Fairtrade announced that it was increasing its minimum price for bananas in response to rising export costs and falling import prices, which have negatively impacted the livelihoods of producers.
Due to an entry into force on January 1, 2022, Fairtrade minimum prices for bananas are expected to increase by an average of 8%, with contracts for next year currently being negotiated between producers and buyers.
“The financial pressure on banana farmers has been devastating for their livelihoods and a real threat to their long-term earnings,” said Nicolas Léger, Global Fairtrade Manager for Bananas. “A slight increase in the Fairtrade Minimum Price will provide vital support to banana producers, especially in these times of distress and global market fluctuations. “
The increase in banana export costs is believed to be due to a sharp increase in the price of packaging materials, as well as a 60% increase in transport costs, with costs expected to continue to rise in the coming months.
Production costs have also been affected by the ongoing Covid-19 pandemic, as well as protective measures against the TR4 fusarium fungus. Meanwhile, import prices have fallen to a 10-year record low of less than € 10 per box.
“It is essential for the world to know, however, that Fairtrade’s efforts are only part of the solution when it comes to enabling banana growers and workers to earn a decent living,” Leger continued. . “The banana industry as a whole needs to change to make banana cultivation sustainable in the long term. “
According to Fairtrade, producers will continue to receive the additional Fairtrade Premium of $ 1 per carton of bananas sold, to invest in projects of their choice. In the past five years, banana growers and workers have apparently received over € 193 million in Fairtrade premiums.
“Fairtrade is the only program with effective tools to meet the social and environmental expectations of consumers and the banana industry,” said Marike de Peña, director of a Fairtrade certified banana cooperative and president of the National Fairtrade Network of the Dominican Republic. “But the question remains how farmers at the bottom of the supply chain can meet all of these expectations without a strong industry commitment to shared responsibility and sustainable pricing.
“The banana race to the bottom will increasingly exclude smallholders and medium-sized businesses from agriculture. Fairtrade is making a strong call for change.
The announcement to increase the Fairtrade minimum price for bananas follows the introduction of a base wage for plantations and a living wage differential.
The basic wage, introduced on July 1, increased wages by up to 15 percent for banana workers, while the living wage differential added a voluntary payment per box of bananas sold, as a contribution to a full living wage.
“Producers are going above and beyond to meet growing market demands for sustainability,” said Léger, “working for decent wages and incomes, making their farms more environmentally friendly and respecting the human rights due diligence requirements. However, market prices do not match these costs and fall instead of rising. It is not sustainable. Fair prices are more necessary than ever to meet these growing demands. At Fairtrade, we do our best to make this happen.