Small banana farmer co-operatives attempting to access international markets are getting dangerously close to their breaking point. The viability – and future – of both these small farmer co-operatives and the independent fair trade importers who struggle to provide consumers with healthy, organic, fair trade bananas is gravely at stake. In fact, if trends continue on their current path, consumers will soon have few brand options available when buying bananas. Roughly eighty percent of bananas are currently sold by only five multi-national banana companies and consumer options will continue to decrease. Farmers will have no choice but to give up ownership and control in their own businesses and return to being mere “suppliers” who sell their products to these same companies for whatever prices the companies dictate.
Due to a variety of factors, not least being unexpected and severe weather patterns causing severe flooding and droughts throughout Latin America, the supply of organic, Fair Trade, export-quality bananas has dramatically diminished. Consequently, competition for the fruit is severe and several large multi-national fruit companies, such as Dole and Chiquita, are employing a range of strategies to secure supply. With time, money, and other resources on the side of these corporations, small banana farmer co-ops are falling further and further behind.
In northern Peru, where Oke USA/Equal Exchange buys its bananas from two small-scale farmer co-operatives, CEPIBO and APOQ, the stakes are particularly high. As discussed in an earlier post, The True Cost of Bananas, Dole is trying to break the co-operatives by offering farmer- members a price always just slightly higher than that which the co-ops can afford to pay. Our co-op partners tell us that week by week they are reducing costs in order to pay their farmer-members a few cents more per box of bananas: only to learn that Dole has come around the farms matching and raising whatever price the co-op is offering. Although many farmers understand this time-tested strategy that those with money can apply (pay high to break the competition and then when you control the market, pay whatever you like), the economic reality of small farmers often causes them to choose a penny wise and pound foolish strategy.
In the Peruvian newspaper, “La Hora”, an article last month discussed how small-scale producer organizations are protesting the “unfair competition campaign that has been undertaken by large companies that are trying to destabilize the organizations and regain exports that now belong to small-scale, organized producers.” According to Valentín Ruiz Delgado, representative of the Fair Trade Network of Organic Banana Producers of Peru, “we are not opposed to an increase in the price of bananas, but in this case it is an irresponsible strategy (an increase) designed to destabilize small-producer organizations that have recently been gaining headway in the international market,”
“These companies buy bananas at high prices and sell them at low prices, meaning that there is a clear intent to destabilize; they take advantage of the fact that we are relatively young organizations and new to the market, confronting very big companies who make use of their economic power to achieve their objective,” said Ruiz Delgado.
If you would like to know more about how these unfair practices are affecting everyone along the supply chain from the farmer, to you, the consumer, please read the Oke Usa team’s latest edition of Beyond the Peel.
This is bad news and something the european fairtrade organisations lack to communicate about. In Belgium Chiquita is by far the largest supplier of bananas. Any indications or prove they act as irresponsibel as their Dole counterparts? I’d like to cimmunicate about it on my blog, since in out worldshop we sell Peruvian fairtrade bananas.
oops, forgot clicking the ‘notify me’-box…
Hi Steven,
Much has been written about Chiquita’s practices in general. Read the Chiquita Papers, https://smallfarmersbigchange.coop/2011/06/13/the-chiquita-papers/
but I assume you’re asking more about their practices in northern Peru? The co-ops told us that while Dole has been operating in this region for a number of years, it is only recently that Chiquita is trying to edge into the market. As I said, lack of supply throughout Central and South America is causing severe competition wherever there is supply. So Chiquita and Dole are in a price war with each other. Unfortunately although it seems like this price war would help the farmer co-ops, it is in fact causing them to be on the verge of folding. Both are undercutting prices in the United States so that stores feel the same temptation to buy their bananas at the cost of other alternative importers.
As always, thanks for your interest and work spreading the word.
phyllis
Excuse me for all those typing mistakes. I’m working on my wife’s laptop and am not very good at it…
Anyway, of course I’ve read the Chiquita papers. Thanks for that article again.
But what about their partnership with Rainforest Alliance, then? Does this all mean they don’t really get the point of fair sustainable trade? And more important: what about Rainforest Alliance? Why are they not acting more bravely in your opinion?
