In occasion of Fruit Attraction 2024, Fairtrade is pleased to show how the expansion of its sustainable banana offer contributes to workers' income and supports businesses committed towards living wages on certified banana plantations across the world.
The sustainable banana offer, officially launched one year ago, covers wage and price calculation, its distribution, reporting, and third party verification in one convenient Fairtrade solution. It includes four core elements – the Fairtrade Minimum Price (FMP), additional cash payments from the Fairtrade Premium, the Living Wage Reference Price (LWRP), and the Fairtrade Living Wage Differential (FLWD), an additional voluntary payment a commercial partner may pay per box of bananas sold that is distributed to workers by the Premium Committee called the Fairtrade Banana Bonus.
Readily available for 2025 contracts currently being negotiated between buyers and producers, Fairtrade has published seven banana origins with Living Wage Reference Prices (LWRP). Cameroon, Ghana, and Nicaragua, join Colombia, Dominican Republic, Ecuador, and Peru (organic bananas only) with LWRP that were updated this year.
Fairtrade is the only voluntary standard system that calculates publicly available LWRPs to enable the banana industry to close the gap towards living wages. An elected workers' Premium Committee on each plantation distributes both the additional cash payments from the Fairtrade Premium and the Fairtrade Banana Bonus made available via voluntary payments to close the living wage gap.
The new service allows the easy distribution of voluntary payments from retailers to workers, and the verification and reporting of payment receipts. For that purpose, Fairtrade has developed detailed payment flow and distribution guidelines.
"Expert knowledge on banana production and wages, many years working with producers on cost calculation, together with banana chambers from producing countries have allowed Fairtrade to collect and validate wage data, and calculate reference prices," said Silvia Campos, Senior Advisor, Bananas, at Fairtrade International. "These reference prices are Fairtrade's contribution to the banana industry that allow producers and traders to negotiate fairer prices and terms of trade, aiming to improve wages of banana workers."
Campos added that the benefits from the Fairtrade Premium are also making a difference, along with the experience and robustness of Fairtrade's assurance body FLOCERT that checks that these benefits reach workers.
Fairtrade has also updated its minimum prices for Banana. The minimum prices for Fairtrade bananas at 'Ex-works' level will increase by an average of 3.6 percent compared to 2023 (an increase of between US$ 0.10 and US$ 0.85 per 18.14 kg box) responding to the increase in wages by 4.7% and 2.3% increase in the cost of fuel. The minimum prices for 'Free on Board' (FOB) bananas will increase by an average of 1.6 percent per box as consequence of the cost reduction of the carton box by 9.5%. The new minimum prices go into effect on 1 January 2025.
Thanks to this offer businesses can play their part in achieving living wages in their banana supply chains. Companies that work with Fairtrade can contribute to achieving decent wages by maintaining and growing their sourcing commitments to progressively work towards the long-term objectives of this offering and make decent livelihoods the norm. For the more than 35,700 workers employed by 265 Fairtrade banana plantations, this could make a significant difference. This new offer complements the already existing Living Wage SmartCheck, another Fairtrade tool based on IDH methodology, which is offered to benefit plantation workers.
For more information:
Fairtrade
Bonner Talweg 177
53129 Bonn
Germany
Tel: +49 228 949230
Email: [email protected]
Website: www.fairtrade.net
Twitter
Facebook
LinkedIn