Identifying the living wage gap at farm level in Costa Rica and Belize

Together with international and local partners, IDH is implementing a project to calculate living wages for the banana producing areas in Costa Rica and Belize

Together with international and local partners, IDH is implementing a project to calculate living wages for the banana producing areas in Costa Rica and Belize, and to identify gaps between current and living wages at seven pilot banana farms. The ultimate intent is to understand opportunities, challenges and possible pathways towards the payment of living wages in the banana sector.

The program

Working conditions in the banana supply chain have steadily improved over the past decades, especially with regard to labor practices and environmental protection. Despite the improvements however, it is still common for workers to receive only minimum wages that proves a challenge to increasing their standard of living.
In this project, IDH and its partners are conducting living wage benchmark studies to calculate the costs of living in the main banana regions in the two countries, and to engage local and global stakeholders to raise awareness on the wage situation in the banana supply chain.

To gain practical insights on the challenges that farms and supply chain actors face, the project partners agreed in having seven pilot farms – four in Costa Rica and three in Belize – to directly participate in the project to better understand how their wages compare to living wage benchmarks, and to consider strategies towards the payment of living wages.

IDH role

IDH is a strategic partner of the project and co-funds around 30% of its overall costs.

The living wages issue emerged as one of the key topics in the Sustainable Initiative Fruit and Vegetables (SIFAV) since its launch in 2012. At that moment the key challenge that actors along the chain faced was that too many different (and divergent) definitions of what a living wage includes were used by civil society organizations, sustainability standards and other stakeholders. This created confusion among farms owners, producers and buyers. The need of a common and organized approach to define the concept in detail was therefore expressed.

IDH welcomed the initiative taken by some of the ISEAL members to organize themselves as a working group to align their different approaches around a common living wage definition. The Anker methodology was adopted by the group that later was named the Global Living Wage Coalition.

In 2015, ISEAL presented the new living wage definition to the SIFAV General Assembly and this stimulated and convinced leading private partners to work with it and to test it in their supply chains. As a result, two projects were put forward by SIFAV members and after discussing the ideas and the project approaches, IDH decided to co-fund this program.

IDH is interested in supporting different approaches to work towards the payment of living wages in different sectors, and in producing and sharing learnings on how companies and the private sector can effectively approach this often complex issue with all its partners.

The goals

1. Conduct living wage benchmark studies in Belize and Costa Rica, which can serve as a reference for plantation managers and workers;

2. Facilitate and stimulate a dialogue on wages and shared value in the banana sector and beyond;

3. Develop practical tools for farm managers to calculate the status of current wages compared to the living wage and to monitor progress over time;

4. Consider strategies and workplans towards the payment of living wages on the selected pilot farms.

COSTA RICA LIVING WAGE BENCHMARK REPORT

Partners

The project sees the participation of SIFAV private partners and several key members of Rainforest Alliance. The select pilot farms are certified to the Rainforest Alliance standard and deliver produce to mainly European Markets. The Global Living Wage Coalition (GLWC) is also a key project partner and is carrying out the living wage estimates for both countries.

Other important stakeholders who have been consulted as part of the activities of the project are the World Banana Forum, the national banana producer organizations, as well as trade union and worker organizations.

Progress and next steps

2017

In September 2017, the Costa Rica project kick-off workshop took place and the first draft living wage estimate was presented during a validation event;

2018

In April 2018, the projects partners met with two independent Rainforest Alliance certified plantations in Costa Rica to calculate the status of the current wages compared with the draft living wages figures emerged from the study. From the visits, it became clear that the wage gaps for these two farms seems to be minimal, and that most likely 50% of the farm workers earn more than a living wage, while the remaining workers earn a wage that is approximately 10% lower than the living wage. The meetings helped partners to further design templates for wages calculations to enable farm self-assessment and monitoring;
In April 2018, a meeting was also held by project partners and the banana producer association in Costa Rica when the first draft of the living wage benchmark was discussed in detail;
In May 2018, a baseline assessment of social and environmental practices (including wages) was completed by Rainforest Alliance in Belize on the select farms and the Belize kick-off workshop took place.
The second version of the living wage benchmark study for Costa Rica was finalized in June and shared with partners for final comments.
The living wage benchmark study in Belize started in 2018 and is currently underway.
Learnings and challenges encountered by partners so far were shared during the World Banana Forum meetings in 2018.

2019

The Costa Rica living wage benchmark was published in January 2019. The Living Wage Salary Matrix self-assessment tool for wage calculations at farm level and the guidance document on how to use the tool were published in January 2019.

Next steps

The validation workshop in Belize is planned to take place in the first half of 2019 and the final Belize living wage benchmark study is expected to be published shortly after.
The templates for wage calculations at farm level to enable verification and monitoring over time are planned to be published in the coming months.
IDH is conducting a study to document best practices at farm and trade levels regarding the wages situation. The study aims to support the development of workplans toward the payment of living wages and to reflect on the next steps that project partners and the entire banana sector would need to take to address the issue of living wage.

LIVING WAGE SALARY MATRIX