Farm Workers’ Living and Working Conditions in South Africa: key trends, emergent issues, and underlying and structural problems

Report prepared by Margareet Visser and Stuart Ferrer based on a research project commissioned by the Pretoria office of the International Labour Organizaiton.

Executive Summary

Employment relations between farm workers and their employers are in the spotlight following violent farm worker protests in the Western Cape in November 2012 and the revision of the Sectoral Determination 13: Farm Worker Sector in March 2013.

The emergence of various (sometimes controversial) studies and media reports on farm workers’ working and living conditions over the past few years has deepened and broadened the discourse on the multiple and diverse challenges facing agricultural producers, employers and workers.

However, outdated assumptions and over- simplifications continue to fuel unhealthy polarisation in the perceptions and views of key role players and the public in general. This study seeks to highlight the ways in which the landscape has changed and to provide a perspective that allows for a more systemic understanding of the drivers that create the conditions for labour conflict.

Five desktop reviews were undertaken as part of Phase 1 of the research project. These reviews focused on (a) the demographics of farm workers and farm dwellers; (b) the underlying economic context that governs farm employment; (c) the regulatory framework that governs the relationship and circumstances between farm workers, farm dwellers, employers and owners, labour brokers and other contractors; (d) the socio-economic conditions of farm workers; and (e) the movement of workers off-farm, including consideration of trends relating to tenure security of farm dwellers and farm evictions. Chapter 1 provides a synthesis of these reviews, as well as analyses of (a)  the financial position of the farm sector, and (b) the working conditions of farm workers based on findings of the Quarterly Labour Force Survey (QLFS) and regression analyses applied to the Labour Market Dynamics in South Africa (LMDSA) data sets for 2011-2013.

According to the 2011 Census, 759 127 households with an aggregate population of 2 732  605 people (5.28% of South Africa’s population) lived in Farm areas1 of South Africa in 2011, of whom 592 298 households with a population of 2 078 723 people lived on farms. At least 91.2 per cent of the Farm Area population was South African citizens, and at least 4.9 per cent was not.

Excluding employed people who earn no income (typically business owners and family members working in those businesses) and those who did not specify their incomes, 65.1 per cent of employed Farm dwellers earned R1 600 or less per month, and a further 17.2 per cent earned between R16 001 and R3 200 per month in 2011. However, 2.5 per cent earned more than R25 600 per month. (Stats SA, 2013b).

According to the Quarterly Labour Force Survey (QLFS) (Stats SA, 2014), 696 288 worked in Agriculture, Hunting, Forestry and Fishing in South Africa in the third quarter of 2014. The list of occupations of those people is diverse, and clearly not all people employed in that group of sectors are farm workers. Two occupation categories that are farm-based, “Farmhands and labourers” and “motorised farm and forestry plant operators”, respectively account for 65.7 per cent and 6.5 per cent of the total. Seventy per cent of farmhands and labourers are employed in the growing of crops, 22 per cent in farming of animals, and seven per cent in mixed farming operations.

The following statistics relate to the working conditions of farmhands and labourers working for someone else for pay in the formal sector in the agricultural, hunting, forestry and fishing industries during the 3rd Quarter of 2014:

Work status: 51.1 percent had employment of a permanent nature, 25.2 per cent had employment of limited duration, and 23.6 per cent had employment of unspecified duration. Women were less likely than men to have employment of a permanent nature.

Employment contracts: Over 92 per cent of workers with employment of a permanent nature and 80.8 per cent of workers with employment of a limited duration have written employment contracts. However, a mere 40 per cent of workers with employment on unspecified duration have written employment contracts.

Work hours: The modal range of hours usually worked per week was 41 to 45 hours per week (41% for men and 47% for women), followed by 36 to 40 hours per week (25% and 23%, respectively), and 46 to 50 hours per week (14% and 13%, respectively). On average, women usually work fewer hours than men, with 22 per cent of women and 30 per cent of men usually working more than 45 hours per week.

Paid vacation leave: Only 46.4 per cent were entitled to paid vacation leave, however, the incidence ranged from 75.2 per cent for workers with employment of a permanent nature to approximately 15 per cent for workers with employment of a limited or  unspecified duration.

Paid Sick Leave: Only 35 per cent were entitled to paid sick leave, however, the incidence ranged from 58.7 per cent for workers with employment of a permanent nature to approximately 10 per cent for workers with employment of a limited or  unspecified duration.

