TRENDS AND IMPACTS OF FOREIGN INVESTMENT IN DEVELOPING COUNTRY AGRICULTURE

ZAMBIA
Trends and impacts of foreign investment in
developing country agriculture
‘livelihoods’ and ‘employment’ are inexorably
linked and according to the Zambia Labour
Force Survey (1986) a “person is employed if
he performs some work for pay, profit or family
gain”, and this includes subsistence farming.
Thus, employment can include a wage for the
employed person or independent production of
a product for direct consumption or market sales
(Scoones, 1998).
Wage employment
One of the policy objectives at the time Kascol
and MDC were being set up was to create
employment and income opportunities in the
rural areas; both companies were seen as an
operationalization of this policy. Today, Kascol
is one of the largest employers in Mazabuka
District and Mpongwe is the biggest employer
in Mpongwe District. When the project started
in the 1980s, Kascol had over 300 permanent
staff – both management and non-management.
By 1999, the number had dropped to 78 and this
has been maintained to the present. The drop in
the number of employees came with changes in
ownership structure. The company underwent
a restructuring process which led to over half of
the employees being laid off and salaries being
reduced for those who remained. Apart from
those who work directly on the farm, Kascol also
runs a clinic which employs four staff. Besides
permanent staff, Kascol employs between 250
and 350 seasonal workers, mostly cane cutters.
These seasonal workers are employed for up to
eight months in a year and, as such, receive an
income for two-thirds of the year. The ratio of
workers to area cultivated in hectares is about
0.38, or 38 workers per 100 hectares.
Between 2004 and 2007, MDC employed
an annual average of 457 full time workers and
1 082 seasonal workers – a combined average of
1 539 workers per annum. This figure translates
to roughly 38 percent of all salaried employees
in the district in the 2000s. 5 The figure in terms
of workers per cultivated land in hectares is 0.14
5 This figure has been estimated by taking into account
a population of 64 371 in 2000 for Mpongwe District
(CSO, 2000) and a wage employment rate of 6.3 percent
in rural Zambia, according to 2000 national census.
308
or 14 workers per 100 hectares, significantly
lower than that of Kascol. The difference is most
likely a reflection of the difference in the levels of
mechanization in the two companies: the MDC is
more highly mechanized than Kascol. At the time
of interviews (July 2011), the company had 520
permanent staff and 1 200 seasonal workers.
These figures are certainly low by international
standards, though still significant within the
Zambian context. A recent survey of Zambian
businesses sponsored by the World Bank and
others (Clarke et al, 2010) found that “even large
Zambian enterprises are small by international
standards. Close to half have between 51 and 70
employees – just above the notional cut off size
of 50 employees for medium-sized enterprises”.
Thus, a company like MDC, which employs over
500 persons in a year, is, by Zambian standards,
a large employer. This is especially true if such a
company is in a rural area – as in the case of the
two businesses studied.
That said, the level of job creation appears
small compared to the size of the rural labour
force. In 2000, Zambia had a total labour force
of 3 165 151 persons, of which 2 151 776 were
in rural areas (CSO, 2003). The rural labour
force was 64 percent of the total labour force,
implying that Zambia’s labour force was (and still
is) predominantly rural. Of the rural labour force,
only 6.3 percent (about 133 205 persons) were in
wage employment.
In 2005 (the year for which comparable
national data on wages is available), unionized/
general workers at Kascol were getting a
minimum of ZMK704 711 (US$206.28) per
month, while seasonal workers were getting a
minimum of ZMK15 816 (US$4.63) per day. 6 In
the same year, the average wage of an unskilled,
unionized worker at MDC was ZMK300 000
(US$87.81). For instance, Brian, who in 2005 was
working as a centre pivot irrigation equipment
operator at the MDC, was earning ZMK370 000
(US$108.30) per month, while Peter who worked
as a security guard was earning ZMK300 000
(US$87.81) per month. These figures are higher
than the national average figure of ZMK293 621
6 Exchange rate of ZMK3 416.34 to a 1 US$ (Bank of
Zambia, average 2005 rate).