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Technology and employment in the food and drink industries

Report for discussion at the, Technology and Employment in the Food and Drink Industries

Geneva, 18 - 22 May 1998

International Labour Office   Geneva

Copyright ® 1999 International Labour Organization (ILO)

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Foreword

This report has been prepared by the International Labour Office as the basis for discussions at the Tripartite Meeting on Technology and Employment in the Food and Drink Industries. It examines recent developments in the food and drink industries and new technology that has been adopted in these industries with a view to illustrating their impact on employment and working conditions.

Background to the Meeting

The Meeting is part of the ILO's Sectoral Activities Programme, the purpose of which is to facilitate the exchange of information between constituents on labour and social developments relevant to particular economic sectors, complemented by practically oriented research on topical sectoral issues. This objective has traditionally been pursued by the holding of international tripartite sectoral meetings for the exchange of views and experience with a view to: fostering a broader understanding of sector-specific issues and problems; promoting an international tripartite consensus on sectoral concerns and providing guidance for national and international policies and measures to deal with the related issues and problems; promoting the harmonization of all ILO activities of a sectoral character and acting as the focal point between the Office and its constituents; and providing technical advice, practical assistance and concrete support to ILO constituents in order to facilitate the application of international labour standards in the various economic sectors.

At its 267th Session (November 1996), the Governing Body of the ILO decided that a tripartite meeting on technology and employment in the food and drink industries would be included in the programme of sectoral meetings for 1998-99. At its 268th Session (March 1997), the Governing Body further decided that the governments of the following 20 countries should be invited to be represented at the Meeting: Burundi, Chile, China, Egypt, France, Ghana, India, Italy, Japan, Lebanon, Mexico, Morocco, Nicaragua, Nigeria, Portugal, Thailand, Turkey, United Kingdom, United States and Uruguay. A number of countries were included in a reserve list from which further invitees would be drawn in the event that a government in the first list did not accept the invitation. The Governing Body decided that the 20 Employer and 20 Worker participants in the Meeting would be appointed on the basis of nominations made by the respective groups of the Governing Body. They will not necessarily come from the above list of countries.

Background to the report

The food industry presents many facets, from the traditional labour-intensive activities often found in developing countries to the capital-intensive industrial processes common in the industrialized world. It includes slaughtering, preparing and preserving meat; milling grains and manufacturing bakery products; canning and preserving fish products, fruits and vegetables; manufacturing vegetable and animal oils and fats and animal feeds; and processing sugar, coffee, tea, etc. In addition to first-stage processing, the food industry today is increasingly engaged in the manufacturing of higher-stage processed products such as convenient and ready-to-eat frozen foods. The drink industry covers such activities as distilling and blending spirits; and processing malt, malt liquors, wine, soft drinks, fruit juice, milk, mineral water and so on.

The ILO's Sectoral Activities Programme covers the food and drink industries in countries at all stages of development. Inevitably, however, most of the data readily available on the topic of the Meeting come from industrialized countries. Because of this necessity, and not by choice, the report underemphasizes the experience of FD industries in developing countries, although it does demonstrate that it is in these countries that FD output and employment are growing most rapidly. While some information on developing countries has been included, it mostly concerns large enterprises.

The report was prepared by Shizue Tomoda, Food and Drink Industries Specialist. It incorporates excerpts from case-studies prepared by J.A. Burns with Marian Garcia, Todd Cherkasky, Anselmo García, Andrés Hernandez and Leonard Mertens, Judit Kiss, Naoki Kuriyama and Veena Nabar. Information has also been provided by employers' and workers' organizations affiliated with the International Organization of Employers (IOE) and the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Associations (IUF). The rest has been collected from a variety of sources by the author with the assistance of ILO offices and also through the author's own research work. All help is gratefully acknowledged.

The report is published under the authority of the International Labour Office. It is hoped that the information and analysis provided herein will serve as a useful basis for discussion during the Meeting.

