In the heart of Indonesia’s Central Java province, a once-thriving shrimp farmer, Yulius Cahyonugroho, has seen his business dwindle to a fraction of its former self. Just a few years ago, he operated over two dozen ponds, employed seven people, and earned a decent living. However, with the relentless pursuit of lower wholesale prices by big Western supermarkets, Cahyonugroho has been forced to scale back to four workers and a third of the ponds. Some months, he barely breaks even. His wife has taken on a job at a watermelon farm to help support their two children.
A recent investigation by a coalition of NGOs has revealed that the aggressive pricing tactics of Western supermarkets are causing widespread misery for people at the bottom of the seafood supply chain. The report, which focused on three of the world’s largest shrimp producers – Vietnam, Indonesia, and India – found that earnings have plummeted by 20-60% since the pandemic. To meet the pricing demands, producers have been forced to cut labor costs, resulting in unpaid and underpaid work, wage insecurity, and hazardous working conditions.
In many cases, workers are not even earning the minimum wage, and child labor has been reported in some areas of India. The report highlights the stark contrast between the windfall profits of Western supermarkets and the struggles of those who produce and process the seafood. As Katrin Nakamura of Sustainability Incubator notes, “The supermarket procurement practices changed, and the working conditions were affected – directly and rapidly.”
The investigation found that supermarkets linked to facilities with exploited labor include Target, Walmart, and Costco in the US, as well as Sainsbury’s, Tesco, Aldi, and Co-op in Europe. While some retailers have responded to the allegations, others have remained silent. The report concludes that the only way to address the issue is for supermarkets to pay higher wholesale prices and ensure that the extra money trickles down the supply chain.
In an ideal scenario, this would not necessarily mean higher prices for consumers, as supermarkets are already profiting at existing prices. As Nakamura suggests, US policymakers could use existing laws to establish oversight and ensure fair pricing from Western retailers. The European Union has taken a step in the right direction by adopting a new directive requiring companies to identify and address adverse human rights and environmental impacts.
The plight of shrimp farmers and workers is a stark reminder of the need for greater transparency and accountability in the global supply chain. As the report aptly puts it, “Labor exploitation in shrimp aquaculture industries is not company, sector, or country-specific. Instead, it is the result of a hidden business model that exploits people for profit.”
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