BANGKOK (AP) – Indonesian shrimp farmer Yulius Cahyonugroho operated more than two dozen ponds just a few years ago, employing seven people and making more than enough to feed his family.
Since then, the 39-year-old said the price he was getting from buyers has halved and he has had to cut back to four workers and about a third of the pool, months without stopping. Her husband had to work on a watermelon farm to support their two children.
“More stable than shrimp ponds,” said a farmer from the province of Central Java, Indonesia.
While large Western supermarkets are turning a profit, their aggressive hunt for wholesale prices is constantly causing suffering for those at the end of the supply chain – people like Cahyonugroho who produce and process seafood, according to an NGO alliance investigation. focused on the world’s three largest shrimp producers provided to The Associated Press ahead of publication Monday.
An analysis of the industry in Vietnam, Indonesia and India, which supplies about half of the shrimp in the world’s top four markets, found a 20%-60% drop in earnings from pre-pandemic levels as producers struggle to meet price demands by reducing their workforce . cost.
In many places, this means unpaid and unpaid work for longer hours, wage insecurity due to fluctuating rates, and many workers not making minimum wage. The report also found dangerous working conditions, particularly in India and parts of Indonesia, and child labor in some parts of India.
“Supermarket procurement practices are changing, and working conditions are being affected – immediately and quickly,” said Katrin Nakamura of the Sustainability Incubator, who wrote the regional report and is a Hawaii-based non-profit leading research on the industry in Vietnam. “The two things go together because they are tied together through price.”
Tubagus Haeru Rahayu, Director General of Marine Fisheries and Fisheries, Ministry of Marine and Fisheries, said he was surprised by the report’s findings and had reached out to the public in the industry to investigate the price pressure.
“If there is such pressure, there will be a reaction – not only in Indonesia but also in Vietnam and India,” AP said in an interview in his Jakarta office.
Indian and Vietnamese officials declined to comment.
Supermarkets associated with facilities where exploited labor has been reported by workers include Target, Walmart and Costco in the United States, Sainsbury’s and Tesco in the UK, and Aldi and the Co-op in Europe.
Co-op Switzerland says it has a “zero tolerance” policy for violating labor laws, and that its producers “receive fair and market-driven prices.”
Germany’s Aldi did not specifically address the price issue, but said it uses an independent certification scheme to ensure responsible sourcing of its shrimp products, and will continue to monitor the allegations.
“We are committed to fulfilling our responsibility to respect human rights,” Aldi said.
Sainsbury’s cited comments from industry group the British Retail Consortium, which said its members were committed to sourcing products at “fair and sustainable prices” and that the well-being of people and communities in the supply chain was fundamental to their buying practices.
None of the other retailers named in the report responded to multiple requests for comment on the report, titled “Human Rights to Dinner.”
In Vietnam, researchers found that workers who peel, peel and devein shrimp typically work six or seven days a week, often in extremely cold rooms to keep the produce fresh.
About 80% of those involved in shrimp farming are women who wake up at 4 in the morning and return home at 6 in the evening, except for pregnant women and new mothers who may stop an hour earlier.
“A working day for peelers consists of standing in a refrigerated and disinfected room and working quickly with a knife while being careful not to make mistakes,” the researchers said.
Wages are generally not disclosed in advance and are based on production. Sometimes workers make minimum wage, but often they don’t.
The Vietnam Association of Seafood Exporters and Producers issued a statement calling the allegations in the report “baseless, misleading and damaging to the reputation of Vietnam’s shrimp exports.”
It cited the government’s labor policy in a four-page statement but did not specifically address the findings, and did not respond to questions.
After the disruption of the food supply chain during the COVID-19 pandemic, the US Federal Trade Commission reported earlier this year that some wholesalers have used the situation “as an opportunity to increase prices to increase profits, which remain rising today.”
Demand for lower wholesale prices for shrimp – combined with rising production costs and oversupply – means farmers often have to sell their produce at cost just to keep operations afloat, a Sustainability Incubator analysis found.
Cahyonugroho said that he was stuck selling his shrimp at the price offered by the fishermen who then sold them to the factory for processing. They cannot eliminate the start-up costs required to sell directly to the factory or market to earn more.
“The opportunity is there,” he said, “but you need a lot of capital if you want to jump like that.”
