Power, rights, and inclusive markets: Public policies that support small-scale agriculture

(by Marieke Poissonnier and Hielke Van Doorslaer, Oxfam)

Agriculture is back on the agenda for both governments and donors. A new era of high and volatile food prices, a growing and more affluent global population, and climate change have refocused minds on the need to invest in agriculture. As a consequence agricultural foreign direct investment (FDI) in developing countries rose from $600m annually in the 1990s to $3bn in 2005–07. Unfortunately, most of the investments are often biased towards large-scale agricultural projects. However, good policy can drive more and better investment to small-scale producers.

Oxfam's message to policymakers is simple: government has a central role if agricultural investment is to combat poverty and hunger. Policy makers, in governments and donor agencies around the world, must embrace their role in shaping agricultural markets and investments. The following principles should guide them:

1. Stand by your small-scale producers

There are 500 million small-scale farms across the world supporting two billion people. And 80 per cent of hungry people live in rural areas, mostly working as small-scale food producers. As a result, growth in this sector has twice the effect on the poorest people as other sectors.

If policies are to reach the poorest people, they must be targeted at supporting small-scale producers and creating non-farm jobs. Women small producers require particular investments and support to overcome entrenched exclusion and discrimination.

2. Put power at the heart of your policies

People are poor because they lack power, both in markets and in politics. Small-scale producers are vulnerable to market abuses such as cartels and monopolies, and too often are dominated by larger market players who capture the profits, whilst transferring the risks downwards.

Policy makers should both protect small-scale producers from market abuses (e.g. by using competition laws) and support mechanisms that give them power in markets (such as producer organisations) and politics (such as platforms for producers to engage in policy decisions).

3. Protect basic rights

Left unprotected by governments, communities and small-scale producers can find themselves robbed of their basic rights. Land grabs, abuses of workers, stolen water: these can all happen where government is missing. States have a duty to protect human rights and to regulate the private sector. Policy-makers should strengthen labour laws and introduce protections - such as a requirement for free, prior and informed consent - and transparent contracts in land deals.

4. Make markets inclusive

Small-scale producers, and their communities, can use markets to lift themselves out of poverty. For this to happen, markets must allow small-scale producers to participate and thrive.

Often, it requires support from government to help traditional markets evolve, e.g. through regularised grades and standards to raise quality, protection from cheap imports and facilitating investment in market infrastructure, such as urban wholesale markets.

Or it can require governments to shape formal markets so they give access to small-scale producers, by training small-scale producers to meet sustainability or safety standards.

There is no silver bullet in tackling poverty and hunger but we know that supporting small-scale agriculture and creating decent rural jobs is a big piece of the puzzle. We hope to see policy makers embrace this and shape markets and investments so they deliver a fairer and more inclusive food system.

Read more here

Appeal filed over business lobbies' privileged access in EU-India free trade talks

(by Pia Eberhardt, Corporate Europe Observatory)

On 10 July, lobby watchdog Corporate Europe Observatory appealed a ruling from the EU’s General Court over information related to the EU-India free trade talks, which the European Commission shared with corporate lobby groups but later withheld from the public.

In a ruling delivered in June 2013, the court in Luxembourg had concluded that the Commission did not violate EU transparency rules when it refused to fully release allegedly sensitive documents related to the EU-India trade deal. All of the documents – meeting reports, emails and a letter – had been sent to business groups like the European employers’ federation BusinessEurope, one of the most powerful corporate lobby groups in Brussels. While they received full versions of the documents, the Commission only released censored versions to Corporate Europe Observatory, arguing that full disclosure would undermine the EU’s international relations.

Why are corporate lobby groups allowed access to information that the general public are denied? How can documents that the Commission has already shared with the business community at large suddenly become confidential and a threat to the EU’s international relations when a public interest group asks for their disclosure? This is the core question raised by the lawsuit.

The appeal comes as the EU and India are reportedly trying to ink their proposed trade agreement before elections in both regions in 2014. Trade unions, farmers, patients' organisations and other public interest groups have repeatedly sounded the alarm at the potentially devastating impacts of the deal, particularly on access to medicines and the livelihoods of Indian farmers and street traders.

While the negotiations between the two largest self-proclaimed democracies in the world have been kept out of the public arena, big business interests have been involved right from the start, as a 2010 report by Corporate Europe Observatory and India FDI Watch showed.

