Can Our Wine Industry Become a Model for the Rest of Our Agricultural Sector?

By Glenn Ashton · 20 Mar 2009

A+ A= A-
    Print this page       comments
Picture: Trevor Samson - World Bank
Picture: Trevor Samson - World Bank

Agricultural practice in modern South Africa has failed to evolve sufficiently to adapt to our emerging needs. Farm workers remain marginalised, their work conditions and job security are poor. The proposed redistribution of land is slow and fraught with problems. Existing farmers feel threatened. Globalisation poses enormous challenges to the sector. However, the travails and success of our wine industry may point us toward some solutions.

South Africa's wine industry has matured since 1994. The 'dop' system, where farm workers received part of their pay in wine, has largely disappeared. An increasing number of worker-owner co-operatives and other progressive BEE deals have been in the vanguard of addressing the discrimination and exploitation that historically existed in this industry. Perhaps some of the successes of this industry can serve as templates for the rest of the agricultural sector.

There are many success stories that have emerged from our wine industry. We have firmly established ourselves as a major player on the world map of good quality wines. We were the first country in the world to have a winery Fair trade certified when Thandi wines gained this prestigious first in 2003. 

Fair trade products are audited and certified to have been produced using both socially responsible and environmentally sustainable practices. A fair price is paid to the producer of the product. Several other local wineries have since joined. The wineries have been partnered in the United Kingdom by the Co-Op supermarket chain, which actively markets their products. These partnerships epitomise the success of our burgeoning wine industry.

Francois Botha, a shareholder in Fairhills Estate near Worcester, one of the world’s biggest Fair trade wine co-operatives, says the programme has made unimaginable differences to both him and his workers. The Fairhills farms – a collective of 22 participating farms - have crèches, literacy and health programmes. Workers enjoy far higher job satisfaction and security than was previously the case. 

South African wine exports have grown from around 50,000 litres in 1994 to more than 300,000 in 2008, accelerating us to become the worlds ninth largest wine exporter. Unfortunately, while the quantity of wine has increased, the 'per litre' price paid to farmers has dropped markedly, mainly driven down through sales of bulk wine exported to be bottled elsewhere. However the wine industry remains the largest contributor to GDP across the entire agricultural sector.

This fall in price has been offset by the corresponding devaluation of the Rand against major international currencies. Yet many material costs for the wine industry, such as cork, machinery and chemicals are priced at international levels, squeezing producer margins, threatening environmental and social upliftment programmes.

As South Africa has accessed international markets, it has simultaneously fallen victim to the pressures of globalisation. We must compete against other emerging wine exporters like Chile and Argentina, together with well established and often subsidised producers in Australia, California and Europe. The role of major supermarket chains in the UK - our largest single export market – has seen margins mercilessly squeezed through predatory purchasing tactics. 

The breakneck competition between emerging producers has induced a serious fight in the global wine lake, with supermarkets and distributors both wilfully and inadvertently ducking the heads of largely defenceless producers below the surface. This is not the survival of the fittest as espoused by neo-liberal market commentators but the survival of the biggest. 

The largest players in the retail industry, while not overtly guilty of collusion, conspire against the interests of the smallest. This is a classic case of the Wal-Mart syndrome, where the entire supply chain is squeezed to bursting point from above.

Whilst many farmers have seen not only the need but also the benefits of treating workers well and of husbanding the land in a sustainable manner, the malign forces of globalisation have played an inordinate role in unravelling our best efforts locally, leading to the continued exploitation of workers, particularly women. Our wine industry is a prime example of how the touted benefits of the trickle down theory of globalisation are all too often a mirage on a distant horizon.

In the case of South Africa the dominance of one Supermarket, Tesco, in the British marketplace, our largest single export market, has exerted a direct influence on the welfare of local workers and producers. Tesco, accused of engaging in predatory pricing practices, has negatively affected local producers, who are forced to carry externalised costs with no consultation. As costs are trimmed, social and environmental exploitation are fostered. 

