Sustainability was undoubtedly the buzzword at South Africa’s only annual event for the country’s fresh produce industry, allFresh!, held last week in sunny Cape Town.
The theme of the two-day conference - ‘The Consumer in the Driver’s Seat?’ - swiftly gave rise to a heated debate surrounding the necessity, and indeed the logistical difficulties, of implementing environmentally friendly, socially responsible and ethically aware codes of conduct across South Africa’s, and indeed the world’s, agricultural industries.
SOUTH AFRICA ON THE MOVE?
Western Cape premier Ebrahim Rasool kicked off proceedings with his explanation of the transformation South Africa is undergoing. “We are seeing more and more black, historically disadvantaged people using their spending power and adding to the traditional base of white consumers. Shoppers are asking more ethical questions, and want to know their consciences can be salved about labour practices and environmental sustainability,” he said.
But the fresh produce sector must become more coherent and united, less internally competitive and more externally competitive, he warned. “We have to understand what is happening to the world market, and know our opportunities,” Rasool said. “Countries like China are emerging as our competitors, but we must not lie down - we must be at the cutting edge of innovation.”
“This industry is not marketing itself sufficiently to highlight the benefits of fruit and veg in a healthy diet. This is not just about your profitability, but about giving South Africans better lifestyles. This sector puts food on the table for 1.5 million people in the Western Cape province alone, but if you are not aggressive and proactive, you will see a decline in your contribution to the country’s GDP, a figure that currently stands at three per cent.”
Political and trend analyst JP Landman told the audience that the country as a whole is set to boost its wealth, having already seen its economic growth rate increase from one per cent in 1981 to five per cent in 2006, and this figure is predicted to rise to 5.5 per cent by 2010, according to official government targets. “Per capita incomes are rising, and population growth is slowing,” Landman told delegates. “Although unemployment rates are still very high, with 59 per cent of the 15-65 age bracket not working in 2006, labour productivity is up and we are creating more jobs.
“The 60,000 farmers working in the agricultural industry in 1994 have now dropped in number to 44,000 - but in 2004, the industry’s productivity was 10 per cent higher than a decade earlier, and that is the key to your survival.”
Landman concluded that in order for South Africa to become a modern society, the country must do three things: achieve a peaceful transition to democracy; get the economy going again; and implement social development initiatives such as housing, sanitation, water and other facilities. “We have already turned the economy round in a most substantial way - but have got to keep it going,” he added.
SUSTAINABLE SOLUTIONS
Nick Scrase, business unit director for produce, organic and ethnic foods for Asda, argued that sustainability is the future for retailers and producers, but as yet nobody has all the answers.
“UN secretary general Ban-ki Moon has said: ‘Climate change, and how we address it, is the defining issue of our era’,” he told delegates. “The outlook is absolutely chilling. Our impact on the planet has trebled since 1961, and by 2050, humanity will demand twice as much as the earth can provide. The world must change the way it produces and consumes. Sustainability is not a social issue, but an economic one - we’re all in it together.”
Wal-Mart, which bought Asda in 1999, is on a mission to cut waste, incorporating a sustainable business model with profitability and affordability. “This will build trust with our stakeholders, and ensure continuity of supply,” said Scrase. “It is also the right thing to do.”
There are major commercial advantages to putting sustainability on the agenda, he said. “Our climate change programme will save us millions of dollars a year,” he said. “Asda has set a goal of zero waste to landfill by 2010, and has invested $33 million (£16.5m) in building five recycling centres across the UK. We will also cut carbon emissions by 40 per cent by 2009, and aim to reduce carrier bag consumption by 25 per cent by the end of 2008. All of the major UK retailers have similar programmes in place.”
But customers must not feel that sustainable products are just for the wealthy elite, said Scrase. Wal-Mart ceo Scott Lee, speaking in London in February, said: “We want to empower our customers to do the right thing for themselves and their families, but also for humanity and this planet. Customers should not have to choose between a product they can afford, and one that is sustainable.”
Businesses will fail if they cannot meet environmental and social sustainability demands, added Scrase. “This is not optional - we have to address it. This is not a PR exercise or an initiative in corporate social responsibility; it is our mainstream business growth strategy. Let’s vow to work together to protect and sustain our resources.”
The Western Cape faces socio-economic impoverishment as a result of climate change, Rasool told delegates earlier in the day, and Peter Johnston from the climate systems analysis group at the University of Cape Town explained to a panel discussion on climate change later that afternoon how Africa of all continents can least afford for temperatures to hot up. “By 2100, global temperatures are likely to increase by between 1.4 per cent and 5.8 per cent, sea levels are set to rise by 0.1 metres and 0.9 metres, and the incidence of extreme weather events is likely to rise.
