Oct 25, 2022
A Dutch circular agrifood system does not stop at the border either*
Part two: Trade, labour and knowledge systems in global food value chains
Today’s understanding of the circular economy fails to address issues of global social equity and threatens to exacerbate the divide between high- and lower-income countries, making it clear that a global circular economy will not be socially just by default. This is the main finding of our latest paper for Circle Economy’s Circular Jobs Initiative: ‘Thinking beyond borders to achieve social justice in a global circular economy’ — and one that has been echoed in many recent publications and events.
In this two-part article, we zoom in on the Dutch agrifood system — arguably a blindspot in current discussions around the subject — and examine actions that the Dutch government — a world leader in both agrifood and the circular economy — could take to ensure greater responsibility in their implementation of a circular agrifood system.
This second part looks at the opportunities and threats that current trade dynamics, labour standards and knowledge systems in global food value chains present for the Dutch circular agrifood transition.
An uneven playing field
Countries in the Global North today are better positioned than those in the Global South to benefit from (circular) trade. This is particularly the case in agriculture: the agricultural productivity of the highest income countries outranks that of the lowest income countries 70 times over. This productivity gap has earned richer countries an absolute advantage on the global market and pushed lower-income countries to increasingly rely on imports for key commodities like grains, as buying from the world market becomes cheaper than domestic production. Others have had to turn to cash crops such as cocoa, coffee or tobacco in order to be more competitive — sacrificing land that could otherwise be used to feed local populations in the process. There are growing concerns, too, that trade liberalisation is increasing inequalities between countries and recent studies by the World Bank show that the benefits of current supply chains fail to reach the poorest.
As a result, global food trade suffers from some of the same imbalances that characterise much of all resource trade today, with value accumulating in the North and negative environmental and social impacts accumulating in the South. The cocoa value chain is a prime example. The current chocolate industry is worth US$130 billion, but cocoa farmers often struggle to make a living wage or income, earning $1 per day (or less) on the field. Although such comparisons have been criticised as unreliable indicators of market power abuses, they still provide a good starting point to explore why such discrepancies exist — especially as poverty among cocoa farmers is a key driver of child labour and the production of cocoa a key driver of deforestation. The Ivory Coast, for example, lost 116,000 acres of forest in its cocoa-growing regions in 2020 alone, and an estimated 1.5 million children work in cocoa production in Ghana and Ivory Coast.
The Netherlands: A case in point
Although the Netherlands primarily engages in agricultural trade with other European countries, it is also an important trading partner to many lower-income countries — sometimes disproportionately so. It is the largest importer of cocoa beans in the world, for example, and some countries heavily depend on the Netherlands to keep their industries running. Sierra Leone, for example, represents less than 3% of total Dutch cocoa imports, but the country sends over 97% of its cocoa — its fifth most exported product — to the Netherlands.
That is not to say the country is not dependent on others, too. The Netherlands heavily relies on raw material imports from lower-income countries to feed its own population. In fact, the land use required for Dutch food consumption alone is one and a half times the total available agricultural area in the Netherlands and most of the greenhouse gas emissions that go into feeding the Dutch actually take place abroad, particularly in low and middle-income countries. Since the Dutch food industry is able to generate a significant amount of added value by processing imported agro-commodities, however, a large share of wages, investments and profits within the supply chains the country participates in takes place in the Netherlands — not abroad.
The country’s dependence on imports does not severely threaten the country’s food security either. Indeed, the Netherlands could theoretically produce enough food to feed its population. Although this would require a significant shift in diets — coffee comes to mind, for example — still, it could be done.
Modern slavery and other issues in agrifood chains
Agrifood chains suffer from a number of structural issues — poverty being one. According to a World Bank report, 80 percent of the global poor live in rural areas and most rely on agriculture for their livelihoods. Jobs in agriculture can also often be unstable — in part due to the seasonality of industrial agricultural production, although the impacts of climate change and severe weather events also play a role. More importantly, instances of modern slavery and human rights violations are pervasive in global food chains, especially as they can be costly to monitor. Despite their best efforts, businesses that rely on these supply chains often find themselves the unwitting accomplices to these violations — Dutch businesses included. Even Tony’s Chocolonely — whose very mission is to build a fairer chocolate supply chain — cannot guarantee the absence of child labour or instances of modern slavery from their supply chains.