Maternity/Paternity leave: Few farmhands and labourers were entitled to maternity (5.6%) or paternity leave (1.5%).

Contribution to pension or retirement fund: Only 20.6 per cent of farmhands and labourers received a contribution to pension or a retirement fund, however, the incidence ranged from 38.6 per cent for workers with employment of a permanent nature to less than 3 per cent for workers with employment of a limited or unspecified duration.

Medical aid or health insurance contribution: Only 1.5 per cent received contributions to medical or health insurance.

UIF Deductions: Approximately two-thirds (67.1%) had deductions for UIF. The proportion was higher for workers with employment of a permanent nature (90.3%) vs. those with employment of a limited or unspecified duration (45.2% and 40.4%, respectively).

Mode of salary negotiation: The most frequent mode of salary negotiation reported by farmhands and labourers is direct negotiation with their employers (81.4%). Negotiation between labour unions and employers is notably higher for permanent employees (9.0%) than for workers with employment of limited (0.7%) or unspecified duration (1.1%). Relatively fewer permanent workers reported having no regular salary increase (3.8%) relative to workers with employment of limited (14.7%) or unspecified (14.8%) duration. A higher proportion of women than men reported having no regular salary increase (11.3% of women vs. 7.9% of men).

The literature reviews identified several important contemporary themes impacting on employment on farms and the working and living conditions of farm workers include the changing regulatory environment of the sector post 1994: 

Market deregulation and trade liberalisation have, on the one hand, seen the state withdrawing from the sector. Agricultural marketing boards and the single marketing system, which previously forced producers to negotiate en bloc with powerful international supermarkets, were phased out. Trade liberalisation saw the phasing out of  tariff protections to South African farmers and further decreases in farm subsidisation.

As a result of the latter, the Producer Support Estimate to South African producers shrunk to about 3 per cent - well below the 20 per cent average of the Organisation of Economic Cooperation and Development (OECD). 2 The extent to which the previous tariff regime was reduced also went far beyond what was required in terms of the Uruguay Round Agreement on Agriculture (URAA, cited in Griffiths, 2003).

Trade liberalisation has also deepened South African producers’ integration into global food value chains. It has done so at a point in time when international (and local) retail power has become increasingly consolidated and more powerful.

The combined processes of market deregulation and supermarket consolidation have served to weaken producers’ collective bargaining power in the market place. As a result, some of the agricultural value chains, which were previously controlled by South African producers, are now controlled by international retailers. In the process, most South African producers have become price takers.

While the state on the one hand withdrew from the sector, on the other hand it has inserted itself purposefully into the agricultural sector by legislating the relationship between producers and labour. First, it extended labour legislation to farm workers, who were previously not protected by either the Basic Conditions of Employment Act or the Labour Relations Act. Second, in 2003, a Sectoral Determination for agricultural was promulgated which set a minimum wage for the sector. Third, the Extension of Security and Tenure Act, effected in 1997, aimed to provide more security of tenure to farm workers living on farms.

As the result of the combined pressures outlined above, producers have adopted various coping strategies. Where labour have been a major cost component of their business, work forces have been restructured, leading to an overall decrease in the total of workers employed, but also increased casualization and externalisation.

The restructuring process is likely to have geared up a notch following the 52 per cent increase in the minimum wage implemented in March 2013.

The second part of this study hones in on how employers in the sector have restructured their labour forces and how this has impacted on farm workers. To this end field work was conducted in ten case study sites across South Africa. In total, 48 farms were visited. In-depth, structured individual interviews (SIIs) were conducted with 208 farm workers of which 158 were permanent workers and 50 were seasonal workers.

Due to logistical challenges, field work was unfortunately conducted during the off-season in some areas, making it difficult to get access to seasonal workers. Group interviews were conducted with an additional 250 farm workers that comprised both permanent and seasonal workers. In-depth SSIs were conducted with 48 producers. In addition, about  90  interviews  with  key  stakeholders  were  held  across  the  case  studies;  these    included representatives of producer organisations, trade unions, NGOs, government officials, industry bodies, social and health care workers.

An important caveat of the study findings: given the size of the sector and the limited resources available for this study, the findings presented are not necessarily representative of  the entire sector. Instead, they aim to present a series of “snapshots” from across the country to highlight key pressures impacting on labour relations in the sector and how these are playing out in the work place. Case studies were chosen to gauge to what extent a range of factors have had an impact on labour management strategies. These included labour intensity, the seasonality of farming operations, the ability of various sub sectors to mechanise, and their exposure to international markets.

