Volume10, No.3 - May 2001

A victory for the people

Food sector job summit

The food industry is a powerful force in South Africa's economy.

• Agricultural producers currently employ approximately 680 000 workers and food processors about 185 000.
• The price of food affects the cost of living more than any other consumer products and influences the rate of inflation.

The few, very large, white owned companies and co-operatives who dominate the industry, are organised into powerful associations that lobby for their interests and have powerful political influence. 70 members of the Agricultural Business Chamber and 100 members of the Grocery Manufacturers' Association have combined turnovers of R40 billion and R25 billion respectively.

On the other hand many of those most dependent on the industry are people with little political economic voice - the poorer consumers, micro producers in rural areas and farm workers - many of them women.

The food industry stretches from the rural land market and makers of seeds and other agricultural inputs to food retailers and caterers. It also impacts on manufacturers of chemicals, packaging materials and machinery. Its overall effect on employment and the economy is much greater than one might immediately expect.

From the late 1980s onwards, the industry has been encouraged to implement deregulation (the removal of state control and support) and has been affected by trade liberalisation, with the reduction of tariffs on imports.

Important issues have also been thrown up by South Africa's economic integration with the Southern African region, where there are concerns about use of low-paid foreign farm workers in South Africa and bringing down trade barriers.

What is the role of the Food Sector Job Summit?

Sector summits are a trade union initiative to focus attention on working-class issues and appropriate strategic actions to develop each industrial sector. They also deal with issues of gender equality, rural development, regional integration and the environment.

The Food Sector Job Summit will be an initiative driven by FAWU, COSATU and other COSATU affiliates. NALEDI provides technical support where needed. The ultimate aim is to develop a working-class industrial strategy for South Africa with other relevant non-COSATU union federations and affiliates.

There are three main issues for workers in the food industry:

1. Creating and retaining quality jobs
2. The price and quality of food bought by the working class and poor
3. Ownership and control

On (1), the industry is performing very badly. From 1988 to 1998, a staggering 140 000 regular jobs were lost in the commercial farm sector. Between 1990 and 2000, formal employment dropped by over 52 000 in the food processing industry. There is also increasing job insecurity and casualisation. No one can reliably say how many jobs have been created or lost in smaller and informal enterprises over the period.

On (2), official statistics show that food prices have increased significantly faster since deregulation and trade liberalisation than before. In the last few years the only product group to show relatively low price increases was meat, consumed mostly by wealthier households.

On (3), ownership within the food industry is still heavily concentrated in the hands of large (often multi-national) companies and local white farmers and their co-operatives or agri-businesses. While some progress has been made in democratising control over the industry, there is much room for improvement.

The food industry is a prime example of improved labour productivity (mainly through investments in labour-reducing technology) leading to a loss of many jobs. In the drive to become internationally competitive and increase exports, one trade-off made by business has been much lower levels of employment.

But the gains from improvements in productivity are not being passed on to consumers in lower prices! Other causes of the job losses have been:

• Increased imports;
• The application of different labour and product standards to small and large businesses; and
• An increase in mergers and acquisitions.

Many food processing companies complain that the levels at which they are utilising their capacity has suffered from weak domestic demand. This is a good example of a serious market failure - while companies complain of 'low demand', millions of consumers cannot afford to buy enough food for their basic needs and many go hungry.

Given the current performance of the food industry on working-class issues, the co-ordinators of the Food Industry Sector Job Summit will firstly have to develop a coherent and appropriate union strategy, built on the understanding and support of union members and high quality research, and develop the capacity needed to implement it.

Should you require any further information please contact the food SJS co-ordinator Katishi Masemola of FAWU on 011-331 1319 or fax 011-331 1332.