What Price, Bananas? New Report Reveals the Hidden Damage in Bunches

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. This means that shoppers in the United States – who eat an average of 11.4 pounds of bananas per year – have a tremendous opportunity to improve the world just by seeking out better produce.

Bananas are often employed as a loss leader in the grocery stores with artificially low prices to attract consumers. Achieving these low prices often means externalizing costs and pushing pressure far down the supply chain. This tactic results in negative consequences for people and the environment, all of which are not included in the price of bananas.

Finding the true cost

In this innovative study with Fairtrade, True Price and Trucost compared the external costs of conventional production with bananas produced as Fairtrade. The hidden costs in the banana sector amount to an average of $6.70 dollars per box (one box is equal to 18.14 kilograms). Much of this due to externalized social costs, including inadequate wages, lack of social security for workers, and inadequate income for small farmers. The largest environmental costs are land use, water exhaustion, and climate change. Fairtrade bananas were found to have average external costs of $3.65 per box of bananas, an average of 45 percent less than the sector.

The study concludes that the banana sector can dramatically improve sustainability by reducing external costs. Best practices adopted by Fairtrade 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 international labor 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.

Download a 2-page summary (PDF) or the full report here (PDF).

Shoppers ready to support banana producers

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 be willing to pay up to 10 cents more for a pound of fair trade certified bananas. (Click here for more 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.
• The Dominican Republic is the top producer of Fairtrade bananas, followed by Colombia, Peru and Ecuador.
• 59 percent of Fairtrade banana sales were also certified organic.
• Banana producer organizations received over $30 million in Fairtrade Premium in 2016, 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.
• 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.