Rising Ecuador shouts about heightened sustainability efforts, banana quality

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A banana packer at SH Pratt's facility in Ecuador.

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Ecuador banana harvesting at Reybanpac Farm Hacienda Norma Grisell, certified by Rainforest Alliance. Photo courtesy of Lisa Giunta

In recent years, a number of UK retailers have made a public commitment to source 100% sustainable bananas, either from Fairtrade, Rainforest Alliance or organic certified farms. In response, Ecuador’s banana industry says it has stepped up its social and environmental responsibility efforts to meet these standards. Here, PBUK learns about the progress made.

Today, consumers can find Ecuadorian bananas not only in Tesco, Asda and Morrisons, but in Aldi and Lidl – all with the Rainforest Alliance certification. Certain supermarkets, including The Co-operative, Waitrose and Sainsbury’s, stock only bananas bearing the Fairtrade Foundation label, including certified bananas from Ecuador.

Nonetheless, there remains, among some in the industry, a negative perception of Ecuador’s banana industry that largely stems from a damning Human Rights Watch report dating back to 2002 that raised serious concerns about labour standards. 

It’s an image ProEcuador and Ecuadorian banana associations are keen to drop for good in view of the steps they claim the industry and the government has made to protect producers, their workers and the environment.

When it comes to labour, for instance, Ecuador has introduced a government-mandated minimum wage, meaning no worker in the country can be paid less than this mandatory minimum rate of pay.

“Ecuador has one of the highest minimum wages in the Latin American region, and the banana is our leading export item outside of oil,” comments Juan Carlos Yépez, Trade Commissioner at the UK office of ProEcuador, the Ecuadorian Institute for Export and Investment Promotion.

“Also, Ecuador is the only country with a system whereby the price of each box of bananas is fixed between producers and exporters,” continues Yépez. “They sit and negotiate with the Ministry of Agriculture as a mediator and they fix a price agreed by both. This is called The Banana Law.”

The Association of Banana Exporters of Ecuador (AEBE) points out that the agreed price takes into consideration all producer costs – not only production but also social and security benefits. The idea is to enable producers to negotiate contracts based on an official price that will not change for at least 12 months, and for exporters to project their cash flow.

“While the international market ultimately determines the price, since 1997 producers, exporters and the government [in Ecuador] have done everything possible to reach a price that meets the expectations of the international market, and assures producers a return that ensures they can continue improving the infrastructure of the farm,” says AEBE executive director Eduardo Ledesma. 

“There are times when producers and exporters agree on a fixed price, as happened this year, and other times the Government defines it through the Ministry of Agriculture. It is not the ideal scheme, but we have done it and this way it is guaranteed that the producer is not harmed.”

Stability paves the way

Importers claim this shift away from selling bananas predominantly on the spot market, where prices fluctuate, is precisely what has led to improved social and environmental standards on Ecuadorian plantations.

“More and more, Ecuadorian banana producers are interested in export contracts,” comments João Barata, Procurement Director at SH Pratt in the UK – one of Europe’s leading banana importers and ripeners.

“They’re no longer interested in the instability of the spot market, where you can make or lose a lot of money depending on the market price. Today, Ecuadorian producers prefer to work with stable markets like the UK, Germany, and other markets in northern Europe that demand the same volumes from week 1 to week 52, and are willing to pay the same price throughout the year.” 

This, Barata says, gives banana producers in Ecuador the stability to develop and make investments in their plantations, and to attain certifications like Rainforest Alliance and Fairtrade.

“The minimum official price really protects the producers,” he states. “In the end, they only need to worry about their production and the quality of their fruit. 

“Increasingly, more plantations have obtained all the certifications needed for the UK market. I’d even say there are many other actions being taken that go beyond the scope of the certifications.”

In agreement is Matthieu Mandon, Banana Sales Manager for Fairtrasa in the Netherlands. Fairtrasa supplies organic and Fairtrade bananas from Ecuador to the UK, and other countries, via its own Three Tier Model for small producers, created in 2005 by Fairtrasa founder Patrick Struebi.

“In the last few years, socially- and environmentally-responsible banana sales from Ecuador have risen a lot; the market trend has pushed producers and exporters to be more responsible,” Mandon explains. 

“In the past, the market was only driven by price. Now, the big importers and many other companies have social and environmental policies that oblige them to buy certified bananas. Today in Europe some countries won’t even buy non-certified bananas anymore.”

Mandon says the main standards in operation in Ecuador are GlobalGAP and Rainforest Alliance for the social and environment care. Increasingly, he claims there is a trend towards organic and Fairtrade bananas too. “This means many producers, associations and exporters are certified and, therefore, audited at every moment,” he adds.

