Macroeconomic strategies, agriculture and rural poverty in post ...

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11 The employment and growth potential associated with high value food exports must be weighed against the costs of an open economy to farmers and farm workers producing field crops like maize, wheat and oil seeds for the domestic market. While exporters will emerge as winners in an open economy, the agricultural losers will be maize, wheat and oilseed farmers. Competing with maize and wheat imported from the United States or the European Union will be extremely difficult for South African farmers given the high subsidies and indirect transfers that farmers continue to enjoy. The United States, for instance, has selected the South African market as part of its export promotion and subsidy programme under the ‘Export Promotion Programme.’ While WTO should theoretically open markets and promote freer trade in agriculture, it seems more likely that agricultural trade will simply be subject to new control and subsidy measures. Moreover, since the provisions of the WTO are for tariff and subsidy reduction rather than the wholesale removal of trade barriers, the impact of freer trade depends on the initial level of protection. Levels of protection have always been much higher in the United States and the European Union and they will therefor retain higher subsidies under WTO regulations. Rather than promoting freer trade, it seems that one of the impacts of the WTO will allow countries in North America and Europe greater access to the markets of developing countries to the detriment of local field crop producers and workers (Keet 1996). The dismantling of domestic subsidies and regulations in the period since the mid-1980s has made field crop farming in South Africa even more vulnerable to imports. Producer subsidies and per capita transfers to agriculture, for example, are much lower for South African farmers than they are for farmers in Europe or the United States (Agrifutura 1996). Indeed, the entire regulatory environment for agriculture has changed radically with the amendment of agricultural marketing legislation, the withdrawal of direct state subsidies, and the replacement of quantitative restrictions on food imports with tariffs in line with the GATT. During most years, these differences will allow US farmers to deliver wheat and animal feed to Cape Town at prices that are below production costs of the same crop in South Africa (Williams 1996). In a more open economy, and in the context of an agricultural policy which is committed to a ‘viable market-directed farming sector’, considerable restructuring of maize, wheat and oilseed farming is likely to occur. The shift from maize farming to stock or game farming, a production regime that requires much less labour, will probably be hastened in this new regime. Employment creation and growth in this sector appears far less likely under Gear and uneven rural development is almost certainly one of the most important long term impacts of an open oriented economy. What private investment does occur in the rural areas is likely to follow sectors with the potential for export earning rather than on those sectors focused on the local market. Job creation and growth in the long term is therefore far more likely in rural regions focused on exports: the Western Cape, parts of the Northern Province, Mpumalanga, Eastern and Northern Cape. In contrast, the maize and wheat growing regions of Mpumalanga, the Free State and the North West are likely to experience job losses and decline, especially in the context of a macroeconomic policy which puts such faith in private sector investment for growth and job creation. One of the more significant impacts of Gear will be the way it reshapes and transforms rural economies and wage earning opportunities. The emphasis of both domestic agricultural and macroeconomic policies on exporters at the expense of farming that is focused on local consumption has important implications for food security and job creation, particularly in industries that are linked to farming through backward or forward linkages. The apartheid government’s commitment to national food security is clearly no longer an important policy consideration at the domestic agricultural or the macroeconomic policy level and this shift is mirrored in numerous other policy papers
produced after 1994. Gear’s approach to food security is thus in line with strategies within other government departments. The implications of Gear on forward and backward linkages are more complicated and perhaps more serious for job creation. As noted earlier in the paper agriculture has important backward and forward linkages with other sectors of the economy which are labour intensive. Although scant research has been done on the topic it is almost certainly the case that the employment linkages are greater for sectors of agriculture focused on the domestic market, sectors which are likely to come under increasing pressure in a neoliberal economic environment. If these sectors suffer from increased competition then the important employment and growth linkages with other sectors of the economy will be lost. Gear’s shortsightedness on the important indirect role of agriculture in the economy may thus jeopardize the employment and growth capacity of those sectors with strong links to agriculture. If penetrating new markets may be difficult, organising farm workers and improving conditions is a more challenging prospect. Nonetheless, the prospect of alleviating rural poverty through agricultural wage work depends ultimately on improving conditions for farm workers. Organising farm workers and the spread of farm worker equity schemes are two immediate ways of improving wages and conditions on farms. Of the two, unionising farm workers is perhaps more challenging; as Murphy (1995, 20) has argued, “...the importance and desirability of organising farmworkers will remain rhetoric until the practical difficulties involved in trying to organise in agriculture are squarely addressed.” These obstacles include the spatial distribution of farm workers, the small number of workers on individual farms, the limited resources of unions, the persistence of paternalism on some farms (Waldman 1996; Kritinger and Vorster 1996; du Toit 1994), and the active efforts of white farmers against union efforts to organise farm workers. Even when worker protest has enjoyed limited success (e.g. Mather 1993), divisions within the workforce have militated against effective and long-term organisation. In parts of the Western Cape, ethnic divisions are being exploited by fruit and wine farmers with the express purpose of defending themselves against unions. On these farms, the work force is divided between a better paid group of coloured men and women who live permanently on the farm and apparently share the same consciousness as the white farmer, and a group of poorly paid seasonal black workers. This division ensures that resident workers are unlikely to be tempted by unions and excludes Africans who are perceived as the ‘union vanguard’ and more inclined to militancy (Hamman and Ewert 1996). One solution to the problem of organising workers is to concentrate on farms where unions have had limited success: large, labour intensive farms exporting high value food for export and employing upwards of 500 workers. Farm owners employing such large numbers are generally less reluctant see union organisation and some may even encourage unions with a view to increasing productivity levels. Greater leverage is possible with exporters - despite the reluctance of the WTO to include a clause which specifies working conditions on farms - who are vulnerable to international pressure as was recently demonstrated in the wine industry. If unions could organise employees on large farms they would represent close to 10% of all farm workers, a figure that is considerably higher than current estimates. In the Western Cape, for instance, unions have organised approximately 18,000 workers, or only 5.5% of the regions workers (Murphy 1995). A second solution which has had some success in the Transkei, is for unions to target outgrower schemes run by government parastatals. On these labour intensive farms, unions have successfully increased wages and improved worker conditions (Porter and Phillips-Howard 1996). The problem with both these strategies is that unions would be organising workers on farms where conditions and facilities are considerably better than the norm. It would also focus on permanent workers at the expense of seasonal workers, most of whom are women, and labour intensive farms at the expense of workers on field crop and animal product farms. The prospects for farm workers 12
Page 1 and 2: Macroeconomic strategies, agricultu
Page 3 and 4: line. 2 The nature of poverty in So
Page 5 and 6: 20,000 people would lose their jobs
Page 7 and 8: are organised have normally had the
Page 9 and 10: 1980s and 1990s. While non-gold exp
Page 11: 10 Despite not receiving the attent
Page 15 and 16: organised by the private sector and
Page 17 and 18: poverty. Current estimates suggest
Page 19 and 20: Bell, T. 1996. Creating rural livel
Page 21: Rustomjee, Z. 1993: Is there a manu

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