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Market Liberalisation in Post-Apartheid South Africa: The Restructuring of Citrus Exports after 'Deregulation'

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Charles Mather; Stephen Greenberg (2003). Market Liberalisation in Post-Apartheid South Africa: The Restructuring of Citrus Exports after 'Deregulation'. Journal of Southern African Studies, 29(2). Taylor & Francis (Carfax).
Type journal article
Scope Post-1994 South African economy
Method survey fieldwork
Period studied 1937–2002
Regions Western Cape, Eastern Cape, Ciskei (Kat River valley), Limpopo and Mpumalanga (background)
Themes agriculture land, transition post apartheid, labour markets wages, business and state, inequality poverty unemployment, bantustans removals influx
Citation key mather2003

Argument

The paper contests neo-classical agricultural economists who celebrate post-apartheid agricultural deregulation, using political economy approaches to markets and commodity chains. Through a case study of citrus, it argues the effects are uneven and more complex. The privatised cooperatives and the former single-channel exporter (Capespan) have struggled to turn their inherited fordist infrastructure into market power. Growers are differentiating by size, resources and quality more than by race, so some black and white growers end up in similar positions. Deregulation has intensified long-run casualisation and shedding of farm and packhouse labour, leaving a small permanent core and a larger insecure seasonal workforce.

Evidence and method

Field research and interviews (2001-2002) with black and white growers, cooperative packhouse managers and directors, export agents, Capespan staff, and UK retailers and importers. Case valleys are Citrusdal, Gamtoos, Sundays River and Kat River. Also uses a World Bank report (Dixie 1995), press reports (Business Report, Eurofruit), company briefing documents, Cartwright's industry history, and secondary literature on maize and wine deregulation.

Findings

  • Citrus marketing was centralised: the Citrus Board appointed the Citrus Exchange as the single-channel exporter from 1940 to 1997. (p. 5)

    between 1940 and 1997, the Citrus Board appointed the Citrus Exchange as the single channel exporter.

  • The single channel was dissolved at the end of 1997, ending the statutory export monopoly despite lobbying by Outspan. (p. 8)

    At the end of 1997 the Citrus Board was dissolved and Outspan lost its power as single channel exporter.

  • Neo-classical studies report heavy farm job losses after state support was withdrawn. (p. 4)

    it appears that between 1985 and 1996 as many as 200,000 permanent - and a further 200,000 seasonal - farm workers lost their jobs.

  • Capespan underestimated new competition; many new agents entered and it lost a fifth of the crop in 1998, though it kept most Western and Eastern Cape fruit through cooperative ties. (p. 11)

    a reliable estimate is that the former single channel exporter lost 20 per cent of the citrus crop to new competitors 1998.

  • The 2000 season shows the financial vulnerability of cooperative growers in the new market. (p. 16)

    Payments to growers who packed for the former cooperative in the Sundays River totalled R49 million, down from R102 million in the previous year.

  • Grower differentiation is shaped by resources and experience rather than race alone, though white advantage persists. (p. 17)

    Although white farmers have historical advantages and access to networks of power that remain intact in the post-apartheid period, differentiation is not occurring simply along racial lines.

  • Black growers in the former Ciskei face debt and the loss of bantustan-era state support, and so struggle to export. (p. 17)

    The vast majority of black farmers in the former Ciskei are mired in debt and are finding it increasingly difficult to participate in export markets.

  • Higher wages and ethical-trade pressure on large export farms came with multi-skilling and retrenchment. (p. 18)

    The industrial minimum wage is now R1,200 on the farm. But it has meant huge retrenchments on the farm.

  • Financially stressed growers cut permanent labour sharply. (p. 19)

    Another grower indicated how he had gradually reduced his permanent, on farm, workforce from 22 people to just four over a period of three or four years.

  • Reduced investment in new plantings has lowered labour demand and signals long-term sustainability concerns. (p. 19)

    the number of citrus nurseries has declined from 160 in the pre-deregulation period to only seventeen in 2002.

  • Liberalisation entrenched, rather than created, the marginalisation of farm labour. (p. 21)

    Liberalisation appears to have entrenched a longer-term process of marginalisation for an already marginalised sector of the South African labour market.