New report highlights major retailers need to do more

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The big squeeze: New report on New Zealand’s banana supply chain highlights major retailers need to do more

• Kiwis consume more bananas per person than almost any other country in the world, at 20kgs per person, per year

• Only 18% of the end price of bananas sold in New Zealand is paid to banana farmers and workers, compared to 40% for supermarkets

• Although the retail price of bananas sold in New Zealand has increased by 25% since 2005, small farmers have suffered from stagnating incomes (flat prices) and a 75% increase costs over the past decade

• This price squeeze means short-cuts are taken by conventional banana farmers which put workers health, livelihoods and the environment at risk

• Fairtrade is key for banana farmers and workers because it offers more stable prices and better working conditions, but currently only 1 in every 14 bananas sold in New Zealand is Fairtrade certified.

A new report exposing the unsustainability of New Zealand’s banana supply chain identifies that major retailers need to do more to address poor working conditions, and poverty in the cultivation of bananas in Ecuador.

BASIC’s (The Bureau for the Appraisal of Societal Impacts and Costs) ‘The Big Squeeze’ report, commissioned by Fairtrade New Zealand, highlights that the New Zealand banana market exerts a significant backward pressure in producing countries, with small farmers and workers suffering the most from ever-increasing costs of production over the past decade.

Alarmingly the report found that while New Zealand has the highest consumption rate per capita for bananas, consuming more than 90,000 tonnes per year, only 18% of the retail price is paid to banana farmers and workers, compared to 40% for major supermarkets.

“Bananas are a clear Kiwi favourite when it comes to fruit and we believe New Zealand’s major retailers have an opportunity to educate consumers about the true cost of food and drive sustainability within the industry for the benefit of all,” says Molly Harriss Olson, Fairtrade CEO Australia and New Zealand.

Marike de Peña, co-founder of Banelino, a banana cooperative comprising nearly 400 small farmers in the Northwestern Dominican Republic says current prices for conventional bananas are not meeting the needs of local farmers.

“The money earned from conventional banana production is insufficient and does not cover the cost of basic needs; it is not enough to pay for education, health, water or electricity, yet banana farmers continue to face rising costs of production,” says Peña.

“Small farmers are not only struggling to compete on costs with larger plantations and traders, but workers are suffering from serious health issues such as cancer and a disease known as Taura Syndrome due to the high use and poor protection from chemicals used on conventional banana plantations and small farms,” says Harriss Olson

The report highlights evidence surrounding Fairtrade's ability to offset such negative impacts of banana trade.

Several independent studies conducted over the past decade have demonstrated the positive impacts of Fairtrade for these small farmers.

Fairtrade provides major economic benefits for producers with a guaranteed floor price (the Fairtrade Minimum Price) for bananas, as well as a Fairtrade Premium (an additional sum that is received by farmer cooperatives/associations, which currently sits at $1 USD per box of bananas), which is used to invest in housing, health, better environmental protection strategies and education.

“Fairtrade is key for banana producers because it offers not only a secure and stable price for produce and for plantation workers but it also means plantations are able to improve productivity and quality through the support networks and training provided through Fairtrade,” says Molly Harriss Olson, Fairtrade CEO Australia and New Zealand.

While the appetite for Fairtrade is high (domestic awareness sits at 79%) New Zealand’s major retailers Foodstuffs and Progressives, who hold 55% and 43% of the supermarket retail market, still have major opportunities to support sustainable livelihoods and fair prices when compared to their multinational counterparts.

The report showed that while retailers in the UK and throughout Europe have significantly adapted ethical sourcing policies, including a greater commitment to sourcing Fairtrade bananas, New Zealand falls well behind with only 1 in 14 of New Zealand bananas sold as Fairtrade.

“Whilst we have seen leading European retailers make 100% commitments to Fairtrade bananas, this is yet to happen in New Zealand. We acknowledge that retailers operate in a competitive environment where consumers are looking for bargains, but New Zealanders would not want that to come at the expense of a farmer’s livelihood and well-being,” says Harriss Olson

While major retailers are yet to make strong sustainability commitments, independent retailers in NZ have been leading the way with the likes of Commonsense Organics selling 100% Fairtrade for the past five years.

The report concludes that major retailers in New Zealand, including Countdown, New World and PAK’nSAVE, need to commit to act on the problems faced by banana producing countries and consumers need to show them their desire for sustainable bananas.

ENDS

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