Unfairly Traded

Fair Trade products shifted the stratosphere of shoppers throughout the EU during the first half of the 2000’s. Sainsbury’s, among others, have redacted their commitment to the project. What does this mean for farmers and communities across the globe? Kate Ryan of flavour.ie investigates.

In May 2017, there was an outcry in the media at Sainsbury’s decision to “pilot” a new own-label scheme with its tea growers. This scheme would replace the chain supermarkets current commitment to the internationally recognised Fairtrade standard with promises of potentially better rewards and conditions than under the current Fairtrade programme.

For many reasons, this announcement was shocking.

Firstly no one expected it, although in what little official communique has been received from Sainsbury’s,  this has been a decision two years in the making.

Secondly, Sainsbury’s has for a long time been a supermarket at the forefront of pushing for better quality food, progressive retailing standards and positive policies around access to healthy foods for families. Fairtrade has been part of that.

Unfairly Traded
Sainsburys – Source

Thirdly as long as I can remember, of all the big UK chain supermarkets, Sainsbury’s has always been the one that seems to trade on a financial knife edge. Every few years there’s a profit warning and job losses followed by a swift turnaround of fortunes and better news. It’s a cycle I’ve been aware of for over 30 years, but yet here they still are. So what is so different about this latest dip?

Money talks…  

  • The Daily Mail, 6th May 2015, reporting first fall in profits for a decade with declining sales of 1.9%.
  • The Guardian, 4th May 2016 reporting plummeting profits and sales falling by 1.1%.
  • The Independent, 3rd May 2017 reporting a rise in sales (due to a boost in electrical sales at newly acquired Argos) but a fall in profits (due to inflation in the food costs and consumer spending).

Times are different now to 30 years ago. Investors are no longer willing to cross fingers and hope for the best that their investment can organically work its way out of the current mire.  They are impatient, and the global investment landscape is volatile: if you wait, you lose. Whether or not objectively a two-year dip in profits can be referred to as a bona fide “crisis”, the fact remains that if your investors say it’s a crisis, it’s a crisis and as such all bets are off and everything is open to sacrifice.

In a time of famine, the temptation to pick the lowest hanging fruit is too strong. It seems Sainsbury’s are willing to take the risk of loss of reputation as the biggest UK retail supporter of Fairtrade in exchange for saving a few million quid. This rationale needs to be looked at later in this article, but for now, let’s dissect the hubris that this one action will kick off a chain reaction across the retail environment.

A domino effect?

Sainsbury’s are not the first, and will not be the last, major retailer to devise their own in-house scheme to replace Fairtrade or any other independently-run ethical food quality standard. And it’s not the first time that Fairtrade itself has been under pressure. Fairtrade’s often mistaken other half, the Rainforest Alliance, is the mark of choice for chains such as Tesco. Are they the same? No:

“Rainforest Alliance Certified is not a fair trade label. It is lacking several key components of fair trade programs including trade standards. There are no requirements for buyers to pay minimum or fairly negotiated prices, develop long-term relationships, or offer to finance. Participating farmers are not organized democratically and are not offered a fair trade premium for community development projects. It is a program focused solely on the management of on-farm environmental resources with some social standards for workers on farms. Because of its on-farm focus and lack of trade standards, it is more naturally suited for larger farms rather than the small producers that are at the core of the fair trade movement.” (Fairworld Project) – a different standard, different beneficiaries, different outcomes and goals.

Unfairly Traded
Are we conscientious enough when it comes to Fair Trade? Source

If you are a large scale producer or retailer and your product depends on a consistent quality and availability of a commodity product, you may look more favourably upon the Rainforest Alliance as your ethical partner in retail. With Fairtrade farming cooperatives, the farmers get a guaranteed price for their product irrespective of its condition.

From this summary, you can see how easy it is to draw pro’s and con’s for each standard, and of course, there is huge merit in the Rainforest Alliances goals of sustainable farming and ecological land management.

But Fairtrade can also achieve many of the same goals as Rainforest Alliance: if you invest in farmers and their communities you will encourage those communities to thrive on farms and working in co-operatives. You will empower the people by paying a fair wage for what they produce. The Fairtrade Premium, which is paid over and above the fair commodity price which all Fairtrade trade partners pay into, goes to investing in building schools, hospitals, community centres and providing affordable access to education and healthcare, sanitation and so forth.

