Far from killing the industry, the labour unrest on table grape farms in the Hex River Valley could lead to an increased focus on labour productivity that would help to underpin strong growth in the industry, Mohammed Karaan, an agricultural scientist at Stellenbosch University, said yesterday.
Karaan, who is a commissioner on the National Planning Commission and is working with the SA Table Grape Industry to develop a long-term strategic plan to grow the industry, said that any increase in wages would lead to major structural changes, which would result in extensive job losses in the short term.
However, Karaan believed that “with the right leadership”, the current crisis could become an opportunity to develop a more competitive industry that would enjoy strong growth prospects over the long term.
If farmers did have to pay higher wages, they would insist on higher productivity and would make the investments necessary to up-skill workers.
“In the short term, this will result in reduced employment opportunities, but this is a dynamic industry and in the longer term, farmers will focus on achieving productivity improvements through changes in technology and mechanisation,” he said.
Karaan referred to the considerable scope for increased productivity through improving harvesting techniques and saving water by optimising irrigation.
He believed that there were opportunities to increase the profitability of individual farms as well as to increase the size of the industry.
“There are still considerable gains to be captured in this business,” said Karaan, who pointed out that despite a fluctuating exchange rate and the weak economy in Europe, South African farmers were not able to keep up with the demand for table grapes.
“The global market in fruit generally is undersupplied, especially of the sort of quality product supplied by South African farmers.”
However, without the right leadership, Karaan believed the current turmoil could see a shrinking of the industry.
“There will be no new investment into orchards or value chains and there will be a dis-investment in people, no house-building and no training and the industry will steadily become less competitive. The only way you get around the challenge of higher wages is by making the cake bigger by being more competitive and expanding the industry.”
Karaan stated that the government would have to take the lead in a number of areas, such as research and development, the establishment of public-private partnerships, settling trade regimes and opening new markets.
Stephen Hanival, the chief economist at the Department of Trade and Industry, said that to date the department’s assistance to the table grape industry had been of a “generic” nature, relating to marketing and trade shows, but added: “In future we would like to engage more with a number of agricultural sectors and would look at five-year development plans that take into consideration concerns around socio-economic issues affecting the industry.”
Hanival said the department would look at a range of costs, such as fertilisers and electricity, and see how these affected farmers. “When industry players sit with the department and discuss the issues they realise that we can bring something to the table.”