International Business & Economy Banana Business- Rising Prices in Singapore, Farmers Still Losing

Banana Business- Rising Prices in Singapore, Farmers Still Losing

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The series For Food’s Sake! Visits the Philippines to investigate the banana business. It has come to their attention that the cost of bananas in Singapore has been increasing but farmers are still struggling, leading to the question of whose pockets is the money going into.

Davao, Philippines: The Philippine Cavendish is a highly popular banana being sold in Singapore mainly because of their appearance. Retailer Ben Phua said, “They look almost perfect. There are fewer blemishes and fewer scratches, compared to the Malaysian ones. Malaysian bananas have black spots.” What consumers may or may not know is that the black spots indicate a sweeter banana but regardless of this fact, the perfect-looking ones are still more well-liked.

Photo: YouTube screengrab – Cavendish bananas

The Panama Disease

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It all started with a fungal infection called the “Panama Disease” that hit the Philippines in 2015. A disease that blocks a banana tree’s water system causing the stem to rot and the leaves to die. After 3 years, the disease has already destroyed 15,000 hectares of bananas in the region.

It was only in 2014 that the Philippines was the world’s second-largest banana exporter, coming in second to Ecuador. After 2 years, the country dropped to sixth place because of the disease that struck the plantations. To make matters more devastating, there is no cure to reverse the effect of the disease. Once an area has been infected, decades may pass but the land will still not be able to yield a harvest and the fungus will always resurface.

The country used to supply 49.5% of Singapore’s banana market in 2015 which dropped to 37% in 2017. As for the costs, the price of Cavendish bananas has gone up by 25% in the past three years. This would mean an additional 50 cents per kilogramme which consumers have to pay. Ironically, not a single cent of this increase reaches the farmers. They are only left with the tedious and complex process of banana farming, diminishing harvests, tight contracts and a continuing epidemic.

 

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Photo: YouTube screengrab – Banana farmer carefully harvesting his crop

The Wholesalers and the Importers

In the 1990s there was a land distribution programme in the Philippines that allowed small-scale farmers to start owning lands resulting to them owning almost half of the country’s banana farms today. The problem lies in the lack of capital to produce bananas for export. This is where multinational companies enter the picture.

In order to finance operations, the farmers enter into contracts with big companies who will help with their needed supplies such as pesticides and fertilisers. But there is a catch. The farmers can only sell their bananas exclusively to the company at a fixed price, regardless of the actual yield.

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When asked for an explanation on the current situation, the wholesalers will put the blame to the importers and say that they too are tied down in contracts with the importers from different countries. When the For Food’s Sake! Team went to the importers, they returned the fault to the wholesalers. Meanwhile, none of the two parties are willing to show any concrete numbers and reports to justify the situation. This leaves the farmers’ situation at a standstill from any progress.

Until Fairtrade bananas become an option in Singapore, there is not much that can be done to help the Filipino farmers. Fairtrade guarantees the farmers a minimum price per box of bananas which could, if done transparently by the intermediaries, give struggling farmers a chance to earn double the current amount.Follow us on Social Media

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