This 2014 study, commissioned by Max Havelaar (Fairtrade) Netherlands, assesses the impact of Fairtrade certification for banana-growing smallholders and hired workers in Colombia specifically on economic, environmental and social developments, organisational management and smallholder position in the banana production chain. The study used structured questionnaires, semi-structured interviews and focus groups sessions with smallholders, hired workers and other stakeholders.
The study finds that “Premium investment has been an essential factor for achieving impact” and that “on average, 35% of the Fairtrade Premium is invested in on-farm productivity and lowering banana production costs; 15% is spent to cover administration costs; 12% is used to pay for Fairtrade-norm maintenance; and 10% is expended for social welfare in the community.”
In terms of standard of living of smallholders’ households, the study results suggest that “Sales of Fairtrade-certified bananas at the minimum price has increased household income and stability; the investment of the Fairtrade Premium in services for smallholders, including loans, has facilitated housing improvement, purchase of household assets, and better access to medicine and education; and part of the Premium is being invested in enhancing on-farm productivity and lowering banana production costs.”
On smallholder cash flow, the report states Fairtrade “has increased incomes and income stability, promoted a savings culture, lowered banana-production costs, and improved access to credit and emergency funds” and smallholders believe that cooperatives support them “with respect to market access, innovation and technology transfer, transparency and justice, on-farm production assets, and various services. They value the fact that cooperatives are now sharing with them the risk and benefits of banana production.”
Looking at the wider area, the report states that “Fairtrade has contributed much to the revitalization of the regional economy in the Magdalena banana zone, through higher incomes, investment of the Fairtrade Premium, and job creation, and by means of the multiplier effect of this incremental income that has stimulated local demand for goods and services.”
To read the original, full report, click below