The Hidden Cost of Budget Bananas

February 18, 2018

 

Bananas are the most popular fruit in the world, and it’s not hard to see why: they are perfect at any time of the day for a guilt-free energy boost, they are the key ingredient in many classic desserts, and they contain tryptophan, a protein that the body converts into serotonin, making us feel relaxed. But sadly, the huge demand for low-cost bananas has a hidden cost: the rights of workers on plantations. Many plantation workers risk dismissal if they join a trade union, whilst trade union representatives have been attacked and even murdered, as in the tragic case of Alberto Román Acosta González, the president of the Guacarí branch of the National Union of Workers in Agricultural Industries, in July 2017 (Connell, 2017).

 

Although there are international organisations that work to protect agricultural workers, they are fighting against retailers and producers with the power to control the prices they pay to suppliers and, indirectly, working conditions on plantations. The questions we as consumers must ask are: why are these workers so exposed to exploitation, why does this problem persist despite the existence of ethical products, and what can be done about it?

 

The UK grocery market is a classic example of an oligopoly, where a few large firms dominate the market. The so-called ‘Big Four’: Tesco, Sainsbury’s, Morrisons and Asda, control 69.3% of the grocery market, and as a result, have significant buying power. They are able to dictate the prices that they will pay suppliers, initiating a ‘race to the bottom’ through paying unsustainably low prices and threatening to de-list suppliers if they do not comply. As a result, producers must keep costs low, and, as the weakest stakeholders in banana production, plantation workers bear this cost, facing persistently low wages, little investment in worker safety, and a lack of basic labour rights.

 

Retailers insist on low costs so that they can engage in price wars with their competitors, a common feature of oligopoly markets, with the aim of increasing market share and ultimately driving their competitors out of business. In the case of bananas, where the supermarket profit margin can account for 41% of the price to consumers (see picture), this is particularly relevant. In fact, bananas are the single most profitable item sold in UK supermarkets, and as such, they are the key weapon in supermarket price wars. Recently, supermarkets have been introducing vertical integration – control of their supply chain – in an effort to lower costs even further, but the effect of this on workers remains to be seen.

Supermarkets often advertise their sustainable initiatives, the most recent being a move to Rainforest Alliance certification in sourcing bananas, but fall short when it comes to labour rights. Many workers on banana plantations receive very little compensation for their work and suffer from a lack of respect for their basic labour rights. Trade union suppression by producers prevents workers from collectively bargaining to secure rights such as a living wage, maternity pay, fewer working hours and safer working conditions. Some large producers, such as Fyffes, refuse to even recognise the legitimacy of trade unions, further impeding the bargaining process and allowing firms to get away with unfair trading practices.

 

For example, in Ecuador and Costa Rica, women represent as little as 7% of the workforce because they are seen as “high cost, high risk” employees, due to the possibility that they may become pregnant (Banana Link, 2009). Perhaps even more concerning is the routine exposure of workers to hazardous agrochemicals used in crop spraying. It is estimated that 85% of chemicals sprayed by plane fail to land on the crop, instead, landing on workers, their homes and their food. Exposure to these chemicals can lead to numerous health problems, from depression and respiratory problems to miscarriages and birth defects, and yet workers are given no personal protective equipment.

 

These injustices exist due to pressure from retailers to keep prices low, but consumers are not without fault: our demand for budget goods sends a signal to retailers that reducing prices will allow them to capture more of the market. But if we know that it is workers who will ultimately bear the cost of price reductions, why aren’t we as consumers doing more to help them?

At the time of writing, the difference between the cheapest 6 bananas in Tesco and the organic, Fairtrade certified bunch was a mere 55p, a small price to pay for helping to improve the lives of thousands of workers. Even in a year, given the average person eats 12kg of bananas, the difference is only approximately £9. It would be easy to say that most people could afford to spend £9 more a year, given the benefits of doing so, and with the trend of consumers changing their behaviour towards buying more ethically-sourced goods, it is hardly a controversial idea.

So why are people reluctant to spend more on their food products? Perhaps it is because there is no perceivable benefit to the consumer themselves, they simply cannot afford it, or there is a distrust of supermarkets and a lack of awareness. Consumers aren’t going to be willing to spend more on goods if they don’t believe the money will go to those who need it, and supermarkets won’t stop selling unethical products without a decisive change in consumer behaviour or new government legislation – neither of which are forthcoming at this moment in time. So, these workers are instead forced to rely on support from small charitable organisations, whose influence can only go so far without more widespread awareness.

 

In the face of such a persistent problem, it is easy to lose hope and pretend that our actions in the UK can’t affect the lives of people thousands of miles away. But we should not use this as an excuse to do nothing; every individual has the ability to contribute in some way to improving the lives of others. From being more conscientious when shopping, to volunteering at a local charity, to even just informing others of these issues, we can cumulatively make a real difference to the lives of workers in developing countries.

 

Rachel Lovitt is a 3rd-year Economics Undergraduate at the University of York

 

Thank you to Banana Link for inspiring this article through their continued work to achieve fair and equitable production in trade in bananas and pineapples

 

Sources:

1) Connell, T. (2017). Union Leader Murdered in Colombia. Solidarity Center. [Online] Available at: https://www.solidaritycenter.org/union-leader-murdered-colombia/ Accessed: 13/02/2018.

2) Mckevitt, F. (2017). Lidl becomes the UK’s seventh largest supermarket. [Online] Available at: https://uk.kantar.com/consumer/shoppers/2017/september-kantar-worldpanel-uk-grocery-share/ Accessed: 14/02/2018

3) Banana Link, 2009. [Online] Available at: http://www.bananalink.org.uk/social-problems. Accessed: 13/02/2013

 

 

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