Eosta: Pilot project on living wages
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Are minimum wages a useful concept for sustainability? To find an answer, the Dutch company Eosta, together with IDH - The Sustainable Trade Initiative and Hivos, has carried out a pilot project on living wages with Kenyan organic avocado farmers. The result of the project called "Living wages in practice" is a Quick Assessment System.
Earnings above the minimum wage
The pilot project was carried out together with a producer of organic avocados in Kenya who cooperates with over 100 small farmers. According to Eosta Managing Director Volkert Engelsman, the aim of the project is to use the results not only to measure the social impact of its suppliers, but also to manage, market and monetise using True Cost Accounting. "Social certifications generally limit their analysis to minimum wages, says Gert-Jan Lieffering, QD manager at Eosta. “And these are almost always lower than living wages." Since corresponding audits are always carried out afterwards, the effect of certificates and labels is usually limited.
The following costs should be considered for a living wage:
- Medical care
In order to be able to cover these costs for producers, Eosta has set itself the goal of acting throughout the entire supply chain from the outset. However, this poses a complex challenge:
- Comparative values do not exist for every location.
- The term 'wage' does not necessarily apply to farmers, as they are a type of entrepreneur who are paid per kilo or per piece.
- The skills and abilities of the farmers also determine their earnings to a large extent.
Two project phases
According to project manager Nada van Schouwenburg, the pilot project was divided into two phases:
- Phase 1: Desk research analysing internal certifications and information
- Phase 2: Data collection in Kenya by interviewing various stakeholders along the supply chain
Quick Assessment Tool
The result of the two project phases is the so-called Quick Assessment Tool. The tool provides the essential questions for each stakeholder in order to collect the correct wage information and provides an overview of the current wages and wage gaps of the various suppliers (see page 34 of the project report).
A living wage as a connecting link
Gert-Jan Lieffering from Eosta: "This topic of living wages is not one which we can easily solve, but the results of a Quick Assessment are ideal for starting a dialogue. The exporter is the connecting link between the farmers and the European market, however the quality of the avocados is not always up to international standards. We are not a NGO, which means that if we want the farmers to earn more, we have to be able to sell the produce for a good price in the market. Nevertheless, living wages are proving to be a great way of getting a better grip on that market mechanism and connect the different links in the supply chain. It offers both ourselves, the exporter and the farmers a better trading perspective.”
Eosta was founded in 1990 in the Netherlands with the aim of creating a company that combines economy and ecology. Today, Eosta is one of the largest trading companies for organic fruit and vegetables in the world.
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