More sustainable and resilient banana supply chains: Fairtrade’s new offer
Our new offer to achieve more sustainable and resilient banana supply chainsis a tailored approach for businesses committed to pay living wages across banana supply chains.
It is composed of a new Living Wage Reference Price, and a tailored Banana Dashboard which allows businesses to explore and report on targeted areas to gain unique insights on specific banana sourcing.
Closing the living wages gap
Low wages are deeply-rooted systemic issue, highly dependent on context and - in the long term - on collective action.
There is no denying there is currently a living wage gap. In order to support closing it – and enable committed companies to get involved - we have worked with local experts to calculate a Living Wage Reference Price and offer a concrete way for this to be paid directly to workers.
How does it work?
By paying the Fairtrade Living Wage Reference Price
per box, workers on a banana plantation can earn at least a living wage as per the applicable Anker Research Institute benchmark.
We have set a Fairtrade Living Wage Reference Prices for each major banana producing country. You can view the prices per origin here. They are based on our calculation of a Fairtrade Living Wage Differential. This differential is the amount still needed to be paid after the Fairtrade Minimum Price and Premium for a producer to earn a living wage.
The Fairtrade Living Wage Differential will be paid through the Fairtrade Premium Committee and
received as a bonus that brings immediate worker benefits. The Premium Committees are uniquely placed to ensure the distribution of
the bonus, to audit this, and report on the benefits.
In the long term
A living wage can only be sustained by plantation management through long term commitment of maintaining and growing the sourcing volumes on Fairtrade terms. Supply chain actors may also commit to support long term social dialogue to make decent livelihoods the norm.
In the long term, the Fairtrade Minimum Price is aiming to capture the full cost of living wages overtime. This measure will be coupled with an gradual increase of the current Fairtrade Base Wage from current 70% to 100% of the Living Wage benchmark. As a result, temporary Fairtrade Living Wage Differential payments will decrease, as plantation payrolls take over. Fairtrade will support workers in building capacities to strengthen social dialogue, improve work conditions and increase salaries through collective bargaining. As ARI benchmarks are refreshed annually, the wage gaps may decrease or increase. We would measure this through accurate wage data reporting and analysis, with our local team’s expertise.
The Fairtrade Banana Dashboard: Supply Chain Reporting and Visualisation
The Fairtrade Banana Dashboard is a platform that will allow Fairtrade commercial partners to explore a range of qualitative and quantitative data sources to gain unique insights into their Fairtrade sourcing. They will be able to see global and regional insights and be able to filter through customised producer groups, their respective information and will include breakdowns on Premium use.
This will be available for all partners as part of our renewed banana offer as a global banana dashboard, however, partners would also have access to a dedicated portal for supply chain specific information.
Driving change in banana requires a holistic approach, it is not only possible to tackle wages, for example worker rights, similarly, to improve incomes for smallholder farmers climate must be at the centre of the approach.