Bananas

1. Bananas

2. The banana is the most popular fruit in the world, worth £5 billion in trade terms. • In terms of gross value of production, bananas are the world’s fourth most important crop after rice, wheat and maize.1 • The banana has been the most popular fruit in the UK for the past two years since it overtook the apple. • Annual sales currently stand at a record £750m, approximately 28% of total fruit sales in the UK. • Bananas are now purchased by 95% of all UK households

3. Comment on the division between producers in LEDCs and MEDCs. How does this fit with the traditional patterns of trade between LEDCs and MEDCs. Could there be another reason for the pattern??? PRODUCTION

4. Between 1988 and 1997 the world’s exports of bananas almost doubled, to just over 12 million tons. This was, however, less than a quarter of the total world production of 58.8 million tons, the remainder being consumed locally in producing countries. Ecuador, with 4.4 million tons in 1997, is the world’s largest exporter, followed by Costa Rica with 1.8 million tons, the Philippines with 1.6, Colombia with 1.5 and Guatemala with 0.6.

5. How does this list contrast with the list of producers? Explain in relation to • Physical geography • Global patterns of trade • Why are some producing countries also importers? IMPORTERS EUROPE LATIN AMERICA N.AMERICA AUSTRALASIA ASIA

6. The Companies • At the beginning of the 21st century, the world trade in bananas is dominated by five large companies. • The two largest producer and distributors of bananas are both US-based companies Chiquita Brands International (formerly known as the United Fruit Company, then United Brands) and Dole Food Co.(formerly Standard Fruit). Each accounts for just over a quarter of all bananas traded internationally. • Then comes Del Monte Fresh Produce, owned by the Chilean-based IAT Group (the capital is held in the United Arab Emirates), and controlling some 15% of the banana trade. The company headquarters remains in the USA. • The fourth biggest banana export company is Noboa, the giant Ecuadorian company that controls over one third of Ecuador’s exports and therefore some 11% of total world sales. • In fifth place is the Irish-based company Fyffes with a 7-8% share. Fyffes has grown to control nearly 20% of the EU market (ie. in second place), but has very little production of its own. Devise a way to show this information diagramatically (ie through use of graphs/maps/annotations). Your diagram should show each company’s share of trade and country in which the “Power” of the company is based.

7. The Companies - POWER The three biggest - Chiquita, Dole and Del Monte - together produce and/or control over two thirds of world exports, which used to allow them to control the market and set the rules of the game. Although they still do have a very strong influence, there is increasing pressure from the major consuming countries to limit their power, or at least to try and alter their behaviour through codes of conduct, legislation and campaigns. (See Alternatives for the Future for more information). Because of their size, the companies are extremely powerful both in exporting countries, and in their country of origin. Today, they set producer countries competing with each other, forcing governments to accept impositions with regards to taxes, tariff preferences, preferential access to loans, and deregulation of social and environmental policies. In 1992, for instance, the government of Panama which had attempted to apply an increase in the minimum wage had to step down after Chiquita threatened to withdraw contracts with the local growers. They have an equally strong influence in industrialised countries on the implementation of food and trade policies. Chiquita, for instance, was at the origin of the complaint against the European banana import regime that the US government brought to the World Trade Organisation in 1995. Make notes on the information in the next few pages: subheadings of “Power”, “Vertical Integration” and “Externalised Costs”.

8. The Companies - VERTICAL INTEGRATION The multinational banana companies are integrated vertically up the chain. This means that they own or contract plantations, own sea transport and ripening facilities, and have their own distribution networks in consuming countries. It enables them considerable economies of scale, and they can sell ‘dollar’ bananas on the Northern markets at a very low price. In recent years, these big companies have tried to free themselves of direct ownership of plantations, in favour of guaranteed supply contracts with medium- and large-scale producers in the countries where they operate. It allows the Northern-based companies’ headquarters to shift responsibility for labour and environmental conditions onto local producers.

9. The Companies - EXTERNALISED COSTS Who pays for cheap bananasThe ‘dollar’ fruit from the plantations of Central and South America are cheaper than anywhere else – largely because the costs are ‘externalized’, which means they are paid by someone else; in this case by plantation workers and the environment. If these costs were ‘internalized’, decent wages paid and environmental damage eliminated, the difference would disappear.

