Doing the right thing

Small farmers and workers within the South African fruit production sector are reaping the benefits of two important concurrent trends, namely the increased focus on corporate social responsibility and “conscience shopping” within the international retail outlets that sell their produce, as well as the South African government’s clear directive on empowerment and development.

On the international front, the large UK supermarkets have become business behemoths in recent years, yet their Achilles Heel remains the field of public opinion. The commitment of some retailers to returning a portion of their profits to the communities who produced the fruit is currently supported by the consumer’s growing commitment to “do the right thing”, and this has resulted in the formation of organisations such as the Waitrose Foundation, Fairtrade and THANDI, the three main ethical trading brands for fruit from South Africa.

The Waitrose Foundation was founded in South Africa in 2005. The initiative is a partnership between all the parties in the supply chain (Waitrose, South African exporter Green Marketing and a number of UK importers), and was formed out of a desire to spearhead the management of the land reform process in South Africa. Under the unique funding model, a proportion of the profits from South African citrus, grapes, stonefruit and avocados sold in Waitrose marked with the Foundation logo go into a fund to improve the lives of farm workers and their communities, and develop their skills in line with the South African government’s aspirations for black economic empowerment.

The foundation spends these funds on projects that directly benefit farm workers. Although the foundation is administered by a board of directors, each farm’s worker committees decide what projects are needed by their employees, and thus far there are 29 projects and over 8,000 workers benefiting from the foundation’s work.

These projects are making a huge difference on the ground. One shining example of this is the Waitrose Foundation project at Katco, a citrus-growing co-operative employing 750 people in the small town of Fort Beaufort. This is in the remote and impoverished hinterland of South Africa’s Eastern Cape province, where citrus production is one of the only economic activities in the area. The legacy of apartheid has left black farm workers with very little access to education and training, and without the necessary skills, there was previously no work outside the citrus season. Claire Wasdell, the farm’s finance manager, says: “Imagine what it was like. You worked for six months of the year, then you sat at home and you couldn’t even get shoes for your kids.”

Using funding from the foundation, workers are now learning skills that will support them and their families. Women are learning how to sew overalls, and have already filled an order book for these, and are also learning to do bead work.

Men are taught how to make belts, bags and sandals, and two young men on the farm are looking to establish their own leather-work business. In addition, classes in literacy and numeracy give workers the skills needed to run businesses and manage their finances.

“We have come quite a long way in two years,” Wasdell says. “This has given them a sense of achievement - they are proud of what they do.”

“I have a passion for seeing improvement in people’s lives,” says Faith Brown, general manager of the Waitrose Foundation. “As a result of the Adult Basic Literacy programme that we are offering, I have recently seen an adult man write his name for the first time and heard a mother say that she can finally help her son with his homework; so our projects are making a profound difference in the personal lives of the people we assist.”

There are two distinct stages in the foundation programme. The first looks at social issues and aims to ensure essential knowledge, through methods such as educational programmes incorporating both literacy and agricultural production. The second stage will ultimately entail the ownership of some land by farm workers, whereby foundation grants will be used to buy land to be held in trust on behalf of farm workers.

“The foundation’s business model is almost a 20-year project,” explains Rory Antrobus, chairman of the Waitrose Foundation and managing director of Waitrose’s exporter, Green Marketing. “Only when there is real infrastructure in these communities can we begin to invest in assets and take the process one step further.

“Since its establishment, the support and commitment that the Waitrose Foundation has received from the growers has been really great. Since the Foundation started making improvements to conditions on the farms, many of the growers have seen a real change in their relationship with their workforce,” he added.

Fairtrade, the international ethical trading brand, is also active in South Africa and was established in May 2005 in the country. There are currently over 30 Fairtrade Labelling Organisation (FLO)-certified producers in South Africa, with a few more applications currently pending. These are mainly producers of fruit, wine grapes and tea, and there are 12 registered exporters of Fairtrade products based in South Africa.

As in other production regions in the world, Fairtrade South Africa promotes the social and economic development of small farmers and workers involved in food production. The considerable premiums received from marketing produce under the Fairtrade brand over the past few years have been reinvested into the producing communities in South Africa. Fairtrade also leaves it up to the growers and their employees to decide how best to apply these funds, and this has translated into the establishment of community halls, crèches, sports facilities, tourist accommodation and a host of other initiatives.