“So what can South African growers expect? I predict rainfall changes, more floods and droughts, higher temperatures, an increase in evaporation and a reduction in soil moisture available for plants, decreased chill units, a shift in agro-climatic regions and increasing frequency of extreme heat.”
So how must growers prepare for this? “You can reduce your vulnerability to the weather, consider adaptation regimes and build up buffer reserves,” said Johnston. “You may have to increase usage of drip irrigation, explore different crops and cultivars and look at the way conditions are changing for your competitors, for example Australia, where drought is very serious. Are you doing enough research?”
Johnston urged the industry to organise itself into associations and unions, and look at new products and land use. “My business advice for you is to identify international marketing opportunities. Are you prepared to switch to more efficient ways of farming?” he added.
The panel discussion threw up yet more intrigue around the now well-established carbon footprint debate. Stuart Symington, ceo of South Africa’s Fresh Produce Exporters’ Forum (FPEF), chaired the session, which saw James MacGregor, senior researcher at London’s International Institute for Environment and Development, Roland Waardenburg, director of corporate social responsibility at Dutch retail group Ahold and Dr Malcom Dodd, a cold-chain specialist for the Perishable Products Export Control Board (PPECB), outline of their views on the issue.
“UK consumers buy 80 per cent of their produce in supermarkets, yet 80 per cent are confused by food labels, and only 40 per cent know about food miles,” said MacGregor, who told delegates about the state of play in the UK. “Only 19 per cent admit to actually changing their decisions based on food miles.”
Negative tools like airfreight labels are juxtaposed against more positive concepts, such as Fairtrade, organic and Kenya’s recent Grown Under the Sun logo in the UK market, according to MacGregor, who argued that fair miles are a much more balanced concept than food miles. “How do we think about messages of economic development, and how are we going to take issues like food miles and Fairtrade to the level of sustainable development?” he asked delegates. “How about identifying the real eco-criminals, such as mobile phones and iPods, and promoting the positive aspects of Africa’s position? The industry must collaborate, not compete, and engage in the debate at a national, political level.”
Waardenburg explained that the triple bottom line of profit, people and the planet must combine under any corporate social responsibility engagement. “Climate change was the fourth most important global public concern in 2007, according to Nielsen research, having rapidly risen up the ranks since October 2006 and now rates as a higher concern than political stability and crime.
“Therefore, it is logical for stores, and in turn their suppliers, to do something about it.”
But Waardenburg warned that a simplistic approach such as labelling goods as airfreighted from Africa is potentially ‘green-washing’ consumers. “If you label food miles, you’ve got to have the guts to label fair miles too - devise an integrated sourcing policy. You’ve got to understand your supply chain and find ways to maximise seafreight and ripening processes at destination. Concentrate on developing integrated carbon footprint analysis,” he added.
Dodd insisted that there are opportunities to improve South African fruit quality and lower the industry’s carbon footprint at the same time. “We have got to identify opportunities in the logistics chain where our exporters can actually add value,” he said. “The largest single cost for shippers is seafreight, but the South African cold chain is not functioning as it should to ensure the quality of fruit needed for today’s markets. Packaging has not changed to allow adequate air flow in the last 10 years, and the internal structure of the shipping container is the same.
“In March 2007, we conducted a successful plastic carton trial with Southern Belle plums, utilising technology designed to enable chilled air to work effectively. The plastic proved much more efficient in terms of fruit cooling time, and the quality when it hit the UK was said to be ‘outstanding’ by importers.
“The definition of carbon footprint is the amount of non-renewable energy resources that are consumed, and there is a lot of potential for us to reduce this. Africa has a low carbon footprint anyway and the shortest shipping distance to our main markets compared to countries like Chile, Argentina and Australia. Why, therefore, don’t we start developing seafreight crops, and make ourselves more competitive through innovation?
“The fruit industry now has the opportunity to conceptualise the best cold chain logistics possible,” he added.
But Justin Chadwick, ceo of the Citrus Growers’ Association of Southern Africa, told the floor during the ensuing panel discussion: “The carbon footprint is an issue we have read about, but it is low on farmers’ agendas - it is not an issue they are worried about yet.”
A representative from Asda/International Produce also took to the mic. “A lot of worthwhile work can be done, but we’ve got to get a dynamic and effective carbon calculator into place. Certain people are taking individual initiatives, but who is taking international leadership in this issue?” he asked.
While New Zealand was cited during the debate as the most vocal non-European country on the issue of food miles, there is also a case for African countries to lobby together. “South Africa is perhaps a natural leader in this respect,” said MacGregor.
Mike Elliott from avocado and mango specialist Westfalia rounded off the debate succinctly: “It is very unfair for this issue to just focus on agriculture,” he insisted. “With cars, passenger planes and other much bigger emitters, why should it only be us put on the spot?”
