Accelerated automation and digital advances in the world of food retail

By Abbie Winton, Alliance Manchester Business School, Faculty of Humanities, The University of Manchester.

The COVID-19 pandemic prompted consumers to buy food online, which meant that food retailers had to adapt quickly, making changes that may have long lasting consequences for the sector.

Supermarket shopping of old has, perhaps, changed forever. For most food retailers, trading online has long lacked appeal due to the low margins which it offers, making it less profitable than operating from brick-and-mortar stores.  However, the coronavirus pandemic triggered an unforeseen shift as many consumers moved to buying food online (growing 25.5% in 2020 compared to the 8.5% previously anticipated). This prompted retailers to expand their dotcom offering almost overnight to both meet demand and stay competitive during a time when customers were restricted in their ability to do their shopping in-store. Alongside expanding their in-house logistics services, five of the big-name supermarkets started to use external delivery services provided by Amazon, Deliveroo and Uber Eats.

A surge in supermarket employment

To meet the excess demand, all of the major retailers took on additional workers. Some were hired permanently in areas which were expanding for the first time, while others were hired temporarily as retailers tackled the uncertainties presented by the national lockdown. Online recruitment mobilised vast numbers of potential workers, many of whom had been furloughed or made redundant from their previous jobs. Highly precarious contracts were offered in large numbers, meaning employees could be more easily let go when demand eased. Some were hired temporarily to minimise the effects of panic buying on stock, yet the majority of new jobs were in warehousing and logistics (including picking, packing and driving) to service the move to online shopping.

The gendering of retail work

Retail work has historically been gendered in terms of the roles which men and women carry out. For example, the move online and growing use of self-checkouts in-store have in part helped facilitate a reduction in the need for checkout staff. These jobs have long been disproportionately filled by women who needed the ‘flexibility’ to manage work alongside caring responsibilities. In contrast, there has already been an expansion of new roles in warehousing, logistics and fulfilment which have traditionally been filled by men and demand hours less likely to suit the needs of the household.

Although there have been some improvements in the occupational segmentation of retail roles in recent years, changing demands mean the future of work in food retail is likely to be somewhat gendered if current patterns persist. To avoid exacerbating these gender inequalities, measures are needed to ensure women are equipped to enter into logistics and distribution; for example, employee-led flexible working arrangements and parental leave would allow for an easier transition into these roles.

High versus low tech models

While online shopping was stimulated during the crisis, the method for fulfilling these orders remained heavily reliant on labour instead of technology. Although some retailers have begun to expand into semi-automated warehouses to fulfil orders, most of the picking and packing is carried out on the shop floor or in centralised distribution centres by members of staff. Predicting a sustained move online, food retailers have made their plans to open new regional dotcom distribution centres across the country public. If these jobs are to be accessible to all, additional considerations will have to be made.

Research has shown that women are more likely to rely on public transport to get to work and thus tend to take jobs which are closer to home/schools. However, the location of distribution centres tends to be in harder-to-reach areas, making these jobs less accessible to women. Therefore, provisions would have to be made to improve transportation routes to these areas (both in terms of accessibility and safety). Secondly, the ‘pick rates’ which dictate dotcom work can often be challenging for disabled and older workers to sustain. Reasonable adjustments will be required where necessary to accommodate for these groups. Finally, moving from a customer service to a logistics-oriented role might not be preferable for all workers. Accounting for this, further measures may have to be put in place for workers choosing to leave the sector, such as extending the reskilling bootcamps already provided.

Within the sector, Ocado is the only major exception to the human labour approach. As a leader in warehouse technology, Ocado already has a portfolio of hi-tech fulfilment centre which uses propriety-design ‘bots’ to pick and pack orders. This is likely to be a desirable model to pursue in the longer term for those retailers with the capital to do so. However, for those who do not, they may approach the Ocado-model with some caution. Ocado had to temporarily suspend new orders as they were unable to expand capacity in the same way as other retailers, yet others were able to expand capacity by taking on a large hyper-flexible pool of workers to pick up the work which technology could not. If this approach to organising labour is deemed more convenient to retailers post-crisis, it could detrimentally impact the quality of work available in the sector in the future.

