COVID-19: supply chain solidarity to support those hit hardest

17 April 2020

In the COVID-19 pandemic, existing vulnerabilities and inequalities are exacerbated, leaving smallholder farmers, miners, and workers at risk. Access to markets and livelihood activities are being threatened, while prevention and mitigation measures are difficult to implement. Now more than ever, solidarity in supply chains is needed to protect workers.

Covid-19 is spreading globally and affecting us all, but farmers, miners and workers in the global South will be hit harder. We are deeply concerned for their health and even more for their livelihoods. Their livelihoods are already precarious in “normal” times and are now severely at risk of falling further into poverty. Amongst these groups, women are likely to suffer the most from the consequences of the pandemic. 

Extraordinary times call for extraordinary measures: now more than ever it is critical to have solidarity throughout supply chains. We call on multinational enterprises to take action to protect the health and livelihoods of farmers, miners and workers, as well as uphold responsible business conduct and provide extra support to the most fragile in their supply chain. 

Health at risk

First and foremost we are worried for the health of smallholder farmers, miners and workers in the global South.

A population at risk

Smallholder farmers, miners and workers are a demographic at risk as a result of poverty, lack of decent healthcare and social security, combined with bad nutrition. All three groups will already be facing above average occupational respiratory illnesses due to the long term use of pesticides, or working in a dusty environment with chemicals, where waste water pollutes the area they live in. Also, the average age of farmers is 60.

Protective measures are a luxury

For rural communities in the global South, taking key measures to help stop the spread of the disease is all but easy: practicing regular hand washing is a challenge when you have no access to water and social distancing may be seen as a privilege few can afford. Especially in remote areas, limited infrastructure and communication can impede preventive measures such as hygiene and social distancing protocols.

Artisanal and Small-Scale Mining (ASM) is nomadic at times, miners follow gold rushes in areas that are often remote. They create communities where basic systems like sewerage, water, schooling and health facilities are not available. Due to their living conditions they often do not have the capacity to observe WHO guidelines to prevent COVID-19 transmission. Occupational and livelihood-related risk factors such as silicosis, tuberculosis, and mercury intoxication increase the severity of COVID-19. 

For textile and leather sectors workers the situation is not better. Often factories are badly ventilated. Workers cannot wash their hands, or do not want to take extra time off to wash their hands, especially when they are paid a piece rate. They work close to each other, commute to work in crammed buses or walking by busy roads and share rooms in dormitories. They generally use masks that are not protecting them from the virus. Often they do not have health insurance and go to work even when they are sick. 

Difficult access to health information and care

Rural communities also generally have limited access to information and awareness of COVID-19 is still low with incorrect health information circulating. Besides, the nearest health care centre may be kilometers away, and only with very basic equipment - certainly not life-saving when you suffer from the worst symptoms of the virus.

We therefore have reasons to be concerned for the lives of those we support. But we are also extremely worried for their livelihoods in the short and long term. 

Livelihoods threatened

While essential economic activities, such as farming, need to continue in this time of crisis, farmers’ livelihoods will be at risk due to this challenging context. As for “non-essential” economic sectors, such as fashion or jewelry, they are suffering very directly from disruption if not halt of business, the livelihoods of workers and miners are in danger.

Farming is essential but incomes even more precarious

Health versus livelihoods and food security

Smallholder farmers find themselves in a tragic catch 22 situation: working their field at the risk of their health or staying safe (at home) at the risk of their livelihood. During the Ebola crisis in West Africa in 2013-2016, “fear of contagion and movement restrictions have kept some farmers away from attending their fields. Both cash and food crop production have suffered from the impact of the disease” (FAO). This raises concerns for the already meager income of smallholder farmers, but also for collective food security. Business continuity of the farming communities are critical to ensure food security to many millions in the nearby urban centres. 

Labour shortages

Even in smallholder agriculture, farmers rely on either family, neighbours or hired seasonal labour for field work, especially harvest. With restrictions to movement, and possibly communities affected by the disease, labour shortages could affect upcoming harvests with produce loss, and have ripple effects down the entire value chain.

Access to input, extension support, credit

Movement restrictions are also affecting farmers' access to critical inputs, such as seeds, feed and fertilisers. In China and India, farmers should be planting income-essential crops such as cotton or soy next May / June. Access to animal health care as well as animal medicines and vaccines is interrupted at many places. Without access to quality inputs, yields could suffer which would weigh on farmers’ income. Limited support from extension agencies will also lead to depressed yields. And with the difficult economic context globally, banks are less likely to lend much needed loans to farmers which will even more limit their capacity to invest in their crop and lead to poor yields. 

Access to market 

On the other hand, trade of vegetables from Africa and fruits from South America to Europe and Northern America is being disrupted, threatening the market access of their producers. With the generalisation of lockdowns, and subsequent closure of local markets, fresh produce farmers will be threatened in their livelihoods. faced with a direct loss of income. Milk collection and distribution is disrupted in many places. Access to local and international markets is a challenge, leading to waste of fresh produce and income loss.

