Words by Nkanyiso Gumede and Katlego Ramantsima
“We are tired!” shouted an angry farm worker. “We have been exploited for far too long. These schemes are not working for us”. That was the main message shared by farm workers from Witzenberg and surrounding regions in the Western Cape during the speak-out meeting held in Ceres on May 4, 2019. The Witzenberg Rural Development Centre (WRDC), Surplus People’s Project (SPP), Women on Farms Project (WFP), and the Trust for Community Outreach and Education (TCOE) organised the meeting. The event highlighted the plight and injustice experienced by farm workers who are collaborates in share equity schemes. This quote highlights the essence of concerns raised: “The Farm Worker Equity Schemes (FWES) were formed with the blessing of the government to ensure that farm workers and their families have a better life… However, farm workers who are shareholders on farms with white commercial farmers as their partners have not seen their lives change for the better. The white commercial farmers have increased their economic status far beyond that of their fellow shareholders.”
Origins and content of the policy
FWES were first introduced in the 1990s. Through the 2000s, these schemes served as alternative land reform. Farm worker households signed up for land reform grants, and formed a Workers’ Trust, which would acquire about 5% of the business enterprise. In some cases, workers acquired shares in cellars specifically, rather than in the farm itself, or getting ownership of their houses. The schemes involved private sector co-funding, as state subsidies were too limited (see VinPro report 2004). Following exposés about equity schemes failing to deliver to farm workers, Gugile Nkwinti, former minister of the Department of Rural Development and Land Reform (DRDLR), issued a moratorium on new schemes in 2009. This came after a report found that only nine of the 88 schemes declared dividends. Tenure security was not addressed, and evictions still occurred in some cases. Overall, there was no meaningful change in the working or living conditions of farm workers.
Minister Nkwinti later revived equity schemes under the 2014 policy ‘Strengthening the Relative Rights of People Working the Land’. This policy proposed a system of equity sharing on commercial farms between farmers and farm workers, in which the state gains 50% equity of the farm, on behalf of the workers, and the farmer retains the other 50%. The allocation of equity among farm workers is proportional to the number of years they worked on the farm. According to the policy: “All labourers who would have worked on a farm for 10 consecutive years (but less than 25 years …must be entitled to a 10% share-equity on the land, based on its market value” (RSA, 2014: 9). The same logic applies to labourers who have worked on the farm for 25 or 50 years. They are entitled to 25 or 50% share-equity respectively (RSA, 2014:10). The government’s provision of 50% equity for workers is for the establishing of an investment and development fund (IDF). The IDF’s purpose includes developing workers’ managerial and production capacity, further farm investment, and pay-out to those not interested in the new arrangement. All parties must be represented and involved in administering the fund. The policy further states that if workers wish to leave the farm, they should be compensated based on the equity they hold, and for other benefits due to them as employees.
Narration of concerns over policy, and demands
During the speak-out, farm workers said that equity schemes have not strengthened their position or improved their socio-economic conditions. They remain uncertain about their status on shareholding. Many have received no dividends or received an amount that does not satisfy them — they also do not know how these dividends were calculated. Despite the policy highlighting that they should be involved in running the enterprise, speakers claimed that this was not happening. They are excluded from decision-making, have no control over production and marketing, and the IDF is not being used to capacitate them as per the policy prescription. According to the speakers, government does not monitor these share equity schemes and whether they deliver the desired outcomes. The workers have not only challenges with farmers and mentors but also with some of their leaders, whom they accuse of being ‘captured’ by said farmers and mentors. There were also allegations of intimidation and victimisation of those who question these schemes. Trustees do not conduct regular meetings, and there is no change in leadership.
In the memorandum, the workers requested an interministerial team to investigate and intervene in equity schemes. There was also a call for a full forensic audit on all equity schemes, and a full socio-economic evaluation of the shareholders to assess how the schemes have affected them. They further demand that any farmer found to have contravened the law should have his farm expropriated, and the farm should be allocated to the affected farm workers. They also called for an investigation into fronting for BBBEE accreditation. Farm workers also want the option to sell their shares when they wish to do so – policy does not address this. They also demand certificates for the shares they hold. In addition, the workers want to select their own mentors and strategic partners – government currently holds this privilege. There was also a call for a moratorium on farm evictions, which are still going on despite the legislations in place that means curb them. Naomi Bethana from WRDC said the following on evictions: “If they get dismissed they lose their shares… [and] must leave the farm… Even the fact that they are shareholders does not secure them in anyway… We need to start tracking shareholders as they are scattered all over. Some are even in the informal settlements. There is a lady that lives in an informal settlement, and she moves from one place to another… She is a clear indication that shareholding is not a security of tenure [on FWES].”
Farm workers who are not part of share equity schemes, but who also attended the event spoke out about the various abuses on farms. This included being required to pay rent for hostel accommodation on farms despite earning little, and having their electricity cut-off when they fail to pay for it. They also complained about officials from the Department of Labour who only talk to farm owners when they visit farms to inspect about labour related issues.
When properly implemented FWES initiatives could provide a path to farm workers sharing in equity growth – but only if managed correctly, and if they include substantial provisions for increasing farm worker representation. The concerns raised by farm workers suggest that these are still lacking. They also highlight the severe shortcomings of policy, further exacerbated by government’s poor monitoring of the schemes. This absence raises questions about the government’s commitment towards improving the farm workers’ lives, and raises questions about the future of farm workers who remain marginalised, and who continue to suffer exploitation and evictions despite laws and policies in place that are meant to avoid it. As a starting point, government must respond to the demands listed in the memorandum. Government must ensure that laws are enforced to respond to the farm workers’ primary demands, which include secured tenure, decent living conditions, improved wages, enforcement of the minimum wage, and access to land for their own use. This could be secured through the land redistribution programme, which has mainly prioritised elites at the expense of those who work it. Since land redistribution is slow, access to land “…could also be improved through availing commonage to farm dwellers rather than leasing it to commercial farmers,” said Fredericks Henry from SPP.
The debate about equity schemes continues to rage. Could equity schemes be an effective way of giving poor people a foothold in a lucrative industry without them sinking their limited funds into buying land? Alternatively, are they a vehicle for struggling commercial farmers to tap into government funds without relinquishing their farms or control over production? According to the farm workers, a full forensic audit on all equity schemes, and a full socio-economic evaluation of the shareholders, can shed light on its impact so far. This audit would guide its adoption as a vehicle for transformation.
Hall, R and du Toit, A. 2014. Smoke and mirrors in government’s farm worker policy. PLAAS Blog. Available here. Accessed on: 8 May 2019.
Republic of South Africa (RSA). 2014. Final policy proposals on “Strengthening the relative rights of people working the land”. Policy of the Department of Rural Development and Land Reform. Available here. Accessed on: 8 May 2019.
VinPro. 2004. Land reform in the wine industry. Paarl: VinPro & Nedcor Foundation.
Witzenberg Region Farm Workers/Dwellers. 2019. Memorandum of concerns and demands of farm workers & dwellers of farm worker equity share scheme in the Witzenberg region. Submitted 4 May 2019. Unpublished.