“Suck it up, buttercup” is the message that came from banana industry players at the World Banana Forum conference in Rome this month. In a world where fruit prices are effectively set by supermarkets, it is a message to them: the prices they pay suppliers must go up, and the era of super-cheap banana prices for consumers must draw to a close.
The bottom line is that consumer prices, and correspondingly the prices paid per box to banana producers, is nowhere near sustainable. Things are going to have to change. Retail buyers are going to have to deal with it.
As one North American marketing company CEO pointed out at the forum, oranges and bananas were pretty much the same price per pound in 1980. Today, banana retail prices in the US have little more than doubled while orange prices have more than quadrupled. If banana prices had followed the same inflationary path, they would be sold at $1.26 per pound. Instead, they were $0.61 per pound in January 2024. And as we know, bananas in the UK are much cheaper now than when the supermarket chains went into price war mode over 20 years ago.
The latest message from the World Banana Forum is not an appeal to the good ethics of major buyers, but can be taken as a warning that if price increases are not agreed, they will be imposed. As the BBC reported during the conference, for example, experts predict temperature rises will make banana exports unviable in many countries of origin. In the meantime, the chances are very high that rising temperatures will lead to less production and therefore higher prices.
In any case, the economics of selling bananas too cheaply makes no sense. Growers are being squeezed between the demands of increasing social and environmental standards on the one hand, and prices that do not reflect the costs of sustainable production on the other. This dynamic, if allowed to continue, will eventually bring down the whole banana trade. Small producers – the canary in the coalmine of the industry – are already falling by the wayside en masse. As the 100-year-old song warned, consumers may have to read “yes, we have no bananas!” on empty shelves.
Living wages and environment
It is finally becoming evident that prices must be high enough to ensure a living wage for those who produce bananas. The implications of establishing decent work and incomes for banana workers will not only improve workers’ lives, and those of their families, but will have a bearing on broader global issues. As one workers’ leader from Central America pointed out in Rome, low income for plantation workers is directly related to low prices per box. Mass migration to the US and Spain is provoked by the lack of economic opportunities in banana-producing countries.
In a joint statement ahead of the conference, producers from Latin America, Africa and the Caribbean called for Fairtrade minimum prices to be established as the basis for future pricing. At the very least, we must negotiate prices that recognise and account for the social, economic and environmental investments that producers must, and are increasingly expected to, make. One multinational suggested buyers should be incentivised on the success of living wage implementation. As they put it: “We can’t have the buyers and CSR teams incentivised with opposing tasks.”
A living wage for workers is just one of the costs of sustainable production the current pricing model does not cover. If banana production systems are to become resilient to climate and disease, and non-toxic to people and the environment, producers must be able to invest in trialling different varieties and production systems, such as agroecological or regenerative farming methods. When the price paid for bananas is kept artificially low, the social and environmental debts accrue.
The only serious study on “true prices” put the real cost of bananas, including the unpaid social and ecological costs, at between 50% and 100% of what is currently paid to big conventional growers.
Some retailers are listening and leading the way. Following negative press on price-setting, Aldi has abandoned the tender-based system and put in place a new approach, with collaboration between buying and sustainability teams and partner consultation. This incudes a long-term commitment to buying relationships. Tesco and most recently Sainsbury’s have also developed longer-term relationships with producers.
Alistair Smith, Banana Link’s international co-ordinator, also highlighted the role of supermarkets in educating consumers. Shoppers need to be prepared for higher prices for their favourite fruit.
As Smith summed up: “For too long, supermarkets in most countries have only communicated on price when talking to consumers about fresh bananas. It should simply not be possible any longer to respond to consumer demands for fair trade, living wages and sustainable farming by keeping purchasing prices as low as they are, and saying nothing about all the other issues.”
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