Mobilise the workers and the poor as progressive motive forces to accelerate land and agrarian transformation in South Africa

Volume 3, No.
16, 25 August 2004

In this Issue:

  • Red Alert: Mobilise
    the workers and the poor as progressive motive forces to
    accelerate land and agrarian transformation in South Africa
  • Financial Sector Summit – Anniversary
    But No Celebration (Report from the Financial Sector Campaign
    Coalition)
  • Previous issues
 
Apology to readers of Umsebenzi Online
 
Due to problems beyond our control, we could
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Umsebenzi Online will continue to be published
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Red Alert

Mobilise the workers and the poor
as progressive motive forces to accelerate land and agrarian transformation
in South Africa

By Blade Nzimande, SACP General
Secretary

Our Central Committee (CC) is meeting this coming weekend to discuss and adopt,
amongst other things, our 2004 Red October Campaign and Plan. The CC will however
also be dealing with other critically important matters, including evaluation
of developments within ANC, Alliance and government since the elections. The
CC will also undertake a comprehensive class analysis of the first ten years
of our democracy, in order to identify some key challenges facing the SACP
over the next decade. In addition we will be undertaking a comprehensive review
progress of our financial sector campaign and decide on appropriate action
in the wake of slow delivery by the financial industry to millions of our people.

Our main focus of our 2004 Red October Campaign is to launch a sustained campaign
on acceleration of land and agrarian transformation, primarily directed at
commercial agriculture. To this end we have invited the Minister of Land and
Agriculture, Cde Thoko Msane-Didiza, to address and engage with the Central
Committee on progress and in land and agrarian transformation.

Our countryside reflects very sharply the enclave nature of our economy. It
is divided into two very distinct (racial) enclaves shaped by centuries of
land dispossession and forcible proletarianisation of the black rural masses,
one being former bantustans and the other white, dominated by agribusiness
and white farms.

The ‘white’ countryside

The South African agricultural economy is dominated by large agri-business
that spans the entire agricultural value chain. Like the rest of the South
African economy, the accumulation regime in agriculture has not fundamentally
changed over the last ten years. Even worse, South Africa’s agriculture
and its accumulation regime still represent some of the worst features of the
political economy of land and agriculture under apartheid. More than 80% of
prime agricultural land is owned by about 55 000 mainly white corporate and
individual farmers.

Since 1994 South African agri-business in particular has
consolidated its economic position, and sections of it actually flourishing,
not least because of new regional and global opportunities post-apartheid.
For example, real profit rate by agriculture, forestry and fishing rose from
100 in 1995 to 143 in 2002, thus increasing this industry’s share of
total profits from 67,8% in 1995 to 72,7% in 2002. Labour productivity in
this industry rose from 123,6 in 1996 to 151,9 with an average annual growth
rate of 3,26 in 2002.

Despite this performance black, mainly African, farmworkers
have suffered greatly and have borne most of the brunt of the continuing
accumulation regime in agriculture. They still represent what is perhaps
the most exploited section of South Africa’s working class. For instance, this industry’s
share of total employment declined from 10,7 in 1996 to 9,9% in 2002. The wage
share by this industry has further declined from 32,2% in 1995 to 27,3% in
2002. Another example of how capitalism is failing our democracy!

Yet there are opportunities. For example it is estimated that between 43-47%
of all cattle in South Africa, about 12% of sheep, and 60% of goats, are owned
by black, and predominantly, African population, and yet this section of our
people only produce 5% of all red meat in South Africa.

The commercial agricultural sector is still characterised
by the many farmworkers’ families
living on farms. Not only are these workers being paid low wages, but also
they are, in many instances together with their families, daily subjected to
all forms of exploitation and abuse. Some of these abuses include long working
hours of work and gross lack of access to basic services like water, electricity,
proper housing and sanitation continue to be major problems, despite new statutory
minimum conditions of service.

There is widespread violence directed against black farmworkers as a routine
form of discipline, including murders. This is complicated by an untransformed
justice system that still predominantly favours the white farmers. Much as
we deplore and condemn all forms of violence in the countryside, media tends
to project a false picture as if most of the violence is that directed against
white farmers. The most pervasive form of violence is that directed against
black farmworkers.

Since 1994 our government has made significant interventions
in the agricultural economy. The flagship of government’s land and agrarian programme has
been land reform and land restitution. However this is moving rather slowly
as it is only 3% of the land that has been redistributed to the majority, hence,
the government’s recent release of an AgriBEE Charter. Other progressive
measures taken by government include extension of security of tenure for farmworkers
and their families, as well as the labour market reforms setting minimum wages
and conditions of service.

