The dilemma of fair trade bananas

At Civil Eats yesterday, Aliza Wasserman explains the dilemma for the public interest entrepreneurs who are developing a fair trade banana market. The article describes a recent conference at Tufts University.

The most difficult question is whether fair trade bananas should come only from smallholders and cooperatives (preserving fair trade principles but limiting scale), or instead whether fair trade sourcing should allow larger plantations so long as they follow the stipulated principles (sacrificing a small-is-best principle but achieving a larger share of the total market).

Wasserman writes:

Fair Trade banana plantations have also been crucial to building a robust supply of Fair Trade bananas. Plantations represent both a key challenge and opportunity, by providing the promise to impact the broader industry and bring Fair Trade bananas to a larger consumer base. Nearly everyone at the conference hoped to impact the broader industry, whether they are focused on the future of small-scale or “smallholder” farmers, or the overall future of Fair Trade bananas.

But many of the presenters felt that the current pricing system, in which the Fair Trade certifying bodies, like Fair Trade International or FLO, distribute the same premium to plantation owners and small landholders alike, represents a major flaw in the system. Many in the industry believe that cooperatives of small producers should receive a premium that is linked to their higher cost of production relative to plantations, which can take advantage of economies of scale. Yet, the first banana producer to receive Fair Trade certification was a plantation, and scaling up Fair Trade would not be possible without them.

While a student at the Friedman School, Wasserman was a regular contributor to the U.S. Food Policy blog.