THE CHALLENGE OF AGRICULTURAL EXTENSION IN IMPLEMENTING A NEW PRODUCTION AND MARKETING

MODEL FOR BANANA

THE CASE OF FAIRTRADE BANANAIN THE WINDWARD ISLANDS

Malcolm Wallace

Agribusiness Society (ABS), Department of Agricultural Economics and Extension, University of the West Indies

THE CHALLENGE OF AGRICULTURAL THE CHALLENGE OF AGRICULTURAL EXTENSION IN IMPLEMENTING A EXTENSION IN IMPLEMENTING A

NEW PRODUCTION AND MARKETING NEW PRODUCTION AND MARKETING MODEL FOR BANANAMODEL FOR BANANA

The Case of Fairtrade Banana in the The Case of Fairtrade Banana in the Windward Islands Windward Islands

Malcolm Wallace, Govind SeepersadThe Agribusiness Society (ABS) and

The Department of Agricultural Economics and ExtensionThe University of the West Indies, St Augustine, Trinidad and

Tobago

IntroductionIntroduction

Traditionally, Windward Island banana was exported under preferential terms to the European Union (EU), primarily the United Kingdom (UK).

Changes to the EU banana regime; The WTO agreement of 1995 and subsequently the elimination of the EU – ACP preferential marketing arrangement in 1998 resulted in the loss of guaranteed access to the UK market

This triggered a systematic decline in the banana industry and as a consequence;

•Reduced revenues for all stakeholders, •Increased unemployment •Related social problems in all of the Windward Islands.

IntroductionIntroductionThe Fairtrade regime has provided an alternative for banana in the Windward Islands, devoid of preferential market access to the EU.

However, it requires strict adherence to Fairtrade production and marketing principles.

Extension services were challenged to convey this message in a less than desirable environment.Farmers were demoralized Industry in a continuing downward spiral.

Implementation of the Fairtrade protocol

Tested the innovativeness of extension services

Highlighted the challenges experienced from moving farmers to Fairtrade compliance status

IntroductionIntroduction

The General Objective The General Objective To determine whether Fairtrade provides a viable option for banana exports

……in the Windward Islands, more specifically the Commonwealth of Dominica.

SPECIFIC OBJECTIVESSPECIFIC OBJECTIVES1. Determine the general economic impact of

the introduction of the Fairtrade protocol

2. Establish the experiences and challenges of the agricultural extension services and other stakeholders

3. Ascertain extension agents assessment of Fairtrade and their overall impressions of the Fairtrades contribution to the banana industry in the Windward Islands.

METHODOLOGYMETHODOLOGY

A structured questionnaire was used for collection of the primary data from agricultural extension agents and other relevant stakeholders

Archival and internet research for secondary data

OVERVIEW OF THE BANANA INDUSTRY IN THE WINDWARD OVERVIEW OF THE BANANA INDUSTRY IN THE WINDWARD ISLANDSISLANDS

Banana production played a multifunctional role in the Windward

Islands !

Contribution to GDP and Employment

Maintaining sustainable Rural Livelihoods Rural Stability,Vibrant Rural Economies

Preserving the integrity of the natural environment in farming areas

Providing funds for investment within all sectors of the economy

Infrastructure (Roads Bridges Air & Sea ports/Other)Education Health

OVERVIEW OF THE BANANA INDUSTRY IN THE WINDWARD OVERVIEW OF THE BANANA INDUSTRY IN THE WINDWARD ISLANDSISLANDS

Banana production played a multifunctional role in the Windward

Islands !!

Functioned as part of a larger food production system.

Financial support to mixed farming systems (inputs for short term crops, permanent crops and livestock)

Facilitation of expansion in trade

OVERVIEW OF THE BANANA INDUSTRY IN THE WINDWARD OVERVIEW OF THE BANANA INDUSTRY IN THE WINDWARD ISLANDSISLANDS

THE BANANA WAR (Impact of WTO)THE BANANA WAR (Impact of WTO)

1993 2002

Export Volume 238,000 T 99,000 T

Export Value US$147million US$45 million

# of Farmers 24,000 7,000

UK Market share

66% 19%

Profile of Profile of “Windward Island Banana”“Windward Island Banana”

Steep Hillsides Small-Scale Operations

Profile of the CompetitionProfile of the Competition

Latin America “Dollar Latin America “Dollar Bananas”Bananas”

Flat Lands/Large Scale Operations

Large-Scale Irrigation

Profile of “Windward Island Banana”

Manual Harvesting Small-Packing Facilities

Profile of the CompetitionProfile of the Competition

Latin America “Dollar Latin America “Dollar Bananas”Bananas”

Mechanized Harvesting

Large-Scale Packing Facilities

RESULTS OF THE STUDYRESULTS OF THE STUDYConversion of existing traditional production systems into Fairtrade compliant systems

Shipments of Fairtrade banana started in the early 2000’s.

Fairtrade maintained a market for Windward Island’s banana in the UK”.

Export data show that although markets in the UK were maintained, a downward trend in exports continued.

1. General economic impact of the introduction of the Fairtrade protocol on banana exports in the Windward Islands.

The Case of DominicaThe Case of Dominica

In 1992, the banana industry in Dominica accounted for

69% of all exports and employed 60% of agricultural workers.

Between 1992 and 2003, Exports fell from 58,000 to 10,000 T/yrRevenues from US$32 mn to US$5.3 mn.

The Case of DominicaThe Case of DominicaThe number of banana farmers declined from 11,000 in the 1980s to just 700 in 2003 Significant rise in unemployment rates in rural communities.

Some 12,000 people are thought to have emigrated in the 1990s A similar demise was evident in islands of St Lucia, St Vincent and the Grenadines and Grenada.