If people take pride in their community and its ability to sustain them, wouldn’t it also follow that they will also understand the need to maintain their land for sustainable farming for future generations?

Between these two gold standards for two very different types of sourcing companies to choose from, one has to then wonder what is the point of deviating from them to recreate the wheel and obfuscating what is known and trusted with something that is unknown and untrusted?

In a word: profit.

Any such move is a clear sign of massive growing internal financial pressure unhappily married to the need to participate in a Corporate Social Responsibility programme of some kind with all the resultant positive optics. The nervy hand-wringing of being seen to be doing something good is a way to shake off the cloak of “faceless corporate behemoth” ruthlessly making profits at the expense of all else. In May 2017, there was an outcry in the media at Sainsbury’s decision to “pilot” a new own-label scheme with its tea growers. This scheme would replace the chain supermarket’s current commitment to the internationally recognised Fairtrade standard with promises of potentially better rewards and conditions than under the current Fairtrade programme.

Harsh? Maybe. In the current context of global trading? Not so much? And I smell a fart in the middle-class ranks.

Squeeze

There is such a thing as “do-gooder burn out”, and it is most prevalent in the class of folk who are most aware of problems and issues and most likely to be the first to champion a cause or campaign. The middle classes are often ridiculed, but actually I like them a lot. Without them, we would just melt away into eternal drudgery for the working classes or eternal hedonism for the 1%. They are also the most squeezed and burdened of all people in society.

The world is not in a good place right now, and the hole in the collective pocket is getting bigger and more threadbare. The same goes for the middle-class do-gooder. They are under pressure to keep stretching the weekly food budget to include the organic, local and ethically traded. Ethical food sales have slumped dramatically in the UK. The reason? A 2.3% rise in the average cost of food against a background of stagnating wages and increasing cost of living.

Something has decided to give.

So, what if instead of paying €5 for a box of Fairtrade tea, I could pay €3.50 for a box of “Fairly Traded” tea and still feel as though I am contributing to something good somewhere?

What if I can’t afford to be as ethical as I once was, but I still want to be able to do something?

What if Brexit means that my weekly food budget doesn’t go as far as it once did?

What if…?

Why target Fairtrade?

Whether it’s grasping at straws or picking off low hanging fruit, from the retailer point of view and the never ending efforts to keep investors happy by reducing costs and increasing profit, they are, figuratively speaking, scraping the bottom of the barrel.

Unfairly Traded
Who does Fair Trade impact? Source

They have tried lowering the cost of everything else. Stores have been assessed, built or retrofitted with energy efficient kits. Distribution links have been streamlined and driven by the need for more and better efficiencies. Workers’ wages and benefits have been reduced, including the adoption of despised zero-hours contracts.  Food prices have been driven down so low that, on an Irish level at least, Beef and Dairy cattle are only profitable because of the farm subsidies paid from the EU.

Every line on a spreadsheet has been analysed and pulled apart to search for additional cost savings. Having a pop at Fairtrade is a new low, but one that has been, up until now, unexplored.

On 16th August 2007, the BBC reported that Sainsbury’s had announced a new “Fair Development Fund” with a value of €1 million to be administered by Comic Relief directly for the purpose of helping farmers in Africa to find new routes to global retail markets. “Organisations including the Fair Trade Foundation, Traidcraft [sic]* and Oxfam [sic]* will help the firm connect with farmers”, the article reads.

Wind that back a minute.

“Administered by Comic Relief.” The same partnership that raises millions of pounds every two years through sales of red noses and other novelty items to fund vital social and community projects in UK and Africa. This year alone, Sainsbury’s raised £11,612,117 for such causes. Red Nose Day was in March; Sainsbury’s announcement of dropping Fairtrade for its own branded tea products was in May.

How does one go about reconciling those two optics?

Of course, for now, the message is that their new “Fairly Traded” scheme is pilot for their own branded tea products, but many feel as though this is just the start and could quickly escalate to cover bananas, sugar, coffee and chocolate. In fact, even the terms of reference of the pilot scheme have been called into question. Mike Gibney, Chief Executive of the Fair Trade Foundation, said “Sainsbury’s call it a pilot scheme, but it’s over no defined period. Where is the detail? Who will administer it? Does it have enough staff? […] The suspicion must be that they are trying to save costs. The question is why have they changed for what may be an inferior scheme?”

