Coronavirus: Fairtrade calls on G20 to provide ‘urgent’ support for low-income suppliers

Fairtrade International has called on G20 nations to implement a coronavirus response plan to protect low-income farmers and producers through economic support and investments that push commodity supply chains towards more sustainable practices.

Coronavirus: Fairtrade calls on G20 to provide ‘urgent’ support for low-income suppliers

The chief executives of all Fairtrade bodies globally have supported a statement sent to G20 chair, the Prime Minister of Saudi Arabia, Salman bin Abdulaziz Al Saud, calling on the G20 to protect farmers and workers in developing countries from the health and economic impacts associated with the coronavirus lockdown.

Noting UN University forecasts that more than half a billion people could end up in poverty due to the Covid-19 pandemic, the Fairtrade groups are warning that producers stand to lose around $380m a year if they are unable to sell their products.

Global sales of Fairtrade products reach $9trn annually and supports around 10 million people who are mainly based in developing countries. The farmers supported by Fairtrade are already among the world’s poorest people and the organisation believes that the communities they operate in often don’t have fallback jobs, economic safety nets and suffer from poor healthcare, a lack of clean water and sanitation and are at risk from hunger and malnutrition.

Darío Soto Abril, Chief Executive Officer Fairtrade International, said: “We are deeply concerned about the effects that the virus will have on farmers and workers across the developing world, including those producing food and other goods that G20 countries rely on.

“There is an urgent need to provide humanitarian measures to protect people’s health and lives while at the same time support economic measures to ensure continued livelihoods.”

In response, the G20 is being called upon to help producers and farmers navigate necessary lockdowns that are resulting in a rapid decline in orders and production across some commodity supply chains. In Kenya, for example, tens of thousands of flower workers have lost their jobs, with no local work alternatives while flower workers have also been laid off in Ecuador due to falling sales. The price of tea in India and Sri Lanka, meanwhile, are also reported to have fallen by 40% due to reduced demand.

Just response

G20 leaders have been urged to work with governments where low-income suppliers and growers are located to agree on furlough schemes that protect farmers from poverty and hunger. Fairtrade believes the furlough scheme can be financed by donor support from the World Bank and other agencies, placing tax holidays for workers that pay taxes and getting corporate retailers and manufacturers to pay forward on supplier contracts.

Fairtrade believes that many farms will get by using skeleton workforces. The cost of doing this for the 44 flower farms that Fairtrade works with in Kenya would be €2.8m over three months. Workers would also need to be supplied with relevant PPE protective equipment and training on social distancing.

At a minimum, Fairtrade is calling for food and essentials to be provided to farmers. Using the Kenyan flower farms as a basis, Fairtrade estimates the support costs for that nation to reach €270,000 over three months.

Alongside short-term contingency measures, the G20 is being urged to create a long-term stimulus package that enables global supply chains to become more resilient and sustainable, in line with both the UN Sustainable Development Goals and the EU’s Green New Deal, both of which highlight socially ‘just’ transitions as essentials in combatting climate change.

Fairtrade is also supporting wider calls for aid to be provided to developing countries to improve healthcare systems through a dedicated G20 taskforce to lead on a global response to the Covid-19 outbreak.

A group of more than 100 other former Presidents and Prime Ministers, along with current economic and health leaders have called for the creation of the taskforce to be complemented by a $150bn fund to support healthcare in developing nations, including the Special Drawing Rights of $500-$600 billion to be proposed by the IMF.

The impacts of the coronavirus on developing nations are set to be severe. Imperial College London estimates that there will be 900,000 deaths in Asia, 300,000 in Africa and 160,000 in Latin America and the Caribbean.

Matt Mace

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