Bananas

Main policy areas

Remarks

Tariff quota administration

• TRQs are applied by some countries. The EC is the most important trade group applying TRQs, discriminating between ACP and other imports;
• Licenses are issued on a historical basis in the EC TRQ regime, with favourable treatment given to multinational companies based on a base period that results in the multinationals having some 80 percent of the licenses to import bananas into the Community,

Tariffs

• In most developed countries, tariffs on bananas are quite low, generally in the range of 0-10 percent. Higher tariffs applied by some developed countries are hold-overs from earlier times when revenue gains were sought or domestic industries were to be protected (e.g. Japanese seasonal tariffs);
• Many developing countries employ an array of tariffs to protect their own banana production;
• Specific tariffs are commonly applied for bananas, creating problems of comparability over time and across countries. Convergence to ad valorem tariffs would improve transparency;
• The greatest point of contention is EC discrimination through preferential access for ACP countries, which themselves are unhappy with the fact that there is discrimination among them due to the allocation of licenses to importers, who earn the economic rents of a restricted regime;
• A commitment by the EC to definitively move to a "tariff only" regime for bananas in 2006 would go a long way to resolving the continued friction in world banana trade.

Domestic support

• EC support to its banana producers is designed to protect the 18 percent of their banana consumption produced within the Community’s overseas territories. EC domestic support has grown almost five fold since 1992 to a point where it exceeds the prices received for fruit by producers; EC production continues to grow due to support, but developing countries have yet to make this a negotiating point;
• Support provided in developing countries is traditionally low, in some measure due to general liberalisation reforms based on IMF structural adjustment packages, financial restraints etc. They are not affected by reduction commitments.

Food security

• Bananas and plantains are the fourth most important food crop; 85 percent of production is consumed domestically in producing countries as food; the problem is inadequate internal distribution, underdeveloped regional trade and inadequate supply due to yield declines for plantains in particular in some countries where plantains/bananas are a staple food.

Environmental measures

• Excessive use of agrochemicals on banana plantations has led to serious environmental damage and health problems in many production areas. As a result, more sustainable modes of production have emerged and are being certified under voluntary programmes run by NGOs (e.g. eco-labelling, fair trade, and organic agriculture).

Food safety

• Traceability programs requested by supermarkets are burdensome for some producers, notably smallholders; GMO traceability may eventually become a problem if and when there is a breakthrough in GM technology in bananas.

Rural development

• Banana exports generate income for smallholders and plantation workers in rural areas of many developing countries; they provide direct and indirect jobs (e.g. packinghouses, input suppliers, transportation) to hundreds of thousands of people.