Plummeting pound could derail sustainability initiatives
As the UK pound reaches a record low, the Fairtrade Foundation has raised concerns that the UK’s sharp currency devaluation will result in costs being passed on to struggling producers and consumers, as well as derailing sustainability efforts. This could set back efforts to tackle the climate crisis and improve the conditions of farmers and workers who produce food for UK markets.
Tim Aldred, head of policy at the Fairtrade Foundation, said:
“Additional exchange rate costs will land on fragile supply chains already struggling from the global cost-of-living crisis. Around 10-15% 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. 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. If the end market does not absorb this new exchange rate hike, costs could be passed on to consumers or farmers. While Fairtrade farmers are protected from the worst effects through commitments to Fairtrade Minimum Price and Fairtrade Premium, they will still be hit by the overall market trend. Efforts to accelerate action towards living wages and living incomes, and to address human rights and climate challenges, will be set back.”