As the SACP we have welcomed the recent publication of a draft empowerment
charter for agriculture, underlining the urgency of accelerating land and agrarian
transformation and as an important pressure point on private capitalist agriculture.
An important objective of our campaign is to ensure that the voice of the workers
and the poor is heard in the development and finalisation of this AgriBEE Charter.

However, significant as these reforms and interventions
are, they have not fundamentally (or even remotely) transformed the current
accumulation regime and the political economy of this ‘white’ countryside.
Despite some improvements, apartheid class, gender and racial relations remain.
Agriculture in general, and small and medium farmers in particular, represent
some of the most backward sections of white private capital in South Africa,
and the one most strenuously resisting transformation of the countryside.

However it is important that we should not blame government for all these
weaknesses, rather to mobilise social motive forces for rural transformation
and put more pressure on commercial agriculture.

The former Bantustans

The vast majority of the rural population in South Africa is located in the
former Bantustans. In most of these territories our people are subjected to
the rule, authority and patronage networks of the system of traditional leadership.
There is minimal productive economic activity, thus having some worst forms
of poverty. However this does not mean there is no accumulation at all.

The single largest source of income in these former Bantustans
is wage remittances from the urban areas, in some places estimated to be
as high as 80%. Social grants are the second most important source of income,
contributing between 10% and 20%. This figure is possibly much higher today
as unemployment rises and government’s increased expenditure on social
grants. In fact in thousands of rural villages, the highest source of income
is now from the social grants. These grants have cushioned many of the rural
people from the worst forms of poverty.

Yet there are very real possibilities to generate productive economic activity
in these areas provided there is a systematic and focused state-led strategy
in this regard. For example the livestock in the hands of many rural families,
as highlighted above, is something that can be used as a basis for generating
sustainable income and livelihoods. In addition many people in rural areas
have access to some agricultural land, which with systematic support, including
necessary agricultural inputs, can be used to launch sustainable household-based
subsistence agriculture, co-operative and small-scale farming.

Government has also made some significant policy and legislative interventions
in this enclave of the rural economy since 1994. Our new democratic constitutional
dispensation, principally the establishment of wall-to-wall municipal government,
is an important advance towards liberating our people from the legacy of apartheid
and bantustan administrations and undiluted rule by traditional leaders.

The government’s approach to traditional leaders
has creatively sought to recognise their role, but within the context of
democratically elected government. This has gone some way in securing the
support of most traditional leaders for our democratic dispensation, though
not without contradictions and contestations.

Some of the key challenges

Government has understandably made quite different interventions in relation
to the two enclaves of the rural economy, because the two are obviously not
the same. However what has been a missing link is an overarching strategy for
the countryside as a whole, the ‘white’ and former Bantustan ‘countrysides’.
Much as the two require different strategies but these must be components of
a single overarching strategy to create a deracialised, sustainable rural economy,
and a single countryside. This should be the main thrust of government’s
Integrated, Sustainable Rural Development Plan.

It is our conviction that the foundation for building sustainable livelihoods
and fight poverty in the countryside should be accelerated access to productive
land for household based subsistence in both, and cutting across, the dualistic
rural economic enclaves. Much as we know that under capitalism, a black farming
capitalist class will emerge, albeit very small, this will not address rural
poverty, nor even transform the current accumulation regime in agriculture.
This also means revisiting the question of agricultural extension officers;
as such a strategy will require the training and deployment of thousands of
these.

A critical debate that needs to be taken forward is around the development
of a coherent industrial strategy in agriculture whose main objective would
be to progressively restructure commercial agriculture to respond to the challenge
of poverty and job creation. Crucial in all this is the mobilisation of the
social motive forces for transformation, principally farmworkers, the poor,
agricultural co-operatives and other small-scale farmers. There should therefore
be a partnership between these forces and an active, and interventionist state.

The above constitute some of the perspectives and issues that will inform
our 2004 Red October Campaign and beyond.

Financial
Sector Summit – Anniversary But No Celebration (Report from the
Financial Sector Campaign Coalition)
 

The second anniversary of the signing of the Financial Sector Summit
agreements on 20 August has come and gone with no progress on finalising
the Financial Sector Charter, one of the main products of the Summit.
Unfortunately, this anniversary is no cause for celebration. This in
the same week as National Savings Week!

The Summit agreements were negotiated by the four partners in the National
Economic Development and Labour Council (Nedlac) - community, labour,
business and government constituencies - and signed on 20 August 2002.

Two years later, the financial sector is in no hurry to finalise Charter
targets or composition of the Charter Council. Intransigence by banks,
insurance companies and black industry professionals has resulted in
the Charter drafters failing to meet Charter commitments and missing
important deadlines.

