Friday, October 9, 2009

Why Bananas Matter

Bananas are a quick, cheap, nutritious and delicious snack. But some producers are slashing their banana prices so low that it may harm the farmers who try to make a living off of this produce.
This article in Britain's The Independent offers some thought-provoking questions--and answers--on the subject of why the price we pay for bananas at the market actually matters. The Independent decided to tackle the subject after Britain's second-largest supermarket chain slashed their banana prices by more than half since last Christmas.
Here are some excerpts:
So? Supermarkets are always cutting prices, aren't they?
It's special for two reasons. One, bananas are the top selling item in British grocery - the trade is worth nearly £600m per year. In terms of value, only petrol and lottery tickets outsell bananas in supermarkets. This means that banana prices have become a key weathervane, like the prices of traditional staples such as bread and milk, of supermarket prices in general. People notice banana prices. If shoppers think you have cheap bananas, they may think your prices are lower across the board. Secondly, and more importantly, in real terms these are probably the lowest prices for bananas that have ever been charged.
Well that's great, isn't it?
It very much depends on who you are. If you're a banana consumer (and most of us are), your weekly banana bill has been cut by half in less than a year. There's a recession on, and every little helps. Bring on the banana fritters and the banana splits. On the other hand, cutting the price in half, and perhaps saving you 50p per week, might represent disaster for thousands of farmers in the developing world, who grow bananas - and barely make a living doing so - and have seen the prices they receive steadily drop over the last decade. These are tough times for the public in Britain, but they are desperate times for poor farmers in countries such as Costa Rica and Ecuador.
Why should we worry about banana producers?
Because banana production is the archetypal example of how agriculture in the developing world can perpetuate social injustice and trap people in poverty. Bananas are the most popular fruit in the world - shoppers spend more than £10bn on them annually, and they are the world's fourth most important crop after rice, wheat and maize.
Banana production is consequently an operation on a gigantic industrial scale and is dominated by just five huge companies, Chiquita (formerly United Fruit), Dole, Del Monte, Noboa and Fyffes, which control 80 per cent of the global trade between them.
They grow bananas in vast monoculture plantations in tropical countries, employing tens of thousands of workers. But, according to the Fairtrade Foundation, many of the workers are paid pittance wages insufficient to provide for their families - less than £1 per day in some cases - for working long hours in very difficult conditions, and often prevented from forming trade unions to protect their rights and improve their working lives.
The situation of small independent banana producers is also precarious, and in the Windward Islands in the Caribbean, which were once the mainstay of Britain's banana supplies, 20,000 out of 25,000 banana farmers have gone out of production since 1992.
Every time the price of bananas in the rich countries falls, there is pressure on the big producers to cut the wages and benefits of their workers to maintain profits, and often impossible pressure on independents to match the low prices. Between 2002 and 2008, supermarket price wars saw the price of loose bananas in the UK slashed by 41 per cent, but Asda's latest price cut is something again.
Why is it different from other price cuts?
Because it takes banana prices to a historically low level, almost certainly below the cost of growing them, picking them and shipping them across the world. The Fairtrade Foundation, which now gives its accreditation to a quarter of the bananas sold in Britain, has been tracking banana retail prices in the UK since 2000 (when they were at 90p per kilo) and the baseline of the graphic it has used was set at 65p, as no-one ever expected prices to fall below that. Now Asda has cut them to 46p - way off the graph.
"We've never seen this," Harriet Lamb, the Fair Trade Federation's executive director, said yesterday."It never even occurred to us we would see prices go this low. This is the lowest level since records began after World War Two, the lowest level in absolute terms ever. It is completely unsustainable. It is ludicrous. It is just Asda playing games. It is also completely pointless, as their rivals will all follow suit. The point is what the long-term impact will be for farmers and workers in the banana industry. It is clearly impossible to cut prices by this much without making the deepest cut of all - to producers' livelihoods."

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