BANGKOK (AP) — Indonesian shrimp farmer Julius Kahyonogroho was running more than two dozen ponds just a few years ago, employing seven people and earning enough to support his family.
Since then, the 39-year-old says the prices he gets from buyers have fallen by half, he’s had to downsize to four workers and about a third of the pools, and in some months he hasn’t even broken even. His wife had to work on a watermelon farm to help support their two children.
“It is more stable than shrimp farms,” said the farmer from Indonesia’s Central Java province.
As supermarkets in the West reel in windfall profits, their relentless pursuit of ever-lower wholesale prices is causing misery for people at the bottom end of the supply chain — people like Kahyungroho who produce and process seafood, according to a recent report. Investigation by a coalition of NGOs It focused on three of the world’s largest shrimp producers Provided to The Associated Press ahead of publication on monday.
An analysis of the industry in Vietnam, Indonesia and India, which supplies about half of the shrimp in the world’s four largest markets, found a 20% to 60% decline in profits from pre-pandemic levels as producers struggle to meet pricing demands by cutting labor costs.
In many places, this meant unpaid and underpaid work for longer hours, wage insecurity as prices fluctuated, and many workers not even earning the low minimum wage. The report also found Hazardous working conditions, especially in India And parts of Indonesia, and even child labor in some places in India.
“Purchasing practices at supermarkets have changed, and business conditions have been affected — directly and quickly,” said Catherine Nakamura of the Sustainability Incubator, who wrote the regional report and whose Hawaii-based nonprofit led the research on the industry in Vietnam. “These two things go together because they are tied together through pricing.”
Tubagus Hero Rahayu, director-general of aquaculture at Indonesia’s Ministry of Marine Affairs and Fisheries, said he was surprised by the report’s findings, and had already reached out to those in the industry to investigate the price pressures.
“If there is pressure like that, there will definitely be a reaction — not just in Indonesia but in Vietnam and India as well,” he told the AP in an interview in his office in Jakarta.
Indian and Vietnamese officials declined to comment.
Supermarkets linked to facilities where workers reported labor exploitation include Target, Walmart and Costco in the US, Sainsbury’s and Tesco in Britain, and Aldi and Co-op in Europe.
The Swiss cooperative said it has a “zero tolerance” policy for labor law violations, and that its producers “receive fair, market-driven prices.”
German company Aldi did not address the pricing issue specifically, but said it uses independent certification schemes to ensure responsible sourcing of farmed shrimp products, and will continue to monitor these claims.
“We are committed to fulfilling our responsibility to respect human rights,” Aldi said.
Sainsbury’s referred to a comment from industry group the British Retail Consortium, which said its members were committed to providing products at a “fair and sustainable price” and that the wellbeing of people and communities in supply chains was central to their purchasing practices.
None of the other retailers mentioned in the report responded to multiple requests for comment on the report, titled “Human Rights at Dinner.”
In Vietnam, researchers found that workers who peel, gut and gut shrimp typically work six or seven days a week, often in extremely cold rooms to keep the product fresh.
About 80% of those involved in shrimp processing are women who wake up at 4 a.m. and go home at 6 p.m., with the exception of pregnant women and new mothers who can stop one hour earlier.
“The peelers’ work day consists of standing in a cooled, sterile room and working very quickly with the knife, taking care not to make any mistakes,” the researchers said.
Wages are generally not disclosed ahead of time and depend on production. Sometimes workers earn minimum wage, but often they do not.
the The Vietnam Seafood Exporters and Producers Association issued a statement It called the allegations in the report “unfounded, misleading and damaging to the reputation of Vietnamese shrimp exports.”
It cited government labor policies in a four-page statement, but did not specifically address the findings, nor did it respond to inquiries.
After the food supply chain was disrupted during the Covid-19 pandemic, the US Federal Trade Commission reported earlier this year that some grocery stores used the situation “as an opportunity to increase prices to increase their profits, which remain high today.”
The Sustainability Incubator’s analysis found that demand for lower wholesale prices for shrimp — coupled with high production costs and oversupply — means that farmers often have to sell their products at below cost just to continue operations.
Kahyonogroho said he is stuck selling the shrimp at the price offered by middlemen, who then sell it to factories for processing. It cannot raise the startup costs needed to sell directly to factories or markets to earn more.
“The opportunity is there, but you need a lot of capital if you want to jump into something like this,” he said.