Beyond the workers in the global value chains it is involved in, the working conditions of Dutch workers, too, could stand to be improved. Migrants are overrepresented in the sector and often face unfair labour practices they are not equipped to address and farmers are often not guaranteed fair prices for the food they produce.
Inappropriate technologies and solutions
Last year, the UN Food Systems Summit was criticised for a narrow focus on high-tech solutions and turning a blind eye to human rights, agroecology and food sovereignty, resulting in a wide-spread boycott from farmers, civil society organisations and scientists alike. Food aid and development projects and models — such as the Water Efficient Maize for Africa (WEMA) project — have also been heavily criticised for pushing technology-driven, one-size-fits-all approaches to food production that fail to utilise the traditional knowledge and skills of local farmers. Indeed, a focus on monocultures, patent-protected seeds and proprietary software — such as software that powers precision agriculture — can lock in farmers and put them in a vulnerable position vis-a-vis the large corporations that hold the rights to these technologies and that already control most of the global food market. In addition to their reliance on tools and processes that are maintained and operationally controlled by outside actors — rather than local populations — these solutions are also often considered inappropriate because they are rarely compatible with local, cultural and economic conditions, or they utilise materials or energy resources that are not always available locally.
Now, the Dutch pride themselves on the innovation and technical prowess they have brought to (circular) agriculture. They also pride themselves on their capacity-building and knowledge-sharing efforts, whether through the work of Dutch embassies or that of the Wageningen University (WUR) — ’a university for the world’ that strives to keep the interests of lower-income countries at the heart of its research. And the value of this work is undeniable. However, in order to avoid perpetuating global inequities around food, moving beyond knowledge exports and technology impositions will be crucial and a key question to address will be on how we might value indigenous knowledge systems and skills, co-create solutions that make the best of both worlds — without falling into the trap of appropriation and exploitation.
Circular food trade today and in the future
The trade of agrifood-related wastes mirrors some of the imbalances of agrifood trade more broadly. Plastic waste, for example — including food and drink packaging waste — has made many headlines over the past years. As we explore in more depth in our paper, high-income countries increasingly rely on lower-income countries for the export of plastic waste for further treatment, disposal or recycling. While this provides jobs for sorters, countries often lack the facilities, equipment or training to safely manage contaminated waste. Facilities are then sometimes used to intentionally burn and get rid of this waste — exposing local ecosystems and people to toxic air pollutants with long-lasting effects on human health in the process. As countries increase plastic collection rates, this issue could be further exacerbated in the future.
The Netherlands, again, is a case in point: the country sends high-value plastic wastes to nearby countries in Europe for recycling, while fractions that are less valuable to countries such as Turkey, Indonesia and Malaysia. Combined, these three nations account for 57% of all Dutch plastic packaging waste exports and receive a combined 26.3 kilo tons per year in plastic packaging waste through direct and indirect trades with the Netherlands. The global trade of agrifood residues, on the other hand, is less problematic today — but it may also raise similar issues in the future. Currently dominated by soy by-products from Argentina, Brazil and the US, these wastes from agriculture and food manufacturing industries are often exported across the world for further processing into animal feed.
As the Netherlands looks to increase food and packaging waste collection rates, shift towards biobased materials, increase the processing of manure (and potentially fertiliser exports), agrifood residues may become the next commodity to drive the circular trade divide even further. As of yet, little is known about the impact of these strategies on employment and on land- and resource-use abroad — with studies such as our own Circularity Gap Report for the Netherlands primarily focusing on local impacts.
