Saturday, November 13, 2010

Cost of Globalized Production

I'm just amazed at how complex and wasteful our food production methods have become.  My studies in global economics initially sparked my interest in globalized food production.  I had done a research paper on globalized labor and production methods in the fishing industry in which practices were significantly counter-ecological.  The basis of such environmentally unsustainable practices were formulated through monetary driven agendas.

For example, back in 2008 I came across the following production process of the Freshwater Fish Marketing Corporation of Winnipeg Manitoba.  Freshwater Fish Corporation actually sent fish caught in their lakes to China for canning.  Fish were caught in Lake Winnipeg and then sent to China to be filleted and packaged, then sent back to Manitoba and other parts of North America for retail.   The company stated that this process was a more economically sound solution and that “it is actually less expensive to transport the fish to China for production and return the fillets to North America than it is to produce the same product in Canada”  (Freshwater Fish Marketing Corporation, 2008).  I'm not sure if these practices are still in place, I was unable to locate information on their canning procedures and the link I used is no longer available: http://www.freshwaterfish.com/FISHMARKET/CHINAPRODUCTION-Whitefish.htm .  

It is interesting that with rising fuel prices it is more affordable to transport products from Canada to China for processing than it is to process locally.  It seems obvious that labor costs are what make this method less expensive.

One has to question how this economic formula equates.  The fish are caught in Manitoba, shipped all the way to China, laborers process the product, ship it back to Manitoba, then the product is put on grocery store shelves in the community where the product originated.  The labor costs of the cannery would have to be decreased to such a minimal level that would compensate for costs of fuel, transportation and overhead processing costs.  How is this possible?  It seems an impossible economic feat, unless of course one examines reports of forced labor camps and child labor.

The US Dept of State released its annual Human Trafficking Report in June 2008, with reports of forced labor and child labor in many countries to include China:

“Forced labor, including forced child labor, remains a significant problem in China.  Children as young as 12 were reportedly subjected to forced labor under the guise of “Work and Study” programs over the past year.  Conditions in this program include excessive hours with mandatory overtime, dangerous conditions, low pay, and involuntary pay deductions.  In June 2007, a Guangdong factory licensed to produce products bearing the 2008 Olympics logo admitted to employing children as young as 12 years old under similar conditions.” (United States Department of State, Trafficking in Persons Report 2008, Page 92)

According to the US Dept of State 2010 Human Trafficking Report, these labor issues have become increasingly problematic:

"Internal trafficking is most pronounced among China’s migrant population, which is estimated to exceed 150 million people. Forced labor remains a serious problem, including in brick kilns, coal mines, factories, and on construction sites throughout China. There were numerous confirmed reports of involuntary servitude of children, adults, and migrant workers during the reporting period. As an example, in May 2009, media reports exposed a forced labor case at brick kilns in Anhui province, where mentally handicapped workers were subjected to slave-like conditions. Workers participating in a government-sponsored program to transfer rural labor to jobs in the interior of China, including children, were allegedly coerced into the program through threats or fines for noncompliance, but others participating in the same program said they had not been forced. Authorities in Xinjiang reportedly imposed forced labor on some farmers in predominantly ethnic minority regions. Forced labor was a problem in some drug detention centers, according to NGO reporting. Some detainees were reportedly forced to work up to 18 hours a day without pay for private companies working in partnership with Chinese authorities. Many prisoners and detainees in reeducation through labor facilities were required to work, often with no remuneration. Authorities held individuals in these institutions as a result of administrative decisions. Forced labor also remained a problem in penal institutions.

There continue to be reports that some Chinese children are forced into prostitution, and various forms of forced labor, including begging, stealing, selling flowers, and work in brick kilns and factories; the children of migrants are particularly vulnerable to trafficking. For example, there were reports child laborers were found working in brick kilns, low-skill service sectors and in small workshops and factories. These reports found that the underage laborers are in their teens, typically ranging from 13 to 15 years old, but some are as young as 10 years old. In November 2009, an explosion killed 13 primary school children working in a Guangxi workshop producing fireworks, all of whom were children of migrant workers working in factories in a neighboring province. Work-study programs in various parts of China, often with local government involvement, reportedly engaged child labor, whereby schools supply factories and farms with forced child labor under the pretext of vocational training. In Xinjiang, children were forced to pick cotton for army-based production brigades under the guise of a “work-study” program, according to foreign media reports. There are reports of some students having no say in the terms or conditions of their employment, and little protection from abusive work practices and dangerous conditions. The overall extent of forced labor and child labor in China is unclear in part because the government releases only limited information on the subject."
http://www.state.gov/g/tip/rls/tiprpt/2010/142759.htm

Of course China is not the only country in this world guilty of human rights violations and labor violations.  However, what is significant is the amount of imports that come into this country from China that are in violation of labor laws (recent news article that comes to mind is Apple admiting to using child labor in producing iPod, computers, mobile phones: http://www.telegraph.co.uk/technology/apple/7330986/Apple-admits-using-child-labour.html ).  Yet, despite these reports the imports keep coming through and our markets are continously flooded with products from questionable production practices.

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