Banana Industry Research Paper

This sample Banana Industry Research Paper is published for educational and informational purposes only. If you need help writing your assignment, please use our research paper writing service and buy a paper on any topic at affordable price. Also check our tips on how to write a research paper, see the lists of research paper topics, and browse research paper examples.

The production, consumption, and sale of bananas are important activities for many developing and low-income countries, generating employment, sustaining rural livelihoods, enhancing nutrition, and contributing to food security. The banana in 2002 was the fourth most important food crop in terms of value and ranked highest among fresh fruit exports in volume and in terms of export revenue to developing countries. Most bananas produced are consumed locally, with only 11 percent exported. At the start of the twenty-first century 85 percent of production was carried out by small producers using limited technological inputs.

Competitive Structure

Banana production for export employs a variety of systems, including small-scale, labor-intensive production on farms between 0.1 and 10 hectares and large-scale plantations ranging from 100 to 4,000 hectares. The latter produce 80 percent of fruit traded, employing high levels of technological innovation, including cable cars and extensive irrigation. These systems result in varying levels of efficiency, evident in a wide range of yields from as high as 60 tonnes per hectare on modern plantation systems to a low of 4 tonnes on smaller farms. The banana trade is highly concentrated. In 2002 four transnational corporations (TNCs), Del Monte, Chiquita, Dole, Fyffes, and Noboa, an Ecuadorian company, controlling more than 80 percent of the trade, which includes shipping, ripening, and distribution. Dole, Chiquita, and Del Monte, whose predecessors United Fruit Company and Standard Fruit and Steamship Company pioneered the vertically integrated production and distribution system that characterized the origins of the industry in Latin America and the United States, continue their involvement in fruit production, accounting for over 50 percent of the fruit traded. Independent banana producers often engage in contract arrangements with banana companies to export their bananas. The structure of the market is grossly unequal, with international trading companies, distributors, and retailers earning 88 percent of the retail price, producing countries under 12 percent, and laborers less than 2 percent.

The conditions of workers involved in banana production vary widely. Low labor costs and cheap prices for bananas are key features of the industry’s competitiveness. The first is oftentimes achieved by poor working conditions, restrictions on workers’ rights to join trade unions of their choice, discrimination against women, and the use of child labor. Low prices, which result from the intense competition for markets, characterize the industry and translate to poor wages for workers, and increase the survival challenge for small-scale, independent producers.

International Trade in Bananas

Developing countries are the main suppliers of banana exports and developed countries the main markets for imports, accounting for over 80 percent in 2002. There are three main markets for banana exports: Europe, North America, and Asia, in order of importance. The European Union (EU) became the largest market for banana imports in 2004 with the accession of ten new member states, absorbing one-third of the world trade in 2005. Together the EU and the United States accounted for over 60 percent of imports, while Japan and the Russian Federation combined imported roughly 12 percent.

Latin America (Ecuador, Costa Rica, Colombia, and Panama) is the largest exporting region, with Ecuador being the largest exporter in the world, exporting 4,653,900 tonnes in 2005. The Philippines was a distant second, exporting 1,904,700 tonnes, followed by Costa Rica. Latin American producers supply most of the United States and the Russian Federation. Ecuador and the Philippines are the major suppliers of the Japanese market. Latin America supplied 67 percent of the EU market in 2004; African Caribbean Pacific (ACP) countries (Cameroon, Ivory Coast, and several Caribbean countries, including the Windward Islands) supplied 17 percent; and producers within the EU (Martinique and Guadeloupe, Canary Islands, Madeira) supplied 16 percent.

Regimes Governing the Importation of Bananas

A variety of arrangements govern the importation of bananas, ranging from wholly unregulated to highly regulated markets. The U.S. market is the most open, with no tariffs, quotas, or sanitary and phytosanitary (SPS) requirements (to ensure food safety and animal and plant health and product standards). Japan operates a seasonal preferential tariff rate. The European Community (EC), up to January 2006, was the most regulated market for bananas, with a complex system of quotas, tariffs, and licenses designed to provide preferential access to suppliers from the ACP countries.

EC Council regulation 404/93, which brought into being the Common Market Organisation for bananas and unified the EU banana market in 1993, changed significantly after the United States, on behalf of banana companies, and Ecuador, Honduras, Guatemala, and Mexico successfully challenged the legitimacy of some of its provisions under World Trade Organization (WTO) rules. It is now a simple tariff quota system, with a tariff of euro 176 per metric ton, and a duty-free quota of 775,000 tonnes for ACP producers on a first come, first served basis. This represents a significant reduction in the protection ACP countries had enjoyed. Latin American producers, particularly Ecuador, and some ACP producers are the main beneficiaries of this change at the expense of highercost, small farm driven production systems that exist in some Caribbean ACP exporting countries. In the Windward Islands, which has some of the smallest farming systems, production declined by 46 percent between 1994 and 2004, and the industry is not expected to survive further tariff reductions.