I have recently read – but cannot locate – something that provides a good critique of the utility of the Rainforest Alliance certification and its conclusion was that they found that certification unsatisfactory. But for now all I can find is this item http://www.makefruitfair.org.uk/solutions/certification
thanks Rodney
A few years back I got the opportunity to talk to the people who were representing Rainforest Alliance in Europa on a charity concert in my hometown. We had a good, open discussion, but in the end they somehow resembled me as being kind of spokesmen for Chiquita.
Hope you’ll catch up again with that link you couldn’t locate.
Hi Steven,
here are a couple of dated or slightly biased articles about Chiquita and Rainforest Alliance if you are interested.
http://www.organicconsumers.org/Organic/chiquita.cfm
http://laborrightsblog.typepad.com/international_labor_right/2009/06/fair-expectations-rainforest-alliance-v-fairtrade.html
I realized in trying to draft a response that I always come back to wanting to discuss what we (and other ATOs) are doing positively by treating producers as partners in trade than what the big 5 banana companies are merely doing which seems to be the same business as usual just slightly better. That being said, small improvements on the scale of the big 5 have tremendous impact on both the environment and the health and safety of banana workers worldwide.
What drew me to Equal Exchange and keeps me motivated in the banana business is the real mix of social values with economics which can create an atmosphere of true empowerment for all parties in the supply chain.
Thanks, Nicole.
Still, I don’t really have my question answered, like probably is the case with you (us all?).
Do labels really make any difference in the end? I mean, in this case it doesn’t seem to prevent Chiquita from destroying the livelyhoods of the people Phyllis is trying to make us aware about.
We definitely need more indepth reporting on cases like these. So keep up the good work you all, and keep eyes and ears open and your customers aware.
It is a tough question Steven about labels and what they mean. I was an organic farmer when the national organic program was implemented here in the U.S. in 2001. In the end the practices agreed on as a benchmark for a national organic standard were far below the practices we had all been using for years as small scale organic farmers to care for our land, our customers and ourselves. Those practices applied to agribusiness however have probably had some good results. But putting us all in the same pot seemed ridiculous just as the work we are doing in bananas compared to the work that Dole and Chiquita are doing seems difficult to compare.
To me, standards are the bare minimum we all start at and we continue to differentiate ourselves after that. Consumers are equally confused by all these different seals and certifications and so part of our job is constant education and raising awareness about the issues.
Thanks for your comments.
Nicole
I just wanted to make a few clarifications! The Rainforest Alliance works with banana farms and co-ops of all sizes, both large and small. We recognize the importance of every farm’s commitment to sustainability through earning Rainforest Alliance certification. However, we also recognize that through commitments from bigger farms and co-ops we can have the most significant impact on improving the lives of farm workers, protecting wildlife and conserving the environment. While the Rainforest Alliance certification program will continue to work with small banana producers and co-ops throughout the tropics, we can not turn our backs on the rights and welfare of the thousands of workers on Dole and Chiquita farms or on farm supplying to Dole and Chiquita. All farms, regardless of size, are independently audited by professional auditors to ensure compliance with a rigorous set of social, environmental and economic standards. The wellbeing of farm workers, farming communities, wildlife and the environment is what is of key importance to the Rainforest Alliance. The Rainforest Alliance belongs to the Sustainable Agriculture Network (SAN) – whose members are grassroots conservation organizations – which developed and continues to update the standards that all farms, both large and small, must meet in order to achieve certification. To learn how audits work on Rainforest Alliance Certified farms, check out the following video:
http://rainforest-alliance.org/multimedia/farm-audit
Thanks Anna. This is the way to go. Let’s communicate with eachother.
Does RA take any stand against Chiquita hiring para-militairy groups in Colombia to break unions? That’s an important issue. In my opinion it will make or break your label in the end. Supermarkets in Europe consider this as “politics”. Which means they don’t really bother. How do you think about this?
Hi Steven,
We are more than happy to communicate with you about this!
