Page 50 - 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
prices that these bananas fetch. In 2006, a survey from the Dominican Republic showed that the retail price of Fairtrade Certification bananas was 12 percent higher than that for conventional bananas. Looking only at the portion of the chain within the producing country (FOB prices), alternative banana chains (organic or fair trade) generate slightly higher values that are secured by exporters and lower shares that are secured by importers, but the value share seized by the retailer does not significantly change for these niche markets compared to that relating to conventional bananas (Roquigny et al., 2008).
A 2007 study on value distribution for the Fairtrade Certification and organic banana chain in the Dominican Republic shows more or less the same results (Roquigny et al. 2008). This is due to the fact that these alternative banana chains involve the same stakeholders and use the same logistics and commercial relations as their conventional counterparts. Thus, alternative banana chains
are not fundamentally different from the conventional chains. Only through more direct relations between producers and consumers can there be a significant shift in the relative value capture towards producers and workers than is currently the case.
4. Analysis of Ecuador’s banana policy
Since the election of the new government in 2008, Ecuador has placed high priority on the Constitution’s Article 344, which states that ”the State shall promote equitable access to factors of production, to prevent the concentration or hoarding of factors or production resources, promote redistribution and delete privileges or inequalities in their access. It must also encourage and assist the development and diffusion of knowledge and technologies aimed at the production processes.”7
The banana industry, which involves close to 10 percent of the total population, is one of the sectors targeted for major reform by the Government of Ecuador. The Government has placed a high priority on reducing income disparities between small-scale producers and large-scale plantation owners, exporters, and national and multinational companies. According to a study by the Central Bank of Ecuador, the banana sector faces a number of challenges, such as global overproduction; dependence on multinational trading companies for export; and lack of proper mechanisms to enforce the Banana Law. A key objective of the reform is to foster a more balanced relationship between the producer and the exporter (the two main stakeholders within
the Ecuadorian banana industry) and between the plantation owner and
the workers/labourers. Moreover, the reformed Banana Law places great emphasis on stabilizing the current use of banana land areas; enhancing productivity for small-scale producers, who suffer from lower average yields; and encouraging those farms, where bananas are unsuitable, to switch to other crops.
Ecuadorian Executive Decree 818: Regulation to Stimulate and Control the Production and
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Commercialization of (Barraganete) Bananas and other musaceas for export.
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