But the implications of the lawsuit go far beyond the EU-India trade agreement. The real issue at stake is whether the European Commission can continue negotiating backroom trade deals, together with, and for, a tiny elite of corporate lobby groups. At a time when more and more people fear that trade agreements threaten their basic rights to safe food, affordable medicines, a healthy environment and decent work, we cannot sit by and fail to challenge a ruling that risks legitimising the privileged access that the Commission grants big business over its policies. Corporate Europe Observatory is challenging this complicity, trying to redress the balance in favour of transparency and a trade policy in the interest of the many rather than the few.

4. In bed with business - Court ruling

Corporate Europe Observatory has also launched a donation call to cover the legal costs of the appeal.

Uniting World Mayors for Fair Trade

During the 2013 Rio Global Fair Trade Week the Mayor of Rio de Janeiro (Brazil) joined his fellow office holders from Seoul (South Korea), Poznan (Poland) and Oxford (United Kingdom) and other world cities in supporting the “Fair Trade Beyond 2015” Declaration. This declaration calls on world leaders to support Fair Trade in the post-2015 global sustainable development framework that will replace the Millennium Development Goals. Preliminary results were handed over to the Brazilian government.

The “Fair Trade Beyond 2015” campaign - which kicked-off at the 6th International Fair Trade Towns Conference on 10 November 2012, with the signature of the “Fair Trade Beyond 2015” Declaration by the Mayor of the host city, Poznan - has found support of numerous fellow local authorities’ leaders around the globe. From Malmö (Sweden) in the North via New Koforidua (Ghana) to Rosario (Argentina) in the South, from Milan (Italy) in the West via Cologne (Germany) to Kumamoto (Japan) in the East and from many more cities in between, local leaders are speaking out for the need to reform trade rules and practices in order to overcome inequalities and to empower small producers and marginalised workers. By signing the “Fair Trade Beyond 2015” Declaration, the Mayors of towns around the world are jointly calling for a new global framework that aims to create a just, equitable and sustainable world and to support Fair Trade as a best-practice partnership for development between governments, local authorities, businesses and citizens. Support by locally elected leaders reinforces even further the recent resolution by the Inter-Parliamentary Union, an International Organisation of Parliaments who asked governments to continue to promote and support Fair Trade and to include it “as an integral component of the Sustainable Development Goals (SDGs), which will be part of the post-2015 development agenda”.

During the week (26 to 31 May 2013) when Rio de Janeiro held the title “Global Fair Trade Capital”, Mayor Eduardo Paes re-confirmed the sustainability credentials of his city, host of the Earth Summit in 1992 and of the recent follow-up “Rio+20” United Nations Conference on Sustainable Development in 2012. At the official ceremony to launch the 12th Biennial Conference of the World Fair Trade Organization (WFTO), the signatures of the supporting Mayors were handed over to the Brazilian government Minister of Labour and Employment, Manoel Dias.

In a video address, Filip Kaczmarek - lead Member of the European Parliament, responsible for the Parliament’s input into the “Beyond 2015” discussions - congratulated the Fair Trade movement on what he regards as a campaign ”of vital importance” to ensure that “Fair Trade is core to the new agenda”. Fair Trade is to him a “key tool for sustainable development”.

In the run-up to the United Nations High-Level meeting on the global sustainable development framework that will replace the Millennium Development Goals, scheduled for 25 September 2013, the signatures of the supporting Mayors will be presented to the participating government leaders, the European Union and the United Nations. “We call on world Mayors to join their fellow colleagues in thinking globally and acting locally” stated, Sergi Corbalán, Executive Director of the Fair Trade Advocacy Office.

The list of signatories and further information can be found here.

Fair Trade as “source of hope” for securing human rights in agriculture

On the occasion of World Fair Trade Day 2013 the United Nations Special Rapporteur on the Right to Food, Olivier De Schutter, released a Question & Answer (Q & A) paper titled “The contribution of Fair Trade to securing human rights in agriculture”, in which he praises the Fair Trade model as a “source of hope” for small-scale famers and states that this trading partnership “should become the norm rather than the exception, and it should be better supported by fiscal incentives and in public purchasing policies”.

Olivier De Schutter recalls that in the agricultural sector fundamental rights at work are frequently violated. It is estimated that less than 20 per cent of the 450 million people who work, often on a seasonal basis, as farmworkers have access to basic social protection. Although the International conventions have been widely ratified, collective bargaining and social dialogue are often entirely absent: farmworkers face considerable difficulties in organizing themselves, and in addition, subcontracting and outsourcing practices are widespread. In recent years, the multiple forms of discrimination women face as farmworkers, e.g. in laws and practices regarding inheritance of land, in the mode of calculation of wages generally or in access to financial services, have become a particular concern. Practices that encourage workers, especially women, to have their children work with them, contributed to the approximately 132 million girls and boys aged 5 14 that work in agriculture, representing 70 per cent of all child labour. 

