South Africa’s export fruit sector is buoyant but growers are under pressure from government legislation and standards imposed by international supermarket chains. The fruit industry is offering less permanent employment and using more temporary contract labour. While some workers have relatively regular employment at reasonable pay many others – particularly women – are poorly paid and have no job security.

Research from the Institute of Development Studies and the University of Stellenbosch examines the consequences of globalisation for South African producers and informal workers engaged in exporting apples. It explores the connections between the informalisation of labour, supermarket buying strategies and national regulation.

Across the globe firms engaged in export agriculture are reducing their permanent labour forces and increasing their use of temporary contract labour. The advantage for producers using workers with temporary contracts is that they are able to meet the tight production schedules set by international supermarket buyers while minimising the costs and contractual commitments of employment. There may, however, be quality risks when using contract teams. Contractors often have a high turnover of workers, and fail to provide training on specific production requirements.

South Africa is integrated into a strident, competitive and technologically advanced global horticulture market. Fruit sold to UK and European supermarkets accounts for 30% of agricultural export income.

Many other developing countries have succumbed to pressure from international financial institutions to deregulate their labour markets. Post-apartheid South Africa, by contrast, has enacted legislation securing workers’ rights to unemployment insurance, basic conditions of employment, the right to strike, security of tenure and employment equity. Alongside this legislation, however, there has been a growth in informal contract work.

Interviews with buyers, trade agents and producers showed that:

• Supermarkets negotiate quantity and quality through pre-programming six months in advance but do not agree price until the time the produce reaches their distribution centres.
• If there is an oversupply when fruit reaches a distribution centre, it is not uncommon for quality standards to be applied more stringently and for fruit to be rejected at the point of delivery: supermarkets thus move the commercial risk onto growers.
• Producers supplying supermarkets have to meet increasingly stringent technical and environmental standards.
• Growers are caught between rising quality standards and falling prices: remaining outside the value chain subjects them to more volatile markets where the risks can be even greater.
• There is a mixture of employment strategies both among apple producers able to directly access supermarkets and meet their standards as well as those less able to access a better position within the global fruit market.

Contract teams facilitate flexible use of labour that can be varied as the season progresses. They allow South African producers to shift the onus of responsibility for compliance with employment legislation onto contractors. They absorb many of the risks of variable production schedules and reduce labour costs while meeting the stringent time schedules required by international supermarket distributors.

As contract workers rarely pay into South Africa’s state insurance system they do not receive unemployment payments or welfare benefits when they are out of work. Their work is very insecure, and they are much more vulnerable to poverty due to unemployment than workers with formal employment status. Many contract workers, especially women, experience difficulties in coping with the constant insecurity of employment. Others, however, are able to work for extended periods during the season if their contract teams can obtain work across different farms.

South African labour legislation may have benefited formally-employed agricultural workers but it has not prevented the informalisation of work and emergence of a pool of workers who lack the benefits of regulation. Recent experience highlights the fact that both gains and losses from global integration can be experienced simultaneously by the same groups of workers linked to global exports.

Source(s):
‘Squaring the circle: global production and the informalization of work in South African fruit exports’ by Stephanie Barrientos and Andrienetta Kritzinger, Journal of International Development, Vol. 16, pp81-92, 2004

Funded by: Department for International Development, UK

id21 Research Highlight: 28 June 2004

Further Information:
Stephanie Barrientos
Institute of Development Studies
University of Sussex
Brighton
BN1 9RE
UK

Tel: 44 (0) 1273 877032
Fax: 44 (0) 273 621202
Contact the contributor: s.barrientos@ids.ac.uk

Institute of Development Studies (IDS), UK

Andrienetta Kritzinger
Department of Sociology and Social Anthropology
University of Stellenbosch
Private Bag X1
7602 Matieland
South Africa

Tel: 27 21 8082098
Fax: 27 218082143
Contact the contributor: ask@sun.ac.za

University of Stellenbosch, South Africa

Other related links:
'The Social and Political Impact of Economic Restructuring and Informalisation of Labour'

'From work to well-being'

International Labour Organisation (ILO)

'Global Production and Flexible Employment in South African Horticulture: Experiences of Contract Workers in Fruit Exports'