Rainforest Alliance and Fairtrade

The Rainforest Alliance confirms to PBUK that there has been a “significant increase” in the volume of Rainforest Alliance-certified bananas coming from Ecuador over the last 18 months.

“Ecuador is the country with the most Rainforest Alliance banana certificate holders; 172 at the end of 2017, up from 62 at the end of 2015,” states Jan’t 't Lam, Markets Transformation Global Fruit Lead at Rainforest Alliance.

“This is also reflected in the Rainforest Alliance banana production areas, which grew from 9,431 hectares (ha) to 24,304ha in the same period. Other countries show similar growth curves but the growth in Ecuador has been the strongest.”

't Lam says he has witnessed “really positive” developments in Ecuador over the last two years. “I feel there’s an overall desire to do more to improve practices, and the retailers in northern Europe are helping to drive that,” he comments.

“Overall, if you take the organic, Fairtrade and Rainforest Alliance-certified bananas sold in the UK, they come to 30% of total banana sales. So, one in every three bananas has specific certification, and I think there’s a role for all.” 

Equally, the Fairtrade Foundation in the UK tells PBUK that Ecuador is one of the “top exporting countries” of Fairtrade bananas at present, according to its latest Monitoring and Evaluation Report

“The volume of Fairtrade bananas produced in Ecuador has increased, together with the number of certified producers,” says Silvia Campos Malpartida, Global Product Manager for Fairtrade bananas. “With the lower import tariff, it is expected that the number of certified producers and sales will become even higher in the following years.”

Campos is referring to the Free Trade Agreement signed between Ecuador and the European Union, which means suppliers pay an import tariff in line with their banana-exporting competitors, Colombia, Peru, Costa Rica and Panama.

“Ecuador has gained competitiveness,” says Campos. “On top of that, shipping companies are offering services with bigger ships to Ecuadorian ports, making the shipping costs per box of bananas more competitive than origins such as Peru.”

In 2016, Ecuador exported 70,390 tonnes of Fairtrade bananas globally, according to the Fairtrade Foundation. The organisation says it has no information on how much of that volume is received by the UK market.

Production-wise, the organisation’s current figures indicate that Fairtrade represents 3.2% of the banana production area in Ecuador.

 

“In 2016, there were 15 Fairtrade-certified banana producers in Ecuador (12 cooperatives and 3 plantations), cropping 5,210 hectares,” notes Campos. “Overall, there are 162,236ha producing bananas in Ecuador, with 4,473 producers (cooperatives, plantations, and medium-sized farms).”

When it comes to labour, on Fairtrade-certified plantations a minimum price is set as part of the Fairtrade standard to ensure workers operating under the scheme are paid fairly.

On top of that, 't Lam at Rainforest Alliance points out that the Ecuadorian government has introduced a minimum wage for workers across all industries nationwide. 

“Ecuador is one of the few countries that already has a scheme in relation to a living wage as part of its national law,” 't Lam explains. 

“Within the different banana-producing countries there’s a progression towards paying a living wage, i.e. what is needed for a banana worker or a banana farm to offer a wage or income that allows workers to live a decent life.

“This is where Ecuador has made steps already; by integrating a living wage into their law.”

Why source from Ecuador?

SH Pratt has increased its banana imports from Ecuador following the appointment of experienced banana buyer Barata in February 2016. Now, Ecuador is the firm’s main source above Costa Rica and Colombia; having grown the trade considerably in the last year. 

SH Pratt only sources Rainforest Alliance-certified conventional bananas from Ecuador, Costa Rica and Colombia in line with demand from its customers – the UK retailers. The company also imports some organic and Fairtrade bananas. 

“I think there’s still some negative press around issues like labour conditions, which have put Ecuador in a poor light,” Barata tells PBUK. “There’s still a feeling in the UK that Ecuador is not as developed as other countries, but I completely disagree. 

“I’ve been to the Ivory Coast, Ecuador, Colombia, Nicaragua, Guatemala, Mexico and the Dominican Republic, and I have to say that of those countries I’ve visited the best banana plantations from a social and ethical point of view are in Ecuador.”

Barata adds that another issue is that bananas from Ecuador are normally slightly bigger in size, while the UK prefers medium to small bananas. Ecuador is sometimes also understood to be the most expensive source.

“If you select the right fruit and prepare the plantations accordingly to produce more medium-sized bananas, together with the right contacts and logistics (we have a very short route from Ecuador), I believe you can be very competitive,” he states.

“Geographically, the weather and soil conditions make Ecuador a perfect location for growing bananas, and Ecuador has the most stable quality all year round,” Barata continues. “I think Ecuador is an origin that has everything customers in the UK are looking for, and the final consumer in the store will see the difference.” 