Contents

Foreword

1. Recent trends in the food and drink industries

Production

Volume
Value
Value added
Geographical distribution of production

Consumption

Product trends

Trade
Structure of the food and drink industries
Investment

2. Recent technological changes in the food and drink industries

Microelectronics and computer technology
Fish and poultry processing
Food technology
Other technologies relevant to the food and drink industries

3. Impacts of new technology on employment

Employment trends

Industrialized countries
Developing countries

Changes in labour productivity
Employment flexibility and women workers
Changing work organization and new skill requirements

4. Impact of new technology and structural change on working conditions

Hours of work and earnings
Occupational safety and health

5. Coping with the effects of technological and structural change

Technological change and industrial relations

Adjustment measures
Training for new skill requirements and better work environment

6. Environmental issues

New technology and the environment
Environmental regulations and their impact on the FD industries
Employment implications of environmental issues

7. Summary and points for discussion

Summary

Recent trends
Technological change
Impact of new technology on employment
Impact of new technology on working conditions
Coping with the effects of change
Environmental issues

Suggested points for discussion

Technology and productivity
Employment flexibility and new work organization
Working conditions
Environmental management
Role of the ILO

Tables

1.1 Index numbers for the industrial production of food products (ISIC 311), 1985-95

1.2 Index numbers for the industrial production of beverages (ISIC 313), 1985-95

1.3 Output in food products as a percentage of total manufacturing output, 1985-95

1.4 Output in beverages as a percentage of total manufacturing output, 1985-95

1.5 Total manufacturing value added (MVA), total value added in the FD industries (FDVA) and the proportion of FDVA as a percentage of MVA in the G7 member countries in 1980 and 1994

1.6 Total manufacturing value added (MVA), total value added in the FD industries (FDVA) and the proportion of FDVA as a percentage of MVA in some ASEAN countries in 1980 and 1994

1.7 Distribution of world value added in the food and drink industries, 1980-93

1.8 Distribution of value added in the food and drink industries among developing regions, 1985 and 1992

1.9 Leading food producers among developing countries, 1985 and 1994

1.10 United States: Personal consumption expenditure on food and drink products in 1997 and 1993, and projected 2005

1.11 Index numbers of global food export and import value, by region, 1988-95

1.12 Australian exports and imports of food and drink products and their proportion of total manufacturing exports and imports, 1989-95

1.13 European Union: Exports and imports of food, drink and tobacco products to and from the countries outside the European Union, 1985-95

1.14 Value of Japanese exports and imports of foodstuffs and their proportion of total exports and imports, 1980-95

1.15 United States: Exports and imports of food and kindred products, by value and proportion of total manufacturing exports and imports, 1985-95

1.16 Hungary's foreign trade in food, beverages and tobacco products, 1993-95

1.17 Germany (former FRG): Gross capital investment per worker in the food industry and in manufacturing, 1988-92

1.18 Investment distribution in Hungarian food and drink industry investments, 1990-95

1.19 India: Capital intensity in the food-processing industry

1.20 United Kingdom: Net capital expenditure and gross value added per head in the food and drink industries as compared with the tobacco industry, 1986-93

1.21 United Kingdom: R & D expenditure in food and drink companies, 1995

1.22 United States: Total investment in new plants and equipment in the food industry (SIC Code 20), 1987-95

3.1 Employment in food products (ISIC 311), 1985-95

3.2 Employment in beverages (ISIC 313), 1985-95

3.3 Employment in food products as a percentage of employment in total manufacturing, 1985-95

3.4 Employment in beverages as a percentage of employment in total manufacturing, 1985-95

3.5 European Union: Employment in the FD branches in 1995 and changes since 1988

3.6 Germany: Employment trends in the food and drink industries, 1985-95

3.7 United Kingdom: Employment in the food industry, 1980 and 1992 (Census of production groups: SIC 1980)

3.8 Employment in Hungarian food and drink industries, 1992-95

3.9 United States: Total employment and the proportion of production workers in the food, beverages and tobacco industries, by subsector, 1991-95

3.10 India: Employment in the food and drink industries by branch

3.11 Nigeria: Employment and number of establishments in the food and drink industries, 1992-96

3.12 Germany: Per capita productivity index in the food industry and total manufacturing, by category of workers, 1988-93

3.13 Hungary: Productivity index in the food and drink industries, by branch, 1994-95

3.14 Malaysia: Fixed assets and added value per employee in the food industry and manufacturing, 1985-92

3.15 United Kingdom: Production, employment and output per worker in total manufacturing and in the food, drink and tobacco industries, 1989-96

3.16 United States: Index numbers of hourly output, by sector, 1988-95

3.17 Japan: Number of employees and the proportion of part-time workers in food-processing industries, by sex and size of establishment, 1992-96

3.18 United Kingdom: Employment in the food, drink and tobacco industries, by sex, category of worker and percentage change, 1993-96