Banana exports (The Case of Dominica)

 

Trend in Dominica's Banana Exports: Trend in Dominica's Banana Exports: (1990 – (1990 – 2008)2008)

Trend in Dominica's Banana Exports: Trend in Dominica's Banana Exports: (1(1990 – 990 – 1999)1999)

Trend in Dominica Banana Exports: Trend in Dominica Banana Exports: (2000 – (2000 – 2008)2008)

Trend LinesTrend Lines

1990 and 2008 y = -3057.7x + 61577

•1990 and 1999 y = -3712.4x + 65223

•2000 and 2008 y = -2086.2x + 26092

22. The experiences and . The experiences and challenges of the challenges of the agricultural extension agricultural extension services and other services and other stakeholders in stakeholders in implementing the Fairtrade implementing the Fairtrade protocol in the Windward protocol in the Windward Islands.Islands.

General Experience: The new banana regime rendered Windward Island banana uncompetitive against the Latin American banana in the UK market

The research found that the Fairtrade concept was embraced as a possible solution to avert the precipitous decline of the banana industry.

Experiences and Challenges in Implementing the Fairtrade Protocol

Experiences and Challenges in Implementing the Fairtrade Protocol

Fairtrade Compliance

Agricultural Extension Agents focused on the thematic areas of the Generic Fairtrade Standards checklist inclusive of:

i. Organizational requirements for farmer associations,

ii. Social requirements, iii. Occupational health and safety,iv. Environmental Requirementsv. Trader requirements

Extension Agents Evaluation of Thematic Areas

 

General Experience: Formal Farmer Organizations were absent. (Implemented as part of the Fairtrade protocol).  Major Challenges: Establishing farmers groups proved extremely difficult

Traditional culture of independence among farmersConcerns over the democratic process

The formation of groups was accelerated because of price incentives and the fact that Fairtrade was the most plausible option given market conditions.

(i) Organizational Requirements for Farmers Association

(ii) Social Requirements(ii) Social RequirementsGeneral Experience:

No serious cases of discriminatory practices against workers and no use of forced or bonded labour.

Child labour is practiced (children contribute to activities on the farm by fulfilling various tasks).  Major Challenges: Farmers were willing to adhere to all the other requirements under the Social Requirements component, making implementation of these requirements relatively easy.

Extension Agents Evaluation of Thematic Areas

(iii) Occupational Health and Safety(iii) Occupational Health and SafetyGeneral Experience: Global Gap Standards for agricultural production was not completed before implementation of the Fairtrade protocol.

Major Challenges: Moderate levels of difficulty in conveying the appropriate practices required for full compliance to occupational health and safety standards.

Particularly challenging was the mandatory use of protective clothing when handling agrochemicals. Construction of on farm sanitary facilities

Difficulty in breaking traditional habits among farmers and farm workers.

Extension Agents Evaluation of Thematic Areas

(iv) Environmental Requirements(iv) Environmental RequirementsGeneral Experience: Traditional production practices included the use of various agricultural agrochemicals prohibited by FLO.

Farmers relied heavily on the use of agrochemical (fertilizers/pesticides) with little regard for proper storage, usage and environmental impacts.

Major Challenges: Adherence to environmental requirements presented the most difficulty.

Farmers wrestled with the prospects of having to reduce productivity to achieve environmental protection.

Farmers Arable land resources are limited (Average farm size of 2 acres) Agro Chemicals reduced labour cost

Extension Agents Evaluation of Thematic Areas

(v) Trader Requirements(v) Trader RequirementsGeneral Experience: A well established trading system facilitated proper documentation and traceability of bananas traded

Major Challenges: (Farm Level)Record keeping at the farm level (Minimal and in some cases non-existent).

Moderate levels of difficulty with traditional (pen and paper) forms and extreme levels of difficulty in the use of new technologies

In the case of the latter, two reasons were identified:

(i) lack of access to the technology,

(ii) reluctance by farmers to engage in the use of computers.

(Age factor)

Extension Agents Evaluation of Thematic areas

3. The Agricultural Extension agent’s assessment of Fairtrade and their overall impressions of Fairtrades contribution to the banana industry in the Windward Islands.

Overall, most agents highlighted

Fairtrade has allowed the banana industry to survive by providing an alternative market (supports economic analysis above)

However, the industry still experiences:Reductions in productivity, Few new entrants into the industry Limited expansion of existing banana farming enterprises (Except in St Lucia and St Vincent and the Grenadines)

Agricultural Extension Agent’s Assessment

The cost of implementing the Fairtrade protocol is high

Appropriate analysis is required to ascertain whether the premium prices cover all operating cost (Reasonable return on investment or farmers)

Fairtrade has contributed significantly to rural development through the social premium

Farmers should be able to benefit directly from the social premiums received under Fairtrade.  

Agricultural Extension Agent’s Assessment

Discussion and ConclusionDiscussion and ConclusionThe results of this investigation present a few salient points for consideration: Continuing downward trend in the banana industry

Economics of Fairtrade and return on investment for farmers

Sustainability of the Faitrade production and marketing in the Windward Islands

These concerns raise the following These concerns raise the following issues/questionsissues/questions

1. Did the Fairtrade Protocol arrive “a little too late”

2. Has Fairtrade just prolonged the inevitable death of banana industry?

3. Has the demise of the banana industry taken a negative psychological toll on farmers? (Reluctance to continue banana production)

4. Are other factors responsible 1. Cost of inputs, 2. Infrastructure 3. Policy regulations

5. Have farmers diversified away from banana or agriculture because of other emerging opportunities ?

Thank you!