Walmart-at-the-Crossroads-FINAL-06.04.15

4. Does the price they receive, after all promotions and discounts, cover their cost of production,
pay them a decent wage and provide for living wages for any workers they may employ?
Unfortunately, Walmart has not provided many answers to these questions.
Walmart has made some attempts to help small farmers to expand their ability to sell products to
larger retailers such as Walmart. As part of Walmart’s Heritage Agriculture Program, The Sustainable
Agriculture Consortium for Historically Disadvantaged Farmers Program (SACH) was designed to
carry out an experiment with five 1890 Land-Grant Universities and five farmer-based southern
cooperatives.
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The goal of this program was to educate small-scale farmers on how to develop their
farms to sell to Walmart.
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The program had some successes. However, these achievements might not
be representative of what might happen if the program was expanded. Without the collective
negotiating power that comes from farmers pooling resources into cooperative arrangements, such as
with SACH, there is a greater chance that farmers will be exploited and run out of business.
There have been a number of recorded instances displaying Walmart’s lack of loyalty
to its suppliers, such as dumping them when they want to cut costs or refusing to fulfill its obligations
to buy from a supplier if a distribution center has already met its quota.
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Walmart’s need for high
volumes of food also compels the company to reproduce practices predicated on economies of scale,
which requires buying from large farming operations that tend to produce one or two crops. This model
of bringing small farmers into Walmart’s supply chain, which is predicated on state and federally
funded organizations subsidizing Walmart’s ability to purchase from these farmers, moreover, raises
concerns about how the company maximizes its own profit by tapping public resources.
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B. Walmart’s Relationship to Small Farmers Overseas
As Walmart increases sales of local foods and brings more small farmers into its supply chain,
new problems are created for these producers. The company declared that at of the end of 2013, it had
sourced $4 billion worth of local food from 1.2 to 1.4 million small and medium-sized farms in
“emerging markets.” Walmart also claims to have trained 307,332 farmers and farm workers, of whom
43 percent are women.
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The company has created programs, such as the Central American Direct
Farm Initiative, to encourage purchasing from small farmers in countries like Honduras and Nicaragua.
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