Shrimp buyers are confused about the original source of shrimp seen in Western supermarkets, so many retailers do not follow the ethical commitments they have made regarding the procurement of shrimp.
Only about 2,000 of the 2 million shrimp farms in the main producing countries of India, Indonesia, Vietnam, Ecuador, Thailand and Bangladesh are certified by the Aquaculture Control Board or the Best Aquaculture Practices ecolabel.
“With the yield from most certified shrimp farms being so small, it is mathematically impossible for certified farms to produce enough shrimp each month to supply all supermarkets committed to buying certified shrimp,” the report said.
Ideally, supermarkets should pay higher wholesale prices and ensure that the extra money goes down the supply chain, Nakamura said.
U.S. policymakers could use existing antitrust and other laws to establish oversight to ensure fair prices from Western retailers, rather than adding punitive tariffs to suppliers for labor violations, he said.
Awareness of trends affecting suppliers is growing.
In July, the European Union adopted a new directive requiring companies to “identify and address the human rights and adverse environmental impacts of their actions inside and outside Europe.”
Britain’s Groceries Code Adjudicator’s Office published a “deep dive” into the supplier’s view of the supermarket’s actions, saying it had chosen to “go to war” with its suppliers.
Higher wholesale prices don’t necessarily mean higher prices for consumers, the Sustainability Incubator says.
“Prices for farmers would be at least 200% higher than they are now if the shrimp sold in the Global North market were produced at minimum wage rates and in compliance with domestic laws applicable to labor, workplace health, and safety,” the report said. “This does not mean higher consumer prices, because supermarkets are already making a profit with existing consumer prices.”
Researchers from the Corporate Accountability Lab found that workers in India’s shrimp industry face “dangerous and harsh conditions” and that highly salty water from newly dug hatcheries and ponds, contaminated with chemicals and toxic algae, is contaminating the surrounding water and soil.
Unpaid labour, including wages below the minimum wage, unpaid overtime, wage deductions for working expenses and “significant” debt arrears, the report found.
Child labor was also identified, with girls aged 14 and 15 recruited for peeling work.
In Indonesia, three non-profit research organizations found that wages for shrimp workers have fallen since the pandemic and now average $160 a month, lower than Indonesia’s minimum wage in most of the largest shrimp-producing provinces. Shrimp peelers are found to regularly have to work at least 12 hours a day to meet their minimum targets.
However, because of widespread poverty, most workers say they are happy to have a job, said lead researcher Kharisma Nugroho of the Useful Research Institute.
“This exploits the vulnerability of workers, because of the lack of choice,” he said.
“They are paid the minimum wage but have to work 150% of normal,” he told the AP. “Can they survive? yes already. Can they move? yes already. Did they make a complaint? No, it’s still there.”
The regional report compiles more than 500 face-to-face interviews with workers in their native languages, in India, Indonesia and Vietnam, supplemented by secondary data and interviews from Thailand, Bangladesh and Ecuador.
After the Indonesian country report was published recently, government officials asked to meet with the authors, and Nugroho said they showed a “genuine willingness to improve the situation.”
Vietnamese officials also joined the Sustainability Incubator to talk about the findings.
Government and industry intervention has helped in Thailand, which has been criticized after the AP exposed serious labor abuses in the shrimp industry in the past. However, this has led to higher prices for Thai shrimp, prompting some buyers to move to India and Ecuador.
Ecuador has an industrial approach to shrimp farming – unlike the smaller, often family-run operations in Southeast Asia – and is now the world’s largest exporter of shrimp. It has the lowest prices, followed by India; China, which was not included in the report; then Vietnam and Indonesia.
But with demand for lower wholesale prices, while Ecuador’s exports will increase in volume by 12% in 2023, prices will drop by 5%. India’s exports rose 1% but fell nearly 11% in value.
Meanwhile, with higher prices, Vietnam’s exports are down 25% in 2023 with Indonesia’s volume down 9.5%.
“Labour exploitation in the shrimp farming industry is not company, sector or country specific,” the report said. “Instead, this is the result of a hidden business model that exploits people for profit.”
___
Associated Press writer Edna Tarigan in Jakarta, Indonesia, contributed to this report.
___
This story is supported by funding from the Walton Family Foundation. AP is responsible for all content.
