EU Import duties on Kenyan flowers threaten future of Fairtrade producers
Fairtrade urgently calls for the EU and Kenyan government to find a solution which guarantees continued duty-free access for Kenyan cut flower imports, to protect the livelihoods of thousands of Kenyan flower workers and their families, before 1 October deadline.
“On behalf of all workers from Fairtrade certified flower farms in Kenya, we are deeply sad following recent news that from 1st October 2014 import duty exemption for Kenyan cut flower destined for EU market will be expiring. As fundamental stakeholders in the industry, we anticipate that when the new trade conditions become operationalized the market price of the produce will significantly rise. Consequently, the competitive demand for the Kenyan flowers will drastically drop favoring other sector players who will continue enjoying preferential trade terms and access. Therefore the sustainability of the business and livelihood of many workers, their siblings and members of the various communities deriving their dependency from this sector will be drawn into jeopardy.
“Surprisingly, the main social-economic gains so far achieved ranging from improved health care, education and enhanced standards of living among workers and the community attributed to Fairtrade business will begin to disintegrate. We feel so sad watching helplessly as the scenario push us to unemployment status and hopelessness
“As we look forward for the fruitful and meaningful EPA negotiations, it is our humble submission that the Kenyan flowers sector is permitted to continue enjoying its previous import duty exemption status beyond 1st October 2014. We guarantee EU member states that as workers we will continue supporting the industry sustainably and it is our sincere prayer that our plight is keenly reviewed taking cognizant of the negative impacts that will arise with the changes.”
– Grace Cherotich Mwangi, Fairtrade Africa Workers Representative
A new duty on cut flowers could have a devastating impact on Kenya's flower industry, including 32 Fairtrade certified flower farms that together employ 32,000 workers.
At present, there is no duty on cut flowers exported from Kenya to Europe, but from 1 October a duty ranging from 5% - 8.5% is set to be introduced.
The tariff is being imposed because, despite long-running negotiations on an Economic Partnership Agreement (EPA) since 2002, the EU and East African Community (EAC) have failed to find a way to secure a continuation of the zero tariffs for cut flowers from Kenya.
Livelihoods of thousands at stake
More than 500,000 people, including 90,000 direct flower employees, depend on the flower industry for their livelihoods. The cut flower industry has become Kenya’s second most important foreign exchange earner, producing exports worth almost €360 million annually.
If introduced, the duty will increase the price of Kenyan cut flowers considerably, threatening farms’ ability to compete with cheaper alternatives. It could also mean potentially devastating job losses for workers in Kenya’s flower industry. The majority of these workers are women, and for many it is their only source of income to support their families.
Fairtrade flower farms also face devastating consequences
Over the past ten years Fairtrade has worked to establish fair trading relationships between European businesses and Kenyan flower producers. 44% of all cut roses produced in Kenya now come from Fairtrade certified farms, with the EU being the chief export market. Producers have diligently built up their organizations, meeting the Fairtrade Standards and investing the Fairtrade Premium in education, better housing, healthcare and infrastructure such as roads. Workers have benefitted from better working conditions, more knowledge about their rights and more autonomy through workers’ committees.
If Fairtrade flower farms suffer a drastic loss of sales, or in worst case go out of business, all their hard work and achievements over the past decade would be undermined. Workers on Fairtrade farms could lose their jobs and their livelihood.
Fairtrade calls for swift and fair solutions
We are calling on the EU and Kenyan government to urgently find a just and fair solution which ensures that cut flowers from Fairtrade farms continue to have tariff-free access to European markets, to protect the livelihoods of thousands of Kenyan flower workers and their families.
What are EPAs?
Economic Partnership Agreements (EPAs) are trade agreements meant to safeguard ACP countries’ preferential access to EU markets, which had previously been granted through the Lomé Convention. However, EPAs are changing this preferential access from non-reciprocal to reciprocal access, meaning that ACP countries who sign have to open their markets to EU imports, and liberalize in other areas too.
Negotiations on EPAs have been happening since 2002. Some regions have already signed EPAs; in others, such as East Africa, the negotiations are ongoing.
Why are the negotiations taking so long?
The issues surrounding EPAs are quite complex. One of the main concerns is around the reciprocal nature of the agreement – developing countries must lower taxes (tariffs) on goods coming from the EU. Many developing countries are concerned that this will have negative consequences for the country’s development.
In Kenya, outstanding issues in the negotiations are export taxes, domestic and export support to agriculture, and human rights.
What do NGOs and civil society think about EPAs?
EPAs are very controversial and have been highly criticized by NGOs and wider civil society. This is also the case in Kenya, where many civil society groups have welcomed the fact that the government has not signed the EPA.
100% Fair Trade organization Traidcraft has detailed information on EPAs on their website. http://www.traidcraft.co.uk/get_involved/campaign/trade_rules/stop_epas/faq/
What products will be affected by the tariffs?
