Michoacán, Morelia, Michoacán, Mexico
How is it produced?
Farmers in the Michoacán hills are responsible for the majority of Mexican avocado production. Their farms consist of avocado trees which produce the fruit. Avocado season in Mexico is essentially year-round, with four different blooming and harvest cycles (Avocados from Mexico, n.d.). When the fruit are ready, pickers are hired to pick the fruit from the tree, and then they are sent to the packers. Conditions surrounding production are less than ideal, as avocados are one of the most labour (and resource) intensive crops to farm (CBC, 2019), with reports of ‘appalling’ conditions for migrant workers (Gilbert, 2017).
Describe the supply chain to the store shelf in Canada:
We begin with the farmers (producers) in the Michoacán hills. APEAM (2020)
recognizes over 29,000 producers and 69 packer organizations, who represent the second step in the supply chain. Packers purchase avocados from farmers and prepare them for export in accordance with phytosanitary regulations (Cho, 2020). The avocados are then transported north to importers who distribute them to retailers like Walmart and Costco. Most of these importers are vertically integrated multinationals who operate on both sides of the border. For example, major Mexican exporters include Gruppo West Pak and Del Monte Gruppo. Their American importing counterparts are West Pak Avocado and Del Monte Fresh (Cho, 2020). Similar multinationals also operate in Canada (Government of Canada, 2020).
What is the power balance between the producer and seller?
Cho (2020) notes the evident power imbalance in the supply chain – one that is essentially controlled by the vertically integrated multinationals. “[These] entities are key actors that bridge farmers and retailers, transmitting demands from the top of the supply chain…vertical integration allows greater control over price and volume” (p. 20). Also clear is the market power held by retailers, who help establish price and quality standards that are relayed to suppliers. Leverage at the producer level is seemingly nonexistent, as farmers must react to the demands of powerful corporations and lateral actors like governmental organizations (i.e. the USDA). This lack of power is compounded by the economic situation in Mexico – one of the world’s poorer nations, with nearly half of the population living in poverty (World Bank, 2020). If it wasn’t for avocados, many workers would have to leave Michoacán – and perhaps even Mexico – to find work (Stevenson, 2019).
Can you recommend changes to the system to improve the balance?
It is clear that greater transparency is needed, but who bears this burden and how can they be held accountable? I might suggest that due to their powerful position within the supply chain and access to information, much of this responsibility falls on the multinational import/exporters. Studies have shown how vertically integrated supply chain actors can evoke change more effectively than those less coordinated (Ponte, 2019). These corporations, alongside NGOs, must fill the governance gap created by transnational supply chains. Retailers, too, hold responsibility due to their associated financial gain. They should demand greater transparency, knowing how their multinational distributors have the ability to trace avocados down to basket level, yet only reveal the country of origin (Cho, 2020). Corporate initiative is required to stimulate change, which can be encouraged by concerned consumers and stakeholders alike. Companies throughout the value chain can then be held accountable through participatory mechanisms (Grant & Keohane, 2005). These relate to reputational accountability and actions within the market, as “firms with brand names to protect may be quite vulnerable to consumer boycotts” (p. 38). Ultimately, greater transparency would place pressure on retailers and middlemen to ensure their avocados are not the product of socially or environmentally harmful activities, resulting in a more sustainable supply chain that would surely benefit all.
References/Resources:
APEAM. (2020). Que es Apeam? Retrieved June 9, 2021, from APEAM:
Avocados from Mexico. (n.d.). The Hass avocado. Retrieved June 9, 2021, from AFM:
Avocados from Mexico. (n.d.). The avocado journey. Retrieved June 9, 2021, from AFM:
https://avocadosfrommexico.com/avocados/avocado-journey/
CBC. (2019). How green are avocados? Retrieved June
10, 2021, from CBC: https://www.cbc.ca/news/science/what-on-earth-newsletter-avocados-road-salt-light-pollution-1.4991627
Cho, K. (2020). Environmental impacts of the U.S.-Mexico avocado supply chain. Retrieved
June 10, 2021, from University of Michigan: https://deepblue.lib.umich.edu/bitstream/handle/2027.42/154993/Cho_Kimin_Thesis.pdf?sequence=1
Gilbert, S. (2017). The poltical saga of avocados. Retrieved June 10, 2021, from The Atlantic:
https://www.theatlantic.com/entertainment/archive/2017/02/a-brief-history-of-avocado-controversy/514748/
Grant, R. & Keohane, R. (2005). Accountability and abuses of power in world politics. Retrieved
June 9, 2021, from TRU Library: https://www-jstor-org.ezproxy.tru.ca/stable/30038917?seq=10#metadata_info_tab_contents
Ponte, S. (2019). Business, Sustainability and the Global Economy. Business, Power and
Sustainability in a world of Global Value Chains. Zed Books Ltd.
Stevenson, M. (2019). In Mexico, avocado industry brings both riches and violence. Retrieved
June 11, 2021, from CTV: https://www.ctvnews.ca/business/in-mexico-avocado-industry-brings-both-riches-and-violence-1.4651800
World Bank. (2020). Poverty and equity brief: Mexico. Retrieved June 12, 2021, from World
Bank: https://databank.worldbank.org/data/download/poverty/33EF03BB-9722-4AE2-ABC7-AA2972D68AFE/Global_POVEQ_MEX.pdf