The structuring of agricultural and the agrarian political economy And the impact on rural labour and social movements

KC JOURNAL NO 23 APRIL 2010

In this article Lali Naidoo* looks at liberalisation in Agriculture and its impact on farm workers

Nature and role of agriculture in Sa

During the apartheid capitalist era agriculture was one of the most protected and regulated sectors in the South African economy. It has often been looked at in terms of a dualism between white commercial farming and black subsistence farming. However, this dualism is best conceived of in terms of the combined and uneven development of apartheid capitalism in the countryside, which favoured the development of white capital to the detriment of black commercial farming.

In the post-apartheid era agriculture underwent major changes resulting in its almost total liberalisation and state deregulation. The passing of the Marketing of Agricultural Products Act of 1996 eliminated the marketing boards and state export monopolies thereby opening up agriculture to global competition. Issues that have emerged since deregulation are: (a) growth and expansion of certain agricultural sub-sectors, (b) strong backward linkages and forward linkages with the food and beverages sector, (c) consolidation of the agro-processing sector, (d) strong export capacity (e) increases in segmentation of agricultural labour markets and a fragmentation of the rural working class and (f) commodification of labour and land continue to dominate the agri-industrial complex. Deregulation has facilitated increased foreign direct investment in agriculture, especially in the fruit and wine industries. A high proportion of this investment has been associated with the establishment of companies tied to the deciduous fruit and citrus export industries.

The agro-industrial regime is bolstered by global trade agreements and the power-divide between the global North and the global South. Institutions such as the IMF and the World Bank determine the macro-economic strategies based on neo-liberalism of governments and through the WTO maintain an imbalance in global trading power and capacity in favour of the North. As opposed to challenging the unfair global trade environment the ANC has embraced these policies which has propelled its course towards liberalisation, making South Africa’s agricultural sector one of the most deregulated in the world.

Agriculture continues to play a critical role in the agrarian context and in the economy despite its declining contribution to the GDP. Primary agriculture’s contribution to the GDP is around 3-4%, while the larger agro-processing sector accounts for around 9%. In 2000 there were approximately 50 000 commercial farms, largely concentrated in the hands of white farmers. In 2000 these farms exported approximately R16 billion worth of products, which accounted for nearly 10 percent of all South Africa’s exports. Consolidation and concentration of ownership of farmland continued. In 1994 there were 124 000 farming units which reduced drastically to 46 000 farming units in 2007. These commercial farms employ between 7 -10 percent of the labour force. It is estimated that 6 million people depend on the wages from employment on commercial farms.

Because of apartheid the National Party government was forced to adopt an inward industrialisation strategy. The Marketing of Agricultural Products Act of 1996 opened up the production and distribution of food in accordance with “the free market”. By doing so the ANC government moved away from inward industrialisation to an export orientated strategy. South Africa experienced an increase in trade. Exports as well as imports increased from around 16% in 1996 to over 20% in 2005. The value of South African exports was R330.3 billion in 2005 and that of imports R350.5 billion. South Africa ranked 39th in the world for both exports and imports and accounted for 0.5% of world exports. South Africa exported products to 249 countries with Japan the major destination. Among the 246 countries, that South Africa imported products from, Germany held the top position.

The ANC’s neoliberal restructuring of agriculture

The ANC introduced its conservative macroeconomic strategy in 1996. In line with neo-liberalism the strategy looks to the market for the allocation and distribution of goods and resources. For neo-liberalism, deregulation and trade liberalisation result in economic efficiency and increased productivity and output. For sure, there have been some positive economic effects for South African agriculture in terms of expansion and export growth. The positive outcomes have not been evenly spread throughout the food chain. Restructuring of product markets has contradictory and varied outcomes producing winners and losers.

Large farms with a strong competitive edge over others in the sub-sector, producing for global trade and operating in stable product markets such wine, game farms and horticulture, benefit significantly. Those at the top of the food chain and who also benefit from a deregulated food regime are the agro-processing sector and retail outlets such as supermarket chains. Inefficient white farmers with high debt are losers. In the ‘race’ to become globally competitive, they have been unable to survive without state support in the form of subsidies and marketing legislation. Small-to-medium sized farmers operating in declining and competitive product markets, land reform beneficiaries and farmers in the former Bantustans are distinct losers in deregulated agricultural markets. Most segments of farm workers and dwellers are also at a distinct disadvantage. It is estimated that between 1985 and 1996 as many as 200,000 permanent – and a further 200,000 seasonal – farm workers lost their jobs. In June 2009, 28 000 farm workers lost their jobs. The neo-liberal macro-economic strategy that the ANC is pursuing has not transformed the power relations in the agrarian political economy and in this sense agriculture and rural areas generally bear strong continuities with the past. The wider impact of liberalisation and deregulation is evident on three levels. One is the change in product markets. There has been a shift away from field crops to livestock and horticulture where returns are better. There are also shifts from agriculture products to game farming and eco- tourism. In this process large tracts of land are consolidated to form a single game park or reserve. Two is the concentration and consolidation of capital in the food value chain creating a pyramid effect. The previous agricultural cooperatives were privatised placing private companies at the top of the value chain. Three, with the removal of price controls we are seeing volatile food prices that hit the poor the hardest.

Impact on farm workers

Current patterns of accumulation can be said to have some level of change mixed with greater degrees of continuities with the past, producing profound implications for the rural workforce. Deregulation in product markets has been accompanied with some regulations in the labour markets. The introduction of labour and tenure laws and the minimum wage for the farming sector has affected the working class in an uneven manner.

Farmers and producers at the top of the food chain are in a better position to comply with labour laws and the minimum wage. However, those who operate in fluctuating and declining markets are often non-compliant with labour and tenure rights. Research conducted by ECARP on the minimum wage show that farmers often partially comply with minimum wage regulations by paying the core male workers the minima and atypical and women workers sub-minimum wages.

Farm labour is becoming fractured with rising inequalities in income distribution and access to services and housing on farms. This furthers segmentation in agricultural labour markets, between female and male, full-time and atypical workers, and the different minimums paid in Area A compared to AreaB. There have been little or no gains for low paid workers to alleviate poverty.

A distinction can also be drawn between farm workers and dwellers. Dwellers are those who merely live on farms and are often not in employment or are employed on a seasonal basis. This group is the most vulnerable as there is very little or no socio-economic protective measures applying to them. They form the bulk of people living on commercial farmland. Despite the introduction of labour and land laws, farm workers and dwellers continue to live and work under appalling conditions. Housing and access to basic services have not improved. Sixty five percent have no toilets, 84% have no electricity and 86% do not have access to clean, reliable sources of water.

The current agro-industrial model of food production and distribution does not only negatively affect the poor, it also impacts negatively on the environment and is a major contributor to global warming and climate change. These trends can be reversed through the strengthening of rural social movements comprised of farm workers, dwellers and small-scale farms to seek alternative models to the current food production regime. The premise must be on meeting people’s needs and not on profits. We need to conceptualise the role of markets, which are human constructs consisting of social interactions between people. New models of food production and distribution must be geared towards meeting local needs. Production should be geared towards local economies and must be based on principles and practices that are ecologically sound and sustainable. The question of farm worker/dweller and small-scale farmer organisational forms becomes crucial to the debates around transformation in rural areas, given that established unions have not had much success in organising the sector on a comprehensive scale. New forms of organisations are emerging, certainly in the areas where ECARP and SCLC are active, through farm and area committees and collective structures of small-scale farming. These structures are strongly rooted at the level of farms and comprise all who live and work on farms. Structures such as these need to be encouraged, as opposed to waiting for a union to arrive on the farm to organise.


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