Dutch supermarkets have joined forces to ensure a living wage for banana workers in the international production chain. Together, they aim to reduce the gap between the currently paid wages and the living wage for their entire banana assortment by at least 75% within five years.
The commitment on living wage for banana workers was signed, with support of IDH by:
Living Wage Gap
After the second year, the identified living wage gap is 10,7% covering 75% of the volumes purchased by the Dutch retailers. The results show that 55% of the farms are paying a living wage to their workers. The remaining 45% of the farms have a living wage gap, affecting 32% of the total workforce.
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According to the supermarkets involved, the Banana Retail Commitment is an important milestone:
Supermarkets are competitors, but when it comes to a more sustainable supply chain and risk reduction, private sector parties can certainly work together. For example, through dialogue with local governments and trade unions, we gain insight into local challenges and solutions. If we succeed, we have paved the way for other products
The commitment is part of the Dutch Agreement for the Food Products Sector on International Responsible Business Conduct
Living wage is one of the priorities of the Dutch Agreement for the Food Products Sector. With this retail commitment, we can aim to ensure that people working on banana plantations will increasingly earn a wage that enables them and their families a decent standard of living. Although a lot of workers do earn the local minimum wage, it is often below the living wage benchmark. This is a problem which is recognized by the supermarkets. They cannot change everything on their own, but together we can make a change.
- In the first phase (2019 until 2020) the supermarkets shall provide insight into the gap between the currently paid wages and the living wage throughout their entire production or supply chain.
- From 2021 onwards they are aiming for a gradual reduction of the living wage gap by at least 10% per year.
- By 2025, the supermarkets will strive to have reduced the living wage gap by at least 75%.
The retailers can use the Salary Matrix, made available by IDH, to calculate the difference between the current wages and the living wage. By using the tool, they can analyze prevailing wages in the supplying locations of their total banana assortment. This will serve as the baseline from which future wages will be compared.
Insights into the Living Wage Gap
During the first phase, the private sector parties involved provide insight into the gap between current wages and living wage benchmarks. The retailers and farms use the Salary Matrix, made available by IDH, to calculate this difference.
After a second year of data collection, covering wages for the calendar year 2020, the identified living wage gap is 10,7%, covering 75% of the volumes purchased by the Dutch retailers. The first year showed an average living wage gap of 9% for 42% of the volumes purchased by Dutch retailers.
During the second year of this project, there was a substantial increase in the number of farms submitting a Salary Matrix compared to last year (217 vs. 117).
Other interested parties
IDH will continue to focus on other interested private sector parties to join the Banana Retail Commitment, such as supermarkets in other countries outside the Netherlands. This will increase the positive impact on living wages.
For other information about the Banana Retail Commitment on Living Wage, please check the FAQ or contact:
Sr Program Manager
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