Characteristics of new retail work

Attempts to outsource labour are becoming more common throughout the sector. In a recent case, it was brought to light that outsourced drivers at Sainsbury’s were being paid up to £12,000 less than direct hires. However, prompted by the demands of the crisis, many more have opted to outsource delivery to third-party platforms to avoid the costs associated with developing their in-house infrastructures. Partnership agreements with platforms such as Deliveroo, Uber Eats and Amazon have allowed food retailers to make use of the low-cost delivery services offered by these providers, which rely on a network of bogus self-employed couriers to fulfil deliveries the same-day.

The longevity of this approach beyond the crisis remains unknown, yet it is a concerning development for the future of employment relations in that growing segment of the sector. The quality of work available within the sector could deteriorate as mentioned, but the quantity of work available could also decline if some choose to adopt an approach, similar to Ocado, which relies on longer-term investments in ‘big-ticket’ automating technologies. However, there is little evidence of yet that either approach is likely to dominate regardless of what certain predictions suggest. Therefore, policymakers should ensure that the jobs which remain do not reinforce the existing inequalities which are endemic to service work and have been further exacerbated by the current crisis.

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Will animal welfare and trade policy makers ever see eye to eye?

By Professor Lisa Collins, University of Leeds, Professor Tony Heron, University of York and Professor Fiona Smith, University of Leeds

This month saw the publication of the Government’s Action Plan For Animal Welfare. With an entire section devoted to international trade and advocacy, the Action Plan adds further pressure on the Department for International Trade to ensure animal animal welfare standards are not forgotten in the ongoing negotiations, not least in the current talks with Australia.

Recognising in law that animals are sentient beings is a landmark step for animal welfare in the UK. Whilst the Animal Welfare Act 2006 recognised that animals feel pain and can suffer, the new Action Plan for Welfare goes beyond this, recognising through a series of bills that animals are sentient — that have the capacity to feel and experience positive and negative emotional states, such as joy, pleasure, pain and fear, and sets out plans for an expert committee to hold ministers accountable for animal welfare in policy.  The Action Plan sets out a wide-ranging suite of reforms that will touch the lives of farm animals, wildlife and pets both on and off the UK’s shores, and bringing animal health and welfare fully into discussions and actions for the 25-year Environment Plan.

The Action Plan, produced by the Department for Food and Rural Affairs (DEFRA), claims the Government’s work on animal welfare extends beyond its own borders; it wants to solidify and enhance its position as a global leader in this field by promoting high animal welfare standards across the world. It states “we will build upon the opportunities presented by our departure from the EU to build an independent trading policy, in which animal welfare will play an integral part and which will complement our strong domestic standards. Our manifesto was clear that in all of our trade deals, we will not compromise on our high environmental protection, animal welfare and food standards”.

Interestingly the extent of the integrity of animal welfare in trade policy is about to become evident as the publication of the Action Plan for Animal Welfare coincides with the UK positioning itself to strike a free-trade agreement (FTA) with Australia, which if secured, as is looking very likely, would arguably constitute the UK’s most significant foreign policy achievement since it left the EU. Yet, we know the deal won’t be to everyone’s liking.  As reported by Peter Foster and George Parker of the Financial Times, the terms of the deal have been the subject of a ferocious battle in cabinet between Environment Secretary George Eustice and Trade Secretary Liz Truss over the subject of agricultural tariffs

What’s at stake?

As a net agricultural goods exporter, Australia sees the UK as a significant market opportunity, especially for its beef, lamb, dairy and sugar exports. At the moment, its access to the UK is controlled by tariffs and so-called tariff-rate quotas (TRQs), whereby only limited quantities of certain goods that meet UK food safety, quality and animal welfare standards can be imported tariff free. Australia, however, is pushing to have these tariffs and TRQs abolished. It is also calling for the elimination ‘where possible’ of non-tariff barriers on agricultural trade that it regards as unnecessarily trade restricting. In public, Australia is not being drawn on which of these non-tariff barriers it is targeting, although its opposition to the UK’s hormone beef import ban is well known. 

At the same time, the prospect of direct competition with Australian beef and lamb is probably the last thing the British farming sector needs at the moment. Although the overall economic effects of a free-trade deal with Australia will be modest, it could have disproportionate impacts in Wales and Scotland where upland farmers are already reeling from the trade disruption caused by Brexit and the phasing out of EU subsidies, not to mention Covid. 

