As protests by seasonal workers on Western Cape grape farms continue against a backdrop of increasing violence there are growing calls for all the stakeholders involved – from farmers, to workers, to retailers to the government – to work together to create a development plan that will ensure the industry is able to grow profitably and pay decent wages.
SA Table Grape Industry (SATI) chairman Johan van Niekerk told Business Report on Friday that failure to harvest this year’s crop “will result not only in massive losses to farmers but also in the loss of employment income as well as the longer-term loss of export markets”.
Van Niekerk added: “This will ultimately and irreparably damage the sustainability of the industry in South Africa.”
Peter McAllister, the UK-based director of Ethical Trading Initiative (ETI), said on Friday that the organisation was concerned about the unrest and was monitoring the situation.
ETI is an alliance of companies, trade unions and NGOs aimed at improving “the working lives of poor and vulnerable people across the globe who make or grow consumer goods” Its corporate members include retailers Tesco, Waitrose, Asda and Marks & Spencer’s.
McAllister said the protests were underpinned by complex and deep-rooted issues.
“It is clear that this sector cannot continue to develop unless workers feel they can properly engage with management to agree suitable wage levels, benefits and conditions. This is not the case currently, which is part of the underlying problem.”
McAllister urged all the stakeholders in the value chain to consider what constructive role they could play.
“These businesses need to consider how value in the supply chain is shared, to ensure the sector is sustainable and provides decent work for those on farms, in processing units and in shipping.”
He said ETI was in contact with its member supermarkets who sourced from the Western Cape as well as trade unions and NGO partners in South Africa. He said all of them were following developments closely.
“We would encourage supermarkets, and others sourcing from this region, to actively engage with their supply base on this issue.”
Gill Smith, the senior manager for corporate public relations at up-market UK grocery chain Waitrose, said in response to queries: “We would encourage local stakeholders in South Africa to engage in a constructive dialogue to find a solution as soon as possible.”
She said the Waitrose Foundation had invested £4.6 million (R64.7m) to support worker-based projects on farms in South Africa.
Neither Tesco nor Aldi responded to Business Report’s queries.
Van Niekerk said key stakeholders would be meeting tomorrow in what would be the first meeting to discuss establishing a development plan for the industry.
He said although there was a perception that after 1994 farmers were “the enemy”, the SATI did have a close relationship with the government and in particular with the Department of Trade and Industry.
“[The] government partners us with most of our market-access efforts… we can’t open markets and keep them open without a close relationship with government and we understand we will go nowhere if we do not have a close relationship,” Van Niekerk said.
SATI statistics reveal the changing fortunes of grape farmers. Following deregulation of the industry in the mid-1990s output surged to 50 million cartons a year in 2003 from 25 million in 1997. However, since 2003 there has been no growth in output and farms have been consolidated in response to the growing pressure on profits.
“It used to be that a 30ha farm was profitable but now a farm needs to produce about 1 million cartons of grapes to be profitable: that’s a farm of around 300ha with a turnover of R50m to R60m a year,” Van Niekerk said.
Part of the profit pressure is due to the fact that at present some 80 percent of the industry output is shipped to Europe, which is often oversupplied.
Van Niekerk said he did not see the powerful European retailers as the main problem as they had helped to grow the market for local suppliers but he stressed the need to develop markets outside Europe.