Bananas by eo9Mh7J

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									Bananas
•The banana is the most popular fruit in the world, worth £5 billion in
trade terms.

•In terms of gross value of production, bananas are the world’s
fourth most important crop after rice, wheat and maize.1

•The banana has been the most popular fruit in the UK for the past
two years since it overtook the apple.

•Annual sales currently stand at a record £750m, approximately 28%
of total fruit sales in the UK.

•Bananas are now purchased by 95% of all UK households
               Bananas            Year
            Production (Mt)       2001         Malaysia                 560,000
World                             66,510,680   Panama                   489,417
India                             15,100,000   Honduras                 457,000
Ecuador                            7,561,119   Dominican Republic       445,413
Brazil                             5,744,200   Spain                    400,200
China                              5,555,000   Congo, Dem Republic of   312,690
                  Comment on the division between producers in
Philippines                         4,500,000 Martinique                310,000
                  LEDCs and MEDCs. How does this fit with the
Indonesia                           3,600,000 Angola                    290,000
                  traditional patterns of trade between LEDCs
Mexico                              1,900,000 Haiti                     290,000
                  and MEDCs. Could there be another reason for
Costa Rica                          1,860,000 Côte d'Ivoire             279,568
                  the pattern???
Thailand                           1,720,000   Australia                275,000
Burundi                            1,548,897   South Africa             268,026
Colombia                           1,380,450   Madagascar               260,000
Viet Nam                           1,125,500   Kenya                    210,000
Venezuela, Boliv Rep of            1,050,000   Cuba                     180,000
Cameroon                            850,000    Argentina                175,000
Guatemala                           800,400    Guinea                   150,000
Tanzania, United Rep of             800,300    Cambodia                 146,000
Egypt                               735,999    Morocco                  142,000
Papua New Guinea                    700,000    Pakistan                 138,000
Bolivia                             687,829    Israel                   130,000
Uganda                              610,000    Jamaica                  130,000
Bangladesh                          572,000
Between 1988 and 1997 the world’s exports of bananas almost doubled,
to just over 12 million tons. This was, however, less than a quarter of
the total world production of 58.8 million tons, the remainder being
consumed locally in producing countries. Ecuador, with 4.4 million tons
in 1997, is the world’s largest exporter, followed by Costa Rica with 1.8
million tons, the Philippines with 1.6, Colombia with 1.5 and Guatemala
with 0.6.
                             Value 1995
         Importer
                              US$ '000         SAUDI ARABIA                   341,275

GERMANY                            5,521,826   PORTUGAL                       277,653

USA                                3,263,497   POLAND                         233,176
                    How does this list contrast with the list of
                                          DENMARK                             232,453
FRANCE                          2,648,194
                      producers? Explain in relation to
UNTD KINGDOM                       2,515,005   NORWAY                         230,321

JAPAN               a) Physical geography
                                 1,946,265 CZECH REP                          219,867

NETHERLANDS                                trade
                    b) Global patterns ofFINLAND
                                 1,610,009                                    213,449