Support for Farmers to improve welfare

While farmers look on to see the outcome of trade negotiations and prepare for the resulting ramifications, they may also be required to alter practices in line with Defra’s Animal Welfare Action Plan, which sets out  clear intentions to give more powers to police to tackle livestock worrying, and from 2022, to provide a source of financial support for farmers to improve health and welfare standards through the new Animal Health and Welfare Pathway. This will include support for biosecurity improvements and diagnostic testing to reduce the risk of disease spread and to encourage early diagnosis to ultimately reduce the impacts of infectious disease. The Pathway will also support the implementation of change in production systems for public-supported welfare enhancements. This will be linked to more transparent food labelling, allowing consumers more easily to support the production systems that they value. To be most effective, this needs to be supported with investment in research that demonstrates the welfare potential of different systems, and balances this against the key issues of sustainability, production sufficiency and farmer livelihoods. Turner-esque aesthetics are appealing on packaging, but we need to ensure the reality matches up to the painted idyll.

The Action Plan states that most live exports of animals for fattening and slaughter will be banned and there will be further consideration on transport conditions for animals more broadly. Alongside this, further reforms to welfare at slaughter will be considered. Whilst many animal welfare advocates were hopeful that the Plan would ban the use of cages for laying hens and farrowing crates for pigs, instead it laid out intentions to examine these two housing systems as part of wider reforms. Farrowing crates represent a welfare compromise for the sow, severely restricting her movements for up to five weeks until the piglets have weaned. However, they are typically associated with higher piglet survival than fully open farrowing systems where piglets are at risk of being inadvertently crushed or suffocated by their mother moving around. Alternatives, such as the PigSAFE and other freedom farrowing systems4, allow low piglet mortality whilst permitting the sow freedom of movement and the capacity to better mother her offspring. N8 facilities such as the National Pig Centre at the University of Leeds and the C-DIAL at the University of Newcastle offer opportunities to demonstrate the welfare benefits of such alternative systems.

Whilst improvements through the Plan may reduce the individual risks and associated severity of individual welfare ‘hazards’ on the animals experiencing them, there is a significant gap on the impact of cumulative experience and how best to protect animals from a lifetime of more minor negatives. Whilst there are major issues to contend with, the minor issues tend to be overlooked. The cumulative impacts of repeated, or many different smaller issues is one that needs more investigation and scientists and policy-makers should work together to determine best practice here, for all farmed species. 

Not one commission but two

Alongside pressure to meet promises in the Animal Welfare Action Plan, the UK’s deal with Australia comes hot on the heels of not one but two other separate reviews commissioned by the Government, both of which have produced recommendations for upholding UK food standards. The National Food Strategy (NFS) recommends a mandatory ‘verification’ system for FTA partners’ goods to enter the UK market tariff and quota free. Under this, food imports from the country concerned would need to show that they met a set of ‘core standards’, including but not limited to standards on food safety, animal welfare and the prevention of severe environmental impacts. 

The Trade and Agricultural Commission (TAC), meanwhile, recommends that the Government ‘should work with trading partners within future FTA negotiations to lower tariffs and quotas to zero’, but only where the partner country can demonstrate ‘outcome equivalence’ regarding a ‘core set of standards’ in the areas of climate change, environmental, ethical and animal welfare standards. The TAC report recommends that imports failing to meet an equivalence test should be treated as instances of an ‘unfair’ trade practice and subject to ‘countervailing duties’ (import tariffs beyond those normally applied to imports).

The policy proposals offered by these two commissions are genuinely innovative and worthy of further study. If implemented, they could serve to disentangle the use of tariff and non-tariff measures for the purpose of upholding high standards from their use as economic protectionism. However, they also share three common problems.  The first is that it is far from clear that using tariffs and non-tariff barriers in the ways proposed would be legal under WTO rules, where the issue of trade discrimination on the basis of different production methods is still a highly controversial one

The second is that it is unclear what incentives trade partners like Australia would have for signing up to such a system, since the logical response would surely be that their own farming systems may be different, but they are hardly unfair.