The first was the 30 June commitment to finalise Charter targets, an
undertaking by the industry to Finance Minister Trevor Manuel on the
launch of the Charter in October 2003.

The second was a request for a progress report by Parliament on 11 August.
Parliament invited the Nedlac constituencies to appear before it but
the business constituency requested a postponement. It appears they were
not ready to report to parliament on progress, or the lack of it.

So what is the hold up? Firstly, the financial sector
balks at the idea of equitable representation on the Charter Council
for community and organised labour. The offer on the table is a Charter
Council of 18 members – 14
business, 2 government, 1 labour and 1 community. What trade union or
community leader would accept such an imbalance? Why would it be in the
interests of our constituencies for us to participate at all in such
a skewed structure? We have proposed equal representation and decision-making
by consensus. The industry has rejected this model.

Secondly, the banks and the insurance companies cannot
agree amongst themselves on the total to be invested through the Charter
process. The October charter said ‘up to R75billion’ would be available
for what it called ‘empowerment financing’ of low-cost housing,
infrastructure development,

BEE transaction financing, black SMEs and agriculture.

After eight months of research, hundreds of hours’ work
in technical task teams and probably hundreds of thousands of rands
in costs, the industry factions still cannot agree on either the total
amount or its breakdown.

It turns out that the task teams were largely populated
by banks’ staff,
under supervision of the Banking Council. It seems the insurers did not
pay much attention. Only when the technical teams recommended that the
R75bn be increased by R20bn did the insurers sit up and listen. And then
they put their collective foot down and said ‘back to the drawing
board’.

Bankers and insurers went into a huddle over the targets but excluded
community and labour groups. We made it clear we could not participate
in work to finalise targets until we have formal status in the Charter
process. That means establishing the Charter Council.

Together with the general secretary of COSATU, Zwelinzima
Vavi, the FSCC wrote on 8 July to the chairperson of the Charter drafting
group, the Banking Council’s Bob Tucker, urging an immediate
resolution of the Charter Council issues.

Together, we issued a public statement on 27 July, widely reported in
this and other media, calling for outstanding issues to be resolved no
later than the 20 August Summit anniversary.

We expressed concern that Charter work was continuing behind closed
doors and reserved our rights on all decisions taken during our exclusion.
We gave notice we would oppose the gazetting of the Charter until it
is agreed by all parties.

The industry has not responded to us. We are still waiting for a reply,
but we are not holding our breath.

In the meantime, we have seen big empowerment share deals taking priority
over truly broad-based black economic empowerment. The current preoccupation
with big deals to sell shares in banks and other financial institutions
to black shareholders violates the spirit of the Financial Sector Summit
agreements. These agreements outlined a package of changes to better
the lives of the majority of South Africans, not just an elite, over-empowered,
minority.

And while we are committed to working with black professionals in the
financial sector to achieve genuine broad-based economic empowerment,
workers and communities are deeply concerned that elevating transaction
financing above the broader interests of millions of our people threatens
broad-based empowerment and financial sector transformation.

We are appalled that some black professionals are
now advancing the shameless argument that half of the sum earmarked
to meet the Charter’s
targets should be allocated to BEE transaction deals.

This would mean that low-income housing as well as
other targets would come a poor second to financing BEE deals. This
is not the kind of transformation we fought for; we will fight any
attempt by a small elite to steal the people’s victory.

We need a big deal on housing for our people – and
that includes reviewing the model for financing low income housing
as well as the amounts the banks are willing to lend.

We call on the government not to withdraw the Community Reinvestment
Bill that was put on hold in anticipation of the Financial Sector Charter
commitments on housing.

The broader issues of investing in poor communities to create work and
fight poverty are a national priority and we call on government and business
to support this position. Following the Growth and Development Summit
review last month, at which President Thabo Mbeki strongly criticised
the lack of progress on GDS goals, we want to see urgent progress on
concrete proposals to meet the 5% investable income commitment agreed
at the Summit.

As well as urgently finalising the Charter targets, other issues, including
access to banking and financial services by workers and the poor, employment
equity, skills development and procurement practices, must be prioritised
with buy-in from all social partners.

And plans to address issues not addressed in the Charter, such as assistance
for co-operatives, access to financial services for the millions employed
in the informal economy and ending HIVAIDS discrimination, must also
be fast-tracked.

When we negotiated the Summit agreements in 2002,
we believed banks and insurers were at last committed to meaningful
change. We warn that our people’s patience is wearing thin. Two
years is long enough. We will be going back to our members in the coming
days and weeks to seek mandates to ensure the financial sector is transformed
to the benefit of all South Africans.

 

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