World Trade- Bananas Flashcards
Describe bananas as a global commodity
4th most important food product
Staple food for 400 million
16.5 million tonnes exported
5th most traded agricultural product
What are the two main groups of banana producers?
ACP group - Africa, Caribbean and Pacific
Dollar producers - countries in central America, these plantations are largely managed by USA based TNCs
How much of the global banana export comes from Ecuador?
80%
Who are the largest importers of bananas? Why are they reliant on the imports?
Usa and EU 27% each
Cant produce bananas in own country
How much of the global banana market is controlled by the five largest TNCs? Describe how these companies operate
45%
Vertically integrated hence they control the trade from plantation to retailers. Hence have the economy of scale
Why are the price of bananas forced even lower than expected?
Retailers sell bananas often as a loss leader
Describe the growth in the fair trade of bananas
1 in 3 bananas are now fair trade
Increased since the 1980s
As people in the west have more disposable income they are more inclined to spend more on ethical shopping
Organisations are inspected by flow cert
Describe the el guabo association, what are the benefits economically and socially
1997 in south Ecuador
Bought together 340 individual banana farming families within ecuador who export 30,000 boxes per week.
Economically Improved income therefor standard of living Fair wages and long term contracts Allows reinvestment into technology Allows them to own their own land
Social
Health care improved
Social security
education invested in
Describe the banana trade war
Lome convention - EU negotiated with the 71 ACP groups and gave them special and differential treatment i.e. Tariff free imports whilst increasing tarrifs on south american TNC rand plantations
The deal protected smaller ran family farms but the USA based TNCs within Ecuador complained to the WTO that this was unfair, WTO ruled in TNC favour and hence allowed USA to put tariffs on EU exports.
EU eventually compromised and lowered the tarrifs on south American bananas
Describe the race to the bottom in banana farming
TNCs will operate where it is cheapest to do so, hence at the moment they are relocating to africa as the environmental restrictions are reduced there hence more profit to be made
Describe the environmental impact of the banana industry
Deforestation
Reduced soil fertility
Reduced biodiversity
2nd highest agrochemical input to the environment
What is the risk of LICs being reliant on banan trade for their main economic income
Bananas are susceptible to disease and annual variation hence it is not a stead flow of income
Where are bananas grown?
Tropical regions
Above 27 degrees
2000-2500mm rain per year