Third, and most importantly, it is ultimately up to the Government to decide which, if any, of these recommendations it wishes to take up and enshrine in its FTAs. This, after all, remains the central political problem raised by the Australian deal – how to satisfy the competing interests of different stakeholders and who to blame when things go wrong.

With the Australia deal imminent, we get to see for the first time how, in practical terms, the Government reconciles the tension between its simultaneous commitment to upholding UK food and animal welfare standards while liberalising trade through bilateral free-trade agreements.

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What to expect from UK agrifood trade policy after the Brexit transition

By Professor Fiona Smith, Professor of International Economic Law, University of Leeds, and N8 AgriFood Chair in Agrifood Regulation

With the UK’s imminent departure from the EU, there are four emerging trends in UK trade policy that have implications for agrifood.

On 29th October, the Secretary of State for International Trade, Liz Truss, delivered a speech at Chatham House in which she set out the UK Government’s vision for new independent trade. The UK Government intends to determine a path independent from the EU which will focus on “neither sacrificing core values of freedom, democracy, human rights and the environment, nor economic opportunities”. The speech was short on specifics and a full trade strategy document is expected. For now, it is possible to identify four emerging trends in UK trade policy that are relevant for the agrifood sector.

1. “Free and fair trade” will be at the core of UK trade policy going forward

The UK’s agrifood tariffs (import taxes), as set out in the UK’s Global Tariff (UKGT), will take effect on 1st January 2021. These tariffs will apply to imports from countries with which the UK does not have a trade deal. The UKGT largely replicates the EU’s agrifood tariffs at present, with some simplification on 10% of all agrifood tariffs.

This emphasis on free trade might signal an ambition (at least in the Department of International Trade) to gradually reduce those tariffs over time to coincide with UK farmers adjusting to the new market conditions in terms of the UK’s new trade relationship with the EU, as well as the changes to farm support set out in the Agriculture Act 2020, which came into force on 11th November. There is no indication of such a move yet, and certainly any changes in that direction should take into account what impact further agrifood tariff liberalisation might have on the UK’s farmers’ competitiveness.

2. Trade policy will be values driven

The UK Government has made it clear on several occasions that it intends to retain existing high food quality, food safety and environmental standards for domestically produced and imported agrifood products. In November, Liz Truss strengthened this commitment by placing the Trade and Agriculture Commission (TAC) on a statutory footing.

The TAC will now produce an annual report evaluating the impact on animal welfare and agriculture of each trade deal signed by the UK after the end of the transition period on 31st December, though its current remit over environmental provisions will be removed.

Whilst the TAC’s new statutory powers will head off concerns that the dreaded chorine washed chicken is headed for UK plates, it is less certain that the same kind of scrutiny will exist for concerns about pesticide residues. It should be noted though that the House of Commons Environment, Food and Rural Affairs (EFRA) Committee has already indicated it intends to carry out detailed scrutiny of the impact of the UK’s new trade agreements on food quality, food safety and environmental standards. As a consequence, concerns about environmental protection can be raised before the EFRA Committee in oral or written evidence instead.

3. The UK will champion a return to a rules-based trading system under the World Trade Organization (WTO)

The WTO has experienced headwinds of its own in recent times, so the UK’s leadership on WTO reform will be welcomed by many WTO members. WTO rules did not prevent the UK-China trade war and the consequential effects for US-China agrifood trade. In July 2018, the Chinese imposed a 25% retaliatory tariff on imports of US soy, resulting in a 75% drop in US soy exports to China between 2017 and 2018. US exports of wheat to China also declined by 90% and dairy exports were reduced by 30% during the same period. There was some trade diversion as US farmers sought new markets, but trade patterns remain difficult to predict. The dispute is ongoing. These market distortions make it difficult for companies operating within global value chains on a ‘just in time’, rather than ‘just in case’ supply model, to accurately predict agrifood trade flows.

The UK’s leadership in the WTO on these and other issues might help unlock some of the WTO’s current institutional challenges. Negotiations to change the WTO’s rules to accommodate trade policies designed to combat the effects of climate change on agrifood production are stymied. President Trump blocked the appointment of the front runner candidate, Ngozi Okonjo-Iweala, to be the new WTO Director General in October. She was to be the first woman, and the first African to take on the role. She is a strong advocate for WTO regulatory reform that recognises the link between trade and environment, as well as the need to reform the rules on agricultural subsidies and export restrictions. President-elect Biden’s new trade policy focus is yet to be announced, but it is hoped he will withdraw the US objection to the new WTO Director General appointment, and he will also enable some movement on changes to the multilateral trade rules.

