Ethical Sourcing in the Global Food System

Stephanie Barrientos, Stephanie Barrientos, Catherine Dolan

• Publisher: Routledge
• Year: 2012
• Print ISBN: 9781844071890
• eBook ISBN: 9781136566233
• Topic: Biological Sciences
• Subtopic: Ecology
• Index: Biological Sciences

Ethical sourcing, both through fair trade and ethical trade, is increasingly entering the mainstream of food retailing. Large supermarkets have come under pressure to improve the returns to small producers and conditions of employment within their supply chains. But how effective is ethical sourcing? Can it genuinely address the problems facing workers and producers in the global food system? Is it a new form of northern protectionism or can southern initiatives be developed to create a more sustainable approach to ethical sourcing? How can the rights and participation of workers and small producers be enhanced, given the power and dominance of large supermarkets within the global food chain? What role can civil society and multistakeholder initiatives play in ensuring the effectiveness of ethical sourcing?

This book brings together a range of academics and practitioners working on issues of ethical sourcing in the global food system. It critically explores the opportunities and challenges in the ethical sourcing of food by combining analysis and case studies that examine a range of approaches. It explores whether ethical sourcing is a cosmetic northern initiative, or can genuinely help to improve the conditions of small producers and workers in the current global food system.

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Transformation of Global Food: Opportunities and Challenges for Fair and Ethical Trade

Stephanie Barrientos and Catherine Dolan

Introduction

Over the past decade a paradox has emerged in the global food system. On the one hand, we have seen a rapid rise in corporate domination of food production, particularly, food retailing. Consumers have become increasingly dependent upon large supermarket chains for year-round food, creating fierce competition and aggressive commercial practices amongst leading corporate players. On the other hand, consumers have also become more discerning about the social impacts of food sourcing. Many civil society organizations (non-governmental organizations, or NGOs, and trade unions) have criticized the adverse social effects of corporate power on small producers and workers in global agriculture. Companies are increasingly under pressure to enhance the position of small producers and workers in their supply chains. This has resulted in the rise of a range of voluntary initiatives under the umbrella of ethical sourcing, including fair and ethical trade.

There are now a plethora of voluntary initiatives and organizations linked to fair trade and ethical trade operating in different parts of the world (see the Glossary to this volume for a summary of examples). They aim to ensure that the small producers and workers linked to the global food system benefit from or, at the very least, are not harmed by company sourcing strategies. Some are individual company schemes to improve conditions for small producers and workers in their own supply chains – such as the ‘preferred supplier’ scheme of Starbucks and supermarket codes of labour practice. Some are wider sector-based initiatives involving groups of companies and other stakeholders – such as the International Cocoa Initiative. Others are independent initiatives that cross sectors and involve different stakeholders, such as the Fairtrade Foundation and the Ethical Trading Initiative (ETI). Some rest on reputation while others operate labelling schemes. It can be difficult for a discerning consumer to navigate this diverse landscape. Increasingly, consumers are confused by the barrage of slogans, labels and schemes, and are uncertain whether or what benefits accrue to the stated beneficiaries in a complex global food system.

The aim of the book is to unravel some of the main ethical sourcing initiatives that have arisen in the rapidly changing context of global food production and retailing. The rise of ethical sourcing raises important questions. What factors are driving the growth of fair and ethical trade? Are civil society organizations promoting ethical and fair trade genuinely able to affect the commercial practices of large corporate producers and retailers? Can a global food system driven by commercial pressures seriously incorporate ethical sourcing? What role does the monitoring and enforcement of social codes play in advancing their credibility? Are small producers and workers who are linked to the global food system genuinely able to benefit from this trend? These are the questions that will be explored through the different perspectives and case studies in this book.

Background

The increase in ethical sourcing is directly linked to changes that have taken place throughout the global food system, from production to consumption, during the last few decades. The past decade, in particular, has seen the rapid rise in supermarket retailing, not only in Northern but increasingly in Southern countries (Reardon and Berdegué, 2002; Fox and Vorley, Chapter 10, this volume). Supermarket distribution chains have become streamlined as they move away from the use of traditional food markets to centralized procurement systems and more direct year sourcing from suppliers. This is often accompanied by vertical integration or relational contracting, where production, processing, marketing and financing are linked. Large food manufacturers and distributors, such as Unilever and Nestlé, continue to play an important role in food sourcing; but their position has been eclipsed by supermarkets at the consumer end of the chain. The unrivalled market power of global food manufacturers and retailers has meant that suppliers are ever more dependent upon them for market access. Increasingly, staying in business hinges on meeting the stringent terms and conditions for price, quality and delivery set by large corporate buyers. The food system has thus become more integrated and expansive in its global reach, but increasingly driven and defined by large corporate players (Vorley, 2004).

