The contribution of Fair trade towards market access by smallholder banana producers

Abstract

Smallholder banana producers meet four major constraints to enter the international banana market: quality, logistics, finances and trade regulations. The quality standards are set by retailers and supermarkets and are difficult to meet by smallholders, mainly due to fungal diseases in banana. Logistics depend on availability of timely vessels over which smallholders have no control. Funding is needed for infrastructure and pre-export operations but smallholders have little access to appropriate credit schemes. The EC tariff-quota regime discriminates against non-ACP banana producers making their bananas more expensive and limiting the establishment of new import distributing companies. Fair trade (FT) is based on cost-internalization paying sustainable production practices that incorporate social rights and environmental protection. FT does not protect inefficiencies but aims to overcome the mentioned obstacles by transparent partnership between the chain partners. FT is based on higher prices paid by consumers that allow an equitable distribution of gains from trade over the chain partners. Less regulation of trade will increase the market share of FT bananas in Europe. An example of the FT organization at two levels, Agrofair and Biorganika, is given to show potential benefits and problems in developing a sustainable chain of FT and organic banana.