Case study: Global Systems, Fair Trade of Bananas

Question 1

How did trade induced conflict with bananas start?

Answer 1

• early 1900s American railroad tycoons bought up large amounts of land in Latin America
  > land is then unable to be used by locals for economic development
• intensive nature of banana farming leaved soil stripped of nutrients
  > farming only possible with expensive fertilizer
  > not realistic for the land to be given back to Latin American
• European countries favour countries which were former colonies in banana trade
  > unequal access to market for countries

Question 2

How many bananas are eaten each year?

Answer 2

• 100 billion
• eaten the most in places where they are grown
  > no need for transport cost or to keep them fresh

Question 3

How do supermarkets sell bananas?

Answer 3

• lost leader
• making them cheaper
• 2002-2018 the price of bananas had dropped 14%
  >lower supply
  > improvement of shipping technology

Question 4

What is the relationship with TNCs and the banana trade?

Answer 4

• 5 TNCs control 75% of the market
  > Dole, Chiquita, Demonte
  > very integrated model, owns the plantation and processing plants
• TNCs can drive down priced due to economies of scale
  > independent farms can’t compete
• all profits leave the LIC to go back to the HQ of the TNCs

Question 5

How does fair trade effect the banana market?

Answer 5

• allows appropriate and fair pay
• allows farmers to drive down the prices and compete with TNCs
• fair trade gives farmers a stable income which improves the standard of living
• reduced cost and increase in revenue allows for more profits
  > allows improvements/investments back into the farm

Question 6

What is El guapo?

Answer 6

-an association of small independence farmers who formed a corporation of 339 family farmers

Question 7

How does fair trade improve the standard of living?

Answer 7

• stable income
• able to invest back into the economy
  > improvement in healthcare
  > improvement in education
• allows workers to ger a social security
  > NHS pension
  > able to support poorest ground though food banks
  > able to employ marginalised groups