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7 Oct 2024
Fairtrade’s Living Wage Differential and Fairtrade Banana Bonus are the ripe choice
© Dina Ramos
By Silvia Campos, Senior Advisor, Bananas, Fairtrade International
Fairtrade has developed a practical and credible solution towards improving the livelihoods of banana workers. Thanks to our robust pricing methodology, the experience of the Fairtrade Premium Committees, and the verification services offered by FLOCERT we are able to support our suppliers on the journey towards living wages.
The Fairtrade Living Wage solution includes price calculation, payment, distribution, reporting, and third-party verification. It is made up of four core elements, and they include the Fairtrade Minimum Price (FMP), additional cash payments from the Fairtrade Premium, the Living Wage Reference Price (LWRP), and the Fairtrade Living Wage Differential (FLWD), an additional voluntary payment a commercial partner may pay per box of bananas sold that is distributed to workers by the Premium Committee called the Fairtrade Banana Bonus.
Today, Fairtrade is calling on all of its commercial partners to pay the Fairtrade Living Wage Differential so that workers can receive the Fairtrade Banana Bonus.
The Fairtrade Living Wage Differential is a voluntary payment that commercial partners can make to temporarily close the living wage gap in their supply chains. Fairtrade has been a pioneer in working with the Anker Research Institute and in the founding of the Global Living Wage Coalition to have a recognised methodology for calculating living wages in the banana industry.
The Fairtrade Living Wage Differential, paid on top of the price and the Fairtrade Premium, will be distributed by Fairtrade Premium Committees to workers as a Fairtrade Banana Bonus. This extra income will translate into better access to basic needs, such as food, housing, healthcare, education, transportation, and clothing.
If our partners pay the Fairtrade Living Wage Differential, they will not only support their suppliers and workers in the journey towards living wages, but also demonstrate their efforts towards responsible banana trade.
Bananas are the most produced, traded, and consumed fruits globally, and because of their significant export value, they form the cornerstone of many countries' economies. However, this competitive market creates price pressure on bananas, which ultimately puts the squeeze on banana farmers and their workers.
And that’s where Fairtrade comes in with its sustainable banana offer that supports workers incomes and businesses committed towards living wages. To achieving decent wages, an open dialogue leading to collective bargaining and/or national regulations that require payment of living wages, are key. To support those decent wages, producers need fair prices, such as the Living Wage Reference Price, to cover the costs of paying living wages.
The companies who work with Fairtrade can contribute to achieving decent wages by maintaining and growing their sourcing commitments to progressively aim to make decent livelihoods the norm. For the more than 35,700 workers employed by 265 Fairtrade banana plantations, the Fairtrade Banana Bonus could make a significant difference.
Fairtrade presented its sustainable banana offer at Fruit Attraction 2024 in Madrid, the meeting point for fruit and vegetable professionals from all over the world.