CANADA                             1,205,317   MEXICO                         150,643
                    Why are some producing countries also
ITALY                          1,164,785 GREECE                               149,653
                      importers?
HONG KONG                            916,454   IRELAND                        146,832
BELGIUM-LUX                          885,699   MALAYSIA                       145,130
SPAIN                                674,097   AUSTRALIA                      131,127
SWITZ.LIECHT                         617,537   KOREA REP.                     127,590
AUSTRIA                              481,345   KUWAIT                         109,600
SWEDEN                               434,279   ARGENTINA                      108,445
BRAZIL                               414,721   THAILAND                       105,097
SINGAPORE                            374,931      EUROPE      LATIN AMERICA
                                                  N.AMERICA   AUSTRALASIA
                                                  ASIA
•At the beginning of the 21st century, the world trade in bananas is dominated by five large
companies.
       Devise a way to show this information
•The two largest producer and distributors of bananas are both US-based companies Chiquita
       diagramatically (ie through use of
Brands International (formerly known as the United Fruit Company, then United Brands) and
       graphs/maps/annotations). Your
Dole Food Co.(formerly Standard Fruit). Each accounts for just over a quarter of all bananas
tradeddiagram should show each company’s
        internationally.
        comes Del Monte Fresh Produce, country in which
•Thenshare of trade andowned by the Chilean-based IAT Group (the capital is
         the United Arab Emirates), the company of based.
held inthe “Power” ofand controlling some 15% isthe banana trade. The
company headquarters remains in the USA.
•The fourth biggest banana export company is Noboa, the giant Ecuadorian company that
controls over one third of Ecuador’s exports and therefore some 11% of total world sales.
•In fifth place is the Irish-based company Fyffes with a 7-8% share. Fyffes has grown to control
nearly 20% of the EU market (ie. in second place), but has very little production of its own.
The three biggest - Chiquita, Dole and Del Monte - together produce and/or
control over two thirds of world exports, which used to allow them to
control the market and set the rules of the game. Although they still do
have a very strong influence, there is increasing pressure from the major
           Make notes on the information in the
consuming countries to limit their power, or at least to try and alter their
           next few pages: subheadings of
behaviour through codes of conduct, legislation and campaigns. (See
           “Power”, “Vertical Integration”
Alternatives for the Future for more information). and
          “Externalised Costs”.
Because of their size, the companies are extremely powerful both in
exporting countries, and in their country of origin. Today, they set
producer countries competing with each other, forcing governments to
accept impositions with regards to taxes, tariff preferences, preferential
access to loans, and deregulation of social and environmental policies. In
1992, for instance, the government of Panama which had attempted to
apply an increase in the minimum wage had to step down after Chiquita
threatened to withdraw contracts with the local growers. They have an
equally strong influence in industrialised countries on the implementation
of food and trade policies. Chiquita, for instance, was at the origin of the
complaint against the European banana import regime that the US
government brought to the World Trade Organisation in 1995.
The multinational banana companies are integrated vertically up the chain.
This means that they own or contract plantations, own sea transport and
ripening facilities, and have their own distribution networks in consuming
countries. It enables them considerable economies of scale, and they can
sell ‘dollar’ bananas on the Northern markets at a very low price.

In recent years, these big companies have tried to free themselves of
direct ownership of plantations, in favour of guaranteed supply contracts
with medium- and large-scale producers in the countries where they
operate. It allows the Northern-based companies’ headquarters to shift
responsibility for labour and environmental conditions onto local
producers.
Who pays for cheap bananas
The ‘dollar’ fruit from the plantations of Central and South
America are cheaper than anywhere else – largely because the
costs are ‘externalized’, which means they are paid by
someone else; in this case by plantation workers and the
environment. If these costs were ‘internalized’, decent wages
paid and environmental damage eliminated, the difference
would disappear.
     Of this only 1-2% is likely
     to reach the paid workers
     on the plantations.




   Who gets what from the price of a
              banana?
     As with almost all commodities
produced in the South and consumed in
 the North, more than 90% of the price
paid by the consumer stays in the North
and never reaches the producer. Most of
the risks of producing a perishable fruit
are, however, born by the producer. The
   largest chunk of all is taken by the
     retailers – mostly the dominant
     supermarkets and chain stores.


Graph, describe and comment upon it!
Almost all the bananas we eat are treated with chemicals throughout
the production cycle. By far the heaviest users are the plantations in
‘dollar’ countries that have minimal monitoring or healthcare services.
Plantations in Central America apply 30 kilograms of active ingredients
            Produce – more than ten times the average
per hectare per year a brain storm/spider diagramfor intensive
            to industrialized countries.
agriculture inshow this information.
Fungicides: Aerial spraying up to 40 times per year. Some, like
mancozebare, are suspected carcinogens.
Nematicides: Applied between two and four times a year. Designed to
kill parasitic nematode worms, they are extremely dangerous. The use
of DBCP resulted in the mass sterilization of tens of thousands of
plantation workers from Central America and the Caribbean to the
Philippines and West Africa.
Insecticides: Like chlorpyrifos impregnated into plastic bags and tags
placed around banana bunches.
Herbicides: Are sprayed between 8 and 12 times a year. Glysophate is a
suspected carcinogen.
Fertilizer: Applied regularly throughout the year.
Disinfectants: After harvest, the fruit is washed with tisabendazol and
aluminium sulphate, which can cause severe dermatitis in direct
contact with human skin.
                The human impact of corporate negligence

