Consumers are Suffering, but so are the Producers



	Consumers are Suffering, but so are the Producers Brandon Sun “Small World” Column, Monday, April 24 / 23 Zack Gross One hears a lot these days, with high prices and inflation, about the challenges facing consumers, struggling to pay for food, housing, and transportation with a shrinking dollar in their pocket. And we hear about corporate bosses reaping high profits and receiving exorbitant annual bonuses while ordinary people suffer. What we don’t hear, and have never really heard much about, is the economic challenges faced by producers who must deal with increasing input costs while struggling to get relatively higher prices for their labour and their harvests. I am thinking of the Southern producer, growing food crops that we deem to be necessities in our daily diets – coffee, cocoa products, bananas and other tropical fruits – or making clothes, accessories or furnishings in workshops around the world (it was just the ten-year anniversary of the Rana clothing factory disaster). The international Fairtrade system attempts to increase the earnings and negotiating power of Southern producers by bringing them together most often in cooperative situations where they can argue from strength in numbers for a better deal. The Canadian consumer might think that this will directly impact them by increasing prices even further, but when one sees that commercial outlets and food processors take an outsize percentage of the value of each product, then we might focus on lowering that amount rather than squeezing the producer to take even less than they do. In bananas, supermarket chains receive about 40% of the value of any sale, while producers receive between only 5 and 9%, John Marron, Director of Commercial Relations at Fairtrade Canada told me, quoting Ethicalconsumer.org. When a group of us traveled to Peru a few years ago and visited banana growers, they told us that they tended to lose financially with every sale into the “free trade” global market. The Fairtrade system, while still a small part of the overall market, offered at least a living wage as well as support for updating equipment, training, climate change mitigation, and community improvements. Back in the day that I delivered presentations in school and university classrooms on fair trade, we brought in a mock-up of a banana and took it apart to show how much of the banana represented what each link in the chain received from sales. The producers, using this method, received only the percentage represented by the little black nub at the end of the banana. For coffee, some surveys show that producers at origin in the conventional market system only retain 1% of the value of the coffee for themselves, while the other 99% go to commercial outlets, processors, shippers and all the other links in the trading chain. For cocoa, farmers producing our chocolate products in West Africa, earn only 6.6% of the value of their product while retailers receive 44%, manufacturers get 35% and marketing gets 4%. The rest goes essentially to transport. Grocery chains and large multinational food companies have, in recent years, been buying up organic and fair trade smaller businesses to add to their portfolios. This is because there is a growing niche market for these products and because, as a recent Leger survey attests, companies want to improve their public profile as more than half of surveyed Canadian consumers are willing to pay more for products and services from a company with a good reputation. Especially during the pandemic years in Canada, sales of products such as coffee and chocolate from the Fairtrade system grew exponentially (in some cases, from 3% of the market to 9%) as people – especially those working at home – sought higher quality and ethical choices. Overall, if you are growing coffee, cocoa, bananas, sugar cane, avocados, wine grapes and other similar products, you are faced with many challenges to your economic survival. Thus, we saw in Peru that the younger generation in rural areas were moving into the cities and leaving only the older generation to continue farming. It is because they see no successful future for themselves, but only continued poverty, lack of education for their children, and ultimately disastrous prospects for farming as the climate crisis takes hold. Unfortunately, the prospect of success in the city is often only an illusion. While we must advocate for living wages for our workers here in Canada, and must push for more reasonable profit-taking, and fair prices for our consumer goods, we must also consider the plight of those who grow our food - or we risk losing producers who can’t live on what we pay them. Zack Gross is Board Chair of The Marquis Project, a Brandon-based international development organization, and co-author of the new book The Fair Trade Handbook: Building a Better World, Together. * * * * * Return to Articles page