Why indeed.

Buried in an offshoot to the main Sainsbury’s website is their “Live Well for Less” portal. In here you will find the information about the company’s commitment to Fairtrade products – the list of which no longer includes tea. I click a link back inviting me to “read more about the Fair Development Fund” where I am told that this is the unique partnership with Sainsbury’s and Comic Relief – the same one announced in 2007. Ten years old. Congratulations…

I read on to the “How we have helped” section. The numbers have a suitable amount of zeros included, but let’s just break this down:

  • Madagascan Cashew Nut Farmers and Processing Factory Workers: £200,000 to 55 people – or about £4,000 per head, put into programmes to learn about agricultural practices and access to better quality trees so they can then sell their crops to Sainsbury’s.

Over 10 years, that’s £400 per person per year. Not bad I guess in terms of a training investment.

  • Tanzanian Tea Farmers: £250,000 for 11,000 small scale tea farmers to provide training on improving agricultural and environmental practices. Or £22.72 per head – over ten years? £2.27 per person, per year. Hmmm. Less impressive.
  • Indian Grape Farmers: We don’t get told how much they have received to “improve the quality and sustainability of their crop”, but on a decreasing ratio of the two above, I’d give a hearty estimate of “not much”.

In 2016, Sainsbury’s posted profits of £503 million pounds. In the same breath, they also announced a slide in sales of 8.3%, a warning of rising costs, threatened to squeeze wages while at the same time saying they don’t want to pass on price rises to their customers.

Unfairly Traded
Look for the label. Source

Low hanging fruit. Which battle would you choose?

What’s worse? Cutting the wages of your staff and/or making redundancies; raise prices and risk watching your customers go across the road to Aldi or Lidl, or find any way possible to slash and burn the problem of rising costs?

Despite the prevalence of images of poverty-stricken people and farming communities permeating our everyday lives, there is still this notion that what happens in Africa has no bearing on what happens here. This is a foolish attitude.

If we allow those with power and money to further exploit those who are already on the outer edges: merely thriving not surviving, we are giving one big fat permission slip to allow the exact same to happen a lot, lot closer to home.

Indeed, it’s already happening. Think indentured servitude and exploited labour is only something that happens in Kenya? Maybe you missed the news reports of Gangmasters being prosecuted in the UK for running groups of slave labourers working on farms picking crops? Maybe you thought it only happened to people living in the UK illegally? Maybe you missed the report showing that the vast majority of people working in the UK that could be legally classified as slaves are, in fact, British?

We, as consumers, have immense power. There are already online petitions for Sainsbury’s to rethink their decision with close to 100,000 signatures and calls for boycotting their stores.

We can also insist that products should be Fairtrade and/or Rainforest Alliance and nothing else. We can exercise the choice not to purchase products that are neither of these things, but another unspecified, untrusted and unverified standard.

What will stop any manufacturer or retailer coming up with a name or a label that may look like it’s something to do with Fairtrade but in fact are just fictitious, made up, charging you extra under the illusion the product is doing good but just lining already well-padded pockets.

What if I signed up to the “Fairly Traded” scheme, but at the end of the year, a committee of people I don’t know, with motivations I don’t understand decide that I haven’t done enough to warrant receiving additional funds from an investment pot that Sainsbury’s have paid into? Who would I appeal too? How will I be able to afford a new water sanitation plant in my village now?  This is the actual deal that has been laid before the farmers that grow the tea for Sainsbury’s own brand.

How can this be right and fair?

If we allow others to sideline exploitation of people for the pure pursuit of increasing profits as its only justification, what does that say about you and me?

What is to stop them from eventually bringing that mentality of exploitation closer to home? Is that multi-buy worth it? Where do we draw a line in our morality? Is it OK to drink a €4 coffee or enjoy a €1 bar of chocolate fully in the knowledge that the farmer who grew and harvested it is working for less than a $1 a day?

Are you happy to be working minimum wage at the checkout of the supermarket that allows this exploitation of human labour so they can pay out million euro dividends to their investors?

Well?

Unfairly Traded
Fair Trade – Source

*Oxfam and Traidcraft have been in touch to inform us that they were not a direct recipient of the Comic Relief grant.


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