The dominant producer strategy to cope with the economic pressures has been to expand production to benefit from economies of scale. To cope with the increased labour demands that resulted from expanded production, employers have resorted to two main strategies. Firstly, they have casualised their workforce.

This means, that instead of employing more permanent workers to cope with increased production demands, they have employed more seasonal workers. While the bulk of seasonal workers are still employed only during peak production periods, a growing section is employed beyond the peak period, sometimes for more than nine months of the year.

This trend of employing seasonal workers on extended contracts is especially evident in labour intensive industries such as sugar cane, table grapes, apples and also oranges. There is a need for clearer guidelines to regulate the employment of such “long term” seasonal workers.

A second strategy followed by producers to meet increased labour demand, has been to externalise labour. Externalisation was especially common in the sugar industry, where almost all cane cutting is done by contractors. Numerous drivers have been listed for externalisation in this industry including the need to cut costs, to improve efficiencies, and to avoid the transaction and frustration costs of having to manage low-skilled workers.

Non-permanent workers in the sugar industry are especially vulnerable: not only is  their employment externalised, but they are often migrants and, in case of Nkomazi, foreign migrants. The scope for exploitation of such workers is therefore high. Reasons provided by producers for employing migrants were that locals were allegedly not prepared to do the work “for cultural reasons”; that it was “below them to do this type of work”.

However, a more likely explanation is that the terms and conditions of work in this subsector are poor. Hours of work tend to be short: while some employers in the sugar industry pay workers at or above the legislated minimum hourly wage, their wages are low because they work for less than nine hours a day. It was also alleged that some small, black farmers in areas under the control of traditional councils and some land reform beneficiaries were not paying workers the minimum wage in the sugar sector.

Consistent allegations were also made that small, black contractors employed in the sugar cane industry were not only using “illegal foreigners”, but were not compliant with labour legislation.

About half of the case study producers in the Western Cape made use of labour brokers to supplement their seasonal labour force. However, probably as a result of ethical trade audits that monitor the conditions of workers employed by labour brokers, farms in the Western Cape were found to be more compliant than those in other areas. An interesting finding was that the majority of producers attached more value to the results of ethical trade audits than to inspections of the Department of Labour.

Reasons offered by case study producers for resorting to casualisation and externalisation were twofold.

Firstly, employing workers on seasonal contracts was more cost effective. This was especially the case in the Western Cape where permanent employment was still strongly correlated with the provision of on-farm housing and a range of benefits that increased overall costs to company.

Secondly, the vast majority of seasonal and externalised workers lived off-farm. Recruiting such workers means that employers avoid having to grant security of tenure to workers living on farms, as required by the Extension of Security and Tenure Act (ESTA). It seems therefore that one of the unforeseen consequences of ESTA has been to contribute to the process of casualisation.

Another key finding is that migrant labour is well established in certain areas and on the rise in others. While the sugar cane producers of Eston and Nkomazi have been using migrants for some time, migrant labour in the Sunday’s River Valley has reached new heights during the past ten years. Migration to the labour intensive fruit areas of the Western Cape is also increasing.

An attraction of Western Cape farms is that they offer longer seasonal employment at higher wages than those in other parts of the country. Moreover, because Western Cape fruit and wine farms have been subjected to ethical trade audits for some time, they tend to be more complaint with labour and health and safety legislation.

From a producer’s perspective, recruiting migrant labour is attractive because more control can be exercised over labour, especially where they stay in on-farm hostels. Such control is critical in highly labour intensive industries where high absenteeism during key production periods can lead to serious crop losses, or, in the case of the sugar cane industry, to costly closures of the sugar mill.

Over time migrants seemingly begin to settle in local townships to avoid having to stay in shared hostel accommodation on-farm, to be closer to services and so they can have their families with them.

As a result of the use of off-farm, seasonal workers, but also because producers are increasingly appointing permanent workers on an off-farm basis, many rural towns that used to resemble sleepy hollows have developed into sprawling, underserviced informal settlements.

It is not entirely clear whether the considerable growth of these informal areas is predominantly part of a voluntary movement off-farm, the result of in-migration from other parts of the country, or because of persistent evictions of farm workers. Recently, it has been alleged that the Western Cape has been hit by a wave of farm evictions, suggesting that the latter has been one of the main causes leading to the expansion of rural towns.