10. Of this only 1-2% is likely to reach the paid workers on the plantations. Banana Split... Who gets what from the price of a banana? As with almost all commodities produced in the South and consumed in the North, more than 90% of the price paid by the consumer stays in the North and never reaches the producer. Most of the risks of producing a perishable fruit are, however, born by the producer. The largest chunk of all is taken by the retailers – mostly the dominant supermarkets and chain stores. Graph, describe and comment upon it!

11. THE CHEMICAL COCKTAIL Almost all the bananas we eat are treated with chemicals throughout the production cycle. By far the heaviest users are the plantations in ‘dollar’ countries that have minimal monitoring or healthcare services. Plantations in Central America apply 30 kilograms of active ingredients per hectare per year – more than ten times the average for intensive agriculture in industrialized countries.Fungicides: Aerial spraying up to 40 times per year. Some, like mancozebare, are suspected carcinogens.Nematicides: Applied between two and four times a year. Designed to kill parasitic nematode worms, they are extremely dangerous. The use of DBCP resulted in the mass sterilization of tens of thousands of plantation workers from Central America and the Caribbean to the Philippines and West Africa.Insecticides: Like chlorpyrifos impregnated into plastic bags and tags placed around banana bunches.Herbicides: Are sprayed between 8 and 12 times a year. Glysophate is a suspected carcinogen.Fertilizer: Applied regularly throughout the year.Disinfectants: After harvest, the fruit is washed with tisabendazol and aluminium sulphate, which can cause severe dermatitis in direct contact with human skin. Produce a brain storm/spider diagram to show this information.

12. The human impact of corporate negligenceCarlos Mora works for the plantation workers’ union, SITRAP, which supports a campaign to get the banana companies to cut back on their use of aerial spraying. He has first hand experience of the effects of the highly toxic chemical, DBCP. Carlos is one of the 20% of the Costa Rican banana workers left sterile after handling this highly toxic chemical.Juan handled DBCP. His wife Maria gave birth to a baby whose head was four times bigger than his body. She says "I couldn’t even hold him because it seemed to make things worse. So I just talked to him and cried with him. It’s the worst thing that can happen to anyone. There are no words that can tell what life is like." Although DBCP has now been banned, at least five chemicals designated "extremely hazardous" by the World Health Organisation. Source: Fairtrade Foundation “Unpeeling the banana trade”

13. DESTRUCTION Waste: For every ton of bananas produced, two tons of waste are left behind, frequently contaminated with chemicals and non-degradable plastic.Deforestation: Rising demand for bananas is met by extending the size of plantations, which often means cutting down rainforest.Soil: Copper and other residues accumulate and can leave land permanently sterile. Fragility of exposed soils, together with the concentrated water flows in irrigation systems, cause severe soil erosion and increased flooding during tropical storms. Biodiversity: Large amounts of plant, fish (including coral) and animal life are lost from the intensive use of chemical agents. Monocultures encourage diseases, some of which are becoming resistant to the chemicals designed to eradicate them.Exhaustion: Many of the plantations in Latin America are now more than 25 years old – the maximum optimal productive life for a conventional plantation. Del Monte, Dole and Chiquita are establishing new plantations in other areas of Latin America, India and Indonesia. Another brainstorm or spider diagram for this one

14. Working conditions can be summarised as: • long and exhausting working days of 12-14 hours or more, without overtime payment • wages which are not sufficient to cover the basic needs of subsistence for a family • dismissals without any social security or redundancy payments • intensive use of agrochemicals which damage health and the environment • lack of medical attention • exploitative management-worker relationships • lack of educational opportunities • The situation for women workers is even worse. Rights such as maternity leave and regular healthcare are not respected in many banana companies. Working Conditions Another brainstorm or spider diagram…

15. As well as being forced to endure appalling working conditions, plantation workers are also paid pittance wages. In Ecuador the plantation workers are paid just $1 per day. When the workers try to organise into trade unions their efforts are often met with violent suppression. In Colombia trade union leaders have been targeted and killed as a lesson to others who may seek to organise. Source: Fairtrade Foundation “Unpeeling the banana trade”

16. 1995 - Banana Wars? The formation of the Single European Market in 1992 meant that the European Union had to decide on trading rules for imports and exports. A new banana regime was agreed in 1993 (EC Regulation 404/93), which used a system of quotas and tariffs to give preferential access to exports from African, Caribbean and Pacific (ACP) countries. Imports from Latin America – and therefore from the biggest banana companies were thus limited both in volume and by higher prices. However, this agreement went against simultaneous moves towards greater globalisation and liberalisation of world trade, designed to establish ground rules for international trade at the widest possible level. The regime has been challenged on five successive occasions at the General Agreement on Tariffs and Trade (GATT), and its successor, the World Trade Organisation (WTO). It has also been the subject of strong protests from the multinational banana companies, who think that the EU regime stops them from expanding. Chiquita, in particular, pushed for the Clinton administration to impose sanctions, which it duly did in 1999. Now 100% tariffs are imposed on American imports from Europe of a long list of products which have nothing to do with bananas. For example, British packaging companies and French cheese and wine makers are subject to sanctions when exporting to the USA. The EU is yet to come up with an acceptable regime. As far as consumers in the EU are concerned, the major impact has been to create and maintain a downward pressure on banana prices.