3.19 Belgium: Employment in the food and drink industries, by sex and category of worker, 1991-95

3.20 United States: Employment trends in the food industry, 1990-96

4.1 Wages per worker in food products as a percentage of wagesper worker in total manufacturing, 1986-95

4.2 Wages per worker in beverages as a percentage of wages per worker in total manufacturing, 1985-95

4.3 Women's average weekly hours of work as a percentage of men's in total manufacturing and in the food and drink industries, 1985-95

4.4 Women's average hourly earnings as a percentage of men's in total manufacturing and in the food and drink industries, 1985-95

4.5 Australia: Average per capita annual earnings in the food and drink industries and in total manufacturing, 1989-93

4.6 France: Average hourly wages in the cooperative sector of the meat and poultry industries, by category of worker, 1991-94

4.7 Germany: Annual hours of work per worker in the food and drink industries and in total manufacturing, 1988-93

4.8 Germany (former FRG): Gross value added per worker and gross hourly wages in the food and drink industries and in total manufacturing, 1988-93

4.9 Monthly average per capita net earnings in the Hungarian food, drink and tobacco industries, by branch, 1992-95

4.10 Monthly average earnings of manual and non-manual workers in the Hungarian food, drink and tobacco industries, by branch, 1995

4.11 Monthly earnings per worker in the Indian food-processing industry

4.12 Japan: Average monthly hours of work and earnings in the food-processing industries, by sex and size of establishment, 1992-96

4.13 Great Britain: Average weekly hours of work in the food, drink and tobacco industries and in total manufacturing, 1988-95

4.14 Great Britain: Average hourly earnings in the food, drink and tobacco industries and in total manufacturing, 1988-95

4.15 Great Britain: Average annual earnings per head in the food, drink and tobacco industries, 1988-93

4.16 United States: Average weekly hours of work and earnings of production or non-supervisory workers in the food, beverages and tobacco industries by subsector, 1991-95

4.17 Belgium: Number of cases of occupational accidents and diseases reported and cost of compensation in the food and drink industries, 1990-93

4.18 France: Occupational accidents in selected sectors, 1993-94

4.19 Germany: Number of cases of occupational diseases reported in the food, drink and catering sectors, 1990-96

4.20 United Kingdom: Number of cases of injury to FDT and manufacturing workers, 1992-95

4.21 United States: Incidence rates of occupational injury and illness, by industry, 1985-94

List of recurring abbreviations

Exchange rates

The exchange rates for the following currencies against US$1 for the period 1980-95 are given here for ease of reference.

1. Recent trends in the food and
drink industries

World population is projected to be 6.1 billion by the year 2000, of which approximately 80 per cent will be found in developing countries.⁽¹⁾ While millions of people in many developing countries, particularly those beset by disaster or war, are still undernourished, the number of such people is estimated to have declined from approximately 920 million in 1969-71 to about 840million in 1990-92.⁽²⁾ Considering that estimated world population grew from 3.7 billion in 1970⁽³⁾ to 5.4 billion in 1992,⁽⁴⁾ the world has been successful in feeding an increasing number of people over the past few decades. The FD industries have contributed significantly to improving global food security over the years through better processing and preservation techniques, more reliable packaging materials and improved distribution systems.

Production

Volume

Owing mainly to improved agricultural technology, per capita food production in developing countries increased by 23 per cent between 1980 and 1993, though it declined by 3 per cent in industrialized countries in the same period. Global per capita production increased by 18 per cent⁽⁵⁾and livestock production and fishery catches grew. By way of example, world beef and veal production increased from 49.7 million tonnes in 1987 to 52.2 million tonnes in 1993. Poultry production climbed from 31.2 million tonnes to 40 million tonnes during the same period.⁽⁶⁾Despite some fluctuation, global nominal fishery catches rose from 100.7 million tonnes in 1989 to 112.9 million tonnes in 1995. The declining rate of growth for the catches in marine areas is increasingly being offset by catches in inland waters, which rose from 13.8 million tonnes in 1989 to 21 million tonnes in 1995.⁽⁷⁾

Table 1.1 presents index numbers for the volume of food production for 1985-95, with 1990 production constituting 100. The rate of increase for the entire period was relatively small in most OECD countries, with the exception of Ireland. This is largely due to the fact that the market in those countries was relatively mature by the mid-1980s. The stagnation and decline in Japanese production in recent years is probably a reflection of domestic food manufacturers being placed under increasing pressure from cheaper imported products as a result of increased trade liberalization.

Table 1.1. Index numbers for the industrial production of food products (ISIC 311), 1985-95 (1990 = 100)