“Supermarkets prefer to keep the price of bananas low to win over the consumer”

“Supermarkets prefer to keep the price of bananas low to win over the consumer”
“Supermarkets prefer to keep the price of bananas low to win over the consumer”

“In 20 years of history of fair trade bananas in Peru, I have seen more progress in the living conditions of small producers than in 35 years of history of the Fairtrade label in other sectors,” declares Diego Balarezo , responsible for Solidaridad’s fruit program, highlighting the success of this social and productive project in northern Peru in collaboration with the Dutch importer AgroFair and several banana cooperatives.

Solidaridad is a global organization with a strong local focus, founded over 50 years ago in the Netherlands. In 1988, Solidaridad participated in the creation of Max Havelaar and the success of coffee marketed under this label led to a global fair trade movement around several commodities produced in Latin America, Asia and Africa which are now marketed under the fair trade label.

A fair price and respect for the environment
In Peru, the organization supports miners and artisanal and small-scale producers of coffee, sustainable oil palm, cocoa and fruit, with a focus on the local sector, but working with all stakeholders. each channel. In the fruit sector, the most important group of products is that of bananas, the marketing of which – after the disinterest of the large banana companies in fair trade in the 1990s – was launched in collaboration with AgroFair. In recent years, Solidaridad’s banana program has also focused on environmental protection, low-emission agriculture and women’s empowerment.


Banana bunches are protected from wind and insects

“In the Peruvian banana sector, I have seen many children of producers take advantage of the opportunity to pursue higher education and significantly improve their quality of life. It is an economic activity which, in less than 25 years of history, has been able to change lives. If the common denominator is the banana, the important thing is the people and the sectoral transformation that has a positive impact on their lives. Behind every banana there is a person and a family,” says Balarezo. “Through fair trade and business growth, medical centers are built in villages, as well as roads and canals, and training and professional development opportunities are provided. A notable project in recent years is the creation of the ECOBAN company, promoted by the Peruvian Banana Cluster in collaboration with several banana cooperatives and the Tulipán Naranja company. ECOBAN collects the plastic bags used for banana bunches and, through a recycling process, transforms them into charlottes that protect the banana boxes during transport to Europe or the United States. »

The Netherlands, the United States and Germany main destinations
Although the first fair trade bananas shipped to foreign markets in 1996 were conventional bananas from Ecuador, the organic market began to gain traction at the beginning of this century. This led Solidaridad to collaborate with several groups of small producers in northern Peru, where organic farming thrives due to the more arid climate. “The first container of fair trade organic bananas was shipped from Peru to the European market in 2002 and to the American market in 2006. Today, Peruvian bananas reach more than 15 different markets, the Netherlands, the United States -United States and Germany being the most important destinations,” explains Balarezo, who adds that Peru’s logistics in the early years of the business were difficult, as there were practically no packing warehouses or of containers available. “We copied everything from Ecuador: the first field technicians were all Ecuadorian. Today, the Peruvian banana industry is much more mature and solid, it has been able to chart its own path, with successes and failures, but always with a collaborative and forward-looking approach. »


Diego Balarezo (third from right) with several producers and operators

From the Netherlands, Luud Clercx of AgroFair says the Dutch company imports around 100 containers of bananas per week, from the Dominican Republic, Colombia, Ecuador and Peru, for distribution to different European countries, as well as New Zealand and South Korea. Many of them are certified fair trade and organic.

While the market share of fair trade bananas on the European market does not exceed 7% on average, this percentage is much higher in Switzerland, indicates Luud Clercx. A large part of the bananas sold in the stores of the Coop supermarket chain are supplied by AgroFair. “Also in Luxembourg, another country where the standard of living is quite high and where consumers are willing to pay a little more for an ecologically and socially sustainable product, the market share of this type of banana is almost 30%. %. »


Disinfection of tools

Moratorium on the certification of new plantations
However, Fairtrade International has announced a moratorium on the certification of new plantations due to the stagnation of the fair trade and organic banana market in recent years. “Bananas are one of the best-selling products in supermarkets, which are determined to keep the price of bananas low and thus serve as a promotional product,” explains Clercx. “Although it is impossible to make a profit with a price of €0.99/kg in the store, the objective of retailers is to attract customers who will then buy other products which in turn make a profit . In other words, bananas represent ‘an island of loss in a sea of ​​profit’ at the point of sale, in the words of a supermarket researcher. »


A young bunch of bananas is wrapped in a cover to protect it from wind and insects

Yet all supermarket chains, under market pressure for greater corporate social responsibility (CSR), continue to announce initiatives for sustainability, both environmentally and socially. “And while their actions would match their words if they only committed to fair trade organic bananas, they prefer to keep the price of bananas as low as possible in order to win the battle for the consumer. »

Producer price
For an 18.14 kg package of bananas, the Fairtrade label guarantees the producer in 2024 a price of $8.00 in Colombia, $7.85 in the Dominican Republic and $7.10 in Ecuador – all prices being Ex Works -, according to data communicated by Fairtrade International on its website. For Fairtrade Ex Works organic product, the producer is paid $10.25 per package in Colombia, $10.30 in the Dominican Republic, $9.75 in Ecuador and $9.70 in Peru. “When the market price is higher than the fair trade minimum price, producers must receive the current market price or the price negotiated when signing the contract,” reads the document published by Fairtrade International. Above the fair trade minimum price, producers receive a fair trade premium of $1.00 per package.

“After 25 years of activity in the banana sector in Latin America under the Fairtrade label, we can say that producers, although they still have cultivated areas which do not exceed 3 hectares for the most part, have managed to improve their living conditions and even send their children to university. There is no doubt that the economic and social fabric of the regions where we are active has been strengthened and that the future prospects of the various communities have greatly improved. All we have to do now is convince the supermarket chains that this is the way to go, because we are convinced that consumers will not stop buying bananas because they pay 30 cents more per kilo.” , concludes Clercx.

For more information :
Diego Balarezo (fruit program manager)
Solidarity
Such. : +51 1 4454242
[email protected]
www.solidaridadlatam.org

Luud Clercx
AgroFair Benelux
Such. : +31 180 643 900
[email protected]
www.agrofair.nl

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