Anticipated Changes in the Industry

The international trade in bananas is dynamic, with a steady increase in production but fluctuating prices. The output in the period between 1984 and 2000 saw a dramatic growth in the industry, which resulted in an increase in banana exports of 5.3 percent, more than twice that of the previous twenty-four years. This growth has been attributed to increased areas of production and, to a lesser extent, an increase in yields, rising demand in newly liberalized markets in eastern Europe and China, and increased income in major banana importing countries in the 1990s. Projections to 2010 show the banana trade growing from 12.6 million tonnes in 2004 to 15 million tonnes, although at a slower rate than the previous decade, with Ecuador and the Philippines continuing to lead production.

Increasing Chinese domestic production suggests that China may become an important player in the export trade. The EU is expected to continue the trend of attracting a greater share of imports, especially in light of the reorganization of its market. Developing countries and transition countries, however, are expected to play a larger role as import markets for bananas, with some developing countries becoming major players after 2010. The production of bananas under organic and fair-trade labels is expected to increase. This market remains small, however, with organic bananas accounting for only 1 percent of the trade in 2002 and fair-trade bananas largely confined to the EU market. The evolution of supermarkets as major players in the production process, especially in standard setting, intensifying price competition, and the increasing use of contractual arrangements with suppliers is likely to strengthen, resulting in a further concentration of the trade at all stages: production, supply, and retail.

Environmental and Labor Practices

The extensive use of inputs to enhance quality and to control diseases and pests has contributed to concerns about the industry’s impact on the environment. These surround the monocultural cultivation of the crop, which increasingly is focused on a single variety, the Cavendish, and its implications for biodiversity and vulnerability to disease and adverse weather; the intensity of production and the implications for soil fertility; the heavy usage of agrochemicals, including pesticides, fungicides, and fertilizers, and the dangers they hold for contaminating water supplies and for workers’ health; and the proper disposal of plastic bags and other waste products.

Cultivation of organic and fair-trade bananas has developed in response to these concerns. Both systems are geared at mitigating the negative effects of production on the environment, with fair trade also focused on improving labor conditions, especially low wages, which can potentially increase the sustainability of small scale production. Environmental and food safety concerns have also led to a proliferation of standards to address some of the more egregious aspects of cultivation. The main standard setting institutions are the International Organization for Standardization (ISO 14001), the Food and Agriculture Organization/World Health Organization (FAO/WHO) Codex Alimentaris Commission for organic bananas, and the Fair Trade Labelling Organisation (FLO).

Challenges Facing the Industry

The main challenge facing the industry, to quote the Costa Rican union leader Gilberth Bermudez Umana from a paper delivered at the International Banana Conference II, lies in “achiev[ing] a system of banana production based on social justice and on a development model in harmony with nature” (Umana 2005). Such a system should also result in a more equitable sharing of profits along the banana production and distribution chain in favor of laborers and small-scale producers. The difficulty, however, is that this is to be accomplished in an industry where cheaper fruit is attained at the expense of the living conditions of banana producers and the environment.


  1. Arias, Pedro, Cora Dankers, Pascal Liu, and Paul Pilkauskas. The World Banana Economy 1985–2002. OfPage.
  2. Clegg, Peter. 2002. The Caribbean Banana Trade: From Colonialism to Globalization. Houndsmill, Basingstoke, Hampshire, U.K., and New York: Palgrave Macmillan.
  3. Food and Agriculture Organization. 2006. Banana Market Situation in 2005 and Early 2006. 21en_p.html.
  4. Grossman, Lawrence S. 1998. The Political Ecology of Bananas: Contract Farming, Peasants, and Agrarian Change in the Eastern Caribbean. Chapel Hill: University of North Carolina Press.
  5. Lewis, Patsy. 2000. A Future for Windward Island Bananas? Challenge and Prospect. Journal of Commonwealth and Comparative Politics 38 (2): 51–72.
  6. Roche, Julian. 1998. The International Banana Trade. Abington, Cambridge, U.K.: Woodhead.
  7. Slocum, Karla. 2006. Free Trade and Freedom: Neoliberalism, Place, and Nation in the Caribbean. Ann Arbor: University of Michigan Press.
  8. Striffler, Steve, and Mark Moberg, eds. 2003. Banana Wars: Power, Production, and History in the Americas. Durham, NC: Duke University Press.
  9. Umaña, Gilberth Bermudez. 2005. Foreword from the Secretariat.

See also:

Free research papers are not written to satisfy your specific instructions. You can use our professional writing services to buy a custom research paper on any topic and get your high quality paper at affordable price.


Always on-time


100% Confidentiality
Special offer! Get discount 10% for the first order. Promo code: cd1a428655