Fairtrade ‘significant’ step towards living wages for banana workers

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A new study shows that sourcing on Fairtrade terms is critical in the journey towards achieving living wages for banana workers.

  • Certification schemes, like Fairtrade, play a key role in supporting retailers to meet their living wage commitments
  • UK retailers sourcing 100% of their bananas from Fairtrade are driving significant change while striving towards closing the living wage gap
  • UK has amongst the highest per capita consumption of bananas in Europe.

New research focusing on Ghanaian and Colombian banana workers in UK retail supply chains shows that Fairtrade Premium plays an important role in achieving living wages.

The study was conducted using innovative FairVoice technology via banana workers’ mobile phones. It highlights how investments made through certification help advance the living wage gap, creating the enabling environment needed to make living wages usable and effective in improving livelihoods.

The impact in Ghana

In Ghana, Fairtrade Premium – an additional sum that producer groups can spend on community or business projects of their choice – reduces the pressure on wages.

It is used to:

  • Subsidise food in cafeterias
  • Build schools and health centres
  • Provide transport
  • Provide access to interest-free loans, equating to a cash equivalent of $75 per worker per month.

The living wage benchmark for the region is $257 per month. 66% of workers also reported that they used cash payments to fund basic needs such as food or running costs.

The effect in Colombia

Meanwhile, in Colombia where the living wage benchmark is $455, banana workers receive additional benefits that are equal to $88.60 per worker per month.

The need for a living wage has always been pressing in the banana sector because workers are among the most vulnerable people in global trade.

Without access to land or unable to make a living from it, they have few options for a sustainable livelihood.

These workers often lack formal contracts, freedom of association, basic health and safety assurances, and adequate wages, among other challenges.

Opportunity to drive change at scale

Global economic uncertainty over the last two years has increased the need for producers to be able to earn sustainable livelihoods.

The UK has among the highest per capita consumption of bananas in Europe, importing on average more than a million tonnes a year. Fairtrade believes that the UK banana industry has unique opportunity to drive real change within the sector, at scale.

Anna Mann, Head of Responsible Business at the Fairtrade Foundation said: ‘Certification schemes, like Fairtrade, can play a key role in supporting retailers to meet their living wage commitments. Data shows that sourcing on Fairtrade terms is a significant step towards achieving living wages for workers, especially for retailers sourcing 100% of their bananas from Fairtrade.

‘As some retailers commit to price interventions in their supply chain to address the gap, and others map wages in their supply chains, it has become increasingly important to understand how investments made through certifications like Fairtrade support the closing of the gap and make wages more meaningful.’

Fairtrade sourcing provides workers with a bundle of interventions through the Fairtrade Premium and Fairtrade Minimum Price, ensuring plantations can maintain the costs of production, including wages, during commodity price crashes.

Mann continued: ‘Fairtrade is committed to a world where workers have the power to improve their own livelihoods and negotiate their wages and terms of work.’

More on the base wage

In July 2021, Fairtrade launched the Fairtrade Base Wage for banana plantations. Set at 70 percent of the take-home pay needed for a living wage, the base wage is unique among certification schemes in making a solid step towards a living wage.

Furthermore, between 30 and 50 percent of the Fairtrade Premium can be paid out as cash for workers.

For bananas coming from estates, the Fairtrade Premium is 1 US$ (€0.96) per box of fresh banana (18.1 kg; Fairtrade International, 2021b) and is paid to the Hired Labour Organisations (HLOs). Each HLO has a Fairtrade Premium Committee that decides democratically – together with its workers – how the money is spent.

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