During this research it was difficult to find any objective evidence proving that this is indeed the case. Municipalities, the courts, Department of Rural Development and Land Reform do not keep consistent, reliable information on evictions, and if they do, such information was not made available to the researchers despite numerous requests.

Data provided by these sources were mostly conflicting. Moreover, while getting information about legal evictions was still an exercise of the possible, getting any objective information about illegal evictions proved to be virtually impossible.

Further research should be conducted to find out what drives migration to rural towns and how this dynamic works as it clearly has important ramifications for rural planning. Some rural towns are serving as unexpected centres of economic growth and (seasonal) employment. Yet, rural development policies are poorly aligned to these processes, leaving local government ill-equipped to cope, let alone benefit, from such migration and development.

Municipal officers  interviewed mostly felt overwhelmed to cope with the influx of people, to provide housing, infrastructure and services. Officials pointed to already long waiting lists – and complained that it would take decades to deal with existing backlogs. These lists did not even include the majority of farm workers.

Many rural informal settlements do not only present a health hazard for those residing there, but also constitute an environmental threat as many rural municipalities do not have adequate infrastructure. At the moment raw sewerage is ending up in river courses. This poses a threat to the exportability of irrigated crops that are subjected to stringent food safety standards. The problem of inadequate housing for farm workers therefore has larger repercussions that threaten all stakeholders.

Legislation and policy aiming to provide farm workers with housing and security of tenure appears to be hugely out of step with a growing, off-farm farm worker population. Extending on-farm tenure security and protection from eviction is no longer the single, biggest need of farm workers.

Farm workers are increasingly becoming a diverse group, living in a variety of different situations and with a range of needs of which tenure security is but one. Thus far, state policy has failed to respond to this complexity.

The state’s main vehicle for providing assistance for farm worker housing is the Farm Worker Housing Assistance Programme (FWHAP). Yet, that programme only provides subsidies for on-farm housing for permanent workers if producers agree to provide security of tenure (and often increased security of tenure) to permanent farm workers.

Yet, the very fact that permanent on-farm workers can obtain security of tenure has motivated producers to recruit seasonal workers off-farm.

The result is that farm worker housing is increasingly becoming the responsibility of local government, which is regrettable given that the provision of on-farm housing would alleviate  some of the pressures on rural municipalities to provide housing.

More importantly, FWHAP does not make any provision for subsidisation of seasonal on-farm housing. Yet, the majority of farm workers are currently employed on a seasonal basis. The policy seems myopic.

While ESTA makes provision for the Minister of the Department of Rural Development and Land Reform to facilitate off-site developments to extend the security of tenure of workers, little evidence could be found of any such development in recent times.

It would clearly be to the benefit of the majority of seasonal workers if government could provide subsidies for on-farm housing that would improve the often cramped seasonal accommodation they currently live in, but also to develop long-term, permanent housing for an increasingly off-farm farm worker community.

A multi-stakeholder approach is urgently needed to ensure that farm workers’ access to housing is improved: it requires innovative thinking and cooperation on behalf of both the state – at all levels – as well as industry.

Regarding farm workers’ working conditions, the study found a fairly high rate of compliance in terms of granting of key rights. It has already been pointed out that the main problem area is the sugar industry, where labour is not only externalised, but where the use of foreign migrant labour is high.

Another problem area, across industries, is the failure to grant pro rata leave to seasonal workers employed for less than four months continuously by the same employer. This is largely because Sectoral Determination leaves too much room for interpretation in this regard.

The conditions under which most producers across case studies grant sick leave to workers are also problematic. Employers’ insistence on a medical certificate or even a clinic letter on the first day of illness frequently has the effect that workers either a.) have to pay expensive medical fees for the “luxury” of being ill or b.) sit in very long queues when they are genuinely ill before they can go back to bed to recuperate.

While employers resort to this tactic to manage alleged abuse of sick leave and high absenteeism, the practice transfers risk to the most vulnerable: poor, sick farm workers.

Most producers in this study complied with minimum wage legislation. However, the issue that led to the 2012 De Doorns farm worker protest was not one of non-compliance with the minimum wage, but one of a “too low” legislated wage. That key challenge persists. As the Bureau for Food and Agricultural Policy (BFAP) has pointed out in its analyses of agricultural wages: the industry is  in a stalemate.

