Globalisation explained through ketchup
The tomato chain
China is the world’s largest producer of tomato sauce, puree and ketchup. In Chinese cuisine, these products are rarely used. About 95% of the tomato crop is destined for export, mainly to Europe and the U.S., where the tomato harvest is too small to meet demand.
The majority of China’s exports of tomatoes grown by tens of thousands of small farmers. Facing high costs of seeds, fertilizers and the lease of state land, farmers’ profit margins are small and, especially in bad years, they can barely make ends meet. The harvest – heavy and poorly paid work – is done by seasonal workers, mostly women from the area.
The small farmers compete with companies, who can by-pass the middlemen and agree contracts directly with the processing plants, while most small farmers are dependent on ‘tomato brokers’ who set the price for the produce.
The growers are responsible for transporting the tomatoes to the factories. They must apply to the factories for special transport permits and run the risk of their tomatoes rotting if the permit comes in too late, or as a result of days spent waiting at the factory gates.
It takes the factory about half an hour to turn approved tomatoes into sauce – and about an hour for ketchup. The process is efficient, but food safety is not guaranteed. Ketchup with too high a bacteria count is rejected and cannot be sold abroad. This ketchup often ends up in the domestic market. The waste water from the factories is often contaminated with pesticides and is simply discharged into the open water.
To ensure food safety for Western consumers, major international customers such as Unilever, Knorr and fast-food chains like McDonald’s and KFC are setting increasingly stringent environmental and health requirements for the Chinese ketchup manufacturers. This results in higher costs for the Chinese manufacturers and farmers, further reducing their margins and putting more pressure on the small tomato farmers.
A small grower from the Bayinguolenregio, Xinjiang:
“I have been growing tomatoes for five years now and have made losses for three years. The problem is transportation: it takes too much time. Last year we harvested seven tons, but 2 tons spoiled already on the farm. We are thinking of cultivating cotton instead, which won’t rot after harvesting.”
A fellow grower: “A man in our village committed suicide because he was not allowed to transport. Last year it took days before the factories came to pick our tomatoes. Angry farmers dumped mountains of rotten tomatoes in front of the police station, but the government made us pay for the clean up.”
This article is based on research undertaken by SOMO, the Centre for Research on Multinational Corporations. SOMO’s Chinese partner, SRI, researched the Chinese production of tomatoes and their subsequent processing into paste for ketchup.
- “Your ketchup probably came from Xinjiang” (2011)
- “Situation, challenges and outlook of Chinese tomato industry”(2012)
- “Ketchup diplomacy in Red China”
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