To alleviate this situation the Special Rapporteur refers his interim-report, “The right to food”, which was presented to the United Nations General Assembly in October 2011. In which the lessons that Fair Trade could deliver to contract farming schemes in general are highlighted, with a view to making global supply chains more equitable for small-scale producers. Based on a range of studies and consultations, the report identified seven principles that echo the concerns of Fair Trade schemes, and should become the norm in global supply chains:

  • For all concerned parties the arrangement must be viable from an economic point of view
  • Small-scale farmer should contribute to the wording of contract provisions
  • Contracts should be put in woman’s name if the woman is e.g. the main person working
  • Pricing mechanism should be clear and transparent
  • Quality standards must be clear and specific
  • Promotion of agroecological forms of production
  • The contracts should identify ways of resolving disputes

Finally Special Rapporteur De Schutter calls on both retailers and Governments to do more to promote Fair Trade. Governments especially should dispel the confusion among consumers surrounding the various certification schemes by information campaigns which highlight the respective merits of the different schemes, also ensuring that the definition of Fair Trade as laid down in the Charter of Fair Trade Principles is not watered down. 

Reining in the Retailers

(by Elizabeth Baines and Fiona Gooch, Traidcraft)

1. Reining in the Retailers by Simon Rawles

Consumer confidence in European retailers has taken a battering in the last few months. First the horsemeat scandal sent shockwaves throughout the continent as consumers realised they had little idea what was really going into their supermarket-bought burgers. Shortly after, the Bangladesh garment factory collapse exposed the potentially deadly consequences of corners being cut to keep costs down in the competition for high street customers.

Despite public assurances by some of the dominant European retailers that they want to improve their purchasing practices and working conditions in their supply-chains, precious little has really changed.

The food sector is a key example. Groceries markets throughout Europe are typically dominated by three to five large retailers: in the UK, four supermarkets alone (ASDA, Tesco, Morrison’s and Sainsbury’s) control over three quarters of the groceries market. This gives supermarkets enormous power over people around the world who supply and grow the food that ends up on our supermarket shelves. Suppliers wanting to access the lucrative European market have little option but to agree to whatever terms are dictated by supermarkets and compete to keep costs low – which can mean corners are cut, with sometimes tragic consequences.

Traidcraft’s research into the cashew nut supply chain shows the unacceptable impact of this price squeeze on the people producing our food.

A big price for a small nut

Cashews are a luxury treat that we enjoy in a number of ways: by themselves as a healthy snack or in products such as cakes, cereals, ready-made meals and even ice-cream. Cashews are also big business: but in the pursuit of profit it’s often the people further down the supply-chain that bear the true cost of getting this product to our supermarket shelves, working for low pay in terrible conditions brought about by the way our retailers buy.

India is one of the biggest players in the global cashew trade and processes more of these nuts than any other country. Over a quarter of the cashew nuts processed in India are sold into Europe. But only a fraction of the returns make it back to the farmers who grow the nuts and the factory workers who process and prepare them for sale.

From each bag of cashews that sells for £2.50 in a UK supermarket, less than 1p is paid to the worker in the factory. In stark contrast, the supermarket captures a whopping 41.5% of the final price. Low wages are forcing cashew factory workers into poverty, but they are reluctant to complain about pay levels for fear of losing their jobs. One worker told us that ‘if we ask […] then they say the factory will close’.

In addition to unacceptably low pay, cashew factory conditions often show little regard for the health and safety of the workers. The process of removing the outer shell from the cashew nut kernel is mainly carried out by women, who often spend all day crouched on small wooden stalls, hitting the nut with a wooden baton to break it open. The oil from the shells is acidic, and in many cases workers are not provided with gloves or other protection for their hands, resulting in blistering to the skin. The dust created as the nuts are broken open causes infections and can damage workers’ eyesight, while the roasting process releases an acrid smoke which causes nausea and headaches.

A local community worker explained how the women’s working conditions lead to health problems ranging from aching limbs, backache and diabetes to urinary tract infections: ‘urinary infections are there, skin diseases, and some of the ladies [...] get infections in personal parts’. In some cases, these infections even lead to fertility problems.  