However after extensive pressure was placed on Tesco by various northern NGOs, customers and the media, it was forced to act decisively. South African NGOs and labour organisations insisted that any social accreditation must be at the cost of Tesco and not of producers. Accordingly Tesco and other UK supermarket chains, in concert with the Wine and Agricultural Ethical Trade Association (Wieta) and other farm labour and environmental watchdogs around the world, instituted a database system to manage transparency and compliance. While this system, the Social and Economic Development Exchange (Sedex) has some serious shortcomings, it is certainly an improvement on what went before.

This does not mean to say that the situation of workers in the wine industry is like a fairy story with a happy ending. A recent report by the UK based NGO 'War on Want,' in association with local farm welfare trade union 'Sikhula Sonke,' highlights the extent to which pressure exerted by UK supermarket chains continues to undermine decent working conditions for farm workers, most particularly those of migrant seasonal women workers. 

It is bitterly ironic that the poorest and most disenfranchised players in the production and supply chain suffer the most from economic exploitation at the far end of the value chain. That supermarkets justify their actions as benefiting relatively wealthy first world consumers while externalising the social effects to this extent deepens the irony. 

Besides Sedex there are several other similar or related local assessment programmes within the wine and fruit industry. These are often repetitive and the costs borne by producers. According to Linda Lipparoni of Wieta there is an initiative to implement a cross-sectoral, integrated assessment system. This will assist the uniform compliance of all producers, will make it easier for smaller producers to access the increasing market for ethical products and in turn benefit both the environment and the lot of both permanent and seasonal farm workers.

It remains problematic that these social and environmental programmes are largely driven by civil society initiatives. While there is government buy-in to these, there is a distinct need to expand the role of the state. Lipparoni suggests that the state does not yet have a proper 'big picture' overview of precisely where and how to improve our agricultural sector in this regard. 

Since 1994 multilateral and bilateral trade agreements have reduced state intervention in implementing agricultural best practice. Extension services are increasingly privatised, inspection is fragmented between departments and true transformation of the agricultural sector remains elusive. Despite some good laws and regulations, farm workers remain marginalised. Were it not for groups like Sikhula Sonke and Women on Farms, the situation would be worse yet. It is essential that the new government elected in April concentrate its mind on matters agricultural as a matter of priority.

Taking the wine industry in South Africa as a bellwether, it would appear that other sectors of our agricultural industry could learn much from both the social and environmental initiatives it has pioneered. While these systems are still evolving, the experience gained by farmers, producers, unions and civil society NGOs can bring distinct advantages from economic, social and environmental perspectives.

We do still need to transform land ownership patterns in South Africa. We equally need to ensure continued competitiveness in the international market. If we can market brand South Africa's agricultural practice as a model to wealthy northern consumers we will certainly be better placed than most developing nations to succeed in this vital primary production sector.

Ashton is a writer and researcher working in civil society. Some of his work can be viewed at Ekogaia - Writing for a Better World. Follow him on Twitter @ekogaia.

Should you wish to republish this SACSIS article, please attribute the author and cite The South African Civil Society Information Service as its source.

All of SACSIS' originally produced articles, videos, podcasts and transcripts are licensed under a Creative Commons license. For more information about our Copyright Policy, please click here.

To receive an email notification when a new SACSIS article is published, please click here.

For regular and timely updates of new SACSIS articles, you can also follow us on Twitter @SACSIS_News and/or become a SACSIS fan on Facebook.

You can find this page online at

A+ A= A-
    Print this page       comments

Leave A Comment

Posts by unregistered readers are moderated. Posts by registered readers are published immediately. Why wait? Register now or log in!


Rory Short
21 Mar

Ethics and Wine

One of the problems with making the wine industry more ethical is that its product, wine, would have great difficulty in being rated as a socially beneficial product.

Respond to this comment