Page 32 - Ecuador's Banana Sector under Climate Change

ecuador’s banana sector under climate change: an economic and biophysical assessment to promote a sustainable and climate-compatible strategy
1. Introduction
Bananas are among the world’s leading four crops including wheat, rice and maize. They are usually grown in developing countries within humid tropical zones and are exported to industrial markets, as well as to emerging economies for
the rising middle class. As a highly traded commodity, the banana is an integral part of the global value chain. The modern banana production systems used in most countries with tropical climates, however, have resulted in a significant cost not only to the environment due to the prolonged use of pesticides, but also to social inequality that is linked to labour practices and to the disparate distribution of the value added. Today’s banana value chain has been characterized as an environmental and social drawback, despite its economic efficiency.
The environmental and social issue, however, is not new. The debate on
the negative externalities of bananas has been ongoing since the 1990s, when retailers took over the multinational companies to become the market leaders. Retailers, close to the sensitivities and the demands of the consumer, responded to the heated complaints by environmental groups and nongovernmental organizations (NGO) relating to the negative environmental and social impacts
of banana production systems. They devised voluntary standards, norms, protocols and certification schemes as a means for self-regulation in order
to allay consumer concerns. These schemes, however, have been limited in
their transitional efforts to curb the impacts and create a more sustainable and equitable system. Moreover, the issue of sustainability has become a more pressing concern due to the rising challenge of climate change and the urgency to address its already manifest effects.
An integrated approach to address the complex issues of climate change
in this context is required - one that can coherently integrate the economic, environmental and social dimensions. To begin, an in-depth economic analysis of the banana value chain is required to establish the principal implications to environmental and social sustainability. The economic analysis should include market, institutional and policy characteristics. In order to provide more concrete recommendations, an analysis of governance structures along the value chain should also be undertaken.
This review examines the economics of banana value chains and the implications of sustainability in the case of Ecuador. It is a part of a larger study relating to the sustainability of Ecuador’s banana production in terms of climate change. The larger project, undertaken by FAO on behalf of the Government of Ecuador, was initiated to support the capacity of the Government of Ecuador to mainstream climate adaptation within its agricultural policies and strategies.
Ecuador is one of the leading banana producing and exporting countries. The banana is significantly important to Ecuador’s economy, and represents 22 percent of total world exports, 27 percent of total agricultural exports and 8 percent of the value of all exports (including oil). The banana sector employs a large proportion of Ecuador’s workforce and over a tenth of its population
is economically tied to the production of bananas and its affiliated businesses (PRO ECUADOR, 2013).
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