The supermarket sector is ripe for change. Tim Gore, Head of Policy, Advocacy and Research for Food Justice at Oxfam International, describes key findings from Oxfam’s research into the human suffering in supermarket supply chains.
Imagine a workplace where 90% of your colleagues can’t afford enough food for their families each month. Where you work so hard you can’t take a toilet break, and are insulted by your supervisor if you do. Or where you risk being fired or demoted for becoming pregnant.
These are all issues reported by women working at some of the biggest seafood processing plants in Indonesia and Thailand, which between them supply major supermarkets in Europe and the US. If you shop at Albert Heijn, Aldi, Lidl or Whole Foods, for example, you may well have bought their products.
Some women described the debt burden incurred to secure their job. Others the exhausting nature of their work – peeling up to 19kg of shrimp per hour throughout the working day, just to make the minimum wage. Many said they didn’t have a permanent contract. All worked regular overtime. None had access to an effective trade union to stand up for their rights.
Despite areas of tangible progress in protecting workers’ rights in the seafood sector in Southeast Asia in recent years, Oxfam’s new research with the Sustainable Seafood Alliance Indonesia confirms that many challenges remain. The reason? Most reform initiatives to date have not adequately addressed the root causes of the problem – which go far beyond the seafood sector.
On farms and factories around the world that supply the food retail industry – a sector worth trillions of dollars a year – women and men are working long hard hours, in often appalling conditions for little reward. The launch report for Oxfam’s new campaign to tackle human suffering in food supply chains draws on similar case studies of products like Filipino bananas, Italian tomatoes and Costa Rican pineapples, providing a range of evidence hinting at the scale of the challenge. For example:
- Across a sample basket of 12 everyday products sold in supermarkets – like orange juice, coffee, bananas and rice – sourced from countries around the world, in none were average earnings found to be sufficient to support a decent standard of living for small-scale farmers or workers. The gap between current earnings and the amount needed is greatest for those products in which women are most prevalent in the labour force.
- Low incomes mean access to adequate food is put at risk. New food security surveys of hundreds of farmers and workers in global supply chains in five countries – including women processing shrimp in Thailand – found a clear majority categorised as severely food insecure. In South Africa, for example, over 90% of surveyed women workers on grape farms reported not having enough to eat in the previous month. Nearly a third said they or a family member had gone to bed hungry at least once in that time.
- Long-run declines in export prices for products like Brazilian orange juice and Kenyan green beans are pushing prices paid to small-scale farmers to little more than their cost of production, threatening their livelihoods.
It’s hard to conclude that these are all just isolated examples of a few problematic products or particularly unscrupulous suppliers. At their root, we argue, is the worsening inequality of power in food supply chains – the result of twin trends over the past 20 years.
On the one hand, the bargaining power of supermarkets over their suppliers is increasing. As their control over mass food retail markets grows around the world, supermarkets can demand ever-lower prices from their suppliers and pass onto them more of the risks of agricultural production – creating demand for labour exploitation in their supply chains.
Meanwhile, as agricultural and labour markets have been liberalised, the bargaining power of both small-scale farmers and workers has been steadily eroded or suppressed in many of the countries from which supermarkets source their products – creating a supply of labour that is vulnerable to exploitation. Entrenched gender norms mean that women are hardest hit: it’s no surprise they are concentrated in the lowest paid and least secure positions in food supply chains.
The result can be seen in the unequal distribution of the price consumers pay at the check-out. Two new studies in our global launch report suggest that supermarkets capture the biggest share of the end consumer price of any actor in food supply chains – up to 50% in some cases – and that their share has grown the most since the mid-1990s. The small share left for small-scale farmers and workers – less than 5% in some cases – has declined.
When we looked at the changing distribution in shrimp supply chains from Indonesia and Thailand, two things stood out. First, supermarkets seem to have increased their share of the consumer price over the past 10-15 years. Second, the share reaching processing factories in both countries had dramatically shrunk, in the context of long-run declines in export prices. This is the context in which women can be paid just 2 Euro cents for peeling shrimps in a packet sold at Albert Heijn for 5 Euros.
At best this rising inequality delays the struggle of small-scale farmers and workers to make a decent living. At worst, it traps them in poverty. Meanwhile, at the other end of the chain, the 8 largest publicly listed supermarkets in the world in 2016 generated over $1 trillion in revenues, $22bn in profits and returned $15bn in cash to shareholders. Just 10% of the returns to shareholders of the biggest 3 supermarkets in the US that year would have been enough to lift 600,000 Thai seafood processing workers to a living wage.
We know it doesn’t have to be this way. None of this is the result of immutable market forces, but of political choices. The supermarket sector is undergoing huge disruption around the world – it’s ripe for change. The next blog in this series will look at what the research in our launch reports shows can be achieved if we challenge the power imbalance driving human suffering behind our food.
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