“We are very excited about our farm’s Fairtrade accreditation and branding,” says Hannes Stapelberg of Eve Brand Farm, an empowered apple, pear and persimmon farm in the Lang Kloof production region. “We joined Fairtrade in early 2007 and already the premiums returned to the farm have been earmarked for a substantial improvement to the farm’s community centre. Fairtrade accreditation has also provided access for our products to UK supermarkets that we would not have been able to supply before, and the prices we achieved this year have left us smiling.”

THANDI is a South African ethical trading label, and is the brand of the Capespan Foundation, the social investment division of the Capespan Group. This foundation focuses on land reform in the fruit industry through the economic empowerment of farm workers in existing farming businesses, and the setting up of new farming ventures, owned by black farmers.

It addresses the vital shortage of skills by enlisting the support of established growers as mentors, in training the new landowners in the necessary skills they require to assume greater responsibility. The Capespan Foundation receives sponsorship from the Capespan Group, as well as from international retailers and governments.

Capespan exports the premium fruit produced on these empowerment farms under the THANDI brand, aimed at the upper end of the market to ensure the maximum benefit to the communities that produce the fruit. “Fruit production on the Capespan Foundation’s empowerment farms now exceeds the shelf space available specifically for empowerment brands, so for supermarket programmes without this specification, we now market some of our fruit under the normal Capespan brand,” says Angelo Petersen, assistant to the group’s ceo. “This also means that some of our emerging small farmers have successfully joined the commercial production mainstream.”

The word THANDI is derived from the African language, Xhosa, meaning ‘love’, which embodies the spirit of the foundation’s land reform initiative.

In South Africa, the government’s clear directive and commitment to empowerment and development is also benefiting previously disadvantaged people involved in fruit production. The South African government has introduced a policy of Broad-Based Black Economic Empowerment (BBBEE), that is both a moral initiative to redress the imbalances of the past as well as a pragmatic growth strategy that aims to realise the country’s full economic potential.

In the decades before South Africa achieved democracy in 1994, the apartheid government systematically excluded black people from meaningful participation in the country’s economy, and the new laws seek to accelerate change within all sectors of the economy. This policy is already showing positive results, as the increased spending power of a broader section of the population has succeeded in boosting the economy, including the South African domestic fresh produce market.

A further incentive for transformation within the agricultural sector is the strong government directive surrounding land reform with regards to the ownership of agricultural land. The South African government has been proactive about this highly politicised and emotive issue, and has set a target to facilitate the transfer of 30 per cent of South Africa’s white-owned agricultural land to previously disadvantaged individuals by 2014. The government has shown a strong commitment to assisting transformation in agriculture. Along with new regulations passed in this regard, the government has invested considerable resources into ensuring the success of this huge initiative, and is also providing good incentives for the private sector to assist with the process.

It is within the framework of this political directive that the fresh produce sector has experienced transformation in the ownership and management of agricultural land, and witnessed the empowerment of many in the process.

The implementation of BBBEE is done according to a scorecard, which covers direct and indirect empowerment and human resource development. The process of empowerment is progressing organically at many levels throughout the South African agricultural sector and its related service industries, and the initiatives are following a wide rage of models - from a single black farmer buying a small farm to complex equity transfers on behalf of employees, worth millions. Over the past few years, a number of these BBBEE models have faltered due to the initial trial-and-error approach, as well as, in some cases, a lack of skills and funding. More recently, successful models have been developed and emulated.

It has become quite clear that in many cases, beneficiaries require development of basic literacy, technical and business management skills prior to being presented with business opportunities to empower them to establish sustainable and profitable farming enterprises. The general shortage of skills in the South African fresh produce sector is one of the main challenges to the sector’s growth, and the government’s Agricultural Education and Training Authority (AgriSETA) is proactively addressing this issue.

The government has also introduced a skills development levy to provide funding for the activities of sector education and training authorities.

This levy is payable by all South African employers with a payroll exceeding R500,000 (£34,000) per annum, and contributions represent one per cent of the taxable income of all employees.

BBBEE has become one of the main areas of focus within South African agriculture, and farmers, organised agriculture and boards representing industry stakeholders have also become very involved and committed to the process.

“The Deciduous Fruit Producers’ Trust is committed to land reform in agriculture and the empowerment of farm workers through education, training and skills development, and fully supports initiatives where previously disadvantaged communities are socially uplifted,” says Stefan Conradie, product manager for top fruit and stonefruit at the South African Deciduous Fruit Producers’ Trust.

In many cases, however, the trend towards empowerment and social development is not new. There are numerous people and organisations in the South African fresh produce industry that have been committed to empowerment for a long time, and for them, the implementation of BBBEE initiatives has simply formed an extension of existing corporate social responsibility programmes.