The banana industry

In Latin America, and increasingly in Africa and Asia, export bananas are largely grown on plantations, where the plants can stretch for miles in a monoculture. Massive investment is needed to keep all this going - from purchasing of land and fertilisation to installation of certified seedling and irrigation systems. Plantations employ workers to carry out tasks from harvesting to packing and are usually under the control of national companies or big corporations with a presence across different countries. 

By contrast, smallholder banana farming generally involves less investment and more physical labour. Due to the smaller scale of their operations, as well as lack of sufficient capital to invest in fertilisation to boost productivity, many banana farmers find it hard to compete with the larger farms that supply big multinational companies. This puts them at a distinct disadvantage when it comes to their financial position and ability to continue operating and remain profitable.

Current challenges

With millions and millions of tonnes produced each year globally, bananas are big business. But there are major issues facing the industry.

Climate change and plant diseases threaten yields. Producers are battling challenges such as droughts, floods and hurricanes. Meanwhile, plant diseases are costly to manage, such as the fungal Tropical Race 4 (TR4) disease. 

Banana plantations in some countries have been linked to human rights violations. This includes poverty-level wages that fail to cover the basics. Workers can be required to do 14-hour days, six days a week, without being paid overtime. Short-term contracts or daily hiring is becoming increasingly common.

Power imbalances. Most of the power within the supply chain sits with retailers, who often offer large discounts on bananas, with competition for customers sometimes sending the consumer price below cost. This price pressure ultimately finds its way to banana growers. A small number of corporate fruit companies also have a lot of influence over the international banana trade.

Consequences for environmental and human health. Chemicals used to control pests and disease can not only impact the environment, for example contaminating water, but also the health of workers and their communities. 

“When a banana is spotless and of the best quality in a supermarket, it is the result of hard work from us, the farmers."

Roberto Gallo Castro, Banana farmer at APBOSMAM, Peru

How Fairtrade makes a difference

Bananas are grown on small-scale farms as well as medium and large plantations. A highly competitive market creates price pressure on bananas, ultimately putting the squeeze on banana growers. Here is how we support.

Fairtrade banana producers are paid a Fairtrade Minimum Price. This acts as a safety net and helps them be resilient in the face of market drops. It also supports payments of the Fairtrade Base Wage for workers and investment in key inputs and services.

The Fairtrade Premium – paid on top of the selling price – is for plantation workers and smallholder banana farmers to invest in business or community projects of their choice. This could include healthcare services, better housing or training. 

The Fairtrade Standards work to improve employment conditions and protect worker rights on large plantations.

The Fairtrade Base Wage means higher wages for thousands of workers on banana plantations. The new Living Wage Differential enables businesses to contribute towards closing the living wage gap.

Fairtrade sets Living Wage Reference Prices. This is the price a farmer needs to earn a living income. These prices serve as a benchmark for the entire industry. Through our Living Wage Solution, Fairtrade offers a practical way to make it a reality. 

Fairtrade supports smallholder farmers to improve their income and bargaining position in banana supply chains through better market access and training to boost yields through things such as soil health management.

Fairtrade contributes to reducing the environmental footprint of banana production by encouraging sustainable development through better agricultural practices.

Fairtrade bananas are good for people, planet and business. Find out how your company can get involved.