By Raymond O’Brien
I have a real scenario for you to consider in regards to the “Modern Slavery Bill”:
If “Modern Slavery” is people working for nothing, there is a real example in New Zealand.
Farmers.
Many farmers work extended hours and have to sell their produce to processors that set the price without regard to farm costs.
The result is that many farmers work for a small fraction of the minimum wage, or in many years lose money while working non-stop, and farmers going broke is not uncommon.
As Supermarkets are $100m+ enterprises, it appears that the Bill will require that they will have to look at their sourcing and entire supply chains to ensure proper compensation to all involved in supplying them food and other products.
For instance it might be ‘fun’ for a supermarket buyer to push down meat processors to a very low price, but when the processor can only meet that price by cutting the rate paid to farmers.. well, you can see the problem.
For instance, for the six or seven years prior to 2025 the price paid by beef processors, while somewhat seasonal, remained unchanged when comparing season with season.
During the same period the unit cost of inputs for farming beef doubled or tripled depending on the items. As well, very dry conditions and then cyclonic conditions raised the amount of grass feed that was required to keep stock in healthy condition and had to be purchased often resulting in farmers losing money.
None of this was reflected in prices paid to farmers. During that 6 or 7 year period any price increases in supermarkets only reflected (to some degree) increased costs from the farm gate to the shelf. Farmers had, and still have, to accept the price or not sell their stock.
Even now, prices paid to farmers do not result in a minimum wage for farmers. To give some idea about how prices paid to farmers are being held artificially low, a 650kg animal in the US will fetch around USD$4,000, or about NZD$6,779.
In New Zealand the same animal will earn a New Zealand farmer around NZD$2,800 – around 40% of the price in the US – and the US is now an open market with no tariffs on beef.
Would Supermarkets have to ensure that all their supply chains are ensuring proper compensation for their work and not being forced into “Modern Slavery”?
