EXPORTING BANANAS FOR IMPROVED LIVELIHOODS AND SOCIAL DEVELOPMENT: EXPERIENCES AND CHALLENGES FROM LATIN AMERICA AND AFRICA

Abstract

Smallholder banana (Musa spp.) farmers traditionally play a role to buffer supply and demand fluctuations of large banana marketing companies. As a result, smallholder farmers faced permanent commercial insecurity. The plight of smallholders in export markets led to the development of the fair trade business model, which was first applied to coffee markets. Since that time, other products, including bananas have been integrated into the fair trade system. This offers smallholder farmers an alternative market opportunity, where they can benefit from stable contract volumes, gain direct access to export markets and share in the upstream revenues. Instead of multinational marketing and production companies controlling the value chain and netting the lion's share of the profits, smallholders can effectively export and market their own bananas. More recently, smallholder farmers' organizations from Latin America have successfully entered the European markets with their co-owned banana and fresh fruit importer AgroFair, operating under fair trade certification and marketing the fruit under its own Oke brand. As shareholders in AgroFair, the profits are ploughed back into the farmers' communities, instead of being added to shareholder's value in stock exchanges. Moreover, a part of the sales revenues is paid to the farmers' organizations as a premium for social and economic development. This improves the quality of the livelihoods of banana farmers and boosts social development throughout communities. At the same time, the farmers respect the environment by means of integrated pest management and in some cases through organic agriculture, so that their value chain is both socially and ecologically sustainable. Whilst this has been successful, the organizational models for farmer and supply chain organizations need to be adapted to the context and the business model does not perform equally well in all value chains. In Africa, good results have been obtained by a plantation that is partially co-owned by the workers, and by a competent export house that works entirely in the interest of small producers. This article analyses the fair trade value chain from production to marketing, highlighting some lessons learnt, the social advantage that can be assessed and the opportunities and challenges it presents to African banana producer communities.