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Social pacts in agriculture, energy and mining, between business, labour and communities, will be crucial to lift market confidence, growth levels and industrial peace, writes William Gumede.
Where practical, commercial farmers must build social pacts
with their employees – in which they provide housing, skills and
Mutually beneficial social pacts between farmers and
employees will strengthen rural safety, security and peace. Such social pacts
at the farm level will better protect farmers against political "farmers"
– politically connected opportunists, gangsters and local strongmen – who have
increasingly tried to hijack farms under the guise of "restitution", "redistribution"
South African President Cyril Ramaphosa has emphasised that
his presidency will focus on fostering a national social pact between
government, business and organised labour. After the Second World War, many
Western European democratic welfare states, such as Germany, Sweden and Ireland,
and many southeast Asian "Tigers" such as Japan, South Korea and
Taiwan constructed social pacts between government, business and labour, in
which different social partners agreed
on mutual compromises to lift productivity, secure labour market peace and lift
Social pacts at the industrial sector level, such as in
agriculture, energy and mining, between business, labour and communities, will
be crucial to lift market confidence, growth levels and industrial peace. How
could social pacts at the farm level look like?
The first would be for farmers to treat employees with
dignity, respect and as wealth creating partners. Decent housing for employees
is a crucial part of dignity.
The second would be for individual farmers to partner with
their employees. A key part of such a partnership could be some form of
shareholding or profit sharing arrangement – in return for increased
productivity, labour peace and cooperation.
The best black empowerment is quality housing, education
and industrially relevant skills to adults. A farm
social pact should include quality schooling for farm children. Of course,
naturally, the expectation is that government should provide schooling to
At the moment, public schooling, except for the "Model
C" schools in the former white suburbs, have all but collapsed. A
turnaround of public schools are unlikely to happen in the near future. Farmers
could pro-actively provide decent schooling to the children of farmworkers.
But it is also crucial that a social pact involves
transferring industry-relevant skills to adult employees; skills they can used
beyond the farm environment. Farmers in the same area or sector could pool
their resources and establish vocational educational institutions, providing
agriculture-based technical and commerce skills training.
Agriculture relevant technical training would also be a
good way to absorb young people in the rural areas, providing them with
transferable skills, which they can use locally or elsewhere. Such vocational
training institutions could be open to local communities not employed on the
Violence in rural areas affect all rural citizens. Farmworkers
must be involved in rural community police forums.
Social pacts in agriculture could also be in the form of
white commercial farmers partnering with existing emerging black farmers. In
such partnerships, white farmers could mentor, transfer best practice
experiences and share markets with black farmers.
Private financial institutions should also give easier,
cheaper financing and advice to farmers.
The role of national government is crucial. Land reform
must be integrated within a
long-term industrialisation strategy, which diversifies production, brings new
technology and expand institutions supporting the existing agriculture
Such an integrated land reform model for South Africa would
safeguard commercial agriculture, prioritising developing black farmers and
employees already farming or on farms
and developing agriculture-related manufacturing, infrastructure and skills.
President Cyril Ramaphosa and the ANC government must take
a strong pragmatic position in public for pragmatic, rather than ideological,
revengeful or emotionally-based land reform, and to counter calls for land
expropriation for purely self-enriching,
opportunistic and criminal reasons.
Crucially, land reform has to be conducted under the rule
of law – if it is not, it could collapse the rule of law across wider society. Aspects
of land reform have already been captured with incidents where farmers have
been forced to transfer farms to "political farmers" (politically
connected leaders masquerading as black "farmers").
On other occasions local strongmen, gangsters and
vigilantes have organised themselves as black "farmers" and pressed
fearful white farmers to hand over land to them. The government must firmly
clamp down on opportunistic land grabs mushrooming across the country to
restore order, the rule of law and peace.
Chaotic land reform could undermine
market confidence in the credibility of the government's policies, undermine
the value of property and disrupt the financial system – because it may disrupt
the system of seeking credit based on one's assets. Foreign and local investors
would in such a case move their money out of the country – and started
divesting because they perceive their assets not to be secure.
Publicly reassuring them that it is not the
case will help very little. The result of chaotic land reform would not only be
a lack of investor confidence when the country is actively seeking investors;
but a collapse of the rand, and outflow of money, skills and investment, and
balance of payments problems.
All three African countries that pursued land expropriation
without compensation – Tanzania, Algeria and Zimbabwe – saw their currencies, property
systems and food security collapse. All had to be humiliatingly bailed out by
the World Bank, International Monetary Fund and foreign donors. All three are today
still among the world's largest food importers.
National government must provide active political support
to the strategy of social pacts for the farming industry. Government can
support such farm social pacts by providing tax breaks, political and
administrative support. But provincial governments and municipalities must also
The agricultural and rural development government
institutions, SOEs and lending institutions must be cleaned up, made more
efficient and less corrupt. Right now corrupt, ineffective and patronage-based
agricultural and rural government departments and SOEs, whether local,
provincial and national are an obstacle to any effective land reform strategy.
Appointments in these public institutions must be based on merit, rather than
Government must use its foreign policy more strategically
by actively opening up new markets for South Africa's agriculture exports. Broadly,
the South African government must govern more efficiently, more honestly, and
with less corruption to secure the necessary persuasive power to secure the
buy-in of all stakeholders.
- Gumede is associate professor at the School of Governance
at the University of the Witwatersrand, Johannesburg and author of South Africa in BRICS (Tafelberg).
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