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Inside Labour: Damaging effects of govt policies on farming

SOUTH African trade unions fought a long, hard and ultimately losing battle against market deregulation and widespread trade liberalisation. Last week they were again publicly vindicated.   

An International Labour Organisation (ILO) sponsored report on farms and farm labour has revealed the damaging effects of these government policies in the years following the adoption of what Cosatu later dubbed the “1996 class project”. However, the report also provides a range of suggested solutions to what should be seen as one of the major threats to the country's wellbeing.

Food, after all, along with water and shelter, is one of the three essentials to sustain life. And one of the unintended consequences of policies based on government wishful thinking has been to threaten South Africa’s food security.

Over the years trade union concerns about these policies, echoed in this column, grew as did news of increasing evictions from farms. Against this background, at parliamentary hearings before the portfolio committee on rural development and land reform, the then chair and now ANC chief whip Stone Sizani suggested a comprehensive, independent study. The ILO promptly agreed to sponsor it.

The 273-page report was completed in February and finally released last week. It lays to rest many of the myths and prejudices that have surrounded the agricultural sector and raises critical warning signals.

Overseen by Margareet Visser of the University of Cape Town and Stuart Ferrer of the University of KwaZulu-Natal, it reveals clearly the unintended and damaging consequences of government’s trade policies. In the process, it vindicates the labour movement’s warnings that dropping tariffs on imported goods to levels even lower than suggested by the World Trade Organisation would result in job losses and the destruction of productive capacity.  

At the time, these warnings were swept aside, with government ministers predicting growth rates of 6% and more. According to one economist, such claims amounted to “a cascade of improbabilities”.

The unions concurred with this analysis. And soon the textile and garment industry became the most obvious casualty.  However, there were also severe unintended consequences in the agricultural sector. Largely ignored it soldiered on, but only by increasingly impoverishing farm workers, many of whom lost tenure on farms.

The loss of farm jobs and the eviction of farm workers resulted in a polarisation of attitudes, without much understanding of the underlying causes and little hard data about conditions in the agricultural sector. Cause and effect were often oversimplified and politicised.

Flood of imported items

Yet an obvious consequence of government’s trade policies was the relative flood of imported items, from canned tomatoes and chicken to biscuits and confectionery. As the ILO report notes, in the agricultural sector the estimate for producer support to South African farmers is some 3% as opposed to 20% in developed - OECD - countries.

At the same time the collective bargaining power of producers was severely sapped; farmers found themselves largely at the mercy of local and international retailers who set prices. In order to remain viable in the face of such competition, farm costs had to be reduced drastically.  

So farmers turned to outsourcing and to casual labour. And when the government introduced its well-intentioned Extension of Security of Tenure Act in 1997, along with subsequent amendments, more farm evictions followed.

What all this boils down to is what Visser and Ferrer refer to in present conditions as a “stalemate”: farm workers need a living wage of more than R150 a day - it is now R120.32 - which most farmers cannot afford.

There exist a plethora of other problems, ranging from migration from deeper rural areas to housing, sanitation and transport. The report deals with them and suggests remedies.

“And we intend to keep the debate alive,” says ILO local office director Vic van Vuuren. This seems critical at a time when local government elections are looming and the government is concerned about waning support. In such circumstances it is always tempting for politicians to put vote catching ahead of sensible policy formulation. Food security is too important for this to happen.  

So government would do well to bear in mind the example of Venezuela where the late Hugo Chavez won massive electoral support by spending billions of dollars on heavily subsidised food imports - and crippled the Venezuelan agricultural sector in the process. The difference here is that we don’t even have the oil revenues.

Read the report here.

* Add your voice to this and/or the big labour debate or simply ask Terry a labour question.

* Terry Bell is a political, economic and labour analyst. Views expressed are his own. Follow him on twitter @telbelsa.

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