In the June 12, 2006 Washington Post article “For Wal-Mart, Fair Trade May Be More Than a Hill of Beans,” writer Ylan Q. Mui describes one of Wal-Mart’s foreign suppliers of fair-trade coffee, a Brazilian co-op farm. The article paints a glowing picture of Wal-Mart’s investment in a small coffee farmer, complete with a portrayal of how the company’s never-ending quest to cut supplier costs led it to remote Poco Fundo.
Unfortunately, this is only a small part of a larger picture. Wal-Mart’s worldwide impact on fair trade and organic standards, farmers and consumers runs much deeper and has far more negative consequences than the article indicates. Wal-Mart has an opportunity to act responsibly and morally to address the issues of lower standards, misleading consumers and squeezing local family-scale farms. By investing significantly in American farmers’ transition from conventional to organic production, Wal-Mart can make good on some of the hype its public relations department has produced in recent weeks.
Wal-Mart’s entry into the organic and fair trade food market has generated much fanfare and publicity, at great benefit to a company seeking to rebrand itself in the wake of broad-based criticism of its business practices. While seeking to improve both its reputation and bottom line by moving into the organic and fair trade market, Wal-Mart has systematically lowered standards for these products by squeezing suppliers and sourcing supplies from factory farms and overseas suppliers. Currently, the demand for organic products outweighs the supply, and Wal-Mart’s entry into the market has only exacerbated the problem.
The scale of Wal-Mart’s procurement of organic products, along with its practice of squeezing suppliers to ensure lower costs, has led to a lowering of standards in its organic purchasing and retailing. Organic milk, for instance, is being purchased by Wal-Mart from large factory farms that, while certified as organic, are at best complying with the letter and not the spirit of organic regulations. Many of the cows on these farms have been imported from conventional dairies, where they were weaned on blood, injected with antibiotic and hormones, and fed genetically engineered grains. National USDA organic standards mandate that cows have access to pasture and that a good portion of their food comes from pasture forage. However, according to a 2006 study by the Cornucopia Institute, larger organic suppliers‹including those that supply Wal-Mart‹are raising their dairy cows in intensive confinement, with little or no access to pasture.
The popularity of organics for consumers has in large part grown from the knowledge among purchasers that products they purchased were raised and produced in a safe, humane and environmentally friendly manner and in many cases were produced locally. The industrialization of organics by companies like Wal-Mart threatens the ability of consumers to be certain that products they are purchasing are indeed raised and produced according to true organic standards.
Currently, certified organics and fair-trade products also provide a sustainable source of income for many American small-family farmers who are threatened by the industrialization of these industries. These small local producers source products according to traditional organic and fair trade standards and have historically received a healthy margin on their sales. Unfortunately Wal-Mart and other large retail chains are now buying products labeled as organic, such as soy milk and tofu made from cheap soybeans from China, where organic standards are dubious and farm labor exploitation is the norm. Wal-Mart’s decision to enter the organic and fair-trade markets and source from industrialized producers threatens the livelihoods of America’s organic family scale farmers.
In spite of these problems that threaten to undermine organic standards and economic opportunities for American small farmers, Wal-Mart has an opportunity to act morally and responsibly by sourcing organics in a sustainable manner. As the world’s largest and most financially successful company, Wal-Mart can treat its customers, suppliers and the earth fairly by sourcing organic and fair trade products from local and North American growers who meet the most stringent standards. Further, Wal-Mart can ensure a sustainable supply of organic and fair trade products by signing equitable, long-term contracts with American family farmers who wish to make the transition to organic practices.
Wal-Mart has shown a commitment to sourcing seafood by pressuring suppliers of fish and shrimp to meet Marine Stewardship Council and Aquaculture Certification Council standards. By taking steps to source organic and fair trade products from local and regional smaller producers who are committed to meeting the most stringent standards, Wal-Mart can do the right thing by the environment, its suppliers and its customers.
Ronnie Cummins, National Director, Organic Consumers Association