Changes in the global food system have brought benefits to some, particularly more affluent consumers in the North, but also amongst some sections of the population in the South. As these consumers come to expect more from the global food system, food industries have responded with new products, packaging and innovations to match shifting consumer tastes. Consumers are now able to purchase a wide range of basic and ‘exotic’ food from different parts of the world throughout the year. As more women engage in paid work, supermarkets provide a convenient means of reducing the time spent on shopping, and the availability of processed and prepared foods reduces the time spent on cooking and food preparation in the household.

Consumer concerns about the nature of food production and its health and safety implications have also grown. While European consumers have long experienced anxieties regarding food quality and safety, a series of ‘food scares’ and safety scandals erupted during the 1980s to 1990s (e.g. outbreaks of BSE, CJD,¹ listeria, salmonella and foot and mouth disease) that dramatically increased concerns surrounding food products. Questions have also been raised about the environmental, health and sustainability impacts of the global food system. Environmentalists have pointed to the risks to health and environment from mono-cultivation, the use of pesticides and more intensive farming methods in agriculture. They criticize the polluting effects of ‘food miles’ involved in the transportation of food from ever-more distant parts of the globe to the plates of Northern consumers. Health experts have pointed to the problems of rising obesity and diet-related diseases stemming from our growing reliance on highly processed foods that are low in nutritional content. Activists are concerned that export-oriented development has triggered a shift away from local food production, undermining food security in developing countries and threatening the livelihoods of small farmers.²

More recently, a growing lobby of civil society groups has also questioned the social impacts of modern global food production, which is the main concern of this book.³ This has been facilitated by heightened exposure to global issues through the media, internet and long-haul international travel. It has also been boosted by the campaigns of some civil society organizations, which have widely publicized the adverse effects of global food production on smaller producers and workers. There is, thus, a paradox in the contemporary global food system: many consumers who are capitalizing on the supermarket economy through faster, cheaper and more convenient food have become more concerned about the social conditions under which their food is produced and distributed.

The Rise of Ethical Sourcing

As the global food system has evolved, civil society organizations, particularly NGOs, consumer groups and trade unions, have become increasingly active in advocacy and campaigning for more ethical principles in global food sourcing. Their focus is particularly on small producers and waged workers whose production and employment conditions are directly or indirectly affected by the global restructuring of agro-food markets and the trading practices of large corporate buyers. While fair trade and ethical trade initiatives share a common ideological commitment to social development, they embrace different aims and methods. Fair trade has its roots in the solidarity and charity movements of the mid 20th century and largely focuses on providing support for small producers marginalized by the global trading system. Ethical trade based on codes of labour practice came to prominence during the mid 1990s as part of a renewed emphasis on corporate social responsibility and self-regulation in the context of privatization and government deregulation. The better of them embody core International Labour Organization (ILO) conventions covering freedom of association, no child or forced labour and no discrimination. They complement a number of wider multilateral initiatives, such as the ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy, the Organisation of Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises, and the United Nations Global Compact. All provide voluntary approaches to enhancing labour standards in global production systems where key corporate buyers are often beyond the control of national regulation in the countries from which they source.

Civil society organizations (NGOs and trade unions) have long been concerned about the adverse effects of globalization on both small producers and workers. In many commodities, small producers are facing falling international prices, even to below their costs of production, often pushing them into crippling debt. They are finding it increasingly difficult to meet the quality standards set by large corporate buyers. Many are being squeezed out of global supply chains as large supermarkets concentrate their supply base (see Chapter 10). At the same time, large production units have generated a growing agricultural labour force in many areas linked to global food production. Much of this labour is female and often draws on migrant workers. Employment in agriculture and food production is largely temporary and insecure, often with poor working conditions, long hours and lack of legal or social benefits (see Chapter 5).

