Walmart impact on agriculture dissected

2011-10-16 12:09

Johannesburg - South African farmers are yet to realise what the Walmart/Massmart Holdings [JSE:MSM] deal is doing to do to them, according to Agriculture Minister Tina Joemat-Pettersson.

The minister raised her concerns with City Press shortly before Cosatu general secretary Zwelinzima Vavi announced that the labour federation was supporting the South African Commercial, Catering and Allied Workers Union’s Competition Tribunal appeal against its approval of the Massmart/Walmart merger.

Vavi had also supported the ministries of economic development, trade and industry, and agriculture’s call for a legal review of the May 31 tribunal decision.

This was based on the fact that it had unreasonably denied government departments access to information in the possession of the merging parties and took a far too narrow view of the merger.

Joemat-Pettersson said: “We are so apprehensive about the Walmart/Massmart intervention because if you bring cheap food into the country it is going to underscore and put our local farmers under so much pressure.”

She added that if farmers ever thought that cheap inputs elsewhere were jeopardising the industry, “give us Walmart/Massmart and you will see what it is going to do to agriculture in this country”.

She further said: “I don’t think commercial farmers have thought about it carefully.

“They sell food very cheaply for the first, second, third year. Their prices are so reduced that they put your Pick n Pays and Shoprite/Checkers out of business.

“Once they have the monopoly after four, five years all their prices will shoot up,” said Joemat-Pettersson.

By then South African production prices would not be able to meet Walmart’s requirements, meaning the company would “import from the cheapest Chinese, from the cheapest Vietnamese, the cheapest Taiwanese farmers, the subsidised farmers”, the minister said.

“Cheap subsidised agricultural products will flood into our country and I don’t think our farmers have thought about it. Yes, they say they will procure locally, but not everything,” she said.

According to her, this emerged from an SMS she received from a local olive farmer who had supported her concerns, saying: “I contacted them but they say they are going to import their olives and olive oil and not make use of us because they buy cheaper overseas.

“This will mean that the community projects we are involved in will not be taken up by them. They don’t even want to talk to us.”

According to Vavi, the Competition Act required the tribunal to consider the competition and public-interest effects of a proposed merger – whether it promoted employment and advanced the social and economic welfare of South Africans – and not just the narrow interests of the firms who intend to merge.

The merger’s initial conditions of approval included that it set up a R100-million supplier development fund to help local producers, that there should be no merger-related redundancies for two years, and that the company must honour existing union agreements for three years.

Walmart has consistently tried to allay fears raised by unions and government by promising 346 new stores across Africa, which would create thousands of new jobs.

It has also announced that it planned a 50% increase in Massmart’s food business.

This week, Vavi said: “Cosatu insists that the application needs to be judged against the background of the job-loss bloodbath which has hit the country in recent years.”

Unemployment stood at 36.6%, and the labour market had been depressed for so long that many unemployed people were no longer looking for work.

There was no evidence to back Walmart’s claim in the tribunal that it would create 15 000 retail jobs in the next three years.

“And any such jobs could be more than cancelled out by the tens of thousands of jobs that could be lost in other local retailers and the local factories that currently supply Massmart,” said Vavi.

  • zaatheist - 2011-10-16 12:21

    What a load of crap ...... and what about the consumers. It is about time these ministers stepped off the gravy train for a while and start representing the interests of ordinary citizens. We need more competition not less. We need fewer cartels, not more.

  • Appietrader - 2011-10-16 12:38

    With respect minister, tell your advisers to do their homework before advising you and then make statements like the above. Wallmart will first procure products from local farmers and producers, that make sense. What they can't get they will import, they will never import all their requirements, nonsense. In fact they will teach all roll players to work and operate smarter and more cost efficient!! In the end the consumers and everybody in the food chain will benefit!!!

  • Fanie Kirstein - 2011-10-16 13:01

    and what about the China influence on the clothing and textile industry?

  • Rijger - 2011-10-16 14:51

    Was it Angie Motsekga boasting about people with disabilities that are deployed in eg government departments? Guess that explains Joemat-Petterson's utterings, she must be one of the intellectually challenged candidates. Do your job, Minister, it is normal people like me that have to foot the bill, if Wallmart means paying less, then the unions have better start seeing to it that their members are competitive, isn't it?

  • JP - 2011-10-17 07:53

    I agree with the minister do your home work before you comment on this. What do you think hapeened in the US because of Wallmart fools? They will kill the agriculture and other industries in SA in the long run same what they did in the US wake up. ( I am not a ANC supporter just using commen sense.

      Appietrader - 2011-10-17 08:19

      You are correct by doing homework, which you obviously have not done. Research Wallmart in the US and you may wise up. How can you call Wallmart management fools, do you know them? Bet they have much more university education and training than YOU!

  • PietBull - 2011-10-17 09:28

    Bull Twang - The agricultural problems has been a problem before the Walmart deal, the public is not that stupid Minister Budhead. Stop stealing the taxpayers monies, and invest then in agricultural opportunities to create an affordable product. We require more employers in SA, we cannot use competition as an excuse. Pick 'n Pay...what a joke...they are out there to charge the consumers. Their profit margins may be little of course on paper for what they decide not to disclose. Their settlement (kick backs) from suppliers are hidden for the consumer on not taken into account in their annual financial reports. Stop screwing people!!!!!!.

  • Collitjies - 2011-10-17 10:25

    It will be an acceptable change where Walmart is now accused of everything instead of apartheid. Pick'n Pay are stealing the public blind with ever increasing prices on even basic food. Don't believe me, check for yourself. Go there and check prices over a month and you will notice how prices increase on a weekly basis. They think we are so stupid that we the public won't notice. There is a problem however as all so called super markets seem to work hand in glove.

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