17. Caribbean producers with whom UK had trade agreement. Note SMALL production LARGE dependence

18. 1995 - Banana Wars? The events described suggest the Caribbean banana industry has been the victim of power politics being played by two global power blocks, namely the US and the EU, each attempting to defend its own interests. It has also highlighted the relative disadvantage of small island states in their ability to adequately defend their interest in international trade disputes. Throughout the protracted period of the dispute, Caribbean banana exports to the EU have declined at a significant rate. In effect the Windward Islands are currently taking up less than half of their quota. This highlights the extent to which farmers have been leaving the industry, while banana importers, unable to get sufficient bananas which meet the supermarkets’ quality criteria, are sourcing from other Latin American countries. As a result, many people have forecast the collapse of the Caribbean banana industry, with all the associated economic and social consequences. The preferential arrangements currently enable the Windward Islands to narrow the price gap with ‘dollar’ bananas on the UK market. Along with protection of prices, they are essential to preventing the industry from disappearing altogether. CONSEQUENCES

19. Figures for the Windward Isles

20. Caphias Duncan, 61, lives on his own in a dark room at the far end of a disused dance hall in St Vincent. He has three acres of bananas. He laments the current situation: "The price we get is bad enough. Before it was much better than now. The cost of living has gone up, the cost of fertiliser has gone up, the price we are left with has gone down. It’s much more difficult to grow bananas now and it’s just not worth it. My sons have gone to the hills to grow marijuana. It's less work and more pay, but it’s illegal." Source: Fairtrade Foundation “Unpeeling the banana trade”

21. Fairtrade? • Use the next TWO slides to answer the following: • What is meant by Fairtrade? • What are the possible advantages of the expansion of Fairtrade bananas (think beyond the two slides – what other knock-on effects may there be?)

22. 1995 - Banana Wars? • Banana Wars show the power of TNCs as well as the importance of Trading Blocs in globalisation. Over the next couple of pages you need to try to summarise under the following sub-headings: • Cause of disagreement • Role of TNCs (particularly Chiquita) • Consequences

23. Fairtrade? • Fairtrade is a means of helping small-scale and other disadvantaged producers in developing countries improve their quality of life by providing a more profitable and stable trade relationship. The criteria of Fairtrade can be summarised as: • direct trading links with producers in developing countries, cutting out local dealers • guaranteed prices to producers to cover production costs • a ‘social premium’ to producers, for investment in social and environmental improvements • credit allowances or advance payments where necessary • long term trading relationships to enable planning

24. Fairtrade? The first Fairtrade bananas entered the UK in January 2000, and were initially stocked in Co-op stores, and soon afterwards in Sainsbury’s and Waitrose outlets. Sourced from Costa Rica, the initial results have been encouraging. In Sainsbury’s, where stocked, they have accounted for 7% of all bananas sold. This has prompted moves by both retailers and importers to introduce Fairtrade bananas from the Windward Islands. It is hoped that this will embrace many of the smaller and poorer producers. The environmental policies of the Fairtrade system offer considerable benefits to long-term land sustainability in the Windward Islands. They also help to move towards meeting the requirements of organic production. A switch to more organic is one sustainable option for the Windward Islands, and Fairtrade practices, and the financial boost they attract, are a way forward. Windward Island Fairtrade bananas became available in the UK on 25 July 2000. The UK’s Fairtrade bananas will continue to come from a number of sources, including Costa Rica, Ghana, the Dominican Republic, and Ecuador.

25. To do... • Either: • Produce a poster campaigning for people to support the UK’s links with producers of bananas in the Windward islands. This poster should set out reasons why we should resist the protests of the US and the big banana companies as well as why we should support the Windward islands. • or • b) Produce a leaflet which could be distributed in supermarkets explaining the case for buying Fairtrade bananas rather than just the cheapest ones.