Written evidence submitted by the Fairtrade Foundation (FS0036)

  1. Introduction

 

1.1   Fairtrade in the UK is part of a global Fairtrade system which supports 1.71 million Fairtrade workers in 73 countries around the world. Our vision is to make trade fair and secure a better deal for farmers and workers, contributing to the UK’s wider climate crisis, international development efforts and achievement of the Sustainable Development Goals (SDGs).

 

1.2   The Fairtrade Foundation welcomes the opportunity to submit to the EFRA inquiry. This submission will focus on efforts needed to shore up the UK’s overseas food supply, particularly commodities that cannot be grown in the UK produced by communities in low-income countries, including cocoa, banana and coffee.

 

  1. Key messages

 

2.1   We’ve seen how events outside the UK can have a dramatic impact on our food supplies, from the disruption caused by COVID to the conflict in Ukraine. 10-15% of the UK’s overseas imports comes from low-income countries[1]. Many of these products, including cocoa, coffee and bananas cannot be grown here in the UK. Securing these supply chains is therefore in the interest of UK food security.

 

2.2   We can’t do this without investing in the people that produce our food overseas – farming communities in low-income countries growing our bananas, coffee and cocoa. Trade injustice, with roots in colonialism, continues today, with low-income countries receiving very little of the value for their commodities. Many key foodstuffs are grown by farmers and workers earning well below a living wage, in poor and exploitative conditions.

 

2.3   Systemic change is needed not only to secure the UK’s food supply, but to ensure the continued livelihoods of farming communities in low-income countries who rely on the UK market. This includes:

 

2.4.5         Trade policy that works for people and planet, improving resilience for those producing food oversees, and securing food security for the UK public.

2.4.6         Responsible businesses, supported by effective Government legislation, that address human rights and environmental violations in their supply chains, including deforestation.

2.4.7         Strengthened UK aid, supporting partnerships between governments, businesses and smallholder farmers and workers, including an immediate return to 0.7% GNI.

[Fairtrade answers to specific inquiry questions]

  1. What are the key factors affecting the resilience of food supply chains and causing disruption and rising food prices – including input costs, labour shortages and global events? What are the consequences for UK businesses and consumers?

 

3.1   One of the key factors affecting resilience of food supply chains is the ongoing threat of the climate crisis.  The COVID-19 pandemic, and now the ongoing war in Ukraine, has shown us just how fragile our global supply chains are. With more severe weather conditions, the impact on supply chains, and particularly producers in low-income countries at the top-end of the supply chain, is likely to be severe.

 

3.2   Often complex and opaque, many global supply chains operate ‘just-in-time’, meaning that supply chain actors will often move materials right before they are needed, and with little long-term commitment to those at the top-end of the supply chain such as smallholder producers and workers. For example, in the garments sector, there was a mass cancellation of clothing orders during the pandemic[2], resulting in large scale loss of income for garment factory workers in low-income countries such as Bangladesh. By contrast, we were pleased to see many Fairtrade buyers maintain their commitments during this high risk period[3].

 

3.3   Coupled with an unfair approach to trading practices, farmers and farm labourers in low-income countries often earn extremely low wages, well below what is needed to earn a decent living and provide for their communities. For example, the average cocoa farmer in Ghana earns just 73p a day[4], despite cocoa being one of the most lucrative industries in Europe.

 

3.4   With such low wages, farming communities are struggling to adapt to and mitigate against the impacts of the climate crisis, such as moving to low-carbon production methods, agroecological approaches and renewable energy to power farms. Investment in farming communities will not only support the UK’s climate and development ambitions but will foster resilient and sustainable supply chains for the UK consumer in the years to come.

 

  1. What is the outlook for UK food price inflation in the short and medium term? What policy interventions should the Government consider to manage these pressures?

 

4.1   Without intervention now, food prices are likely to increase as the impacts of the climate crisis and the Ukraine conflict are felt among farming communities in low-income countries. The past 12 months has already seen a significant rise in production costs for many Fairtrade producers.

 

4.2   Concerted action is needed both to address global emissions and minimise the extent of climate change-related damage to food supplies, and to invest in adaptation measures immediately.

 

4.3   Emissions from trade account for 20-30% of global emissions[5]. We can’t escape the need to reform trade policy such that it supports decarbonisation and investment in low-income countries (enabling them to adapt their own practices to more environmentally friendly methods). Doing so now will mitigate against price increases for the UK consumer in the future.

 

4.4   Trade policy therefore needs to pull its weight and build up strength and security in UK supply chains. In order to this, it needs to fully consider climate risks and risks to supply resulting from low wages. Trade for development policy has a key role to play in investing in producers growing our food, to secure long term food security.

 

4.5   There is also a need to invest at farm level. Businesses need to pay fair prices to enable smallholder to build resilience and respond to the climate crisis. There is high support for responsible business practices among the UK consumer. What might be a short-term cost (for example, implementing effective environmental/human rights due diligence systems) will be gained back in the long term as supply chains become more sustainable and productive for the future

 

4.6   Businesses have a responsibility to ensure that their supply chains are free of modern slavery and human rights violations, and ensure that their businesses practices are not actively contributing to environmental degradation. Government support for Human Rights and Environmental Due Diligence can level the playing field and ensure that all businesses are doing their part.

 

4.7   Sustainable trade policy and regulatory changes can also be supported by UK aid programmes supporting partnerships between governments, businesses and smallholder farmers and workers. There is a role for Government to catalyse public-private partnerships that drive forward the transition to net zero and boosts the livelihoods of smallholder and workers and their communities. Good examples of this way of working can be found in the role the German and Dutch governments have played establishing multistakeholder initiatives on cocoa and flowers through aid / economic development spending.

 

  1. How will the proposals in the Government’s food strategy policy paper affect:

 

5.1      the resilience of food supply chains?

 

5.1.2         The Fairtrade Foundation was disappointed by the lack of an import strategy in the Government’s food strategy policy paper. The policy paper fails to adequately take into account the significance of our overseas imports and the important role played by farmers and workers in low-income countries.

 

5.1.3         Without attention to the sustainability of our overseas supply, and securing the livelihoods of farmers and workers within it, supply chains will be increasingly vulnerable to future shocks, perhaps especially from climate change. As at the onset of the pandemic, production shocks can quickly lead to empty supermarket shelves empty and high prices. We continue to call for a robust government strategy for food imports which is mindful of climate and other risks, and which focuses on long-term viability of production for smallholder farmers.

 


[1] DEFRA, 2020

[2] Major apparel brands delay & cancel orders in response to pandemic, risking livelihoods of millions of garment workers in their supply chains - Business & Human Rights Resource Centre (business-humanrights.org)

[3] https://www.n8agrifood.ac.uk/blog-posts/fairtrade-and-the-covid-19-response-lessons-for-business-and-the-food-system/

[4] The-Invisible-Women-Behind-our-Chocolate.pdf (fairtrade.org.uk)

[5] clim_03nov21-4_e.pdf (wto.org)