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More than 200.000 Guatamalans depend on banana industry

Guatemala banana industry: Call to action

There is a global interest to turn our world into a more sustainable place, not only for those of us who presently live on Earth, but more so for future generations.

Besides better environmental practices, respect for democracy, human rights and freedom, among others, one key element in this sustainable vision shared unanimously by most free societies, is the price of goods we buy and the impact on the salaries of those who work on producing said goods.

In this regard, we have received news that one of the biggest retailers - ALDI in Germany - is planning a significant price reduction for the banana box in 2019 that will severely impact the producer.

Inevitably, this hinders producers from being able to increase the price and in turn, transfer part of that increase to the workers, thereby reducing the gap between living and minimum wages, whilst also being unable to compensate for the increase in production costs, as fuel, fertilizer, and cardboard prices (to name a few) have been steadily on the rise for the past 4 years.

ALDI's recent announcement is important because other retailers in Europe and the US market may follow and continue this race to the bottom on banana prices.

As the "Banana value Chains in Europe and the consequences of Unfair Trading Practices" written by BASIC in 2015 made clear:

"Up to 90% of fresh fruits and vegetables are sold through modern retailers in Europe. Bananas are a key consumer commodity for setting the price image of retailers and attracting consumers, creating fierce price competition between retailers. As a result, the average consumer price of bananas in Europe, the main fresh fruit imported from outside Europe, is 25% lower than that of apples, the most consumed local fruit.

This decline in import prices has been transferred to all major countries supplying the EU, where the value left at origin has fallen by 20 to 50% in real terms. This at a time of significant increases in both production and living costs. Inputs, have risen by up to 130%, while the high costs of compliance with quality, sanitary and environmental standards for bananas entering the European market are incurred mainly by producers. For banana workers and farmers themselves, food, health, education and other living costs have rocketed in the period since 2001, in the Dominican Republic, for example, by 278%."

The World Banana Forum has been working for many years to organize the industry in an effort to have a better grasp of the value chain inherent to it; the price of the box is its very cornerstone. Improving on workers' wages has been an issue that the World Banana Forum has prioritized for the past 10 years. The following statement, posted on the World Banana Forum website, reinforces this very idea:

"Bananas are the world´s most exported fresh fruit. They are an essential source of income for thousands of rural households in developing countries. However, agrochemical-intensive production along with declining producer prices has given rise to many environmental and social challenges. These can only be properly addressed if all the stakeholders actively collaborate."

The independent banana producers of Guatemala, through its association APIB, are very concerned about the possibility of a price reduction as described at the beginning of this letter. We make a call to action and challenge retailers not to reduce prices to the banana box, but rather, to increase $1.00 to aid in making a better life possible for our industry´s workers. This would be congruent with sustainability and will increase credibility with consumers.

The world needs urgent changes in breaking old paradigms, such as low prices for bananas. Guatemala is one of the biggest banana exporters in the world and more than 200,000 families in rural areas depend on this industry ends the letter of APIB. It´s signed by their president Roberto García Botrán.

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