End of the banana wars?

9 Nov 2012 17:36

Barbara Crowther, Director of Policy & Public Affairs

Over 20 years of disputes in the banana trade between European & Latin American countries spurred on by US multinationals, officially came to an end this week with an agreement signed at the World Trade Organisation, so why aren’t banana growers cheering? 

'Peace in our time. The banana wars are over,' trumpeted the Financial Times today in response to the signing of an agreement at the WTO on Thursday 9 November, officially bringing to an end eight separate disputes on banana trade between Europe and the rest of the world. In fact, the deal was agreed almost three years ago, pushing the EU to reduce tariffs on imported bananas from non-Africa-Caribbean-Pacific (ACP) countries from €176 per tonne to €114 per tonne, thus levelling the trade playing field, according to economists. 

It’s true the banana wars have wreaked enormous collateral damage, especially for small scale growers of the Caribbean, whose governments have also signed up to Economic Partnership Agreements with Europe on the back of continued promises of market access for bananas as one of their key export crops. Such promises already look a little hollow, with progressive eroding of preferential terms of banana trade that immediately followed. From 25,000 banana farmers in the early 1990s, barely 3,000 survive today.

According to Renwick Rose of Windward Islands Farmers Association (WINFA), the dispute was never between Latin America and Europe, but between a multinational, largely US-based banana industry and Europe. Whilst the Caribbean small farmers had been able to build solid labour rights and sustainable agricultural methods as a result of continued market access, cheap dollar bananas were produced on the backs of low-wage, mass scale industrialised monocropping. ‘That bananas from Latin America and the Caribbean are cheaper in our supermarkets than locally grown apples today is because inhuman conditions on plantations made them so,’ said Renwick last month to a meeting of NGOs in London.

Free trade economists would argue that if small farmers can’t compete against large scale fruit production then it is simply the natural order of things for them to drop out of the industry. ‘The World Bank was telling Caribbean farmers they had no future, they’d be better off going and becoming golf caddies,’ said Renwick. But, in a world which by 2050 will need to feed 9 billion, surely the rich volcanic soil of the Windward Islands ought to be part of a vision towards food security, with investment in key cash crops also fuelling farmers to stay on land and produce other foods for local consumption too? Instead, today the exodus from farming means that 90% of food is now imported – opening already vulnerable islands up even further to volatility of oil and transportation costs.

Meanwhile, whilst negotiating delegations may be cheering the end of the disputes at the WTO, fighting is still happening on another front – supermarket banana price wars. Today, notwithstanding rises in food, fertiliser, fuel prices and the cost of living for farmers, bananas are nearly 50% cheaper in our shops than they were ten years ago. Surely we should question why a banana grown across the world can cost just 12p today, compared to a local apple which costs 21p (still a bargain!). This has only been made possible by the progressive stripping of value from banana supply chains. Retailers privately say the price wars need to stop. Banana importers moan that margins are too tight to mention. Plantations admit that prices will never facilitate progress towards paying workers anything near to a living wage. Small farmers are simply deemed unaffordable, and often struggle to earn minimum wage themselves.

That’s why at the Fairtrade Foundation, we’ve not put out any bunting to celebrate the end of the banana wars. For small farmers and workers on banana plantations alike, the battle for a sustainable livelihood remains at a critical stage, and until there is also an amnesty in the race to the bottom on price, we will keep fighting for a fairer deal for farmers and workers. And that means being prepared as consumers to play our part in paying a fair price for our bananas.

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