Ecuador: pioneering fairtrade banana co-op loses stream
One of the world’s first co-operatives to ever sell fairtrade bananas is feeling the strain in international markets, with supermarkets showing a greater preference for certified organic fruit and direct purchases from competing farms.
El Guabo Association of Small Banana Producers (ASOGUABO) president Fabiola Ramón told www.freshfruitportal.com while her co-operative exported around 7,000 boxes of organic bananas per week, a further 13,000 boxes of shipments were conventional.
“There are many markets and supermarkets that are not firmly committed to fairtrade. They have sought to buy more directly from farms, and this is one of the disadvantages for us,” said Ramón, whose group of growers is based in southern Ecuador.
“Many supermarkets changed toward the consumption of fairtrade organic bananas, so we have lost space within what is conventional fairtrade and last year we had to sell 5,000 boxes in the local market per week.
“While not everything we do is organic, we are more responsible with the environment and socially than most conventional banana producers.”
She said ASOGUABO’s growers did not use pesticides at all and had drastically reduced their use of herbicides.
Aside from market challenges that directly affect the co-op, Ramón also mentioned trade-related issues that proved difficult for the Ecuadorian industry as a whole.
“Our geographical situation doesn’t help us either, making things more expensive on arrival as they have to go through the Panama Canal.
“Also, because of political reasons we haven’t signed a deal with the European Union which is our main buyer. This disadvantages us as there are countries, our neighbors like Colombia and Peru that have signed these agreements, and can therefore sell cheaper fruit.
“Apart from that, our cost of production is much higher here in Ecuador.”
As a result of these problems, the amount of grower members in ASOGUABO has been cut by more than half in recent years.
“We are a cooperative of 165 growers currently. Four years ago we grew a lot and reached 400 growers but because of some of these issues I spoke about, many people had to abandon the business, either selling their plantations or by changing to another variety of crop.
“But I think that in the end as small growers we can achieve many things when we are united. We can achieve better access through cooperation, whether it be to credit or government support,” she said, adding the government had set up a direct purchasing system for inputs, to offset the high associated costs of purchasing from a fairly monopolistic market.
“For a small grower who is alone with their five or six hectares, staying in the market is very difficult.”
While Ramón said her growers did not sell to Chiquita Brands International (NYSE: CQB), she believed its proposed merger with Fyffes Plc (ESM: FFY) would make conditions more difficult for growers.
“As far as I understand Fyffes doesn’t have much here in Ecuador, but Chiquita does What I see is that practically they will become stronger,” she said.
“Without a doubt we will not have a greater participation. We will have a lower participation. Their purchasing power will be much stronger, they will be able to name the price, and it will be more difficult to compete.”
The co-op leader emphasized that fairtrade premiums continued to have a positive effect on the lives of growers involved, as well as their families and communities.
“With the premium we have our education programs to help schools find teachers. For example some don’t receive teachers with skills with computers or English, so we support them,” she said.
“We also have schools for special needs children. We have a medical dispensary to help the community, the members and the workers.
“There is also the issue of irrigation installation and the improvement of farms for workers.”
ASOGUABO’s main markets are Europe and the U.S., and she recently visited the latter to attend the Equal Exchange Banana Conference in Boston, where she was pleased to see strong support for fairtrade.
Ramón was also optimistic about entry into the New Zealand market, where shipments were growing.
“We have just three containers a week, but we are on a very good path in New Zealand,” she said.