  Carlos Mora works for the plantation workers’ union, SITRAP, which
 supports a campaign to get the banana companies to cut back on their use
of aerial spraying. He has first hand experience of the effects of the highly
toxic chemical, DBCP. Carlos is one of the 20% of the Costa Rican banana
        workers left sterile after handling this highly toxic chemical.

 Juan handled DBCP. His wife Maria gave birth to a baby whose head was
four times bigger than his body. She says "I couldn’t even hold him because
it seemed to make things worse. So I just talked to him and cried with him.
   It’s the worst thing that can happen to anyone. There are no words that
 can tell what life is like." Although DBCP has now been banned, at least
    five chemicals designated "extremely hazardous" by the World Health
                                 Organisation.


                                               Source: Fairtrade Foundation
                                               “Unpeeling the banana trade”
Waste: For every ton of bananas produced, two tons of waste are left
behind, frequently contaminated with chemicals and non-degradable
plastic.
Deforestation: Rising demand for bananas is met by extending the
size of plantations, which often means cutting down rainforest.
Soil: Copper and other residues accumulate and can leave land
              Another brainstorm or spider diagram
permanently sterile. Fragility of exposed soils, together with the
              for this one
concentrated water flows in irrigation systems, cause severe soil
erosion and increased flooding during tropical storms.
Biodiversity: Large amounts of plant, fish (including coral) and
animal life are lost from the intensive use of chemical agents.
Monocultures encourage diseases, some of which are becoming
resistant to the chemicals designed to eradicate them.
Exhaustion: Many of the plantations in Latin America are now more
than 25 years old – the maximum optimal productive life for a
conventional plantation. Del Monte, Dole and Chiquita are
establishing new plantations in other areas of Latin America, India
and Indonesia.
Working conditions can be summarised as:

•long and exhausting working days of 12-14 hours or more, without overtime payment

•wages which are not sufficient to cover the basic needs of subsistence for a family

•dismissals without any social security or redundancy payments

•intensive use of agrochemicals which damage health and the environment

•lack of medical attention

•exploitative management-worker relationships

•lack of educational opportunities

•The situation for women workers is even worse. Rights such as maternity leave and regular
healthcare are not respected in many banana companies.




                                                          Another brainstorm or spider diagram…
As well as being forced to endure appalling working conditions,
plantation workers are also paid pittance wages. In Ecuador the
plantation workers are paid just $1 per day. When the workers try to
organise into trade unions their efforts are often met with violent
suppression. In Colombia trade union leaders have been targeted
and killed as a lesson to others who may seek to organise.




                                        Source: Fairtrade Foundation
                                        “Unpeeling the banana trade”
The formation of the Single European Market in 1992 meant that the European Union had to
decide on trading rules for imports and exports. A new banana regime was agreed in 1993
(EC Regulation 404/93), which used a system of quotas and tariffs to give preferential
access to exports from African, Caribbean and Pacific (ACP) countries. Imports from Latin
America – and therefore from the biggest banana companies were thus limited both in
volume and by higher prices.

However, this agreement went against simultaneous moves towards greater globalisation
and liberalisation of world trade, designed to establish ground rules for international trade at
the widest possible level. The regime has been challenged on five successive occasions at
the General Agreement on Tariffs and Trade (GATT), and its successor, the World Trade
Organisation (WTO).

It has also been the subject of strong protests from the multinational banana companies,
who think that the EU regime stops them from expanding. Chiquita, in particular, pushed for
the Clinton administration to impose sanctions, which it duly did in 1999. Now 100% tariffs
are imposed on American imports from Europe of a long list of products which have nothing
to do with bananas. For example, British packaging companies and French cheese and wine
makers are subject to sanctions when exporting to the USA.