4. “Friends and family first”

The UK intends to channel 80% of all its trade through bespoke trade agreements by 2022. This is an ambitious target. As of mid-December, the UK has concluded 27 trade agreements with 55 countries. The number of agreements signed so far is impressive. These are slightly amended versions of existing agreements entered into by the EU that the UK benefited from during its EU membership, so there is no substantial change to the UK trading position with these countries.

Liz Truss made it clear in her Chatham House speech that as far as wholly new trade agreements are concerned, the UK Government intends to prioritise negotiations with “longstanding allies and nations who share [the UK’s] values”. Consequently, negotiations with the US, Australia and New Zealand, as well as a UK-EU deal will be prioritised. While the UK-EU trade deal lurches ever closer to the 31st December cliff edge without signs of a conclusion (at the time of writing), there is more hope for the US, Australia and New Zealand negotiations.

Indeed, there is a draft text “at an advance stage of preparation” for the UK-US deal, which includes an ambition to increase market access for Scottish salmon and whisky exports to the US market. The US election has slowed progress. President-elect Biden has made it clear that the US will not enter into a trade deal with the UK unless the UK resolves how it will achieve frictionless trade across the Northern Irish border. Whether the UK-EU agreement concluded on the 9th December that exempts tariffs on 98% of goods travelling across the Northern Irish border and reduces some border checks will allay President-elect Biden’s fears, remains to be seen. The UK-Australia and UK-New Zealand trade negotiations are less advanced. The second round of trade negotiations with Australia occurred in October this year and the UK only issued a formal invitation to New Zealand to enter into negotiations in July.

Where does this leave the UK trade policy after the Brexit transition?

The UK is the first major country to leave a large trade agreement with its close geographic neighbours, as well as the first to reintroduce trade restrictions. As such, the UK is writing the rulebook. There is no precedent for how the UK should craft its trade policy, particularly in relation to agrifood. Despite the political rhetoric, the initial phases of UK trade policy have focused on renegotiating many trade agreements the UK already benefitted from while an EU Member State. Rollover of these existing benefits after the end of the transition period on 31st December 2020 is not automatic, as every trade agreement is the product of a negotiation between two (or more) states.

Many of these countries – like Japan, with whom the UK struck a deal in October – are keen to renegotiate market access commitments with the UK that they had to concede to the EU. The UK seems to be pivoting away from Europe and towards Asia too. Liz Truss has already signalled the UK’s intention to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) in September this year. Whether membership of the CPTPP delivers new markets particularly for meat cuts not eaten by UK consumers, is currently unknown. The significant distances over which goods must be transported and the costs of doing so may deter some UK exporters despite the existence of a trade agreement. And, it should be mentioned that the UK will be negotiating these trade agreements with significant headwinds, including the impact of COVID-19; the call for reshoring of agrifood production; and a shift from ‘just in time’ to ‘just in case’ supply chain models.

Whether the UK can become “a major voice in global trade” once again remains to be seen. What is clear, is that the ambition to pivot the UK to being a hub for trade to create more export opportunities, provides new possibilities for UK agrifood business in the medium-to-long term.

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Fairtrade and the COVID-19 response – lessons for business and the food system

By Tim Aldred, Head of Policy, Fairtrade Foundation

As the rapid spread of COVID-19 has provoked emergency restrictions across the world, colleagues across the Fairtrade movement have been looking hard at the risks to the 1.6 million farmers and workers in the Fairtrade system, and the many millions more in their families and communities.

The numbers are mind-boggling. The International Labour Organization estimates that 94 percent of the world’s workforce are living with some form of workplace closure, alongside a drop in working hours equivalent to 305 million jobs.

The United Nations estimates that nearly 50 million more people will be pushed into extreme poverty. At Fairtrade, we immediately started asking what we could do to support farmers facing this terrible storm.

