The Fairtrade Foundation is warning of the impact of market volatility following on from the pound hitting a record low against the US dollar this week. This could oversee impact on both farmers in low-income countries and UK shoppers who buy the food they grow.
The Foundation reports their concerns that the currency devaluation will “set back” efforts to intensify action on the climate crisis, human rights and good pay for farmers and workers.
“The dramatic fall in the pound means more bad news for Fairtrade farmers and consumers. Additional exchange rate costs will land on fragile supply chains already struggling from the global cost of living crisis,” said Tim Aldred, the Head of Policy at the Fairtrade Foundation.
“Around 10-15 percent of the UK’s food comes from Africa, Asia and South America, including key products such as bananas and coffee. But many of these farmers and workers live in ‘in work poverty’, earning well below a living wage,” he added. “The cost of living crisis provoked by war in Ukraine, climate damage and the continuing impact of the pandemic were already placing additional pressure on farmers.”
Mr Aldred went on to say that if the market wasn’t able to absorb the new exchange rate rise, costs will be passed on to consumers or farmers, the latter of whom are protected thanks to Fairtrade Minimum Price and Fairtrade Premium, but will still be affected.
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