Likewise, Mandon at Fairtrasa is positive about what Ecuador has to offer the banana market in the UK.

“Ecuador suits perfectly the UK market – for conventional, organic and Fairtrade bananas – if the grower controls the size and grade of the fruit, because the UK is very much accustomed to Caribbean bananas that are the sweetest and smallest,” he comments. 

As for reliable quality and supply chain logistics, Mandon adds that Ecuador offers “great advantages” over other Latin American banana-producing nations.

“Ecuador is an important source of bananas,” he states. “The weather is very stable and the two seasons (winter and summer) are very well marked. This helps the grower to have good and consistent quality, which is very well recognised on the market.

“The number of logistic solutions from [the Port of] Guayaquil allows us to split the risks and therefore give more reliability to our clients.”

Furthermore, Mandon points out that next year [2019] the EU import tariff for Ecuadorian bananas will continue to drop to the level of €83 per tonne. On the flip-side, he says the high costs of materials (mainly boxes), together with high freight rates, could make Ecuadorian bananas more expensive than before. 

Evidence of improvements

As for the social and environmental progress made in Ecuador, Barata says he can see a difference when he visits plantations that comply with globally-recognised certifications. 

Along with the audits required by the Ecuadorian government, international certification organisations and importers’ own independent inspectors, he visits Ecuador multiple times a year. 

“People tend to think that certifications are just another way of doing business, but I’ve seen very positive changes on certified farms,” Barata comments. “These include environmental improvements like the protection of the soil, the flora and fauna and the waterways and rivers in and around the plantations.” 

Many growers go above and beyond the requirements of their certification too, according to Barata. Initiatives include: extra recycling efforts, plastic usage reduction, sports tournaments, celebrating traditions like Mothers’ or Fathers’ Day and other activities that many farms organise and promote on their Facebook pages.

't Lam says the benefits of the Rainforest Alliance scheme vary depending on the farm, although largely they have led to improvements in how the land is treated and how the waterways are used, which has a knock-on effect on other areas of a grower’s business.

“When I was in Ecuador I spoke to a lady who owns a 1-2ha farm who was asked to take away some banana trees to create a buffer and pollinator area with natural vegetation and flowers where bees can thrive,” 't Lam recalls. 

“She told me that thanks to all the measures, she had decreased her input costs through a more effective use of pesticides. Also, by treating the land better her yields were improving, and the quality of her product had increased; leading to less rejects and an overall higher income from the harvest.” 

From a Fairtrade perspective, one Fairtrade-certified banana farm in Ecuador that is benefiting from investing its Fairtrade Premium is the Asociación Agraria Bananera Fincas de El Oro.

“Fincas del Oro in Ecuador has a fantastic investment of their Fairtrade Premium into the business, especially on productivity and water management,” explains Campos.

“They are part of the Programme for Increased Productivity (outlined in the May 2018 Fairtrade Banana Newsletter) and have built a bio factory to produce bio-ferments that are used as fertilisers.”

More to be done 

Nonetheless, 't Lam at Rainforest Alliance says that the positive progress made to date does not necessarily mean that everything is alright.

“There are still challenges that remain with the working conditions on fruit farms,” he concedes. “The existence of those challenges is one the key reasons why we choose to work in Ecuador and other banana-producing countries.

“I do think we’re on the right path,” ’t Lam continues. “The Rainforest Alliance certification very much focuses on continuous improvement; it’s a journey and not a destination.” 

't Lam says progress also requires a joint effort with collaboration among the key stakeholders, including government, unions and the different supply chain actors operating outside of the country of origin.

Barata too accepts that there is more to be done. “The Ecuadorian government is working very hard and well to spread the use of best practices around all the banana plantations,” he says. “I’m not saying that all the growers are doing it, but I’m sure there are only a few left that aren’t because the government is putting a lot of pressure on them.” 

Going forward, one key aspect holding back Ecuador’s banana industry is its lack of self-promotion, according to Barata.

“The only thing that Ecuador needs to improve is its self-promotion,” he explains. “I believe Ecuador is now at the same level as Costa Rica and Colombia in terms of its social and environmental standards.” 

Through its marketing and communication efforts, ProEcuador UK is striving to share these opinions and other Ecuadorian banana facts with UK retailers, importers and distributors. 

“We want to share as much information as possible about Ecuador’s banana industry in terms of what we do, our practices, all the quality controls we have in place, and why Ecuador is the biggest banana exporter in the world,” details ProEcuador’s UK Trade Commissioner Yépez. 

“Ecuador’s banana market share in the UK is expanding. Whole market and convenience store presence has increased considerably. Yet there are more opportunities to be realised with the communication of the right information.

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