Conversations with retailers and supply chain businesses also made clear just how challenging it was to keep food and other essential supplies moving to the UK’s supermarkets. With nearly half of the UK’s food coming from overseas, and around ten to fifteen percent from Asia, Africa and Latin America, the global shutdown could have led to shortages on the shelves.

Fairtrade farmers and workers, and millions of others like them around the world, quickly became recognised as “key workers”. Their well being was understood to be directly linked to yours and mine; a well being, of course, which became suddenly and profoundly threatened, in several ways:

  • Most obviously, the immediate public health emergency. How could farmers and workers be protected at work and at home? There were urgent needs for protective equipment, additional sanitation, distancing measures and health education, for example.
  • Producers of shopping basket staples, such as banana farmers, typically saw demand for their produce rise or remain stable. However, necessary movement restrictions at work (including shielding leave for older workers) and transport difficulties for shipments made production harder and more expensive.
  • Some sectors saw potentially catastrophic drops in income. “Non-essential” goods such as flowers, and “delayable” purchases such as storable commodities, saw huge drops in sales, sometimes in a matter of days. Garments and flowers were two sectors hit hard as consumers simply stopped buying overnight. Flowers were also badly affected by the sudden drop in air freight capacity. The flower industry in East Africa saw mass layoffs, with businesses at risk of permanent closure. Migrant and casual workers are especially vulnerable, without the protection of employment contracts, and with movement restrictions preventing travel to work.
  • The risk of human rights abuse in factories and fields increased, partly because movement restrictions and lockdowns have prevented the kind of workplace scrutiny from buyers, researchers, journalists and auditors that would usually be taking place. In addition, the drop in incomes and availability of work could be putting pressure on people to accept poor or even abusive working conditions. Such risks are heightened in settings with pre-existing human rights concerns.
Business responses – what does good look like?

The grave context means that action by retailers, brands and traders during the crisis has been (and continues to be) critical for the protection of livelihoods, human rights and the public health of vulnerable suppliers. At Fairtrade, we’ve been offering advice and taking action ourselves. The following points summarise our advice to retailers, brands and supply chain businesses.

  • Support public health at work
    Businesses can support their suppliers in taking emergency measures such as establishing social distancing and utilising protective equipment. With misinformation about COVID-19 widespread, sharing accurate health advice is also important.
  • Immediate business protection
    With a high risk of business failure, emergency funding to help cover cash flow problems can help to keep workers paid or to pay for measures such as furlough and shielding leave. As well as looking after the workforce, preventing businesses from going under in the “first crunch” also makes it easier to restart or scale up production.
  • Financing and responsible purchasing practices
    With money so tight, predictable, reliable financing and prompt payment of bills is very important. Prompt payment terms, pre-financing, reassurance that existing contracts will be honoured, and commitment to future orders all help producers to plan and to keep paying wages.
  • Making human rights expectations clear
    With human rights risks heightened, buyers need to be clear to suppliers that there is an expectation to see human rights, wages commitments and public health measures upheld, even within these exceptional circumstances. If such messages come alongside commitments to help producers with financing or other support, there will be reassurance that the buyers are not about to cut and run, and therefore less temptation to cut corners.
  • Market intelligence
    Information about the UK market and insight into future buying trends will be critical for producers, helping them plan and prepare with as much confidence as possible, despite the uncertainties.
  • Advocacy
    Governments too need to hear what is going on in supply chains as a result of COVID-19. They set policy for managing the crisis and will commit large sums towards recovery and rebuilding. We need policy to back protective measures in the short term, and the kind of sustainable, resilient supply chains that are needed both by supply chain workers and UK consumers in the long term. As we move into the recovery phase, there is an opportunity to rebuild fairly and sustainably, but this could be lost if business does not raise its voice alongside civil society.
What has Fairtrade itself been doing?