Changing demand and price volatility

Consumption patterns have already shifted as a result of the pandemic: consumers tend to increase their purchasing of staple and non-perishable food. The price of staple foods such as rice and wheat has already increased, which could affect the food security of the poorest and will most likely not trickle down to farmers.

On the other hand, other crops markets have already started depreciating and will be volatile for the times to come. Cotton prices had dropped by 30%, before stabilising again. Coffee prices have been very volatile, going down as demand decreased due to coffee shops closure, and then up as importers are stockpiling coffee in anticipation of disruption of their supply chain. Price volatility is also noticeable for palm oil or cocoa. A decline in tropical commodities prices will hit smallholder farmers’ income the hardest. For farmers of annual crops (soy, cotton) price fluctuation makes it even more difficult to decide which crop to grow. 

And while many farming households depend on off-farm income from family members working in the city, these sources of income are threatened as well, for example in the textile industry. 

Workers and miners: no business, no income

In the “non-essential” economic sectors, the situation for workers is also dire as business has simply come to a halt.

The textile industry as well as the leather industry among others are hit hard by temporary factory closures due to lockdown, unavailability of raw materials for which factories depend on China, or plummeting demand, cancelled orders and lack of payment from international brands. Millions of low wage workers in South East Asia are left with a partial or no wage at all, a limited, if any, compensation, and no social security. Local governments often do not have the financial means to support factories, some have already been closed permanently and their staff laid off. In this context, large numbers of families could fall into poverty, setting back decades of development. 

For ASM miners, while they might still be mining, the supply chain is simply broken as large gold refiners in Europe are closed: miners cannot sell their gold as local traders have either closed shop or have no liquidity to buy the gold. Many miners have started to return to their hometowns, without any income at all. So while the price of gold, as a refuge commodity is high, ASM miners can’t sell their gold or are forced to sell it at highly reduced prices, leaving them without an income. 

A halt to sustainability?

We are extremely concerned to hear that some companies now facing a difficult financial situation are slacking their commitment to sustainability programmes that aim to support these very farmers, miners, and workers that are most at risk. These programmes that train farmers, miners, factory owners and workers in normal times, are best placed to support them in times of crisis. It is vital they continue to be funded adequately. Similarly, while sustainability standards will in all likelihood face challenges to certify sustainably produced crops, it remains crucial that companies keep their commitment to sustainable sourcing and their supply chain partners. 

Multinationals: call to solidarity with the weakest in your supply chain

As COVID-19 is spreading worldwide, we’re all affected, individuals and companies. However we know the most fragile amongst us (farmers, miners, workers) will be most severely affected. 

We understand that many companies suffer from loss of business and some find themselves at risk of bankruptcy. In a supply chain if any link has any macro level influence, those are multinational enterprises. In adequation with this level of influence, comes responsibility, not only for the companies own staff but also for the people in their supply chains. 

More than ever it is important to show solidarity with suppliers and their workers who live and operate in precarious circumstances. 

Support health care efforts

Inform

Cease all non-essential farm, mine, factory visits, including training, audits etc. Wherever possible explore the possibility to replace in person by digital online interaction. 

There is a huge need to raise awareness about the COVID-19 virus in rural communities. Use company communication channels to provide information and guidance to communities on basic protective measures and reinforce key health messages from the national governments. In the cocoa sector, good examples include Barry Callebaut, Cargill or Olam sending information to farmers via their digital farming tool.

In factories, it is essential to ensure that workers are informed about their rights and preventive safety measures related to the COVID-19 outbreak. 

Logistical support

Use existing supply chain connections to produce and / or distribute soap, water, healthcare and protective supplies, print and distribution of medical information, etc. Henkel is one of many examples of companies that are using their supply chain for this purpose.

Make an inventory of your in-country infrastructure that could be used for healthcare. 

Support safe and productive business continuity

To ensure that food security is maintained and that smallholder farmers keep an income, they will need support. Relevant companies can play a role (directly or through local partners) by: 

  • continue investing in sustainability programmes that support farmers, especially to increase food productivity; 

  • ensuring inputs such as seeds and fertilizer continue to get through to farmers (input providers);

  • taking measures to ensure that local markets function (transport companies);

  • maintaining rural financial services and credit (financial institutions);

  • providing market information including on prices (supply chain managers);

  • supporting the introduction of new technology and tools - drones for example - to decrease the dependence on labour (IT and tool companies);

  • equipping rural communities with protective equipment and training them on safe harvesting protocols (supply chain managers), for example Wilmar’s efforts to curb the Pandemic in their operations.

Buying companies should also ensure that supplying factories have taken the following measures: 

  • ventilation of the work floor; 

  • adequate spacing between workstations;

  • hygienic work floors and toilets;

  • appropriate hand-washing facilities;

  • breaks and protective equipment in accordance with relevant public health authorities; 

  • safe transportation of workers to the factory.

