State playing dangerous game with farmworkers

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If there was policy consistency in South Africa, policies aimed at strengthening the rights of workers in the various sectors of the economy would be much the same, if not identical, unless there was a good reason for any exception to the rule.

If this was so in the media sector, for instance, the owners of Independent Newspapers – and other media groups – would be required to hand over 50 percent of the company to its workers. An employee who had laboured for the company for 20 years could get a 20 percent share of half of the business, an employee with 30 years’ service, 30 percent, and so on.

The Sekunjalo Independent Media Consortium, the new owner of the group, which paid R2 billion to acquire it from the former Irish owners would, of course, be highly peeved by this obviously absurd proposal.

However, this is what is being suggested for the commercial agricultural sector by the Department of Rural Development and Land Reform in its final policy proposals on “Strengthening the Relative Rights of People Working the Land”.

Commercial farm owners would retain half their farms and the state would pay for the 50 percent expropriated for the workers. However, this would not be paid to the farm owners but into a trust to be jointly owned by the “new owners” and used to invest in and develop the farm.

Two main sources of financing the worker equity are listed in the proposal as through the land reform programme and the worker’s own historical contribution.

South Africa has some serious financial challenges in financing its planned infrastructure expenditure programme and in meeting, even partially, other enormous demands being made on the fiscus. If implemented in its current form, this planned agricultural policy will increase the pressure on government finances, possibly resulting in ratings agencies downgrading the country’s credit rating, with dire consequences for the cost of debt.

Comments made about the proposals have consistently described them as unworkable, unconstitutional and a threat to South Africa’s food security. The policy sounds like a recipe for disaster and it is to be hoped it is merely an election ploy. If it is, the government is playing a dangerous game because it will have raised the hopes of farmworkers while at the same time increasing the concerns of investors and potential investors in the country.

Nashua Mobile

It is a shame that Nashua Mobile will be closing its doors after being in operation for 14 years. The ripple effect of the decision, which was announced yesterday, is likely to be felt across many layers, especially its staff, who face uncertainty over the future of employment at a time when the credit market is depressed and jobs are scarce.

There is not much of the strategy that the company can disclose until the return of the subscriber businesses to Vodacom and MTN has been approved by the Competition Commission, according to chief executive Dave Rawlinson.

One of the factors that influenced the decision to close the business is the regulatory intervention on call prices.

Last month, the Independent Communications Authority of SA won the right to force the big network operators to lower the rates they charge to connect calls to each other, with the expectation that the operators will lower prices for consumers.

This strategy may already be bearing fruit. Yesterday, MTN South Africa dropped its tariff for prepaid customers to a flat rate of 79c a minute for calls made to any network.

“Our new 79c flat promotional rate is designed to stimulate the industry to provide even more affordable services to consumers, understanding their need for connectivity,” Brian Gouldie, the chief marketing officer for MTN SA, said.

This promotional activity benefits consumers but it poses a head-on challenge to companies such as Nashua Mobile and Altech Autopage.

Rawlinson said many clients had begun to approach the operators directly and had cancelled their contracts.

The decision by Nashua’s holding company, Reunert, will not result in new customers for the networks but the management of contracts will be transferred.

Edited by Peter DeIonno. With contributions from Roy Cokayne and Asha Speckman.


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