How the Commodities Market is Pummeling Sugar Rights Holders

Blog by Kendyl Salcito, NomoGaia

Sugar. It’s such a labor-intensive crop that it drove the slave industry in the Caribbean for decades. Even in the two centuries since then, sugar has been at the center of allegations of forced labor, child labor and deadly working conditions.

Belize is home to perhaps the world’s most ethical sugar supply chain. It is nearly 100% certified by Fairtrade, from seed planting through sugar refinement — and on to rum production and ice cream churning.

Belize’s sugar industry is not without its issues, but the labor challenges, pesticide controls, and capital flows are being addressed. Legions of rights advocates from the local labor associations, to the sugar mill, to Fairtrade auditors, to Ben and Jerry’s, to the Government of Belize itself are working shockingly diligently to address these issues.

No, here in Belize, the biggest threat to human rights is the commodities market.

Global sugar prices have been plummeting for three years, dropping from $0.30 a pound in 2011 to less than $0.13 today. Belize is being particularly hard hit, because it sells primarily to the European market, where sugar was selling at $0.40 a pound in 2011 (follow the blue line in the above graphic). This year it dropped to $0.23, but next year Europe’s market will align with the global market, as a trade agreement expires.

In the real world, that means that cane farmers need to plant, fertilize, manage, burn, cut and transport their cane to mills, and then mill and ship sugar with about a quarter of the operating margins they had just a few years ago. Imagine doing your desk job with 75% less internet, or time, or electricity – that’s kind of what Belizeans are facing right now.

The tanking price of sugar is what threatens to undermine major advances in adequate wages, child schooling and the elimination of child labor. One farmer told me that his neighbors are pulling their children out of school because they can’t afford school fees right now. A woman whose son cuts cane and husband drives a cane-loading vehicle says she stays up nights wondering how the family will survive.

So what can be done? Well, for one thing, pay more for sugar. In Belize, Fairtrade increases the value of sugar harvests by almost 150%. This money doesn’t (generally) go directly to farmers, but is designed to go directly to communities. When Fairtrade sugar was selling well, Belizean farmers were establishing scholarship programs at local schools, buying communal equipment to improve efficiencies in sugar production and distributing herbicides and fertilizers. Major sugar buyers like Unilever, Coke, Pepsi and Nestle have a role here. So do consumers like you.

This doesn’t solve everything. One group not particularly assisted by Fairtrade payouts is the laborers hired by farm owners. These people do everything from operating machinery, to burning and cutting cane, to feeding migrant workers who travel to northern Belize for 6 months a year specifically for harvest. Helping them will require a wage boost – something that is impossible under current prices – or a transition from manual to mechanized labor, spreading the available wages among fewer workers.

Those aren’t easy fixes, but they’re not impossible either. NomoGaia will be heading back to Belize to follow up with the industry leaders that are working to make sugar production beneficial to everyone involved.

Photo: Rachel Greiman, Green Chair Stories.

Kendyl Salcito is Executive Director of NomoGaia, a nonprofit research and policy organization dedicated to clarifying the corporate role in human rights protection and facilitating corporate responsibility for the communities impacted by capital projects.