McCormick+Schmitz Handbook for value chain research on - PACA

Let us start with the latter, asking what increase in piece rates would be necessary to allow
the home-workers to ‘release’ her children from work and send them to school? Working
this out (and checking it out <strong>for</strong> two or three cases) should not be difficult. Then chose
two or three typical garments and work out the increase in cost per garment to the
manufacturer (should be easy if you have obtained the cost data from the manufacturer –
see section 12.1). The final step in the calculation is to work out the absolute and
percentage increase to the final sales price to the consumer. For the latter you may need
the help of the buyer or of an overseas collaborators who can check the prices in the
shops. You may even able to check prices on the internet but this remains a rare option.
In all likelihood the calculations will show that the increase in producer price and retail
price is tiny yet the effect on the use of child labour could be big.
Working out the cost data is one line of work, making effective use of it is another. It
may require mobilising the entire <strong>chain</strong>. Doing so effectively requires that you respect
certain principles: a) recognise that all actors (manufacturers and traders) operate in a
global market characterised by increasingly severe competition; profit margins are often
very small; b) do not blame producers or buyers personally <strong>for</strong> the use of child labour in
their <strong>chain</strong>; remind them (if required) that being associated with child labour undermines
their ability to compete in European and NorthAmerican markets and that being
associated with initiatives which eliminate the use of child labour enhances their ability to
compete.
In such projects of exerting <strong>chain</strong> pressure <strong>for</strong> good causes, NGOs have a mixed record.
Most are very good in raising the flag and alerting to problems such as child labour. But
few are able to contribute to a solution. In the UK, the government has provided a <strong>for</strong>um
which facilitates constructive solutions: the Ethical Trading Initiative (see
www.ethicaltrade.org ).
[Readers: could those of you who have worked on ethical trade initiatives help to spin out
this example. The story can be hypothetical but it needs to be based on real experiences
or at least realistic expectations. DM/HS]
98