PUTTING IT INTO PRACTICE
An innovative farming practice called Natuurboerdery has been employed by South African tomato, onion and avocado business ZZ2 in a bid to drive forward sustainable options for the land, delegates heard. “Our yields were dropping by 30 to 40 per cent as a result of crippling soil disease, and we had to look at alternatives,” said ceo Tommie van Zyl. “This is why we have introduced Natuurboerdery, a different approach to commercial farming working with the land and the soil.
“Natuurboerdery needs a support base of specialists - soil scientists, microbiologists, entomologists and plant physiologists - as it is such a complex system, but we have seen remarkable differences in the last few years which have inspired us to continue healthy farming.”
Microbiologist and president of Soil FoodWeb Inc, Dr Elaine Ingham, was instrumental in ZZ2’s implementation of Natuurboerdery. “Nature farming is all about establishing and maintaining nutrient recycling and nutrient retention in the soil,” she said. “In many cases it has already been destroyed, and now we have to go back and establish it. The aim is to maximise production of desired plant material without the use, or at least with minimum input, of toxic chemicals, pollutants, inorganic fertilisers and other damaging amendments. We also want to maintain the habitat and enhance beneficial organisms while minimising diseases and pests, and improve the nutrition, shelf life and quality of the products.
“People are now starting to realise the importance of soil biology, and that is what Natuurboerdery is all about. There is hope that we can return soil we have damaged to health,” she added.
CHANGE OF IMAGE
While sustainability was high on the agenda, the image of South Africa’s agricultural industry both at home and abroad was the topic to kick off the second day of allFresh!.
Elaine Alexander, executive director of the South African Table Grape Industry (SATI), explained the work of the Agri CEO Forum’s Task Group on Positive Positioning of Agriculture, of which she is a member.
“Agriculture tends to have a poor image, but why?” she asked. “I think we are part of the problem ourselves - we tend to air our dirty linen in public. But we need to do what other industries do to get government support - otherwise, we will be left at the back of the queue.”
The forum, which launched in September 2006, aims to deliver a sector-wide strategy to promote the brand of South African agriculture. “We have to improve our image and create a united and prosperous agricultural sector, showing that we are innovating and making the most of our resources. We must stop retailers commoditising our product,” said Alexander.
Several meetings later, the forum has devised a three-year communication plan, prioritising equitable access, good governance, safety and security, co-operation and opportunities. “We want the commitment of stakeholders,” said Alexander. “We are the backbone of South Africa, and we have to sing our own song if nobody else will. Other sectors are a lot more persuasive in getting the budget from political leaders, so we need investors and the media on our side. We are going to provide a total solution for agriculture and roll out a slogan and logo campaign shortly, incorporating prizes and a media conference - will you carry the generic South African brand on your product?
“We want to get Europe excited about our product, and need a brand message in time for the 2010 World Cup. We will develop a DVD to show around the world, on aeroplanes and televisions, and will work out which exhibitions will be the best for us to visit.
“But above all, we would really like you, the agricultural sector, to come together and participate in this venture,” Alexander added.
WHOSE RESPONSIBILITY?
A panel discussion chaired by Norma Tregurtha of the ComMark Trust moved on to look at sustainability of corporate social responsibility initiatives, particularly the European standard, the Business Social Compliance Initiative (BSCI), and its implications for South African growers.
A labour and social monitoring system for ethical procurement, the BSCI is open to retailers, importers and manufacturers, and in 2005 incorporated the food industry into its fold. Based in Brussels, it is an auditing and qualification system, not a certification (although it encourages firms to certify against social accountability standard SA8000), and focuses on maintaining and improving retailer-supplier relationships.
Roland Waardenburg from Ahold spoke on this subject, explaining how his firm has offices in Ghana and Johannesburg supporting African agricultural initiatives. The Albert Heijn Africa project aims to meet basic social requirements and strives to involve smaller producers in the supply chain.
The Albert Heijn Foundation also supports communities, but Waardenburg insisted it is not a charity and adopts a business approach. “We think introducing BSCI into our approach makes good business sense, and also offers a risk management component since it addresses child labour, wages, working hours, discrimination and health and safety issues,” he said.
Robert Hale, director of ethical business services at Africa Now, spoke to the crowd about the work his firm has done in Kenya, Zambia, Zimbabwe and Namibia. “We focus on business development in small firms, helping them with finance, technology and market access, and also empowering women, who run a lot of small businesses across the continent. All our projects have a private sector partner.
“There is increasing concern over working conditions globally, and too often a negative focus on Africa. But there is a lot of pressure on the government and consumers in the UK to support Africa, and generally lots of goodwill towards the continent,” said Hale. “Africa Now develops a team of nationals in each of the countries where it delivers its ethical business solutions, balancing the team in terms of gender and race to reflect the profile of that country’s workforce and conducting progressive training. Having nationals on the ground provides a local context, language skills and knowledge of the local law and contacts.
