Fairtrade International announces measures to increase banana plantation wages

Fairtrade says the new service allows the easy distribution of voluntary payments from retailers to workers, and the verification and reporting of payment receipts

Fairtrade International has launched a campaign to deliver decent incomes for workers on Fairtrade-certified banana plantations around the world.

Launched at the global Fruit Attraction expo in Madrid on 2 October, the initiative aims to offer banana workers their country’s living wage at the very least, using combination of measures: an updated Fairtrade Minimum Price (FMP) coming into force from 1 January 2024, a Living Wage Reference Price (LWRP), and a Fairtrade Living Wage Differential (LWD).

LWRP is defined as the price of a packed box of 18.14 kg fresh banana set for a specific banana-producing country, that if paid for each sold box, would ensure that all workers on a banana plantation earn at least a gross Living Wage, as defined in the benchmark reports published by the independent Anker Research Institute.

LWD is the amount of money that a commercial partner may pay in addition to the FMP. If paid for all sold boxes, it would ensure that all workers of a banana plantation earn at least the gross Living Wage, as defined by the Anker methodology.

“Our key commercial partners are increasingly demanding the tools and the data to enable them to fulfil their commitments to pay a fair price so that banana workers can earn a living wage,” said Silvia Campos, Fairtrade International’s senior advisor for bananas.

“Our unique offer is a game-changer for workers, traders and retailers. Fairtrade is working to strengthen protection for banana producers, workers and their families as they struggle to cope with mounting economic costs, climate change, human rights risks and the need to adopt more sustainable agricultural practices.

“Despite some slight reductions in the price of fuel and fertilisers, banana producers are still suffering from post-pandemic losses. They simply can’t afford to pay higher wages or invest in the future of their farms.”

Fairtrade calculates a publicly available LWR while an elected workers’ premium committee on each plantation can distribute additional cash payments from the Fairtrade Premium, an additional amount earned by selling on Fairtrade terms, to close the living wage gap.

Fairtrade says the new service allows the easy distribution of voluntary payments from retailers to workers, and the verification and reporting of payment receipts. It has also developed a new banana dashboard with all the data traders and retailers need to report progress back to their stakeholders.

The organisation has also announced an average increase of 0.2% in the Fairtrade Minimum Price for ‘free on board’ bananas (the purchase price for importing traders), which comes into effect from January 2024. Meanwhile, the Fairtrade Premium – the additional US$1 per box of bananas sold – remains unchanged.

“The combination of an updated minimum price and a commitment by many of our major commercial partners is a real cause for optimism,” said Marike de Peña, president of CLAC, the Fairtrade Producer Network for Latin America and the Caribbean, herself a Fairtrade banana producer in the Dominican Republic. “Fairtrade’s unique offer is a win for plantation workers and a win for traders and retailers. I believe this service will lead to more companies sourcing more bananas under Fairtrade terms.”

“Achieving a living wage is only possible if prices are sustainable along each step of the supply chain,” said Campos. “Fairtrade has taken concrete steps towards closing the living wage gap for banana workers in recent years – including introducing the base wage and Living Wage Reference Price. There’s still a long way to go, but workers on Fairtrade-certified banana plantations can now look forward to a more secure future.”

Fairtrade estimates that more than 35,658 workers and farmers are employed by 265 Fairtrade banana producers.

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