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Luud Clerckx, from AgroFair, and Diego Balarezo, from Solidaridad:

"Supermarkets prefer to keep banana prices as low as possible to win the battle for the consumer"

"In the 20 years of Fairtrade banana history in Peru, I've witnessed more progress in the living conditions of small-scale producers than in the 35 years of the fair trade label's history in other sectors," says Diego Balarezo, manager of the fruit program at Solidaridad, highlighting the success of this social and productive project carried out in northern Peru in collaboration with the Dutch importing company AgroFair and several banana cooperatives.

Solidaridad is a global organization, but with a strong local focus, founded over 50 years ago in the Netherlands. In 1988, Solidaridad had a part in the creation of Max Havelaar, and the success of coffee marketed under this label would lead to a global fair trade movement around various commodities produced in LATAM, Asia and Africa, which are currently marketed under the Fairtrade label.

A fair price and environmental care
In Peru, the organization provides support to small-scale miners and producers of coffee, sustainable palm oil, cocoa and fruits, focusing on the small-scale industry, but working with all links in each chain. Bananas are the main product in the fruit sector. Although in the 90s, there was disinterest on the part of major banana companies in fair trade their marketing was initiated in collaboration with AgroFair. Also, in recent years, certain topics have become more relevant for Solidaridad's banana program, including environmental care, low-emission agriculture and women's empowerment.

Banana bunches are protected from wind and insects.

"In the Peruvian banana sector, I have seen many sons and daughters of producers completing a higher education and significantly improving their quality of life. It is an economic activity that has changed lives in fewer than 25 years of history. While bananas are a common denominator, what matters most is the people and the sectoral transformation that has had a positive impact on their lives. Behind every banana, there's a person and a family," says Diego. "Thanks to Fairtrade and business growth, medical centers are being built in towns, as well as roads and canals, and opportunities for training and professional growth are being offered. A notable project in recent years has been the founding of the company ECOBAN, promoted by the Peruvian Banana Cluster in partnership with several banana cooperatives and the Orange Tulip company. ECOBAN is devoted to collecting the discarded plastic covers from banana bunches and, through a recycling process, transforming them into corner protectors for banana boxes shipped to Europe or the United States."

The Netherlands, U.S. and Germany are the main destinations
Although the first fair trade bananas shipped to foreign markets in 1996 were conventionally grown ones from Ecuador, the organic market started gaining traction at the beginning of this century. This led Solidaridad to collaborate with various groups of small-scale producers in northern Peru where organic cultivation could thrive thanks to the more arid climate. "The first container of organic fair trade bananas was shipped from Peru to the European market in 2002 and to the US market in 2006. Today, Peruvian bananas reach more than 15 different markets, with the Netherlands, the United States and Germany as the most important destinations," says Diego, adding that in the early years of the activity, managing the logistics from Peru was challenging, as there were hardly any packing warehouses or containers available. "We copied everything from Ecuador; in fact, the first field technicians were all Ecuadorians, but now the Peruvian banana industry is much more mature and stable. It has found its own way to do things, with successes and setbacks, but always with a collaborative and forward-looking vision."

Diego Balarezo (third from the right) with several producers and workers.

In the Netherlands, Luud Clercx, from AgroFair, says that the Dutch company imports about 100 containers of bananas per week. The fruit, which comes from the Dominican Republic, Colombia, Ecuador and Peru, is marketed in various European countries, with some shipments going also to New Zealand and South Korea, many, with fair trade and organic certifications.

Although the average market share of fair trade bananas in the European market does not exceed 7%, in Switzerland, this percentage is much higher, according to Luud Clercx. A substantial part of the bananas in Coop supermarket chain stores are supplied by AgroFair. "In Luxembourg, another country with a very high standard of living and where consumers are willing to pay a bit more for a product that is sustainable both ecologically and socially, the market share of this type of banana reaches almost 30%."

Disinfection of tools.

Moratorium on the certification of new plantations
However, Fairtrade International has announced a moratorium on the certification of new plantations due to stagnation in the fair trade and organic banana market in recent years. "Bananas are one of the most sold products in supermarkets, so the stores strive to keep the price of this fruit low to be able to use it as a promotional product," says Luud. "With a retail price of 0.99 €/kg it is impossible for stores to make a profit, but their goal is to attract customers, who will then buy other products that do yield profits. In other words, bananas represent 'an island of losses in a sea of gains' at the sales points, as described by a supermarket researcher."

A young bunch of bananas is wrapped with a cover that protects it from wind and insects.

Still, all supermarket chains, under pressure by the market, which demands greater Corporate Social Responsibility (CSR), continue to announce initiatives to promote sustainability, both environmental and social. "And while just by betting on organic fair trade bananas their actions would match their words, they prefer to keep the price of bananas as low as possible to win the battle for the consumer."

Prices at origin
For a box of bananas weighing 18.14 kg, this year the Fairtrade label guarantees the producer a price of 8.00 $ in Colombia, 7.85 $ in the Dominican Republic and 7.10 $ in Ecuador (all Ex Works prices, i.e., at the farm itself), according to data shared by Fairtrade International on its website. For the organic Fairtrade, producers are paid 10.25 $ per 18.14 kg box in Colombia, 10.30 $ in the Dominican Republic, 9.75 $ in Ecuador, and 9.70 $ in Peru. "When the market price is higher than the Fairtrade Minimum Price, producers must receive the current market price or the price negotiated when signing the contract," says the document published by Fairtrade International. On top of the minimum price, producers receive a 1.00 $ Fairtrade premium per box.

"After 25 years of activity in the banana sector in Latin America under the Fairtrade label, we can say that producers have managed to improve their standards of living and even send their children to university, even though the acreage of their farms rarely exceeds 3 hectares. We have undoubtedly seen a strengthening of the economic and social fabric in the areas where we are active, and the communities have significantly better prospects for the future. All that remains is to persuade supermarket chains that this is the way forward, as we are convinced that consumers won't stop buying bananas even if they have to pay 30 cents more per kilo," says Luud Clercx.

For more information:
Diego Balarezo (fruit program manager)
Av. Reducto n.º 130 Of. 203
Miraflores, Lima 18, Peru
Tel.: +51 1 445 4242
[email protected]

Luud Clercx
AgroFair Benelux
Koopliedenweg 10
2991 LN Barendrecht, Netherlands
Tel.: +31 (0)180 643 900
[email protected]

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