On the one hand, most farmers cannot afford a wage of R150 per day; on the other, most households (consisting of two adults and two children) cannot prepare meals that are of acceptable nutritional standards, even if both parents earn R150 per day. The key challenge for the industry is to move beyond this stalemate.

This research points to the critical role which government must play to enable worker and producers to break this stalemate. Trade liberalisation and deregulation has considerably weakened producers’ collective power over the last decade.

The result has been that they have become price takers and are increasingly on the defensive to protect their dwindling profit margins. Government’s prevaricating statements on land reform have further increased producer’s perceptions of their own vulnerability. This research shows that as producers have become more pressurised, they have increasingly passed on risk to farm workers through the processes of casualization, externalisation, and making further cost savings by recruiting workers off-farm.

Government’s failure to take a value chain perspective of the industry’s woes has resulted in macro- economic policy that is increasingly weakening producers bargaining power in the market. Supporting farm workers without simultaneously supporting producers will be an exercise in futility.

It is necessary to strengthen the bargaining power of both producers and workers to ensure that profit is distributed more equitably along the value chain. If retailers are concerned  about sustainable value chains, also they have to engage with this problematic.

A positive spin-off of the De Doorns strike has been the realisation among key industry players in both the producer and worker camps that their fortunes are intertwined. Their willingness to engage each other presents a key opportunity. Government has to become part of this social dialogue and reshape the macro- economic environment to enable both producers and workers to move forward.

Key recommendations

The state should play a much more active role to simultaneously bolster the collective bargaining power of producers and workers to ensure a more equitable flow of value down agricultural value chains. State intervention aimed to improve the livelihoods of farm workers since 1994 has largely failed to achieve its objectives because it does not appreciate that the fortunes of workers and producers are interlinked.

Lack of state support to producers has reduced their ability to resist pressures in the value chain. Producers’ coping strategies have passed on risk to workers. The pressures on both producers and workers will keep mounting if the state does not intervene more decisively and take a value chain approach to the problem. During this research, clear signs could be found that both groups are exiting the agricultural sector. Producers and workers should both separately and jointly put pressure on government to deliver on the following key recommendations.

To bolster the bargaining power of producers in agricultural value chains, the following recommendations are suggested. The state should:

- help to open up new export markets to make producers less beholden to their traditional markets. This will increase their bargaining power. More generic marketing of South African agricultural produce by the state would also benefit the industry;

- Eliminate non-tariff trade barriers imposed by other countries on SA exporting producers when negotiating trade agreements;

- Consider exempting exporting producers from the Competition Act to allow them to collectively set floor prices that would incorporate a living wage for farm workers; and

- More aggressively support the establishment of processing facilities and post-harvest facilities (such as cold storage facilities) that could extend the season and give more work to seasonal workers, but also allow producers to sell value-added products that will fetch them higher prices.

To bolster the bargaining power of workers in agricultural value chains, the following recommendations are made. The state should:

Adapt existing labour legislation to the fact that most workers are now seasonal;

Eradicate ambiguities in SD13 to avoid interpretations that are harmful to workers (e.g. the granting of pro-rata leave);

Change the Labour Relations Act to make it easier for both unionised and non-unionised workers to bargain collectively and take part in protective strikes;

Facilitate the appointment of labour representatives on farms, provide or facilitate labour rights training to them and give them access to a regularly updated data basis of organisations that offer assistance to farm workers;

Support paralegal offices servicing rural areas such as advice bureaus and legal centres which are acutely under-resourced;

Facilitate closer co-operation between the Department of Labour and ethical trade bodies such and WIETA and SIZA to monitor on-farm training;

Not ban labour brokering outright as these agents currently fulfil an important function coordinating seasonal work. If labour brokering is banned, another agent should be found to coordinate seasonal work. Different types of labour brokering should be better defined and regulated. Self-regulation of the industry should be encouraged; and

Roll out the Public Works Programmes in rural areas during the off-season to allow seasonal workers to benefit from more work opportunities and a more consistent income (e.g. road building; brick-making for RDP houses.)

During this research both workers and producers raised lack of housing support as a key issue. It is recommended that the state revisit its existing housing policy in relation to farm workers.

More specifically, the state should:

Provide more support for on-farm housing (conditions for housing subsidies should be less onerous) to alleviate the burden on the state to provide housing to an ever-growing pool of off-farm workers. One of the unintended consequences of ESTA has been increased casualization of farm work and the accompanying trend of sourcing farm workers from local towns;

Enter public/private partnerships with producer communities to build more off-farm worker housing;