In June 2012, ‘all major supermarkets, trading companies and NGOs in the Netherlands’ signed a covenant, committing themselves to ensuring that ‘all fresh fruits and vegetables in Dutch supermarkets are sustainably produced’ by 2020. The covenant sets targets for sustainable procurement of 30% by 2014, 50% by 2015 and 100% by 2020, and the programme is coordinated by the Sustainable Trade Initiative (IDH). Significantly, the agreement covers virtually the entire fruit and vegetable sector, representing more than 90% of the retail volume according to Joost Oorthuizen, chief executive of IDH. The definition of sustainability under the programme is based on existing standards (such as Rainforest Alliance and Fairtrade). The covenant is to be backed up by specific projects aimed at ‘improving working conditions of seasonal workers and stimulating sustainable water use’, with the first projects being launched in South Africa and Colombia.
In a consumer-led initiative in June, a coalition of consumer organisations petitioned the EC for the ‘Code of Practice the Commission has promised to govern food retailers [to] be extended to cover the overseas suppliers’. Renwick Rose, former coordinator of the West Indies Farmers Association (WINFA) stressed the petition was not ‘anti-supermarket’, pointing out that British supermarkets had been ‘instrumental in saving the banana industry in the Windward Islands with the stocking of Fairtrade bananas’. However, he highlighted how ‘the supermarket practice of offering low priced bananas to attract customers was having an impact on the quality of life of many farmers and workers’.
The move towards sustainable trade initiatives could potentially be a double-edged sword for the ACP, with a number of challenges arising. The first challenge is the scope for non-ACP suppliers – who are now penetrating the EU market with growing volumes of fruit and vegetable exports – to more rapidly gear up to meeting the expanding market demand for sustainably produced fruit and vegetables than ACP suppliers. This situation could arise, as there are targeted government initiatives in a number of non-ACP countries to support producers in exploiting new trade opportunities arising from pending or recently concluded trade agreements with the EU.
The second challenge would arise if sustainability certification became the norm for supplying major components of the EU market, without the costs of such certification being equitably distributed across the supply chain. This could lead first to ACP suppliers facing increased costs in order to supply the EU market, but also to a downward pressure on prices as a result of increased competition among retailers applying the same sustainability standards.
In terms of potential ACP policy responses, this suggests a need for:
- government-supported programmes to assist ACP producers in better serving sustainability-certified components of the EU export market;
- ACP producer organisations to engage with sustainable trade initiatives to ensure that issues of economic sustainability are adequately addressed, not just at the level of primary producers, but also at the level of the pricing policy adopted by retailers.
Such initiatives could be supported by the EC’s proposed retailer code of practice being extended to overseas suppliers, and by collaboration between the EC and ACP governments on the policy framework required to strengthen the functioning of international supply chains, to the benefit of primary producers.