Lessons from Rooibos tea

Under apartheid a Rooibos tea board was created to nurture the market and protect this novel product both nationally and internationally. This created a strong foundation to assist the nascent industry, while excluding its traditional users, who had been responsible for revealing its secrets to the world.

Today we have well-established overseas markets with wealthy nations like Germany, Netherlands and Japan amongst our biggest customers. We export more than 60 per cent of the crop yet the price paid to farmers has sharply declined over the past five years, dropping by over 200 per cent from its peak in 2004. There has been a failure to optimise a potentially lucrative export market which has exhibited instability over the past seven years. Rooibos traders and retailers receive far higher returns on their investments than farmers.

Despite these challenges some emerging indigenous farmers made remarkable headway in establishing niche markets through the support and assistance of non-government organisations, funded mainly by Northern donors during the post democracy heyday. Small co-operatives like the Heiveld Co-op, based around Nieuwoudtville in the Northern Cape and Wupperthal in the Western Cape, made bold strides to establish themselves as superior quality organic and Fairtrade producers, partnering with international Fairtrade organisations.

Fairtrade was created to benefit producers in developing nations and assist the replacement of historically exploitative plantation trading systems with a socially, economically and environmentally sustainable system. It aims to pay a fair price to producers, reflecting the true value of the product.

Over the past few years several established plantation farmers have gained inclusion into the Fairtrade system through questionable assessment criteria. This has tended to undercut indigenous farmers whilst also undermining the intent of Fairtrade, which was never intended for use by plantation farms.

This already delicate situation has been significantly worsened by political interference. The members of the Heiveld Co-op all farm in the Northern Cape in the region of the village of Nieuwoudtville.

In 2007 the Northern Cape Government impetuously interfered in the Rooibos tea industry, without any proper due process, research or consultation with local farmers. Well over ZAR100 million has been injected into building packing sheds, drying courts and other infrastructure in the Nieuwoudtville area.

While intentions were doubtlessly good, the immediate result was the re-marginalisation of the indigenous emerging farming community, who despite raising questions – and being told to shut up – were instead tempted to comply by promises of free diesel, vehicles and Rooibos seedlings. As these seedlings were not organic, several farmers lost organic certification of tea lands which had been gained at significant expense, and will take three years to regain.

The primary beneficiaries of this massive cash injection were conventional, primarily white Rooibos farming community. There was also significant market disruption through farmers being offered prices significantly above the open market value, resulting in a massive stockpile, which now serves to further depress already low market prices. The emerging farmers remain marginalised, mere pawns in the game.

What is even stranger that this whole scheme was initiated by a partnership between the Limpopo and Northern Cape Departments of Agriculture. Limpopo? Rooibos? How did this occur? It appears that the then head of the Limpopo agriculture department, Bigman Maloa, was instrumental in pushing this scheme to supplement his attempts to save the failed conventional tea estates in Limpopo province, which were abandoned by overseas investors.

In association with his political colleague Tina Joemat-Pettersson, then head of the Northern Cape department of Agriculture and now national minister of Agriculture, Forestry and Fisheries, Maloa sought Rooibos tea to market through a new quasi-governmental tea company, Venteco (Pty) Ltd, with questionable marketing proposals that have yet to bear fruit. This entity was bailed out, yet again, in May 2010 by the Limpopo provincial government.

At the end of 2009 Maloa was summarily suspended by the Parliamentary Standing Committee on Public Accounts (SCOPA) because of alleged misappropriation of over ZAR45 million from his department, pending a forensic audit and investigation that is reportedly not yet complete.

Despite this Maloa was appointed Deputy Director General of the national Department of Agriculture, Forestry and Fisheries, being put in charge of Food Safety and Bio-security by his erstwhile partner on this Rooibos project, Joemat-Pettersson.

To rub salt in the wound, Minister Joemat-Pettersson sung the praises of the Nieuwoudtville Rooibos project at the World Economic Forum (WEF) in Dar es Salaam in May this year. She apparently remains misinformed as to just what has been achieved at this project and how it has really affected emerging farmers.