In Kenya, the main products which will be affected are cut flowers, fruits and vegetables.
What can I do?
You can express your concern by sending a letter to your Head of Government, asking them to raise this issue at EU level. You can download an example letter here.
5 January 2015 (Brussels) – We wish you very happy New Year. Let´s make #EYD2015 work for small producers and workers.
18 November 2014 (Brussels) – Have you ever wondered how come those local apples in season remain more expensive than bananas all year long? Why do poor farmers get poorer just as the international price of their products rise non-stop? Why is environmental damage increasing even as large companies prove they are implementing sustainability programmes? With city dwellers increasing and rural population dwindling, who will produce the food the hungry urbanites will demand?
The new study opens the door to the answers. “Who’s got the power? Tackling imbalances in agricultural supply chains”, released today in Brussels by the Fair Trade movement reveals how the growing integration –and concentration of power- in the supply chain of agricultural products is having a serious effect not only on producers far away from the supermarket shelves, but all along the supply chain, the environment and onto the choices available to consumers. Unfair trading practices (UTPs) appear, and they are not accidental but structural.
Olivier De Schutter, co-chair of the International Panel of Experts on Sustainable Food Systems and former UN Special Rapporteur on the Right to Food, says in the foreword to the study that “the need to improve the governance of food systems, in order to avoid instances of excessive domination by a small number of major agrifood companies, is hardly ever referred to in international summits that seek to provide answers to the challenges of hunger and malnutrition. This report helps to fill that gap”.
Click here for higher resolution picture.
The study identifies common patterns of concentration involving the main elements of the supply chain, the one exerting pressure on the other all the way down to the producers. The more these elements are integrated with one another, the stronger is the pressure exerted onto the next link in the supply chain:
- Retailers (supermarket chains)
- Branded products manufacturers
- Traders of produce
- Input producers (seeds, fertilizers, etc.)
In sheer size, the Consumers (7 billion) and the Producers/Farmers (2.5 billion) are by far the most numerous. However, most of the value share of the transaction (up to 86%) stays with numbers two to five. But trying to present the problem as one between consumers on one side, and farmers and workers on the other, is meaningless. The degradation of the trading and living conditions of farmers and workers, whether inside or outside Europe, creates important risks of unavailability and unaffordability of products for consumers in the midterm, reducing their welfare in the end.
Addressing concretely the global nature of the problem and its consequences, the study emits no less than 16 practical recommendations to policy-makers, businesses and workers all over the world. The European Union has a clear responsibility to prevent and punish UTPs, considering the superior purchase power of its 550 million inhabitants, as well as the numerous trade agreements it has with produce exporting countries. Transactions do not occur in a legal vacuum but national legislation needs to be adapted to counter the power concentration trend, and it is clear that no solution will be found in isolation, which is why the study includes action proposals to all seven links of the supply chain as well as to multilateral instances such as the Food and Agriculture Organization (FAO).
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- In order to address and resolve the issues the study recommends actions to adopt a comprehensive strategy based on:
- A vision of consumer welfare that goes beyond purchasing power and recalls its inherent link with farmers’ and workers’ welfare.
- Measures to rebalance business power in agricultural chains in the short term, currently the law of the strongest has the upper hand.
- Mechanisms to enhance transparency in agricultural chains so that stakeholders can better identify the risks of abuse of buyer power and unfair trading practices.
- A renewed European competition policy framework capable of better regulating such abuses.
- Enforcement mechanisms to stop Unfair Trading Practices (UTPs) within food supply chains serving the EU market, with authorities able to investigate claims and punish abuses.
- Initiatives to promote and widely spread fair trading practices in the mid to long run.
Notes to Editors:
- The presentation of the findings of the report took place on 18 November 2014 at an event at the European Parliament.
- Please find attached and via the following links the Abstract and the Full versions of the study by BASIC (Bureau d’Analyse Sociétale pour une Information Citoyenne) titled “Who’s got the power? Tackling imbalances in agricultural supply chains”, November 2014. Available at www.fairtrade-advocacy.org/power
- For more information about the organizations commissioning this study, please follow these links: Fairtrade International www.fairtrade.net; World Fair Trade Organization www.wfto.com; Fair Trade Advocacy Office www.fairtrade-advocacy.org; Traidcraft www.traidcraft.org.uk; Plate-forme pour le Commerce Equitable www.commercequitable.org; Fair Trade Germany www.fairtrade-deutschland.de
The report was commissioned by the Fair Trade Advocacy Office (FTAO), Traidcraft, the Plate-forme pour le Commerce Equitable and Fairtrade Deutschland, with the support of the European Commission, the Belgian Development cooperation, the Agence Française de Développement and the region Île-de-France.