Brokers who buy shrimp obscure the real sources of the shrimp that appear in Western supermarkets, so many retailers may not follow the ethical commitments they have made about purchasing shrimp.
Only about 1,000 of the 2 million shrimp farms in the major producing countries of India, Indonesia, Vietnam, Ecuador, Thailand and Bangladesh are certified by either the Aquaculture Stewardship Council or the Aquaculture Best Practices Ecolabel.
“Because the production of most certified shrimp farms is very small, it is mathematically impossible for certified farms to produce enough shrimp per month to supply all supermarkets that boast commitments to purchase certified shrimp,” the report said.
Ideally, supermarkets should pay higher wholesale prices and make sure the extra money makes it into the supply chain, Nakamura said.
She said U.S. policymakers could use antitrust and other laws already in place to create oversight to ensure fair pricing from Western retailers, rather than adding punitive tariffs on suppliers for labor violations.
Awareness of trends that are hurting suppliers is growing.
In July, The European Union has adopted a new directive Require companies to “identify and address the negative impacts on human rights and the environment resulting from their actions inside and outside Europe.”
Britain’s Grocery Law Arbitration Office has published a “deep dive” into the matter Suppliers’ opinions on the behavior of supermarketsSaying they chose to wage “war” with suppliers.
The Sustainability Incubator said that higher wholesale prices do not necessarily mean higher prices for consumers.
“Prices to farmers would be at least 200% higher than they are today if shrimp sold in supermarkets in the Global North were processed at minimum wage rates and in compliance with applicable local laws regarding labor, health and safety in the workplace,” the report said. . “This does not necessarily mean higher consumer prices, because supermarkets are already benefiting from current consumer prices.”
Researchers from the Corporate Accountability Laboratory found that workers in the Indian shrimp industry face “dangerous and abusive conditions,” and that hypersaline water from hatcheries and newly dug ponds, contaminated with chemicals and toxic algae, contaminates the surrounding water and soil.
The report found that unpaid work is prevalent, including salaries below the minimum wage, unpaid overtime, wage deductions for labor costs and “substantial” debt bondage.
Child labor has also been identified, with girls aged between 14 and 15 being recruited to work as peelers.
In Indonesia, three nonprofit research organizations found that wages for shrimp workers have fallen since the pandemic and now average $160 a month, below Indonesia’s minimum wage in most major shrimp-producing provinces. It was found that shrimp peelers are routinely required to work at least 12 hours per day to meet minimum goals.
However, given widespread poverty, most workers said they were happy to have their jobs, said lead researcher Khreshma Nugroho of the Migunani Research Institute.
“It’s an exploitation of workers’ vulnerability, because they don’t have enough options,” he said.
“They get minimum wage, but they have to work at 150% of normal wage,” he told the AP. “Can they live? Yes. Can they move? Yes. Do they file a complaint? No, they are still there.”
The regional report collected more than 500 in-person interviews with workers in their native languages, in India, Indonesia and Vietnam, as well as secondary data and interviews from Thailand, Bangladesh and Ecuador.
After the recent release of the report on Indonesia, government officials asked to meet the authors, and Nugroho said they showed a “real willingness to improve the situation.”
Vietnamese officials also collaborated with the Sustainability Incubator to talk about the results.
Government and industry intervention has already helped in Thailand, which came under fire after an AP expose Serious labor violations in the shrimp industry in the past. However, this has caused Thai shrimp prices to rise, prompting some buyers to shift their sourcing to India and Ecuador.
Ecuador takes an industrial approach to shrimp farming – in contrast to smaller, often family-run operations in Southeast Asia – and is now the world’s largest shrimp exporter. It is the lowest price, followed by India; China, which was not included in the report; Then Vietnam and Indonesia.
But with demand at wholesale prices falling, while the volume of Ecuador’s exports rose by 12% in 2023, their value fell by 5%. India’s exports increased by 1%, but their value fell by about 11%.
Meanwhile, with their prices relatively high, Vietnam’s exports fell by 25% in 2023, and Indonesia’s export volume fell by 9.5%.
“Labor exploitation in shrimp farming industries is not limited to a specific company, sector or country,” the report concluded. “Instead, it is the result of a hidden business model that exploits people for profit.”
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Associated Press writer Edna Tarijan in Jakarta, Indonesia, contributed to this report.
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This story was supported by funding from the Walton Family Foundation. AP is solely responsible for all content.