Oxfam and IPL release joint report investigating poverty issues in the supply chain of major UK supermarkets

A new report, Exploring the Links Between International Business and Poverty Reduction: Bouquets and Beans from Kenya, has been released by Oxfam and International Procurement and Logistics (IPL). IPL is the biggest importer of fresh produce into the UK, owned by ASDA, the UK’s second largest supermarket.

The study looked at the fresh produce export sector in Kenya specifically in relation to the production of cut flowers and green beans. The export of high-value horticulture from developing countries into developed economies is a significant opportunity for economic development. The study was therefore used to gain an insight into the issues affecting workers and farmers in this sector and to identify how IPL can address issues within its own supply chain.

The report identified three key issues affecting small holders and workers in Kenya:

• Workers: the priority issue emerging from the study was that wages are insufficient to enable a decent standard of living for workers and their dependants.

• Small-scale producers: the income of small scale producers is generally higher than workers but is unstable and new growers face a range of barriers.

• Women: women are highly disempowered; keeping many in poverty, and childcare is often poor.

The report is based on the Poverty Footprint methodology which was developed by Oxfam and provides a framework for measuring private sector impacts on communities.  The methodology looks across value chains to provide a comprehensive understanding of how companies are impacting sustainable livelihoods, health and well-being, diversity and gender, empowerment, and security and stability, all key dimensions of poverty.
 
For some time IPL has assessed its core business practices with poverty reduction and development goals in mind. Oxfam’s Poverty Footprint methodology provided a perfect tool to assist IPL in better understanding their impact and commit to making changes to improve the impact on poor people.

In response to the findings Oxfam has provided key recommendations to address these issues:

• Rewarding suppliers providing better quality jobs and higher wages.
• Increase bargaining power for small scale producers making it easier for producers to engage with the companies for better terms and business practices.
• Ensure women get access to technical inputs and childcare, and improve representation of women workers including protection from harassment.

IPL has committed to focus on three areas based on Oxfam’s key recommendations:

• Workers: IPL will partner with committed suppliers to build strategies that achieve improved living standards for workers. To support this we will strengthen the seasonal review process under which IPL rates suppliers’ performances and plans future growing programme.

• Small-scale producers: IPL will create an enabling environment for exporters who aggregate supply from small scale producers to overcome challenges faced by them e.g. more consistent and regular volume demands and better payment terms. IPL will also partner with suppliers to create an environment that includes small-scale producers in the supply chain e.g. group organisation, training in certification requirements, input provision etc. to develop their ability to meet export demand (quantity, quality, and legality).

• Women: empower women by monitoring suppliers’ progress towards equal pay, reducing harassment and discrimination, access to financial services, and improving child-care provision.

Mark Goldring, Oxfam GB Chief Executive, says: “The world food system is a topic of enormous importance to Oxfam and it is clear that, with 1 in 8 people in the world without enough to eat, this is a system that is not fit for purpose. Although some of the findings of this report are challenging it has provided us with a unique opportunity to understand the role that large corporations play and shown that with the right policies and practices they can be part of sustainable and inclusive development. We hope for positive reports on IPL’s progress in meeting our recommendations in addition to seeing other companies re-evaluating their own impacts and being open about the challenges.”

Nick Scrase, Managing Director of IPL says: “IPL has made a series of commitments to drive a positive impact for small-scale producers and workers which Oxfam believes could affect workers, their families and communities directly within the supply chain.

“We will continue to seek the input of Oxfam and other external stakeholders as we develop our approach and implement our commitments.  We have taken important learnings from this work and are committed to ensuring that the value that we create is shared across our supply chain, especially benefitting standards of living for farm and packhouse workers and livelihoods of small holders.”

Positive impacts

The study did also reveal some positive impacts from the horticulture sector on ethical trading, namely that two million workers are involved in the export horticulture sector of Kenya, 60 per cent of them women. It also showed the positive impact from Ethical Trading Initiative programmes and Fairtrade certification, in addition to progress in safer pesticide use, andwith less impact on the environment from airfreighting the produce than had been predicted.

Related links

Download the report: Exploring the links between international business and poverty reduction. Bouquets and beans from Kenya