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Food system is ‘brutally unfair’ for producers

Millions of people who produce food for UK supermarkets are “trapped in poverty and face brutal working conditions”, according to a new report by Oxfam.

Ripe for Change highlights how supermarkets, including Tesco, Sainsbury’s, Morrisons, Asda, Aldi and Lidl, are increasingly squeezing their suppliers.

The analysis found that across 12 common food products, including tea, orange juice and bananas, UK supermarkets receive almost 10 times more of the checkout price than the small-scale farmers and workers who produce them.

The report comes in the same week that the Food Ethics Council published a poll showing that 45% of UK consumers believe the food system is “unfair” to people working in food farming in developing countries. This rises to 52% amongst 18- to 24-year-olds. Only 28% of those surveyed thought the system was unfair to UK producers and suppliers.

The Oxfam report found that for some products, like Indian tea and Kenyan green beans, the average earnings of producers were less than half what they needed to get by.

The share paid to small-scale farmers and workers in their supply chains fell by a quarter to just 5.7%, Oxfam reported. Meanwhile, the UK supermarkets’ share rose from 41% in 1996 to nearly 53% in 2015.

Farmers are being “brutally squeezed”, said Winnie Byanyima, Oxfam International executive director, and especially women: “Our modern food system is built on squeezing women’s labour hardest of all.”

The report includes a scorecard, based on the assessment of the publicly available policies and reported practices that affect the workers and farmers – especially women – in the food supply chains of some of the biggest supermarkets in the UK, United States, Germany and the Netherlands. Scoring was made against a series of indicators “based on international standards and widely-recognised good practice”.

The analysis of the six biggest supermarkets in the UK – Tesco, Sainsbury’s, Morrisons, Asda, Aldi and Lidl – placed Aldi at the foot of the table with 1% and Tesco at the top with 23%.

The “tight grip” on retail markets gives supermarkets significant power to shape food production around the world, the charity said. Market concentration in the agri-food sector among corporate giants has now reached “extreme levels” thanks to a succession of huge mergers.

In an exclusive interview with Footprint this week, Dan Crossley, FEC’s executive director, was asked about the potential mega-merger between Sainsbury’s and Asda. “I suppose it’s possible for consolidation to lead to stronger ethics. However, I struggle to find evidence that it has in practice,” he said.

Oxfam calculated that supermarkets and other supply chain actors would need to invest only a marginal amount to close the gap between prevailing and living incomes or wages in comparison to the end consumer price – no more than 5% across the basket of 12 products assessed, and often less than 1%.

Also, consumer prices may not need to rise to achieve this additional investment.
 In each of the 12 cases the extra investment needed is far less than the amount by which supermarkets (or other lead firms) have increased their share of the end consumer price in the last 10 to 15 years.