Heiveld Co-op tea was rapidly becoming established as one of the highest quality Rooibos teas on the market, with its product still being marketed under the Pick ‘n Pay organic house brand. Yet instead of government assistance, its farmers and their organisation were undermined and many are now trapped in an awkward situation, dependent on powerful industry players. Do we need a clearer example that politics and agriculture do not mix?

Fortunately Heiveld has managed to re-establish its independent management systems and marketing, largely recovering from these setbacks. Members learned both the value of their independence and how inappropriate investment by government can undermine local initiative and fuel conflicts within the community.

What has specifically happened in this case is a microcosm of what has befallen our agricultural markets more generally. Political interference, whether building or dismantling systems, has inevitable unintended consequences.

Neo-liberal and free market influences imposed on South Africa’s agricultural system since our democratic transition have undermined true transformation of the sector by throwing our farmers to the wolves of international trade. Just how do we manage to sustain, uplift and transform our agricultural system against these complex challenges?

Our agricultural sector has a long history of political meddling. The apartheid state strongly supported the Afrikaaner farming community through protective instruments such as agricultural marketing boards. There were wheat, potato, maize, citrus, red meat and dairy boards, each working to improve market stability through state support mechanisms.

These boards were dismantled under our new dispensation because of internal economic and political pressure as well as through external neo-liberal influences such as the World Trade Organisation (WTO). This exposed the sector to disruptive influences like subsidised and dumped commodities from the developed world.

These problems were compounded by the facilitated entry of multinational corporations and traders who now control our seed and commodity crop trading services, further undermining national sovereignty and food security.

While we dismantled agricultural protection, other nations recognised the threats and took steps to protect their agricultural systems. In 1997 the Russian agriculture minister stated unequivocally that he would maintain agricultural protection as a matter of national security. The WTO Doha round remains stalled primarily because of developing nations’ unhappiness with the unequal agricultural trading systems proposed in by developed nations.

South Africa’s small and emerging farmers remain marginalised. In the Western Cape protests are becoming increasingly vociferous, with another protest taking place this week against ongoing displacement and lack of state support. The political failure to protect emerging farmers from the vagaries of the neo-liberal market system continues to undermine new entrants.

South Africa has lost markets throughout the region through our blind adoption of genetically modified crops. The trans-national corporate control of our grain commodity markets has made it artificially cheaper to import feed into the Western Cape from Argentina and the US than to shift our surplus from bulging silos inland.

Instead of uninformedly singing the praises of ad-hoc, non-consultative schemes at WEF gabfests while ignoring the malign side-effects, we need political leadership that is both informed and that works toward supporting national interests. We cannot continue to rely on career politicians who fail to comprehend fundamental realities of globalised agricultural markets.

Mistakes made at national level are being repeated and compounded provincially. Pseudo-nationalisation and the appointment of politically connected cadres tend to trigger costly mistakes rather than attain success.

The case of the Heiveld co-op demonstrably undermined more than a decade of hard work that had yielded tangible dividends for the farmers and first peoples, who were first marginalised by colonialism, then by apartheid, then free market fundamentalism and now through incompetence.

And just what are taxpayers to think about paying millions of their Rands to break a working system that cost them nothing to set up? At the very least there ought to be a commission of inquiry to get to the bottom of this travesty.

Powerful arguments can be made to reinstate protective measures for our beleaguered agricultural sector. We need to support markets that work toward our national best interest. In doing so we must carefully examine any state intervention so that food security and sovereignty are prioritised and emerging farmers meaningfully supported.

Enabling our agricultural sector is pivotal to not only feeding ourselves but also to our future growth, employment and prosperity. A nation that cannot feed itself cannot prosper.

BROUGHT TO YOU BY PAMBAZUKA NEWS

* This article first appeared on The South African Civil Society Information Service.
* Glenn Ashton is a writer and researcher working in civil society. Some of his work can be viewed at www.ekogaia.org.
* Please send comments to [email protected] or comment online at Pambazuka News.