31 Oct 2017, in Tea - Good progress is seen around the activities of the Malawi Tea 2020 program, such as investments by estates, work around energy efficiency and environment and farmer field schools and Village Savings and Loans schemes. At the second Annual Progress Meeting of Malawi Tea 2020, stakeholders heard about last year’s developments and activities.
Over 40 national Malawian and international organizations from the tea supply chain came together this month to hear about the progress across a range of programs on tea estates and smallholder farms. The meeting was opened by Honorable Cecelia Chazama MP, Minister of Culture and Civic Education and the Principle Secretary in the Ministry of Labour and Manpower Development.
The current living wage gap is 43%, as it was last year. Despite high inflation the living wage did not deteriorate. According to the by Richard and Martha Anker led Wages Committee is “the significant progress on wages from the start of the Malawi Tea 2020 Program maintained in the face of a difficult macro environment for tea estates such as a constant USD exchange rate despite high inflation in Malawi. This meant that costs in Kwacha were rising while the currency in which tea is priced remained the same. Despite this, tea wages expressed in USD increased in the past year.”
A key activity this year was around the sustainable procurement practices, a process initiated by Oxfam and IDH to calculate the additional cost of paying workers a living wage and for this cost to be fairly shared across the tea value chain. To accommodate this calculation a unique price discovery model has been developed in partnership with Accenture Development Partnerships. Throughout the different stages of the development of this model key consultations with buyers and producers were made. Further discussions on how to finalize the development of the model and how to apply it in the Malawi tea trade are still ongoing.
Jordy van Honk, program director Tea at IDH said: “It is encouraging to see the progress made with the sustainable procurement practices. It is a complex issue, and it isn’t fixed overnight but we have managed to develop an innovative mechanism that sets out the contribution of all stakeholders (buyers as well as producers) to the additional costs of paying a living wage to tea workers.”
For the progress on the other roadmap activities of Malawi Tea 2020 check out the Second Progress Report.