Chiquita’s public documents do not in any way indicate that payments were made to “break unions,” but rather were made to protect the lives of employees, which is quite the opposite. As the company has admitted, it was illegal for them to make payments to the FARC in exchange for protection for their employees and their families.
If we had evidence that any business that owns Rainforest Alliance Certified farms took action to “break unions,” then yes, that would put their certification in jeopardy. But this is clearly not the case with the issue in Colombia.
Dear Anna,
I am native Flemish speaking, so I’m tempted to go not too much in detail, because of my rather poor English.
Anyway, it’s really great you want to discuss this wholeheartedly overhere.
I actually was referring to documents I’ve read, like this one:
Chiquita: The Guns and Drugs and Union Killing CNN Didn’t Mention. Excuse me for not being specific enough.
” After its agreement with Chiquita, the AUC understood that one goal of its campaign of terror was to force laborers to work in the plantations. Anyone who disobeyed the order knew what would happen to them. For example, one individual who worked in Chiquita’s offices at a plantation in Urabá, was present when paramilitaries arrived at the plantation and summarily executed a banana worker who had been seen as a troublemaker because his slow work held up the production line. Another individual saw paramilitaries arrive to threaten banana workers after a salary dispute.”
[snip]
” In addition to directly suppressing labor activity, the paramilitaries regulated the banana-growing population and protected Chiquita’s profitability by controlling the provision of medical services in the towns of Urabá. Residents of Apartadó reported that they feared seeing doctors because they believed that medical personnel were under the control of the AUC. On information and belief, this arrangement benefited Chiquita because it allowed the paramilitaries to inform the company of its employees’ medical issues that could potentially affect labor productivity, including pregnancy.”
Let me make one thing clear: I’m in total favour of this:
Joint Statement Fairtrade, SAN/Rainforest Alliance & UTZ Certified. How about you?
Hi, what has happened to my #comment-4079 ?
Hi Steven,
The Rainforest Alliance has not seen a response from Chiquita regarding this specific lawsuit and we cannot speak on their behalf. We do understand that the statements you cited are allegations and have not been proven. As you are probably aware, Chiquita no longer owns any banana farms in Colombia.
The Rainforest Alliance can speak to the situation on banana farms today. Any reports we receive regarding the treatment of workers on banana farms that violate the Sustainable Agriculture Network (SAN) standards are thoroughly investigated. We have an established process for filing complaints and for independent audit investigations. Learn more about the SAN standards – see section 5: ‘Fair treatment and good working conditions for workers,’ pages 24-30:
Click to access SAN%20Sustainable%20Agriculture%20Standard%20July%202010.pdf
While Rainforest Alliance certification cannot guarantee that every single worker on every single certified farm is being treated fairly every single minute of his or her working days, we do strongly believe that certification offers huge protection to the employees on farms throughout the tropics. And this speaks to our joint statement with Fairt Trade and Utz.
We are indeed pleased that the three certification programs are better aligned, so we can focus on working toward out join goals of improving the lives of workers and their families and the environment on which they depend.
A good resource for learning about the current conduct of the large banana companies is http://www.bananalink.org.uk
You can just enter the name of the company/brand into the search box and instantly get a long list of recent news about that firm.
According to the site “Banana Link is a small and dynamic not-for-profit co-operative, founded in 1996 that campaigns for a fair and sustainable banana trade. We work in close partnership with Latin American banana workers trade unions, small Caribbean farmers and civil society organizations in Europe and the U.S. “
source: http://www.ethicalcorp.com/
“The Rainforest Alliance had been working with Chiquita in Colombia and had certified a number of the company’s farms. Chris Wille, Rainforest Alliance’s chief of sustainable agriculture, says that Chiquita’s farms “were paragons of good management, both environmentally and socially”. He says that the farms were models of ethical harmony and “islands in a sea of violence”. Wille admits that Rainforest Alliance would not have certified Chiquita’s farms if it had been aware that the company been breaking any Colombian laws.”
“The real losers seem to be Chiquita’s former employees. Whatever the rights or wrongs of any “protection”, they had certainly been benefitting from the company’s progressive labour code. The local labour unions had strongly lobbied the company to retain its Colombian operations in 2004.”