In the Fairtrade system, we’ve taken a number of steps to support producers through the crisis. We’ve been coordinating across the Fairtrade system, bringing together our producer networks and market-facing organisations, to support producers in several ways:

  • Fairtrade Premium
    We made a temporary change to the rules on Fairtrade Premium use. Fairtrade Premium is an additional payment made by Fairtrade buyers to farmers and workers groups. Producers could use these additional financial payments for a wider range of uses than usual, including salaries. It has been widely used by producers across the world to pay for furloughs and shielding leave, job protection, public health measures, and other steps.
  • Human rights
    Our advice to producers was accompanied by a statement of Fairtrade expectations with regard to maintaining standards including human rights, wages and health.
  • Market intelligence
    We have been sharing regular briefings with producers on UK market conditions and trends, to help them understand the trends in the UK retail market and inform their planning.
  • Financing
    We have established a Fairtrade relief fund with initial resources of €3.1 million to support immediate protection and restart needs. This is underwritten with reserve funding and seeks to leverage donor and company funding.
  • Advocacy
    We have produced a series of briefings aimed at decision makers, which have been shared widely with politicians, businesses and beyond. We’ve also taken part in webinars and press work to draw attention to the issues facing producers, as well as encouraged business and donor responses. As discussions begin on recovery plans, we’ll be continuing to put the position of Fairtrade farmers and supporters forward.
What are we learning?

The crisis has shown us just how fragile our food supply chains are. With many producers in developing countries already working on very low margins. With workers close to the poverty line, the shock of COVID-19 has seriously challenged the production of food and the well being of whole communities.

There are important lessons here for business and government decision makers. How can we be better prepared to face the risks of future shocks to supply, whether they come from further pandemics or are shocks caused by extreme weather related to the climate crisis?

Some initial reports suggest that supply chains where Fairtrade approaches were operating have often shown impressive resilience through the first months of the crisis. It was also important that producer to buyer relationships were strong and based on a shared commitment to fairness and sustainability. We have received many reports from producers about the ways in which they have been able to offer job protection and furloughs, introduce health measures and keep businesses running, despite the extreme circumstances. Why might this be?

Where this has happened within Fairtrade producer groups the following may apply:

  • A strong base of investment in community infrastructure, medical facilities and possibly better household assets, with this being linked to better value received over time through Fairtrade Premium investments and (where applicable) the minimum price mechanism.
  • The release of Fairtrade Premium for emergency support has clearly been very significant as a buffer for job protection and emergency measures. Again, this is linked to additional value paid over time.
  • There has often been impressive community and/or worker organisation in response, arguably supported by Fairtrade’s focus on producer empowerment.

The approach taken by buyers also seems to be significant. Where issues such as human rights, environmental measures and poverty reduction are embedded in company values and structures, they are more likely to be “top of mind”. In this context, the business case to invest quickly to support vulnerable suppliers has been well understood, and the expertise to take appropriate action has been on hand within the company.

For example, Waitrose quickly announced emergency funding to help suppliers in developing countries with public health advice and improve sanitation, as well as committing to speed up payments to vulnerable suppliers, alongside other actions. Co-operative Food committed significant emergency funding for their Fairtrade producers and announced human rights due diligence measures as part of a package of support.

Tate & Lyle sugars recently confirmed to me that they had been able to replicate the communication and safety measures adopted in the UK premises in their overseas operations within days and ensure that appropriate provisions were agreed with the cane farmers who supply them. They felt that the relationships and structures developed through Fairtrade were instrumental in this being done in a timely way.

Sadly, this kind of good practice is not universal. We also heard a different kind of story, notably from the “fast fashion” industry, of buyers cancelling contracts as the crisis hit, leaving suppliers and their workforce, high and dry.

An opportunity to learn and redesign

So far, these examples are based on personal experiences of working with and within Fairtrade supply chains. Independent research into these and similar experiences would be invaluable. If there is strong evidence that businesses practicing fairer trading practices have seen their supply chains stand up better in the face of the pandemic, then the implications for business planning and government policy on trade, food security and environment could be huge.

Fairtrade has argued for years that the problems of poverty, human rights and environmental damage linked to the food we buy will not be solved unless farmers and workers are paid fairly. The pandemic experience makes clear that failure to pay fair prices is not just something that hurts farmers and workers, it also progressively stacks up the risk of future shocks to our food system and food supplies.

By contrast, paying farmers fairly, investing in decent livelihoods and building community resources like housing, schools and health facilities, as well as paying living wages and incomes, have always been intrinsically the right thing to do. We can now see that building the resilience of farmers is also key to protecting the well being and food security of the world’s future consumers.

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