aqa a level geography banana case study

Jack Williams Geography

Case Study: The Banana Trade

The banana market is dominated by one species of banana, the Cavendish banana. There are other types of bananas that do not fit the specified description of one and so are excluded from trade. (e.g red bananas)

Quick Facts

Facts about bananas

• Staple food (commonly eaten) for over 400 million people
• One of the 5 most eaten fruits worldwide
• 90 calories per 100g
• 2013 16.5 million tons exported. (Latin America and the Caribbean)
• Grown mainly in India, Philippines
• 30kg of active ingredients (pesticides, fungicides, insecticides, herbicides) added per hectare of bananas.
• Mass production in developing countries is bad for the environments
• WTO will support free trade at all cost
• TNCs have a large influence
• Supermarket price wars decide on the price
• Power and control has moved to supermarkets

Negatives of banana farms

• Deforestation to build (greenfield)
• Chemicals added to farms to increase yield can cause eutrophication
• Kill biomass decreasing biodiversity
• Decreased soil fertility due to contaminants

Positives of banana farms

Four main TNCs

TNCs used to own 80% of  the banana trade. This has changed as TNCs have released direct control of farms and as of 2002 TNCs only control 60% of the trade. They are, however, large influences in the labour standards. Recently retailers have been gaining power and due to the large number of up-coming banana companies exporting. This allows for retailers to demand low prices from suppliers as they can threaten to stop imports from that company.

• ACP  – Africa, the Caribbean and Pacific
• ‘ dollar producers’  (so called due to the heavy investment from US TNCs) – Central American Republics, mainly Ecuador. and Colombia.
• EU (4.5 million tonnes)
• USA (4.5 million tonnes)

Banana Trade War

• Lasted 20 years (1992 – 2012)
• Geneva Banana Agreement
• Between US and EU
• EU negotiated trade agreements with 71 African, Caribbean and Pacific former European colonies ( Lomé Convention ) . They were given special and differential treatment (SDT) when supplying to EU to allow them to develop without European aid.
• The deal was extended to include Cameroon, Dominican Republic, Belize, Ivory Coast, Jamaica, Ghana, Suriname and the Windward Isles.
• The idea of the convention was to protect the smaller, family run business to develop as around 75% of crop supplied to the EU were from large mechanised South American TNCs plantations.
• In 1997 the WTO ruled against the EU
• EU proposals did not satisfy TNCs and were put under pressure and so imposed a number of WTO sanctions on various EU products.
• A compromise was reached in 2009 between the EU and 11 Latin American countries. The Geneva Banana Agreement was ratified in 2012

Race to the Bottom

Supermarkets are paying low prices to suppliers and so TNCs are looking for cheaper places to produce bananas. They are settling in West Africa where there is weaker legislation and low labour costs. This has lead to some very bad social impacts, such as the long, hot hours for workers.

Fair trade bananas help smaller-scale producers in the Caribbean. Fair trade gives consumers organic products that are at a slightly higher price and help developing small suppliers.

Further Reading

http://www.fao.org/economic/est/est-commodities/bananas/en/

Summary: Global exports of bananas in 2017 were expected to reach 18.1 million tonnes which is good as in 2015 export fell to 16.7 million.

https://www.express.co.uk/news/world/1003246/Brexit-news-Africa-banana-trade-wiped-out-fear-Latin-America-European-Union-UK

Summary:  UK import 20% of all bananas that are imported to the EU. Brexit threatens food quotas and suppliers that rely on UK imports

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World Trade ( AQA A Level Geography )

Revision note.

Geography Content Creator

Coca-Cola – A Global Product

• Coca-Cola is an American TNC that manufactures, markets and sells soft drinks
• It was established in 1886 in Atlanta where its HQ remains, and now operates in over 200 countries
• Two-thirds of Coca-Cola’s revenue comes from overseas and it owns other brands like Fanta and Sprite
• Coca-Cola has promoted itself through global advertising campaigns and by sponsoring major sporting events
• It is one of the most recognisable global brands and it has many positive and negative impacts on people and environments all over the world

Positive and Negative Impacts of Coca Cola

Worked example

Explain how one transnational corporation (tnc) has contributed to the globalisation of the world's economy.