Squeezing suppliers

The price pressure placed by supermarkets on cashew factories is huge, with European buyers demanding the lowest prices for the highest quality nuts; as one Indian supplier told us, ‘selling to supermarkets is never easy’. European importers that supply supermarkets, such as Intersnack, are regarded as ‘aggressive buyers’.

This sentiment is backed up by plenty of evidence that proves supermarkets consistently exploit their massive buyer power. For example in the UK years of enquiries by the Competition Commission found that supermarkets were passing ‘excessive risks and unexpected costs’ onto suppliers despite the existence of a voluntary code to prevent such practices. Examples included supermarkets making changes to orders at the last minute and refusing to pay the full amount (already agreed) to suppliers.

Fairer food chains: tacking on the EU

In the UK Traidcraft campaigners and others have successfully lobbied for a watchdog that can hold supermarkets to account by using strong powers, such as the ability to fine supermarkets that break the rules. This success, and the establishment of other regulatory bodies such as in Hungary, sets an important precedent: but given that every global supermarket, bar one, has its headquarters in Europe, the time has come for credible EU regulation of our retailers.

Earlier this year the European Commission launched a consultation on how to tackle unfair trading practices in food and non-food supply-chains. Traidcraft, alongside partners throughout Europe, is using this opportunity to call for strong regulation of retailers with credible enforcement body. This regulator must be both Europe-wide and, if it is to be effective in tackling supermarket buyer power, have the ability to impart meaningful sanctions, including the power to fine retailers, when abuses occur. It’s time to move beyond voluntary codes supermarkets have been shown to ignore.

Without meaningful legislation we will continue to hear stories of mistreatment and exploitation from the people working in their supply-chains, at home and overseas.  The time has come to rein in the retailers.

Join us in our campaign for fairer food chains. Visit www.traidcraft.co.uk/campaign to find out more.

Read the background to the European Commission’s consultation on tackling unfair trading practices: http://europa.eu/rapid/press-release_MEMO-13-47_en.htm

 

 

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      The first EU Cities for Fair and Ethical Trade Award is officially launched!

       

      08 December 2017 (Brussels)Yesterday, the European Commission officially launched the first EU Cities for Fair and Ethical Trade Award. The Fair Trade movement warmly encourage local authorities to give the necessary visibility to their key contributors to make trade Fair by joining the competition.

      The long-awaited EU Cities for Fair and Ethical Trade Award has been officially launched yesterday. This was a commitment that the Commission took in October 2014, when the current EU Trade strategy was launched.

      The purpose of the award is to:

      • Recognize and celebrate cities’ achievements and positive impact in the areas of social, economic and environmental sustainability in international trade. 
      • Emphasize Fair and ethical trade schemes, as well as other non-governmental sustainability schemes, which may bring more sustainable opportunities to small producers in third countries and thus support sustainable and inclusive development.

      The call for applications is now open and EU local authorities can apply until April 2018. The winner is expected to be announced in Brussels in June 2018.

      “The launch of this award has been strongly requested by the Fair Trade movement and the more than 2000 Fair Trade Towns. Therefore, we welcome this initiative which gives the necessary visibility to the contribution of local authorities in promoting sustainable consumption and production models.”

      Sergi Corbalán, FTAO Executive Director

      The Fair Trade movement looks forward to supporting the European Commission and the International Trade Centre, appointed to set-up the award, to make this initiative a real success! The Fair Trade movement will mobilise its network to ensure a high participation of EU local authorities in the award. It will also seize the opportunity to raise awareness on the role of local policy makers in promoting sustainable development through trade.

      You can learn more about the award and how to apply here

      You can read FTAO’s toolkit on localising the SDGs through Fair Trade here

      A pdf version of this press release can be found here.

       ENDS

      The Fair Trade Advocacy Office (FTAO) speaks out for Fair Trade and Trade Justice with the aim to improve the livelihoods of marginalised producers and workers in the South. The FTAO is a joint initiative of Fairtrade International, the World Fair Trade Organization-Global and the World Fair Trade Organization-Europe.

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      Peter Möhringer | moehringer@fairtrade-advocacy.org | Tel: +32 (0)2 54 31 92 3

      Fair Trade Advocacy Office

      Village Partenaire - bureau 1 | 15 rue Fernand Bernierstraat | 1060 Brussels – Belgium

      www.fairtrade-advocacy.org

       

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