Minister pleased with Agri SA’s farm-by-farm deal

Agriculture Minister Tina Joemat-Pettersson appeared as pleased as punch yesterday that she has achieved an agreement – albeit temporary – to the farming crisis in the Western Cape. The answer, extraordinarily, has been to adopt Agri SA’s solution: hold negotiations “farm by farm”. This means the workers must negotiate with their employer over wages and service conditions.

Pressed on whether this wasn’t selling out to a “divide-and-rule” tactic by farmers, activist Nosey Pieterse, who claims to represent non-unionised farmworkers, was emphatic that it wasn’t uncustomary for worker wage and compensation negotiations to take place on “the plant”. So, for example, workers in a particular factory negotiated with their employer.

Joemat-Pettersson said the Hex River Table Grape Association and Agri SA had agreed to farm-by-farm negotiations. “This is one area at least [where we] have found agreement… this has not been easy.”

What she did not say was that organised agriculture had won the argument that they had been making all along – that wages could not be negotiated by farmer associations with unions. It had to be done by an individual farmer with his workers.

In addition, Agri SA has repeatedly pointed out that the bulk of workers were not unionised, acknowledged by Pieterse at a media briefing in Parliament yesterday. He described this as merely a by-product of the fight for an end to slave wages. The bigger picture was to raise wages to at least R150 a day, up from a minimum of R69.

One person, who until yesterday opposed the farm-by-farm option, was Tony Ehrenreich, Cosatu’s regional secretary for the Western Cape.

Agri SA, which he said “still wants to perpetuate the old boere ideas” was “completely opposed” to putting any monetary offer on the table. “The route that the farmers and Agri SA have chosen… by disregarding workers, will lead to the common ruin of us all and the collapse of the industries around agriculture.” Yesterday he called the agreement “a breakthrough”.

He may well have said that the farmers want to stick to the philosophy: Two legs [on farms] bad, four legs good. page 6

Ratings

Moody’s Investors Service’s 14-page report on South Africa’s banking system is a bit like the proverbial curate’s egg – overall it is bad and a bit smelly, but it is not without some redeeming features.

Indeed in another time, such as any time before the collapse of Lehman Brothers in 2008, those redeeming features might have been given greater exposure and Moody’s would be telling us a different story. But it is December 2012 and it is some three months after Moody’s downgraded the government and four years since it became apparent to the world that the ratings agencies had not only misled us all so dreadfully, but had played a critical enabling role in the sub-prime crisis that underpinned the financial collapse.

Because of this enormous “error” and the subsequent huge outcry, Moody’s and the other ratings agencies are unlikely to be doing much upgrading in the foreseeable future. As things stand, it is much safer to dwell on the negatives than highlight the positives.

So, while the ratings agencies have to listen to us all complain about how they are just as wrong this time around – in the opposite direction – they can smugly cling on to their claims to be scientific and dispassionate. Of course in a globally interconnected economy, once you start downgrading things like countries and companies and institutions, well, there’s really no stopping – the process feeds on itself. So it becomes very difficult to dish out upgrades, unless you’re the Philippines or Turkey.

That said, Moody’s et al do make a number of important points that will need to be addressed by the government and regulators. In particular the issues around Marikana, income inequality and unemployment expose all corporates and institutions to downgrades. If these are not resolved then even when ratings upgrades become fashionable once more, the egg may remain overwhelmingly bad. page 3

Prasa

The Passenger Rail Agency of South Africa (Prasa) behaved in a very unorthodox manner yesterday by inviting journalists to its press conference to announce the winning bidder of the first phase of its rolling stock fleet renewal programme, merely two hours before the event.

Journalists were expected to drop everything they were doing because the “one who must be obeyed” had made a call.

But what was so urgent about the announcement that it could not wait for a day? Chief executive Lucky Montana and his press officer, Moffat Mofokeng, did not say anything about the urgency.

The audience, which was mainly staff of Prasa, was kept waiting for an hour in an auditorium with a faulty air conditioning while VIPs gathered.

It is also odd that the winning bidder, the Gibela Rail Transport Consortium, was appointed without having a black economic empowerment (BEE) partner. But it is within the National Treasury regulations, which looks at the price alone as the most determining factor in the adjudication of tenders. Montana said there was no reserve bidder. This means that Prasa trusts Gibela absolutely to deliver a BEE partner on time. But what if it fails to meet this guarantee? Does it mean that Prasa will go back to the drawing board?

But all in all, Gibela promises to hand over very impressive goodies to the local economy, although the bulk of the money will still make its way to France, where Alstom, the lead company in the consortium, is based. Gibela promises to spend a lot of money on good causes like empowering women, developing enterprises and subcontracting qualifying small enterprises.

Those who have not set up their small and medium enterprises are advised to do so right away, or they will miss the train.

Edited by Banele Ginindza. With contributions by Donwald Pressly, Ann Crotty and Wiseman Khuzwayo.