• Remember, this answer is a point marked with 1 mark for each valid point made with extra marks for developed points (d)
• The command word is ‘ explain’
• The focus of the question is ‘ TNC ’
• You will gain marks for explaining how the chosen TNC has contributed to increased flows of goods, capital, labour and/or technology and ideas
• For full marks, you must make sure that you link to globalisation of the world economy
• Nike has become one of the world's largest suppliers of sports equipment (1) , employing over 44 000 workers in over 50 countries (1d) .
• Manufacturing helps the social and economic development of these countries through the transfer of skills, technology and the rise in wages (1) .
• The company’s headquarters and much research take place in Oregon in the USA (1) but its products are manufactured in poorer countries like Indonesia and Vietnam, where labour costs are cheaper (1d) .
• Components for sports goods are sourced from various different countries around the world (1) , including rubber for its trainers from Malaysia and Indonesia and cotton from Turkey and India (1d) .
• From its global operations, Nike’s annual turnover continues to rise, with profits reaching $14 billion in 2015 (1) .
• The company has increased its global market and reputation by sponsoring and promoting international sports events and sports stars (1) .

Bananas – A Fairtrade Commodity

• Pay a fair and guaranteed price for a product
• Improve working conditions
• Pay a Fairtrade premium, which is reinvested in the community
• Bananas are one of the most produced , traded and consumed fruits in the world
• More than 50 million tonnes are produced each year, and over 20 million tonnes of these are exported
• Bananas are grown mostly in tropical regions with high temperatures and rainfall
• More than 90% of bananas for export originate from Central and South America and the Philippines

Map to show the largest exporters and importers of bananas

Domination by TNCs

• The global banana trade is dominated by just a few TNCs such as Chiquita, Dole and Del Monte
• They often own or control large plantations , allowing them to dictate terms and prices to smaller growers who depend on TNCs for access to the market
• Vertical and horizontal integration enables the TNCs to control the entire supply chain from production to transportation and marketing
• This gives them a significant advantage in terms of economies of scale , allowing them to undercut smaller competitors
• They also have considerable marketing power , influencing customer preferences e.g. the USA banana market is dominated by Chiquita and Dole which together account for around 70% of the market

Positive and Negative Impacts of the Banana Trade

Fairtrade bananas

• Fairtrade aims to empower producers by promoting better trading conditions for farmers who have been disadvantaged by the global trading syste m
• It does this by ensuring that producers receive fair prices for their products, improving working conditions and investing in community projects such as schools and clinics
• The Fairtrade price is typically higher than the market price to cover the costs of sustainable production and fair prices for farmers
• This is partly due to supermarkets such as Sainsbury’s, Waitrose and the Co-operative which only sell Fairtrade bananas
• The Windward Islands have significantly benefitted from Fairtrade with farmers receiving above market value for their crops when before they struggled to make a living  
• In the Windward Islands, Fairtrade farmers have reduced their pesticide use by 50%

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AQA A-Level Geography Global Governance- Banana world trade case study

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Banana wars case study

Banana Wars

Explain why the EU and USA were in a dispute over the trade in bananas

In 1992 the European Union; including created a single market, by acting as one single trading bloc, (an intergovernmental organization in which groups of countries trade together) meaning that all members of the trading bloc must agree on getting the produce from the same producer.

The United Kingdom, who has had strong ties in the Caribbean due to their colonial past mostly bought Bananas from the Caribbean via the Geest company, the producers of Bananas in the Caribbean are just small independent farmers who relied on the UK for a flow of income for them

Whilst the UK had a special relationship with the Caribbean farmers, the EU, the world’s no.1 consumer of bananas, got some of their bananas from Latin American plantations – owned by big MNC’s (Multinational Companies) such as Chiquita and Del Monte. These MNC’s payed workers the bare minimum and made them work long hours. They also use many chemicals and pesticides to keep the Bananas healthy, but at the risk of deformation of the local population, and the destruction of the environment, and wildlife. The companies grow many banana crops and sell them for lots of money and massive profits, whilst leaving the workers poor.

Because of the EU now being a single market, there was a dispute between the EU and UK about not having any special relationships with countries outside of the EU for trade purposes, this meant that the EU would purchase bananas from the cheapest place possible; the MNC’s in Latin America. This deal meant that many of the independent farmers on the Caribbean islands have gone out of business and gone into illegal drug production.

In 1993 the EU and UK came to a solution, they would purchase the cheapest bananas from Latin America, but would also buy bananas from the Caribbean, Pacific islands and Africa as well, although these were to be controlled by quotas .MNC’s such as Chiquita believed that this deal was an unfair trade agreement, as their bananas were the cheapest, but were not being bought in large quantities.

This is a preview of the whole essay

MNC’s began talks with the capitalist U.S government, saying this was a unfair agreement, and because of this less money was coming into the U.S. The U.S government agreed that this was unfair, and fought back by increasing income taxes for products from Europe, such as Scotch whiskey and wine.

As well as taxes being raised, the U.S contacted the WTO, (World Trade Organisation) the organisation in charge of regulating world trade and solving disputes (which is very pro-free trade) was sent in to solve the problem.

