True cost analysis and market introduction Organic Bananas

The problem: Bananas are the most sold product in European supermarkets. The value chain is completely price-driven and the competition between supermarkets to offer the cheapest banana has a devastating effect on production conditions. Land and water degradation and social abuse are examples of this. Organic and Fairtrade have taken a first step to tackle the social and environmental problems, but producers are still forced to use (cheap) fossil energy and cheap migrant workers (e.g. Haitians on the Dominican Republic) by the low prices that supermarkets offer, even for organic and Fair Trade bananas. To tackle these issues adequately it is necessary to take another step and internalize all social and environmental costs in the price that consumers eventually pay.

Target group: That is why partners in the supply chain of organic bananas from Peru and the Dominican Republic want to establish the true cost for the production of their organic bananas and forward these costs in the value chain. To establish the true price, True Price and Fairmatch Support will support the producers Grupo Banamiel SAS (Dominican Republic) and APPBOSA (Peru) in a CSR risk analysis with regard to poverty and carbon footprint on their production and packing system and develop, and eventually implement (in Project B), remediation measures. For the analysis, the producers will use the True Price assessment tool.

Impact: Through the tool, the producers will know the true cost for their bananas being produced taking the main CSR risks for banana cultivation into account. The project will establish a closed supply chain of producers, exporters, importers and resellers. This closed supply chain will allow the consumers to see and pay the True Price for organic bananas and will allow producers to receive a price that rewards their efforts to produce an environmentally and socially sustainable banana. The project will also create consumer awareness on the costs of remediation of social and environmental risks in the supply chain.