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 worlds 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 worlds 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 worlds 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 Ecuadors 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 companys 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.Nematicide
s 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
couldnt even hold him because it seemed to make
things worse. So I just talked to him and cried
with him. Its 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. Its much more difficult to
grow bananas now and its just not worth it. My
sons have gone to the hills to grow marijuana.
It's less work and more pay, but its 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 Sainsburys and
Waitrose outlets. Sourced from Costa Rica, the
initial results have been encouraging. In
Sainsburys, 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 UKs 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 UKs 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.