The Fairtrade Foundation is calling on the government to intervene in a banana price war in supermarkets that is putting pressure on suppliers and, it claims, could lead to shortages.

The foundation, which aims to protect farmers in developing countries, says the price of bananas in UK supermarkets has nearly halved in the past 10 years to just 11p, while farmers at the same time have seen costs double.

The fall in the price of bananas, 5bn of which are eaten the UK every year, comes despite a rise in the price of other staple foods such as bread, eggs, milk and sugar, of 79% an average.

The policy director at the Fairtrade Foundation, Barbara Crowther, said: "If prices don't deliver long-term sustainability in the industry, that's not just bad for producers, it's bad for consumers because we could see much higher prices or shortages in the long term."

The foundation's chief executive, Michael Gidney, compared the price of a banana that has been shipped in from the Caribbean or Central America to the 20p paid for an apple grown in Britain.

He said: "If prices go up for farmers and down at the consumption end it's pretty obvious there's a squeeze. Our research is showing that squeeze is disabling farmers, making it impossible to build up resilient businesses and to trade out of poverty."

Gidney said some supermarkets may also be losing "hundreds of thousands of pounds per week" by selling bananas at a loss and called on the government to investigate what he called a "dysfunctional market", which was not good for farmers, retailers or consumers in the long term.

But the British Retail Consortium denied that farmers were being squeezed.

"The fact that supermarkets are choosing to sell bananas at below margin cost has no relationship to what they are paying producers. Producers are getting a good price and customers are getting a good price as well. Supermarkets sell such an enormous range of products that they can choose to sell particular products at a loss."

In a letter to the business secretary, Vince Cable, Gidney called for the new competition watchdog, the Competition and Markets Authority, to launch an inquiry into the retail price of bananas.

Gidney said shoppers could help support farmers by switching to Fairtrade but the price of bananas was now so out of kilter with the cost of production the industry needed real "structural change".

However, Cable's Department for Business Innovation and Skills suggested the government had little appetite for an intervention. "It is not our policy to get involved in price-setting. The price that people pay at the checkout is down to the supermarkets."

In the dairy market, prices for milk have improved after high-profile action by farmers and concern from shoppers forced individual supermarkets to agree deals with their suppliers to pay at least the cost of production. Gidney said banana farmers had suffered because they were less able to publicise their plight from far overseas.

Farmers within the fair trade system are protected, to some extent, because they are guaranteed a minimum price as well as a premium that goes towards community projects.

However, only a third of bananas sold in the UK come under the fair trade system so that even those farmers that supply via Fairtrade usually sell some crop in the open market. Sainsbury's, the Co-op and Waitrose all sell only Fairtrade bananas.

Independent research carried out by the Ethical Consumer Research Association ranked discounter Aldi as the least fair in the way it bought bananas based on social, economic, environmental and transparency criteria that included the amount of Fairtrade bananas sold. The Co-op came out as the fairest retailer followed by Sainsbury's, Waitrose and Marks & Spencer. Aldi was closely followed at the bottom Lidl and Morrisons. Tesco and Asda were in the middle of the pack.

Aldi said: "We are disappointed with the findings of the report. Our supplier base is similar to all retailers and we work closely with all of our suppliers to ensure that everyone in our supply chain is treated fairly and is guaranteed their human rights."

Tesco said it was committed to pay at or above the Fairtrade minimum price while Waitrose added: "Bananas are competitively priced across supermarkets, and if other shops cut the price of bananas, we make sure our customers don't lose out. But crucially we absorb this cost so none of the retail price decrease is passed on to our growers, who consistently receive the Fairtrade price to support their long term sustainable development."