The EU is yet to come up with an acceptable regime. As far as consumers in the EU are
concerned, the major impact has been to create and maintain a downward pressure on
banana prices.
Caribbean producers
with whom UK had
trade agreement. Note
SMALL production
LARGE dependence
The events described suggest the Caribbean banana industry has been the victim of power politics being played by two
global power blocks, namely the US and the EU, each attempting to defend its own interests. It has also highlighted
the relative disadvantage of small island states in their ability to adequately defend their interest in international trade
disputes.

Throughout the protracted period of the dispute, Caribbean banana exports to the EU have declined at a significant
rate. In effect the Windward Islands are currently taking up less than half of their quota. This highlights the extent to
which farmers have been leaving the industry, while banana importers, unable to get sufficient bananas which meet the
supermarkets’ quality criteria, are sourcing from other Latin American countries. As a result, many people have forecast
the collapse of the Caribbean banana industry, with all the associated economic and social consequences.

The preferential arrangements currently enable the Windward Islands to narrow the price gap with ‘dollar’ bananas on
the UK market. Along with protection of prices, they are essential to preventing the industry from disappearing
altogether.
Figures for the Windward Isles
Caphias Duncan, 61, lives on his own in a dark room at the far end of a disused dance hall in St Vincent.
He has three acres of bananas. He laments the current situation: "The price we get is bad enough. Before it
was much better than now. The cost of living has gone up, the cost of fertiliser has gone up, the price we
are left with has gone down. It’s much more difficult to grow bananas now and it’s just not worth it. My
sons have gone to the hills to grow marijuana. It's less work and more pay, but it’s illegal."




                                                                Source: Fairtrade Foundation
                                                                “Unpeeling the banana trade”
Use the next TWO slides to answer the following:
a) What is meant by Fairtrade?
b) What are the possible advantages of the expansion of
   Fairtrade bananas (think beyond the two slides – what
   other knock-on effects may there be?)
Banana Wars show the power of TNCs as well as the importance of Trading Blocs in
    globalisation. Over the next couple of pages you need to try to summarise under the
    following sub-headings:
a) Cause of disagreement
b) Role of TNCs (particularly Chiquita)
c) Consequences
Fairtrade is a means of helping small-scale and other disadvantaged producers in developing
countries improve their quality of life by providing a more profitable and stable trade
relationship. The criteria of Fairtrade can be summarised as:

•direct trading links with producers in developing countries, cutting out local dealers

•guaranteed prices to producers to cover production costs

•a ‘social premium’ to producers, for investment in social and environmental improvements

•credit allowances or advance payments where necessary

•long term trading relationships to enable planning
The first Fairtrade bananas entered the UK in January 2000, and were initially stocked in Co -op stores, and soon afterwards in
Sainsbury’s and Waitrose outlets. Sourced from Costa Rica, the initial results have been encouraging. In Sainsbury’s, where s tocked,
they have accounted for 7% of all bananas sold.

This has prompted moves by both retailers and importers to introduce Fairtrade bananas from the Windward Islands. It is hoped that
this will embrace many of the smaller and poorer producers.

The environmental policies of the Fairtrade system offer considerable benefits to long-term land sustainability in the Windward
Islands. They also help to move towards meeting the requirements of organic production. A switch to more organic is one sustainable
option for the Windward Islands, and Fairtrade practices, and the financial boost they attract, are a way forward.

Windward Island Fairtrade bananas became available in the UK on 25 July 2000. The UK’s Fairtrade bananas will continue to com e
from a number of sources, including Costa Rica, Ghana, the Dominican Republic, and Ecuador.
Either:
a) Produce a poster campaigning for people to support the UK’s links with producers of bananas
   in the Windward islands. This poster should set out reasons why we should resist the protests
   of the US and the big banana companies as well as why we should support the Windward
   islands.
or
b) Produce a leaflet which could be distributed in supermarkets explaining the case for buying
     Fairtrade bananas rather than just the cheapest ones.

								
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