How ethical are the buying practices of supermarket chains?

The South African fruit
industry is doing everything
in its power to become a
leading light in ethical fruit
farming practices, says Stuart
Symington, CEO of the Fresh
Produce Exporters’ Forum.
Addressing the Cape Town
Exporters’ Club last week,
Symington made clear that
ethics should be a subject that
the entire international trade
chain addresses – from the
fruit farmer right up to the
fruit consumer overseas.
“We should be very vigilant
that attention to ethical
business practices is not just
focused on labour treatment
on farms. For example, if
supermarkets abroad insist
that labour practices on farms
are compliant with various
standards that they impose on
suppliers, then farmers and
their exporters should insist
that buying practices of these
same powerful supermarket
chains are ethically compliant
as well.”
The Wall Street crisis of
2008 is a recent reminder
of poor ethical conduct by
society’s supposed custodians
of the international financial
arena. The antics on Wall
Street caused liquidity to dry
up in 2009. And with little
money in circulation over
that period, growers lost out
on the conventional advance
payments from importers for
product already shipped. Fruit
growers landed up having to
take disproportionate risks,
and in some cases, never got
paid.
Another unhappy scenario
that South African growers
have had to contend with is the
extraordinary level of import
duties on imported fruits in
various countries. India’s 50%
import duty on apples, and
35% import duty on citrus is a
case in point.
“Politicians in a number of
our customer countries are
out there buying votes, and
the instruments that they use
are import tariffs and farm
subsidies. This is the way that
they protect their local farmers
from having to contend with
imported products. And if you
consider that South African
farmers do not get one cent in
the form of farm subsidies, it
provides for an unlevel – and
therefore unfair – playing field.
In recent years, farmers in
Europe received US$80 billion
per annum in government
subsidies, and their US
counterparts US$20 billion”.
It is interesting to observe
that the resolution of the Doha
Round on agriculture has
come to a grinding halt for
these very reasons. So one
has to ask: just how ethical is
it for politicians to engineer
the playing field for their
own good, and to do so at the
expense of the international
trading system?
In summary, the crucial
role-players in the value chain
that are the custodians of
ethical practices are financiers,
supermarkets and farmers.
Financiers need to keep the
risk of their dealings within
the accepted norm of banking
standards. Supermarkets need
to desist from dodgy practices
such as over-procurement
of fruit or insisting on
specifications that differ from
those agreed on by respective
governments. And farmers
need to abide by the labour law
of their countries and ensure
that humane labour practices
are uppermost in their minds
at all times.
The controversial matter
of labour broking in farming
remains unresolved in South
Africa. “Various models of
managing labour in a fluid
South African agricultural
system are coming to the fore,”
claims Symington, “and the
fittest will survive. One such
model is the establishment of
a labour co-operative, with
its own secretariat to properly
deal with important worker
issues such as benefits and
representation. It’s a blend of
socialism and unionism. And
if it works for the labourer as
well as the farmer, it’s a winwin
for all.”