True Price & Fairtrade take an in-depth look at the social & environmental costs of a favorite fruit
Bananas may be the most familiar fruit on grocery store shelves, but behind that billboard-bright exterior are steep external costs that take a heavy toll on the planet and people. Research from /True Price/TruCost and Fairtrade pegs the hidden damage in one box of bananas at $6.70, a cost most often borne by the producers and the environment.
Last year, the US imported nearly 5.2 million tons of bananas (roughly 130,000 boxes), making it the world’s top importer of bananas. Unfortunately, achieving the low prices that shoppers expect often means externalizing costs and pushing pressure far down the supply chain. This tactic results in negative consequences for people and the environment.
In this innovative study commissioned by Fairtrade, True Price and Trucost mapped the external costs of banana cultivation to compare the banana sector with Fairtrade producers. The externalized costs in the banana sector amount to an average of $6.70 dollars per box, much of this due to social costs (60 percent), including inadequate wages, lack of social security, unsafe working conditions, and an inadequate income for small farmers. The largest environmental costs are land use, water exhaustion, and climate change. In comparison, Fairtrade bananas were found to have average external costs of $3.65 per box of bananas, 45 percent less than the sector.
Reducing costs, improving sustainability
The study concludes that the banana sector can dramatically improve sustainability by reducing external costs. Best practices adopted by Fairtrade certified producers and traders can be instructive. Under the Fairtrade Standards producers and industry actors must pay fairer wages/prices, invest in community programs, create safe and healthy workplaces, negotiate more transparently, and ensure rights outlined in the ILO conventions.
The research was based on agricultural inputs, working conditions and environmental impacts at 15 Fairtrade plantations and 97 small-scale farmers in Colombia, the Dominican Republic, Ecuador and Peru. Sector data looked at the same aspects and were derived from secondary sources and verified and validated by local experts.
Shoppers ready to support fairer pricing
Last year, Fairtrade America released research from Globescan indicating that consumers are ready to reward retailers that stock fair trade bananas. Of consumers surveyed, 64 percent indicated that they would purchase fair trade certified bananas at a differential of 10 cents per pound. (Click here for information on the Globescan study.)
Fairtrade Banana Monitoring & Impact Facts
- Fairtrade currently works with over 22,044 farmers and workers organized into 147 producer groups in 16 countries.
- In 2016, banana producer organizations received over $30 million in Fairtrade Premium, an amount over the purchase price that they invest in communities or businesses according to their priorities.
- Workers on Fairtrade certified plantations invested 33 percent of their Fairtrade Premium in worker housing and home improvements.
- Small-scale farmers invested 52 percent of their Fairtrade Premium in improving their businesses, including facilities and infrastructure, training and capacity building, and cooperative administration.
- 59 percent of Fairtrade bananas sold were also certified organic.
- 91% of workers in Colombia have seen household assets increase by an average of 64% since their plantation became Fairtrade certified.
- Three quarters of farmer cooperative members in Ecuador said their income and wellbeing had improved in the last three years.
- Small-scale farmers in Colombia reported an average 34% increase in income due to their affiliation with Fairtrade certified organizations.
About Fairtrade America
The Fairtrade label, licensed by Fairtrade America, is the most recognized and trusted ethical certification worldwide. By complying with the rigorous social, economic and environmental criteria in the internationally-agreed Fairtrade Standards, farmers, traders and brands can improve the sustainability of their entire supply chain. There are currently more than 1.65 million farmers and workers in certified organizations across 74 countries. The Fairtrade label appears on more than 35,000 products sold in over 50 countries. Visit www.fairtradeamerica.org to learn more.