“A long-term commitment from buyers to smaller growers is essential for sustainable change,” Hale added. “Good ethical practice brings productivity and profitability benefits.”
Hella Alikuru, regional secretary for IUF Africa, said her organisation aims to ensure businesses respect the rights of their workers, offering them access to information on the company performance and implementing dialogue to improve workplace relations and productivity.
“We try to ensure workers are respected,” she told delegates. “Equity can only be achieved when there is transparency of information and fair negotiation. A worker needs to feel empowered, to feel a workplace is his livelihood, and this can only be achieved with equitable wages and benefits.
“But many workers feel insecure in their jobs and are therefore not productive. How can Africa achieve sustainable development if people roam from one place to another without developing skills, which can improve quality and thus market access?”
Ethical codes of practice have been around for some years now campaigning on behalf of hours, wages, collective bargaining rights and so forth, said Alikuru, but who monitors their implementation? “Do workers understand the codes or are they for the privilege of the few?” she asked the audience. “Do they really make a difference?”
Ethical codes have had some success, she admitted, such as structural changes on farms and greater observance of safety procedures. They have provided employment to local people and, in some cases, improved environmental standards. But there are still serious labour issues affecting workers, including congested, unsanitary housing that does not meet the minimum standards set out by the ILO, high levels of harassment, especially sexual, intensive use of pesticides and chemicals and child labour.
“The IUF has tried to help, but codes can only improve conditions if companies actually apply the rights to which they refer, if standards are translated into local laws, and if procedures are agreed upon or penalties introduced in case companies violate the code.
“Like a rose with its thorns, codes have good intentions, but when they are mishandled, they can actually be dangerous for the workers,” Alikuru added.
The HIV/AIDS epidemic sweeping Africa and its impact on the agricultural sector came next on the social responsibility agenda.
Rosanna Price-Nyendwa from the Comprehensive HIV AIDS Management Programme (CHAMP) in Zambia told delegates that not only was implementing an HIV management programme on the farm about saving lives, it was also about saving money. CHAMP works in 22 of Zambia’s 72 districts, and with eight of the country’s largest private sector companies, three of whom are agricultural. The national HIV prevalence rate in Zambia stands at 16.5 per cent, but that figure rises to 38 per cent in certain areas, said Price-Nyendwa. “Agribusiness workers are high risk because they are often migrant and seasonal, but their employers believe there is very little benefit in supporting an HIV programme. There is a feeling that workers outweigh demand, so they don’t have to work to retain the workforce they have. Employers just say ‘this is the government’s problem - not mine’. But this is not about the feel-good factor - implementing a programme makes plain common sense for a company.”
Studies have shown that ignoring an HIV epidemic can seriously impact on competitiveness, and by 2010, the impact of AIDS will reduce the Zambian labour force by 21 per cent, which in turn impacts on economic growth and government plans to invest in the country’s infrastructure, according to Price-Nyendwa.
“Firms without programmes report loss of skilled seasonal workers, high absenteeism, low morale among workers and a feeling of helplessness in response to HIV - but they are not convinced a scheme would make a difference. Related costs from HIV/AIDS for a firm come from absenteeism, employers as caregivers, healthcare costs, funeral costs, funeral attendance and replacement costs ie. to train new employees.
“At this conference we have heard how Africa is aiming for a higher level of productivity, but if that is so, we also have to consider what happens if we keep losing members of the workforce.
“Going forward, you as employers have got to make informed decisions, and talk to the right people. The private sector may have disdain for NGOs, but we do know what we’re doing. To make a programme sustainable, public and private have to work together. You need to think outside the box, own the problem and the programme. Community is very important - you don’t live on an island,” she added.
Gretha Kostwinder is chairperson of AgriAids, a South African NGO. “Farmers and producers in this country have to deal with a lot of problems - price fluctuation, land reform, black economic empowerment - but on top of all this they also face an HIV/AIDS epidemic in which 800 to 1,000 people are dying every day in South Africa, and 2,000 are newly infected daily,” she said.
Some 15 to 35 per cent of adults aged 15 to 40 are infected, and the country has one of the highest prevalence rates in the world - in fact, nearly half of the population dies from AIDS-related issues.
“Since 1985, seven million farm workers have died from the epidemic in South Africa,” said Kostwinder. “There has been little response to date from the agricultural sector because of the stigma attached to AIDS, and also because people do not see it as their problem.
“But AgriAids has implemented HIV programmes on three farms - and people have stopped dying. The country is heavily dependent on labour and agriculture, and is losing human capital.
“We have to face the truth and get rid of the stigma, and AgriAids is supporting the industry to do just that. We want to raise awareness and disseminate knowledge and experience, but if you start doing it, you have to see it through and be 100 per cent supportive of your workers,” Kostwinder added.
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