Low banana prices threaten investment in sustainable production

Lidl has joined Asda in confirming it will only stock bananas certified by the NGO Rainforest Alliance; Tesco could soon follow suit. The Co-op, Sainsbury’s and Waitrose already stock only Fairtrade or organic bananas. However, although the UK may be the biggest market in the world for certified bananas – consuming more than 70 per person each year – it still has one of the lowest retail prices in the northern hemisphere. This is problematic for producers hoping to invest more in plantation conditions, wages and environmental impacts. Campaign group Banana Link argues that selling fairtrade bananas at a loss means that growers have no room to invest in ways that will ensure longer term sustainable production and trade.

Head down to your local supermarket and it is getting hard to avoid buying a banana that has not been certified as in some way sustainable.



The Co-op, Sainsbury’s and Waitrose already stock only Fairtrade or organic bananas, while Lidl joined Asda this week in limiting themselves to bananas certified by the NGO Rainforest Alliance. Tesco could follow suit soon.

By rough estimates, in the UK we each gobble up more than 70 certified bananas every year.

But here’s the contradiction: the UK may be the biggest market in the world for Fairtrade, organic and other certified bananas but it still has one of the lowest retail prices in the northern hemisphere.

For example, a quick check online will show you that Sainsbury’s and Waitrose are selling their loose Fairtrade bananas at the same price as Tesco’s non-Fairtrade ones at 68p/kg. The Co-op is the only chain selling its bananas at a higher price.

So while it is great news for consumers to feel good about buying fairer or sustainable bananas, it is not so good for producers hoping to shift bananas away from being seen as a low-cost staple and invest more in plantation conditions, wages and environmental impacts.

Supermarkets argue that thanks to the certification standards, such as the Fairtrade minimum price (agreed on an annual basis by region), prices always cover the cost of production no matter how low supermarket prices go.

“Bananas are competitively priced across supermarkets, but our customers can be confident that none of the price reduction they see is passed on to growers as we absorb this cost,” says Waitrose. “Our retail prices are in no way linked to our cost prices,” adds Lidl. Both appear happy selling bananas at a loss.

While guaranteed minimum prices (not offered by Rainforest Alliance) and additional social benefits delivered by certification have been an important positive step, banana growers and workers are not immune to supermarket price wars.

“Selling loose Fairtrade bananas at a loss in order to keep an unsustainably low price is sending the wrong message to consumers about the real value of fair bananas,” explains Alistair Smith, founder of the campaign group Banana Link. “The smallholder growers in particular have little or no room to invest in the improvements in wages conditions and environmental practices that are needed to ensure sustainable production and trade in the longer term,” he says.

Life on a banana plantation

The reality of what artificially low prices mean for banana producing countries can be seen in the plight of workers in the UK’s main source of organic and Fairtrade bananas: the Dominican Republic.

The UK consistently buys more than half of the country’s exports, with certified schemes like Fairtrade helping to maintain a strong smallholder sector that would otherwise be unable to compete with large-scale plantation farms.



However, the driving force behind the booming banana sector (both small farms and large) has been largely slum-dwelling Haitian migrants, who make up an estimated 90% of the workforce. Long denied legal status in the country, until recently, most survived on poverty wages and lived in makeshift slums.



Housing used by migrants working in the banana sector in the Dominican Republic. Photograph: Tom Levitt/The Guardian

There has been some progress, with the vast majority of banana workers reported to have taken up a new right to apply for legal status. The benefits are said to include health insurance, access to bank accounts for sending remittances back to Haiti and the ability to form and control their own trade union or NGO organisations. They are also protected from deportation or financial exploitation at border crossings.

However, NGOs working with migrants in the country say the benefits are far from clear. Many have not yet collected their legal status documentation, which in any case is only a temporary one that needs to be renewed after one or two years.



Haitians make up an estimated 90% of the workforce in the Dominican Republic’s banana sector. Photograph: Alamy

“The Dominican Republic has tried hard to do a PR exercise to show that the problem has been resolved but the facts on the ground suggest otherwise,” says Bridget Wooding, director of the Caribbean Migrants Observatory (OBMICA). “Much of the supposed benefits, beyond not being deportable, are not yet evident.”

Even with legal status, it is not certain issues such as living conditions will improve for migrants. “You have to understand the migrant strategy,” explains José Horacio López, director general of Grupo Banamiel, a banana exporter on the island. “They come [the vast majority without family] to save as much money as possible and won’t invest in living standards.”

There are also health and environmental issues that need more attention, such as the risks of using often dangerous chemicals (organic plantations have been using a natural pesticide mixture of garlic and rotting vegetables) and the monoculture landscape created by banana plantations. Another visible issue on all farms are the plastic bags used to protect the bananas from over-exposure to the sun. Sadly most end up deposited after use on roads and in rivers.

Source: Banana Link Illustration: Guardian

The future for bananas

After switching his stores to 100% Fairtrade in 2007, Sainsbury’s then CEO Justin King said that every customer would now know that “buying bananas from Sainsbury’s is helping to make a difference to a developing country”.

A difference, yes, but not yet a fair market says Smith. “As long as Sainsbury’s and others retain the retail price at an unsustainably low level then the room for manoeuvre on price negotiation is minimal. Somebody needs to break the supermarket price war and send a message to people about what really is a sustainable price to pay.”

The Co-op claims selling bananas at a higher price has not seen it lose revenue (they consistently appear in its list of top ten highest selling products) yet supermarkets and even certification bodies appear fearful of losing sales.

Ultimately, says López, only consumer pressure is likely to change the status quo. “I don’t think consumers have much problem paying more, the problem is supermarkets. The consumer happens to pay less but they are not pushing to do so. Just a couple of pennies per kilo could make a huge difference.”