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.”