A role for the Netherlands: evening the playing field
The Netherlands is already working with low- and middle-income partner countries on advancing circular agriculture and food, for example in Kenya, Turkey, Vietnam and Peru. This work is mostly driven by creating opportunities for Dutch business, helping other countries set up their own circular practices — often both — or on capacity-building, an accurate reflection of the Netherlands’ overall international efforts in the circular economy. Last year, the Netherlands also announced a proposal for a national law on human rights and environmental due diligence — legislation that aims to ensure that responsible and sustainable business practices in global chains become the norm and that hopes to improve conditions for millions of people worldwide. A few research projects are also underway in the Netherlands that look at how to support a socially just transition to circular agriculture.
However, much more can be done.
Governments like the Netherlands’ — as well as multilateral organisations — can look to the following levers for guidance on how to build circular agrifood economies that work for everyone:
Think beyond your borders
- International impact assessments of circular agri-food systems could be built, early on, into the design and implementation of circular agrifood policy. These could look at impacts on equity and multidimensional wellbeing, for example, and make use of material flow analyses to understand where the largest opportunities and risks are.
- Actively involving low- and middle-income countries in the design and implementation of circular economy and (circular) trade policy will be especially crucial to ensure value is fairly distributed in future value chains.
Trade responsibly
- The Dutch government could create conditions for producers — both at home and abroad — to earn a living income, improve stability and guarantee better working conditions.
- Setting stricter social and environmental standards for companies to improve labour conditions and increase transparency and traceability — both through national legislation and at EU level — could be a good start.
Share knowledge and means
- Education, too, will play an important role. The skills required to accelerate a transition to a circular agrifood system are different from the skills that support today’s unsustainable food production, distribution and waste management practices. Understanding what these skills are and how, exactly, a circular agrifood system will impact jobs — both locally and abroad — will be crucial to make provisions for the people that will be most impacted and support them in the transition.
- Finally, the Netherlands could play a key role in making funding for agricultural research and development available to focus on solutions that are designed together with the people they are meant to serve and that leave room for a plurality of circular agrifood visions.
There is much more left to be explored, of course. What if other countries, too, switched to circular agrifood systems, for example? How could multilateral organisations support circular food systems and trade? How might we best balance local and global interests?
The global food system also faces unique challenges beyond those covered in this piece — from animal welfare to food apartheids and rising hunger levels, not to mention the devastating impacts that wars and conflicts can have on food systems the world over.
Perhaps no other system requires a true systems perspective as food. We hope this article starts a deeper conversation around these questions — and paves the way for a transition agenda that looks beyond the ‘technical’ circular economy.
Further reading and resources
- Chatham House’s recently published framework for inclusive circular trade and framework to understand the social impacts of agricultural trade
- The Netherlands Environmental Assessment Agency’s policy brief on addressing the international impacts of the Dutch circular economy transition
- World Resources Forum’s latest forum on Global North-South relations for a fair circular economy transition
- The ‘Global trade and the transition to a circular economy’ session at the World Trade Organisation Aid for Trade Annual Global Review
Part 1 of this series looked at corporate concentration and power within a socially just and globally-minded Dutch circular agrifood system. Read it here: https://www.circle-economy.com/blogs/a-dutch-circular-agrifood-system-does-not-stop-at-the-border
* In a presentation of the main messages of the Netherlands Environmental Assessment Agency (PBL) policy brief ‘Addressing international impacts of the Dutch circular economy transition’, Hester Brink, researcher at PBL, argued that ‘A circular economy does not stop at the border’, and that taking an international perspective in circular economy policies is important. The title of this article is a response to this.
About Circle Economy
We are a global impact organisation with an international team of passionate experts based in Amsterdam. We empower businesses, cities and nations with practical and scalable solutions to put the circular economy into action. Our vision is an economic system that ensures the planet and all people can thrive. To avoid climate breakdown, our goal is to double global circularity by 2032.
About the Circular Jobs Initiative
The Circular Jobs Initiative (CJI) defines and identifies circular jobs, analyses the environment needed to create them. We produce research, training and advocacy to champion circular strategies that governments and businesses can use to have a positive social impact.
We work with employers, workers, governments, multilateral organisations, education institutions and research organisations to realise this ambition. Get in touch with us here.
