Fairtrade America, the U.S. branch of Fairtrade International, announced it is backing calls from banana producers and farm workers for fair prices and decent incomes - or banana producers risk going out of business.

Fairtrade recently undertook its annual public consultation and extensive cost-of-production study involving more than 165 farmers, traders and retailers to deliver on its promise to secure fairer prices for farmers and workers. As an outcome, the organization updated the Fairtrade Minimum Price across 16 banana-growing countries and introduced a brand-new Fairtrade Living Wage Differential.

“Price plays a critical role in creating fairer terms of trade for farmers and workers," said Fairtrade International's senior advisor for bananas, Silvia Campos. "The price we pay for bananas at the supermarket checkout has a ripple effect back up the supply chain to the workers and farmers who grow them. As the saying goes, price is everything, especially as these producers face inflated costs outside their control."

"We found that banana production costs have shifted significantly in key areas," continued Campos. "For example, wages - which account for around half of all production costs - have risen by nearly 15 percent. Fairtrade continuously monitors these changes and adjusts prices to reflect the realities of banana producers on the ground."

Fairtrade's unique minimum pricing and premium model have acted as a vital safety net for banana producers since its introduction in 1996. The Fairtrade Premium alone has brought more than USD 259M in Fairtrade Premium to banana growers since 2015. Fairtrade International is the only certification in the world to have 50 per cent producer governance and is proud of its farmer-centred approach to decision-making.

“This mechanism [Fairtrade] represents a significant step forward in ensuring sustainability and fairness in the banana industry, encompassing key elements such as fair labor standards, environmental sustainability and social responsibility," said Jose Antonio Hidalgo, executive director of the Association of Banana Exporters of Ecuador AEBE and coordinator of the Banana Cluster of Ecuador. “The new Fairtrade mechanism establishes a Fairtrade Minimum Price that not only covers the Fairtrade Base Wage (seventy percent of the Minimum Living Wage) and labor costs, but also includes environmental and social costs, as well as those necessary to address all of the industry's phytosanitary challenges such as sigatoka, moko and TR4 prevention. This comprehensive approach recognizes the complex nature of banana production, ensuring that producers can meet their financial obligations while achieving social and environmental sustainability."

Through the 2023 Fairtrade America Consumer Insights report conducted by independent insights consultancy Globescan, Fairtrade America learned that - despite increases in the cost of living in the U.S. - nearly 80 per cent of consumers who know Fairtrade are willing to pay more for a product to ensure producers are paid a fairer price and 86 per cent of them trust Fairtrade.

The study also found a shift in consumer perceptions around the value of certified bananas. On average, U.S. shoppers today will pay USD 0.60 more per pound for Fairtrade bananas.​ The tolerance for higher banana prices increased from 43 per cent to 66 per cent in the past two years. Today, 61 per cent of consumers are aware of the Fairtrade Mark, and 2 in 3 shoppers familiar with Fairtrade prefer to shop at retailers that carry certified products.