FAIR TRADE BREAKTHROUGH RATTLES BIG BOYS
(Banana Trade News Bulletin n. 9 - Febraury 1997)
The first 'fair trade' labelled bananas in Europe have taken the Dutch market by storm. The new OkŽ brand has put the cat among the pigeons of the two big US-based multinationals, Chiquita and Dole.
In mid-November Rotterdam, the world's largest port, was the backdrop to a significant moment in the history of world trade. The first shipments of fair trade bananas arrived by barge from an environmentally managed plantation in Ghana and from a small farmers' organisation in Ecuador. Some 400 people from the Dutch government, press and supermarkets, from the producer organisations across Europe greeted this long-awaited moment.
The initiative was organised and dinanced - complete with prime-time TV adverts - by Dutch development agency, Solidaridad. The consumer guarantee is provided by the familiar Max Havelaar Foundation, breaking new ground by including environmental criteria with the better-known social criteria. A new company, Agrofair, one third owned by the producers, has also been set up.
By Christmas, in just one month, the OkŽ banana had achieved a 10% share of the highly competitive Dutch market. This alone makes history for fair trade (the most successful product previously had 5% of the Swiss coffee market). It is available in all seven major supermarket chains. But xhat is likely to shake up the "big boys" even more in the medium to long term, is that the producers are receiving between 40% and 80% above world prices, whilst consumers are paying the same price as for a conventional banana. All along the chain the margins have simply been trimmed.
This price structure also allows for a "profit" to be invested back in to the producer organizations: in Ghana, this will give plantation workers 25% ownership of the company over the next five years; whilst in Ecuador it will go to strengthen the small farmers' organization and to finance an environmental improvement programme.
On March 18th, Max Havelaar Switzerland will launch a similar initiative in Bern.
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