Backed by calls from producers, Fairtrade America ups its banana price minimums
Sometimes, a price hike can be welcome news.
Fair-trade certification program Fairtrade America has recently updated its Fairtrade Minimum Price across 16 banana-growing countries to keep up with escalating production costs, according to a news release. Not only has the U.S. division of Fairtrade International upped minimum banana prices, but it’s also introduced the Fairtrade Living Wage Differential, a tool designed to empower businesses to assess and take meaningful action toward closing the living-wage gap.
“Climate change, workers rights and living wages are more top of mind than ever for U.S. shoppers. The time is right to create meaningful change throughout the supply chain,” Amanda Archila, executive director of Fairtrade America, said in the release. “We are optimistic that with a continued focus on fairer prices that address the urgent needs of banana producers, we can create a banana industry that will last for years to come.”
These price updates were informed by stakeholder consultation and a cost of production study that included more than 165 farmers, traders and retailers, according to the release.
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“Price plays a critical role in creating fairer terms of trade for farmers and workers,” Silvia Campos, Fairtrade International’s senior adviser for bananas, said in the release. “The price we pay for bananas at the supermarket checkout has a ripple effect all the way back up the supply chain to the workers and farmers who grow them. As the saying goes, price is everything, especially as these producers face inflated costs outside their control.”
Together, these foundational updates were designed to make both living wages and a resilient banana supply chain attainable, according to the release.
The toolkit seeks to enable fresh produce buyers and retailers to better support farmworkers and banana production in today’s dynamic market, the release said. These three updated tools include:
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Fairtrade Minimum Price index.
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Living Wage Reference Price guide.
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Fairtrade Living Wage Differential tool.
Catching up with rising banana production costs
“We found that banana production costs have shifted significantly in key areas,” Campos said in the release. “For example, wages — which account for around half of all production costs — have risen by nearly 15%. Fairtrade continuously monitors these changes and adjusts prices to reflect the realities of banana producers on the ground.”
Since 1996, Fairtrade’s model of minimum pricing and premium has acted as a safety net for banana producers. The Fairtrade Premium alone has brought more than $259 million in funds to banana growers since 2015, according to the release.
“This [Fairtrade] mechanism represents a significant step forward in ensuring sustainability and fairness in the banana industry, encompassing key elements such as fair labor standards, environmental sustainability and social responsibility, José Antonio Hidalgo, executive director of the Association of Banana Exporters of Ecuador and coordinator of the Banana Cluster of Ecuador, said in the release.
“This comprehensive approach recognizes the complex nature of banana production, ensuring that producers can meet their financial obligations while achieving social and environmental sustainability,” he added.
Tools to track impact
Along with its price tools, Fairtrade also offers commercial partners a package of reporting and monitoring tools along with a suite of technical information. These tools are designed to measure and visualize how a commitment to pay a fairer price is helping workers earn a living wage and supports farmers and large-scale farming operation owners to pay for sustainable practices on their farms, the release said.
“At Equifruit, we've had a 100 percent Fairtrade brand promise since day one. In order to assure fairness within our banana supply chains, it is crucial that we operate within a framework where we are not setting the rules nor marking our own progress. Fairtrade Standards are clear, and minimum pricing is reviewed annually to reflect the cost of sustainable production,” Kim Chackal, director of sales and marketing at Equifruit, said in the release. “The pricing that retailers are accustomed to is unsustainably low for banana farmers. The Fairtrade framework gives us confidence in the transparency and traceability of our business model.”