Make the best of due diligence 

More than ever due diligence and dialogue with suppliers are useful tools for the resilience of your supply. 

  • Monitor the situation in sourcing countries; 

  • Ask your suppliers about their challenges and discuss ways to overcome them together; 

  • Ask your suppliers about their ability to retain their workforce; 

  • Communicate publicly about how COVID-19 is affecting your business, your suppliers and what measures you’re taking. 

Uphold responsible purchasing practices

Supply chain partners are all in this crisis together. Responsible purchasing practices are not only a matter of solidarity they are also essential for business continuity after the crisis. Buying companies should: 

  • Keep close, personal contact with suppliers, farmers and miners;

  • Maintain orders which are already in production, that are in transit or for which supplies like trims are already bought and pre-financed - H&M is leading the way in the clothing industry on this matter;

  • Consider maintaining at least pre-pandemic prices conducive to a living income for farmers and miners, and for suppliers to continue to pay wages to the workers; 

  • Respect pre-crisis, or even offer early, payment terms as much as possible;

Facilitate financial support for suppliers

Supply chain finance is a good instrument. Consider directly supporting supply chain partners that are struggling, for example:

  • Unilever is offering early payment to their “most vulnerable small and medium sized suppliers” and “credit to selected small-scale retail customers” to the amount of 500 milions Euros of cash flow. 

  • Danone is also providing financial support of 250 millions Euros for 15,000 small businesses in their global ecosystem (farmers, suppliers, service providers) through their cash flow. 

Support your suppliers in getting access to affordable and timely finance from financial institutions or emergency funds based on your off take commitments to enable them to continue paying wages and benefits of workers and support their businesses. 

Create a fund like Primark to ensure textile workers will still receive their wages. Leverage your influence to engage with donors, development banks, international financial institutions and governments to mobilise emergency funds that create the mechanisms through which farmers, miners and workers’ incomes are (at least) maintained during the crisis. 

Stay committed to sustainable and inclusive value chains

Throughout the crisis it is crucial that the private sector remains committed: companies should continue to embed sustainability across their business. When lockdowns start to ease and demand returns, there  might be a temptation to focus on economic recovery, squeeze supply chains and disregard environmental considerations. More than ever we are convinced that sustainability is a matter of resilience, not ticking boxes and glossy reports and we urge our corporate partners and the entire business community to stay committed to sustainable and inclusive value for the benefit of all.

Solidaridad is here

Besides adapting the way we work - all our staff is now working from home - we continue to support farmers, miners and workers and help them through this crisis (see box). Corporate partners can support farmers, miners, and workers in their supply chain by partnering with Solidaridad. Get in touch to discuss how we can help your company support the resilience of your supply chain. 

Examples of COVID-19 interventions by Solidaridad

  • Across the Solidaridad Network we use our digital tools to connect and engage with smallholder farmers, workers and artisanal miners. For example in Ghana we use our interactive voice response application to reach out to our audience with essential health information; digital classroom to deliver training to small & medium enterprises; prevention manuals for beneficiaries to be distributed electronically (e.g. via whatsApp); and a Podcast with a local partner is in the works.

  • Dissemination of information on protective measures to people in our programmes, e.g. a short video was developed by Solidaridad Asia and the Indian Tea Association (ITA) for the Trinitea programme smallholder farmers and workers in Assam; 

  • Providing protective materials so that field work can take place in the safest conditions possible, e.g. cotton harvest in Brazil next May with the support of the C&A Foundation; 

  • Identifying of needs from the field to better support farmers, miners and workers; 

  • Advocate governments to ensure that food supply chains are kept alive, domestically and internationally, to mitigate the risk of large shocks that would have a considerable impact on everybody, especially on the poor and the most vulnerable. 

  • To mitigate the pandemic’s impacts on food and agriculture, we engage and lobby with local and national governments to meet the immediate food needs of their vulnerable populations, boost their social protection programmes, keep global food trade going, keep the domestic supply chain gears moving, and support smallholder farmers’ ability to increase food production. 

  • Support for productivity-enhancing safety nets and reducing post-harvest crop losses and improvement of food stock along the value chain. 

  • Participating in multi-stakeholder organisations and other civil society organisations to define together how sectors need to live up to the challenge and protect the most vulnerable in the supply chains;  

  • Informing and training companies on responsible purchasing practices; 

  • In Asia, Solidaridad is conducting action research to better understand the most vulnerable people affected in this crisis in our projects to inform response programming. Especially women & children will likely be the most vulnerable. We foresee child safeguarding measures will need to be mainstreamed.  

  • In Southern Africa we focus on working with governments specifically. We are engaging with different public agencies and with the Southern Africa Development Committee to see which country needs what in terms of food, energy and water security support to aid farmers’ resilience specifically. 

 

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