The WTO declared that countries should not discriminate between products on grounds of social or environmental conditions of their products, and should only be made solely on economic grounds. The WTO also said that the EU should abandon the policy.

This meant that the EU could only purchase from one source – the American MNC’s in Latin America, whilst the Caribbean have to struggle, until the introduction of Fair-trade.

What have been the economic and social consequences of this dispute on Caribbean Farmers?

Because of the WTO’s decision stating that the EU should only purchase bananas from MNC’s in Latin America, Caribbean farmers have lost massive amounts of money from not selling bananas to the UK because of the special relationship they had.

Before the Banana wars, the Caribbean Windward islands used to export 76,000 tonnes of banana’s a year around the world, it was a major income for the island; but now the EU cannot purchase bananas from the Caribbean, the number of the crop being exported has halved.

Because of the banana industry falling in the Caribbean, many farmers are getting in debt, and losing their land and their businesses, causing mass unemployment on the already incredibly poor islands.

Some of the banana farmers have begun to use a different crop to make money; Marijuana, an illegal substance, which as some sources say, 30% of farmers on the Windward Islands are growing.

This drug is selling for much more than the banana plants would do, but at the massive risk of getting caught and arrested.

Because of the MNC’s huge amount of wealth, the Caribbean farmers can not try to outmatch these companies, because they are all independent farmers, and the MNC plantation owners such as Del Monte have hundreds of workers on the plantations with lots of chemicals to stimulate the growth of the bananas whilst the Caribbean farmers must use nature alone to grow their bananas.

 What are the environmental and social consequences of the activities of MNCs in Central America?

The incredibly wealthy, and often American MNC’s in Central America bring hundreds of jobs into countries but at some very large consequences, for example many hundreds of acres of trees are deforested and in their place bananas are grown, these woodlands may be places of cultural importance to some people, but are now gone.

The Chemicals used in the plantations are probably the most important consequence of MNC’s being in Central America, these chemicals, such as DBCP ( dibromochloropropane) cause major problems for the workers, and their families of the banana plantations; those in contact with this chemical can carry deformations into the family, children are commonly born with abnormally large heads or missing limbs; it has also been known to be so toxic it can kill people in contact with it.

The clothes for protection used by the workers, distributed by the MNC’s are very poor, mostly gloves and facemasks, this means that chemicals such as DBCP can easily get in contact with the workers skin and cause an array of problems.

These chemicals can also contaminate local water sources, the irrigation used in the banana plantations usually flow right into the local river, also the main source of water for the communities of Latin America; this creates huge issues for the ecosystem and biodiversity of the area, affecting every animal in the food chain, from fish, and eventually to man.

Because of the deforestation to make way for banana plants, there is an increased amount of erosion on the soil; the rain will wash away the soil with ease.

Explain the difference between free trade and fair trade.

There are two types of trade, Fair trade and Free trade, Free trade is a type of trade which does not involve governmental interference, most of the worlds trade is free trade, The WTO is very pro-free trade as it does not create as much disputes as other trade agreements do, which involve governments. In free trade many consumer states use the countries who produce products cheaply rather than the ones who are more expensive (such as Latin America plantations and the Caribbean farmers).

Fair trade is a trade movement which aims to help producers in developing countries, promoting sustainability; we pay more for fair trade products, but the producers receive much more than they would in free trade.

Document Details

• Word Count 1168
• Level AS and A Level
• Subject Geography

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Bananas case study

• Case studies
• Created by: steloah1
• Created on: 28-05-22 16:33
• b-a-n-a-n-a-s
• Vulnerable to price fluctuations and money generated does not reach the producers
• land cleared for production which impacts soil fertility and biodiversity
• increases the risk of disease and pest outbreaks - lack of other plant and animal species that limit the spread of disease
• Agrochemicals are considered hazardous by the WHO - pollutes water and contaminates soil
• Supermarkets earn 40% of price paid by consumers and 4-9% is earned by producers
• Del Monte, Chiquita and Dole dominate  80% of the banana trade
• Lasted fro 20 years from 1990 to the 2009 Geneva Banana Agreement
• provide special differential treatment with tarriff-free import quotas to supply EU markets
• Example of protectionism
• 2009 Geneva convention between the Eu and 11 Latin America  countries
• Former EU colonies still unable to compete - only the Dominican republic, Belize and the Winward Isles are competing
• attempts to undercut the competition's prices by sacrificing quality standards or worker safety  or fair labor costs.
• 4th most important food in LICs and staple food for 400 million people
• 21 million tonnes were exported in 2019
• Largest importers are the EU, USA, China, Japan and Russia
• Equador is the largest trader

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