Fairtrade International launched a public consultation on a model to enable banana plantation workers to earn a Living Wage. The organization invited all relevant stakeholders, including workers, plantation owners, retailers and traders to take part so the banana industry as a whole can make Living Wages a reality for all workers on Fairtrade certified banana plantations.
Fairtrade wants to ensure that all certified banana plantations compensate workers fairly, whilst recognizing that buyers and retailers also have a role to play in sharing enough value with producers. Here’s what Fairtrade is proposing:
- A compulsory Fairtrade Base Wage: Starting in mid-2021 at least 70 percent of the cash amount to reach a living wage must be paid to all workers at Fairtrade banana plantations. This amount will rise to 75 percent in 2023. Every Fairtrade banana worker will get at least the base wage, even if the legal minimum wage is lower. If they already receive more, their wages can’t be lowered.
- Fairtrade Premium: As a temporary measure to close the gap, up to 30 percent of the Fairtrade Premium must be paid out as a cash bonus, on top of the existing, optional 20 percent that can be paid out in cash if workers choose so. Depending on local tax rules, workers may choose to receive the Premium bonus in vouchers, instead of cash. Fairtrade’s unique model includes a Premium fund that farming cooperatives receive on top of the price of the product. Co-op members vote to determine how the money is spent, typically on community programs such as access to education or healthcare.
- A negotiated plan towards Living Wages: Collective bargaining is the most economically sustainable and socially empowering approach to reach a Living Wage, both for workers and their employers. Fairtrade’s Hired Labour Standard already requires wages to increase over time to reach a living wage. After applying the Fairtrade Base Wage, employers must negotiate with trade unions or other elected workers’ representatives about timelines and steps to bridge the remaining gap. These timelines may depend on the company’s financial position, but wages should always be increased above inflation to make sure that the gap is narrowed and ultimately closed.
Fairtrade’s proposal to improve wages for banana workers depends on commitment and collaboration between stakeholders across the supply chain. The goal is to approve the new Standard by the end of 2020, coming into effect in mid-2021.
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