question 12

Asia and the banana trade

Answer 12

Produces 17% of exporting market
Main commercial producer is the Philippines

Question 13

2 main exporters in Africa

Answer 13

Cameroon, Côte d’Ivoire

Question 14

Largest importers

Answer 14

USA, EU
2013 consumed 27% of total exported

Question 15

Global systems banana trade

Answer 15

HICS reliant on import
Without global system including use of refrigerated ships bananas could not be imported

Question 16

Consumer prices banana trade

Answer 16

around 90% of the price paid by the end consumer stays in the richer ‘north’ and never reaches the producer

Question 17

Who are the main profit makers in the banana trade?

Answer 17

retailers- bananas are one of the biggest profit-makers in supermarkets.

Question 18

Which TNCS dominated banana trade?

Answer 18

Chiquita (USA)
Dole (USA)
Del monte (USA)
Fyffes (Ireland)

Question 19

What % of banana trade was dominated by TNCs?

Answer 19

80%

Question 20

How do TNCs controlling banana trade operate?

Answer 20

Integrated vertically up the chain
They own or contract out plantations to other producers; they have their own sea
transport and ripening facilities, and their own distribution networks in consuming
countries.

Question 21

How does vertical integration benefit the TNCs?

Answer 21

• This chain allows them significant economies of scale gains so they can sell bananas in
the USA and EU market at a very low price.
• The repatriate profits to their countries of origin.

Question 22

Where are most bananas for export grown?
Where are the remainder grown?

Answer 22

Monoculture
Small-scale family farms eg. In the Caribbean

Question 24

Control of market by TNCs.

Answer 24

In 2002 the big 5 companies controlled nearly 60% of the market, but their share has now fallen by volume to 45%.
They are still major stakeholders in the business and have responsibility for, and influence over, labour standards on the plantations they own or source from.

Question 25

How has organisation of Banana trade changed in recent years?

Answer 25

big companies have freed themselves of direct ownership of plantations, in favour of guaranteed supply contracts with medium- and large-scale producers. • An increasing number of national growing companies based in e.g. Ecuador sell their produce to either banana TNCs (as distributors) or directly to retailers in the developed countries e.g. Tesco. There has been a shift in power and retailers in the grocery sector in importing countries are increasingly dominating the supply chain.

Question 26

When was the banana trade war?

Answer 26

1992 until the 2009 Geneva Banana Agreement coming into effect 2012

Question 27

How did the dispute over bananas begin?

Answer 27

-1975 when EU countries negotiated a trade agreement with former European colonies -The Lomé Convention was made with 71 African, Caribbean and Pacific countries (ACP countries) and many were banana producers. -These countries are given special and differential treatment (SDT) with preferential tariff- free import quotas to supply EU markets. -the effect of the deal was to protect the mainly smaller, family-run farms in the Caribbean and Africa from competition with the large Latin American producers, whose bananas were produced more cheaply on mechanised plantations. -At the time, the US TNCs which controlled the Latin America crop were supplying around 75% of the EU market whilst only 7% came from Caribbean suppliers. - Despite this, in 1992, the TNCs, filed a complaint to the WTO that the EU practice was unfair trade

Question 29

How did the WTO organisation respond to the banana trade war?

Answer 29

In 1997 the WTO ordered the EU To cease the discrimination. The dispute was not resolved as the EU proposals did not satisfy the larger producers. This led to a trade war between the USA and EU as the US government retaliated under pressure from TNCs and imposed WTO-approved sanctions on a range of EU products.

Question 31

How was the banana dispute resolved?

Answer 31

A compromise was eventually reached in Geneva in 2009 between the EU and 11 Latin American countries. The EU agreed to gradually reduce tariffs on Latin American bananas; the agreement was ratified in 2012.

Question 32

Race to the bottom

Answer 32

• Owing to lower prices paid to suppliers by supermarkets, many of the larger companies are relocating their plantations, increasingly to West Africa, as companies search for lower labour costs and weaker legislation. • This is called pursuing a ‘race to the bottom’ in terms of social and environmental standards. • Employers usually sub-contract labour so plantation work is increasingly casual. • The work involves long shifts in unbearable heat and many workers fail to earn enough to cover their basic needs.

Question 33

Fair trade and organic bananas growth

Answer 33

Steady growth in ‘sustainable bananas’ Help smaller-scale producers in the Caribbean and parts of Africa and will partially counter the deterioration of conditions in banana production Growing market of ethical consumers in richer nations who are becoming more aware of shortcomings the supply chain and are willing to pay more for an ethical product

Question 34

How many bananas in 2013 were sold as fair trade in the UK?

Answer 34

1 in 3 bananas carried a fair trade certificate

Question 35

What is fair trade?

Answer 35

Grassroots movement of NGOs Over last 40 years price paid to farmers has halved for many products Fair trade aims to pay farmers a guaranteed minimum wage and offer fair terms of trade and pay additional development premium for reinvestment in the local community

Question 36

4 international fair trade networks

Answer 36

-Fairtrade Labelling Organisations International, World Fairtrade, Network of European Worldshops and European Fairtrade Association

Question 37

When were the first Fairtrade products sold in the US?

Answer 37

1940s

Question 38

Recent fair trade 1980s onwards

Answer 38

From the late 1980s the labelling of Fairtrade products has boosted consumer awareness and the influence of TNCs has significantly decreased. The creditability of Fairtrade has been strengthen by the creation of an international monitoring system. FLO-CERT is the independent company with the job of inspecting and certifying producer organisations and auditing traders.

Question 39

El Guapo Association of Small Banana Products

Answer 39

Formed in 1997 south-west Ecuador One of the largest Fairtrade producers of bananas exporting around 30,000 boxes a week to the USA and Europe

Question 40

Economic benefits of El Guabo

Answer 40

-stabilised incomes and improvements to standards of living -guaranteed fair wage and Long-term supply contract including direct access to new and international markets -producers able to raise additional capital for reinvestment eg. Tanks to wash bananas -migrant labours helped eg. With assistance to buy their own land

Question 41

Social aspects of el guabo

Answer 41

-health care benefits to families of cooperatives eg. Free use of El guabo clinics -provision of educational and medical supplies -payment of retirement benefits -support for poorest groups eg. Food baskets -improved education eg. Schools

Question 42

Overall points about TNCs + bananas

Answer 42

• Mass production in developing countries will have negative environmental consequences. • TNCs have a large element of control of markets and can influence political decisions. • WTO will support free trade against protectionist activities or agreements at all costs, even if the protection may be to help development. • Geopolitical processes mean that trade disputes can spread and can escalate to trade wars between regional trading blocs.