Civil society organizations have attempted to address these concerns through different ethical sourcing strategies. Early movements focused on creating alternative trading channels for poor producers so that they could access Northern markets without going through mainstream commercial food chains and reach socially conscious consumers. Fair trade was launched to extend these channels into more mainstream retailing, and to reach a wider range of consumers prepared to pay more for food that was certified as having been produced and distributed under more equitable conditions (Barratt-Brown, 1993).

Civil society organizations have also been able to take advantage of increased centralization within the global food system to pressure large corporate buyers and retailers. Where food is produced and distributed via open markets, it is difficult to trace its origins to a specific retailer, manufacturer or importer, let alone relate any malfeasance to a particular production site. Fragmented supply chains conceal the social relations and exploitative practices of production. By contrast, where food is produced in more integrated supply chains, it is possible to trace the effects of production on specific groups of small producers or workers, and link any adverse impacts to specific manufacturers or supermarkets. This has rendered large corporations, who occupy the most visible and powerful position in these supply chains, more vulnerable to negative publicity, linking them to the poor conditions of their overseas suppliers even where they are not formally responsible through direct ownership or employment. Such publicity can tarnish corporate images and potentially affect market share (particularly amongst the more affluent section of the consumer market) and company share prices.

However, some large retailers and producers within the food industry also want to actively project a positive corporate image. They appeal to consumers on the basis that they take responsibility for all aspects of the food they purchase, including the quality and hygiene of the food, as well as the social and environmental impacts of its production. They aim to encourage and maintain consumer loyalty in a competitive commercial environment in part, on the basis of the ethical principles and values represented by the company itself. Promoting fair and ethical trade can play an important part in sustaining this ethos and in differentiating some companies from others within the food industry.

While there are a plethora of ethical sourcing initiatives aimed at targeting the market of an ethically minded public (as summarized in the Glossary to this volume), the diversity of initiatives and ambiguity of terminology can be bewildering. A myriad of products, from fair trade milk chocolate, to shade-grown coffee, to ethical investments are now presented as part of ‘alternative’ consumption practices that encourage social justice and fair trade (Johnston, 2001). Yet, what is the difference between eating a banana that is fairly traded from one that is ethically sourced? Does ethical sourcing mean paying a farmer a fair price or ensuring that workers enjoy decent working conditions or both? How do fair trade and fair trade labelling differ? The answers to such questions are not always clear cut. The following sections first define and then examine the main aspects of two of the most prominent ethical sourcing initiatives in the global food industry: fair trade and ethical trade. Finally, we compare the two and weigh up the challenges facing them in the context of the wider global trading system.

Definitions and Scope of Ethical Sourcing

Ethical sourcing covers a wide number of voluntary initiatives concerned with the ethics of production and trade. Given the plethora of initiatives, it is important to clarify the terminology we use, which can be confusing since there is no common agreement. In this book we focus primarily on the social dimensions of ethical sourcing – fair and ethical trade.⁴ Fair trade focuses on equity in trading relations, and particularly support for small producers and farmers. Ethical trade covers employment conditions of workers through the implementation of codes of labour practice in the supply chains of large food corporations and retailers.

‘Fair tra...

Table of contents

• Cover
• Half Title
• Dedication
• Title Page
• Copyright
• Contents
• List of Figures, Tables and Boxes
• List of Contributors
• Acknowledgements
• Preface by Tim Lang
• List of Acronyms and Abbreviations
• 1. Transformation of Global Food: Opportunities and Challenges for Fair and Ethical Trade
• 2. The Development of Alternative and Fair Trade: Moving into the Mainstream
• 3. Organic and Fair Trade Movements in Global Food Networks
• 4. Corporate Social Responsibility from a Supermarket Perspective: Approach of the Co-operative Group
• 5. Ethical Trade: What Does It Mean for Women Workers in African Horticulture?
• 6. Central American Banana Production: Women Workers and Chiquita’s Ethical Sourcing from Plantations
• 7. The Gangmaster System in the UK: Perspective of a Trade Unionist
• 8. Participatory Social Auditing: Developing a Worker-focused Approach
• 9. Oxfam’s Coffee Campaign: An NGO Perspective
• 10. Small Producers: Constraints and Challenges in the Global Food System
• 11. Concluding Reflections on the Future of Ethical Sourcing
• Glossary of Selected Fair and Ethical Trade Organizations
• Index