Banana Food Commodity - World Trade Flashcards
(16 cards)
Where are they grown?
predominantly in hot, rainy lowlands of tropical regions
average temperature 27°C and annual rainfall 2000-2500mm.
What are the issues with banana production?
Banana varieties are susceptible to diseases and almost all the bananas are treated with chemicals throughout the production cycle.
Commercial plantations operated by large TNCs apply around 30kg of active ingredients
per hectare – fungicides, insecticides, herbicides.
Fertilisers are applied regularly and after harvesting disinfectant is used to wash the fruit.
Apart from cotton, the banana industry has the largest agrochemical input into the environment.
Banana plantations also cost the environment in terms of deforestation, waste (2 tonnes per 1 tonne of bananas) soil fertility (owing to contaminants) and loss of biodiversity (especially aquatic life owing to pollutants)
What is the pattern of banana trade?
Trade of bananas follows the traditional pattern of developing regions exporting low-value primary product to more developed countries.
Main commercial producing-regions for export are geographically concentrated in Central America and the Caribbean.
World trade is dominated by 2 groups of producers:
The ACP group – Africa, Caribbean and Pacific
‘dollar producers’ of Central American republics – Ecuador and Colombia – controlled by large US TNCs
Exports are dominated by Latin America and the Caribbean countries (Ecuador is the main exporting country) which produce 80% of bananas for the export market.
Smaller countries in Central America are now exporting at a faster rate.
largest importers are the EU and the USA – in 2013 they each consumed 27% of the total exported.
Why is the banana trade reliant on global systems?
Many HICS are entirely reliant on imports so without global systems, including the use of refrigerated ships, the bananas would never get from banana plant to supermarket shelf.
As with almost all commodities produced in developing regions, but consumed in rich countries, around 90% of the price paid by the end consumer stays in the richer ‘north’ and never reaches the producer, who has most of the risk producing a perishable fruit.
Which 5 TNCs dominate 80% of banana trade?
In the past, 80% of the banana trade was dominated by 4 large TNCs - Chiquita, Dole,
Del Monte (all US-based) and Fyffes (Ireland). The other important producer is Noboa,
which is a national corporation based in Ecuador.
When did the banana trade dispute wars take place?
From 1992 until 2009
What was the purpose of the SDT agreement?
Where ACP countries (Africa, Caribbean, pacific) were given special and differential treatment (SDT) with preferential tariff-free import quotas to supply EU markets.
The idea was to develop these former European colonies without using overseas aid.
Why was there a trade war?
*The dispute stared in 1975 when EU countries negotiated a trade agreement with former European colonies (ACP countries).
The effect of the SDT deal was to protect the mainly smaller, family-run farms in the
Caribbean and Africa from competition with the large Latin American producers, whose bananas were produced more cheaply on mechanised plantations.
At the time, the US TNCs which controlled the Latin America crop were supplying around
75% of the EU market whilst only 7% came from Caribbean suppliers.
In 1992, the TNCs, filed a complaint to the WTO that the EU practice was unfair trade.
In 1997 the WTO ordered the EU to cease the discrimination.
*The dispute was not resolved and became a trade war between the USA and EU as the US government retaliated under pressure from TNCs and imposed WTO-approved sanctions on a range of EU products.
What is the ‘race to the bottom’ and why is it happening?
Owing to lower prices paid to suppliers by supermarkets, many of the larger companies are relocating their plantations, increasingly to West Africa, as companies search for lower labour costs and weaker legislation.
This is called pursuing a ‘race to the bottom’ in terms of social and environmental standards.
What impact is the ‘race to the bottom’ having?
Employers usually sub-contract labour so plantation work is increasingly casual.
The work involves long shifts in unbearable heat and many workers fail to earn enough to cover their basic needs.
What are sustainable bananas?
There has been a steady growth in sales of so-called ‘sustainable’ bananas, which includes fair trade and organic produce. will help smaller-scale producers in the Caribbean and parts of Africa and will partially counter the deterioration of conditions in banana production.
Why and where is there a growth in the market for sustainable bananas?
There is a growing market segment of ethical consumers in richer nations who are becoming aware of the shortcomings the supply chain and are willing to pay a higher price for a certified product.
In 2013 1 in 3 bananas sold in the UK carried the Fairtrade certification mark. Many are
grown on small-scale farms and are sold via cooperatives.
Describe the El Guabo Association of Small Banana Producers
Formed in 1997 in SW Ecuador.
Today, one of the world’s largest producers of fairtrade bananas and exports around
30 000 boxes a week to the USA and Europe.
Before Fairtrade, the 339 family farms sold their bananas through intermediaries at a
price that was too low to cover basic costs.
Fairtrade has resulted in individual and community benefits.
What are some economic benefits of the El Guabo Association of Small Banana Producers?
Stabilised incomes and improvements to standards of living.
Guaranteed fair wage and long-term supply contract, including direct access to new and
international markets
Producers able to raise additional capital for reinvestment, e.g. tanks to wash bananas.
Migrant labourers are helped e.g. assistance to buy their own land.
What are some social benefits of the El Guabo Association of Small Banana Producers?
Health care benefits to families of cooperatives, e.g. free use of El Guabo clinic
Provision of educational and medical supplies
Affiliation with a social security system e.g. payment of retirement benefits
Support for the poorest groups e.g. food baskets
Improved education provision e.g. new school for children with special needs
Marginalised groups helped to find employment e.g. HIV/AIDs sufferers
Summarise the world trade in bananas
Mass production in developing countries will have negative environmental consequences.
TNCs have a large element of control of markets and can influence political decisions.
WTO will support free trade against protectionist activities or agreements at all costs, even if the protection may be to help development.
Geopolitical processes mean that trade disputes can spread and can escalate to trade
wars between regional trading blocs.
Power and control of food production has shifted away from growers and towards
retailers in high-income countries.
Supermarket price wars may ultimately decide how food is produced.
More ethical, sustainable consumer markets are growing but relatively slowly and only in places that can afford products bought at a higher price.
