The external costs of banana production: a global study

While it has long been accepted that the commercial production of bananas has negative impacts on the environment and on society, these ‘external costs’ have never been methodically evaluated or captured in prices. Increasingly, however, businesses are being required to internalize such external costs by stakeholders in search of more sustainable and transparent production processes. To help the banana sector make this transition to sustainability, Fairtrade International commissioned True Price and Trucost to prepare a first-ever study on the external social and environmental costs of banana producers in the key origins of Colombia, Dominican Republic, Ecuador and Peru. The study found that the average external costs of banana production are 45 percent lower for Fairtrade producers than for sector average producers, mainly due to considerably lower external social costs for Fairtrade producers as compared to the sector benchmark.