Patti McGill Peterson Center for International and Intercultural Studies
With the CIIS Independent Travel Research Grant, I was able to spend twenty days in Ecuador. My research was to see how El Guabo Association of Small Banana Farmers has managed to work so efficiently to independently manage a supply chain of bananas and create an island of development in the region. I was able to spend 7 days in El Guabo (El Oro Province), where the head office of the small banana farmers association is located. I was only able to interview the administrative staff working in the office. It was very difficult to get hold of the farmers; however, the staff at the head office told me their answers to my questions would be the same as the farmers had I been able to conduct interviews with them.
In 1997, 14 farmers from Southwestern Ecuador organized themselves and founded El Guabo Association of Small Banana Producers (which is registered under (FLO) Fair-Trade Labeling Organizations International and is shareholder of AgroFair) to compete for an equitable price in the world market. Fair Trade gives these small farmers access to the international market and competes with the multinational corporations. The AgroFair is the third party involved in empowering the farmers with small holding of lands whose produce is not as large as multinationals.
To protect the small banana farmers, El Guabo and the farmers sign a contract saying that El Guabo will pay the farmers a fixed price which is not the case with the multinationals. Signing contracts with El Guabo protects the farmers from an international decrease in the banana price. However, the banana producers who are selling their bananas to multinationals are not protected from international banana price fluctuations.
In an interview with the administrative staff of El Guabo, the director of public relations said that "With Fair Trade we have an incentive to invest in social programs that benefit producers and the community. We also receive higher incomes to sustain ourselves. If it were not for Fair Trade, we wouldn't exist as banana producers since the amount we receive for a box of conventional bananas does not cover our expenses."
In addition to the fair price, small farmer cooperatives and plantation worker organizations receive a premium to invest in education, healthcare and crop diversification.
I found that Fair-Trade bananas have a limited market because not everyone buys it. It has a market in Switzerland, Germany, Austria, Scandinavian countries, and the US. Within Ecuador no one buys fair trade bananas because it is more expensive than the conventional banana which is the biggest dilemma of expanding fair-trade. The consumers of fair-trade bananas are either environmentally conscious and care about human rights or have money. Education about the importance of fair trade will create more market around the globe. One of the challenges that El Guabo might face in the future is that their members will grow but their market will not grow at the same rate.
El Guabo can be an exemplary farmer co-operative for farmers in developing countries who are struggling to compete in the international market as they have managed their own supply chain independently. The income that they generate from the fair-trade bananas is diverting them from the dependence of government annual budget.