 Practices that grossly deviate from good commercial conduct, are contrary to good faith and fair dealing and are unilaterally imposed by one trading partner on another.
18 November 2014 (Brussels) – At the event “Solutions to tackle imbalances of power in agricultural supply chains”, hosted by MEP Catherine Stihler, in the European Parliament the Fair Trade movement officially launched its report “Who’s got the power? Tackling imbalances in agricultural supply chains”. Eminent speakers underlined the importance of the issue and discussed the suggestions made in the report.
The Fair Trade movement hands over the new report “Who’s got the power? Tackling imbalances in agricultural supply chains” (available here: abstract and full version) before the debate to EU representatives.
Left to right: Florence Sonntag (PFCE), MEP Paul Brennan (S&D, UK), Sergi Corbalán (FTAO), MEP Dennis de Jong (GUE, NL), host MEP Catherine Stihler (S&D, UK), Claire Bury (DG Internal Market). Click here for higher resolution picture.
MEP Catherine Stihler, Vice-chair of Internal Market and Consumers Committee of the European Parliament (IMCO) hosted and chaired the event that featured a list of eminent speakers from various backgrounds. Ms Stihler gave her opening speech that was followed by the input from MEP Mairead McGuinness (EPP, IE), Vice-President of the EP and chair of an MEP informal working group on the issues in supply chains, expressed that the level of progress made so far by the EU on the topic was not enough and demanded more focus on this issue. The following speaker was Claire Bury (Director of Directorate E – Service of DG Internal Market and Services of European Commission), who explained what the Commission has been doing on the topic of Unfair Trading Practices in the past years and what is to be done regarding the evaluation of Member States’ enforcement mechanisms.
The results of the report about the repercussions that result from imbalances of power in supply chains were presented by the drafter Christophe Alliot of BASIC, who then passed the word onto Sergi Corbalán of the Fair Trade Advocacy Office (FTAO) that put forward possible solutions that the EU can take. “Policy-makers should not tolerate strong supply chain actors squeezing out weaker ones, both upstream and downstream. Turning a blind eye to abuses of power in supply chain is not only unethical, it also a main obstacle to the sustainability of supply chains and the interest of future consumers” he said.
Panel left to right: Olivier De Schutter, Dennis de Jong, Sergi Corbalán, Catherine Stihler, Claire Bury, Mairead McGuinness, Adam Bedford. Click here for higher resolution picture.
Olivier De Schutter, former United Nations Rapporteur on the right to food, was the first one to be given a word after the presentation. In his reaction he stated that governance in the supply chains is something that is never discussed by governments. It is still a taboo.
The similarity of the problems faced by farmers in and outside of Europe and the change that the Grocery Code Adjudicator made in the UK were highlighted by Adam Bedford representing UK (National Farmers Union) and European farmers (COPA-COGECA). The last speaker on the panel was MEP Dennis de Jong (GUE, NL), rapporteur of the European Retail Action Plan who in his speech called for a more nuanced approach towards regulation.
MEP Catherine Stihler then invited the audience to join the debate. The last part of the event was filled with interesting questions and lively exchange of views.
More pictures of the event can be found here.
Notes to Editors:
For more information about the organizations commissioning this study, please follow these links: Fairtrade International www.fairtrade.net; World Fair Trade Organization www.wfto.com; Fair Trade Advocacy Office www.fairtrade-advocacy.org; Traidcraft www.traidcraft.org.uk; Plate-forme pour le Commerce Equitable www.commercequitable.org; Fair Trade Germany www.fairtrade-deutschland.de.
For further information please contact Peter Möhringer at firstname.lastname@example.org.
8 October 2014 (Brussels) – The European Parliament Fair Trade Working Group hosted a Fair Trade Breakfast today. Large numbers of renowned and new Members of the European Parliament attended in support of Fair Trade, marking a successful start to the new legislative term.
Linda McAvan, Chair of the European Parliament’s Committee on Development and of the Fair Trade Working Group, welcomed the 50 Members of the European Parliament (MEPs) from all major political groups, officials from Permanent Representations of European Union Member States, as well as Fair Trade movement actors and network representatives. Linda McAvan went on to introduce the new Vice Chairs of this cross-party group of MEPs working together for EU policies in support of Fair Trade: Sirpa Pietikäinen, Judith Sargentini, Charles Goerens and Helmut Scholz. She highlighted the work that the Fair Trade Working Group had done in the last legislature and the challenges that now lay ahead for Fair Trade in the European Parliament.
Educating the audience about various aspects of Fair Trade (from left to right): Sergi Corbalán, Nyagoy Nyong’o, Linda McAvan and Giorgio Dal Fiume. For picture with higher resolution click here.
While listening to the speeches MEPs and Fair Trade actors enjoyed breakfast with Fair Trade ingredients. For picture with higher resolution click here.
Peter Möhringer | email@example.com | 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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