Introduction

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Vuki Farming is a commercial fruit farm located in the Overberg region of the Western Cape, outside the small town of Grabouw. It is wholly-owned by a workers trust and employs 40 permanent workers and around 300 casual and seasonal workers.

The farm extends to 318 hectares on which apple and pear orchards and wine vineyards have been established. The farm produces apples and pears for export and for the local market and sells its grapes to local wine cellars. After harvest, the fruit is sent to a central packhouse, Valley Packers, where the fruit is washed, sorted, packed and placed in cold storage ready for distribution.

Eight varieties of apples are grown: Granny Smith, Golden Delicious, Braeburn, Royal Gala, Starking, Fuji, Pink Lady, and Sundowner; five varieties of pear: Bon Chretien, Packham, Clapp’s Favourite, Keiffer, and Abate Fetal; and three varieties of wine grape: Chardonnay, Pinot Noir, and Sauvignon Blanc.

Vuki Farming has been Fairtrade certified for its production of apples, pears and apple juice since 2004.

Sales

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In 2008, Vuki produced 5,700 tonnes of fruit (apples and pears), of which approximately 40% was sold on export markets. Of the export volume, 346,000kg (14%) was sold as Fairtrade, made up of 252,000kg of apples and 94kg of pears.  

Background to Vuki

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In 1994 Whitehall Farming, as the enterprise was then known, initiated a groundbreaking empowerment venture in which the workers obtained a loan to purchase a 50% share in the farm. Unfortunately the venture failed to recover from the loss of important export markets during the harsh economic climate of the late 1990s and went into liquidation in 2001.

The workforce was kept on by the liquidator to run the farm with the help of an appointed general manager and the farm quickly went into profit. In 2002 the workers formed the Vuki Trust and obtained the finance to purchase the farm from the liquidator. Following a protracted legal process, ownership of the farm was finally transferred to the trust in 2005. The new enterprise was named Vuki Farming Pty Ltd, after the Sesotho word meaning ‘to stand up’. The word implies ‘rise, awaken … and go and do something for yourself’.

The vision of Vuki Trust is to empower and improve the living standards of the members and employees by providing fair and adequate wages, fair labour practices, and decent living conditions. They aim to support adult education and provide bursaries for young people’s college education, and support peripheral entrepreneurial business and other community-based projects.

The fruit orchards that the workers had acquired were in a state of neglect and badly in need of investment if they were to have a viable long-term future. Nearly 58% of the apple and pear trees were over 16 years old and past their period of optimum production. It would cost approximately R8 million (£716,000) to replant the orchards, with an additional R4.85 million (£434,236) needed to repair or replace the fleet of vehicles and agricultural machinery.

Vuki is made up of two separate legal entities; the Vuki Trust which represents the legal interests of the worker owners and owns the farm plus all fixed property. It is the single shareholder in Vuki Farming (Pty) Ltd, which is responsible for the day to day operation of the farming enterprise.

Membership of the trust is made up of 38 of the 40 permanent employees and is open to all permanent employees after two years of employment.  The trust is governed by six elected trustees who include permanent workers, retired workers and other stakeholders. The trust appoints the directors of the enterprise and oversees its operation. A management committee is appointed to run the farm enterprise. The enterprise employs up to 300 casual and seasonal workers during the peak harvest time of January to May.

Most permanent workers, along with the management, live in rent-free accommodation on the farm. Only seven permanent workers reside in town. Most of the casual workers live in the nearest township. They receive a housing allowance and are provided with transport to and from work. The seasonal workers are mostly migrants from the former Transkei in the Eastern Cape and live in hostels on the farm.

Since acquiring the enterprise, the workers trust has put the business back on track, returning a profit each year. All surplus funds after deduction of costs have, however, been reinvested into the enterprise. Future investment is earmarked for ongoing projects to replant 40ha of new orchards. In 2008, for example, Vuki was able to replant 6.5 ha under wine grapes and 3.5 ha under apples.

Broad-Based Black Economic Empowerment (B-BBEE)

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A Black Economic Empowerment programme was introduced in South Africa after the end of apartheid to redress the legacy of inequality in business ownership, management, skills and opportunity.

Fairtrade Labelling Organisations International (FLO) is responsible for setting Fairtrade standards. Its certification policy for South Africa, adopted in 2007, requires enterprises which depend on hired labour to comply with the South African Government’s Broad-Based Black Economic Empowerment Act (2003) and with the subsequent Codes of Good Practice, the framework for assessing levels of worker empowerment.  B-BBEE legislation promotes black ownership of businesses, training and skills development to increase employment opportunities, and promotes employment equity for ‘historically disadvantaged individuals’.

Fairtrade

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The purpose of Fairtrade engagement with commercial fruit farms is to contribute to the economic and social development of farm workers and their communities. This has two main elements: farms must meet Fairtrade standards based on core ILO conventions for the protection of workers’ rights. They include the right to join a trade union or other workers organisation, the right to collective bargaining, freedom from discrimination, decent employment conditions, a safe working environment, and no forced or child labour. Secondly, as well as the Fairtrade minimum price paid for the fruit, Fairtrade provides workers with an additional sum, the Fairtrade premium, to tackle poverty, improve the quality of their lives and invest in their futures.

The Fairtrade premium is paid into the bank account of a Joint Body (JB) made up of seven members - five elected workers and two representatives from the management - with a gender composition of three women and four men. The JB meets regularly to discuss and select which projects to fund with the Fairtrade premium and the management members use their skills and experience to support the JB in performing its administrative functions and managing finances.

Impact of Fairtrade

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The positive labour relationships existing between management and workers have been enhanced by the establishment of the Joint Body and the workers committee, both required for Fairtrade certification. The workers committee protects workers’ rights and also provides a forum for workers to consult with management on a range of matters affecting them.

Fairtrade standards have improved conditions in a number of ways: mobile toilets are provided in the orchards so workers no longer have to use the bush, rain shelters have also been provided, salaries have increased, and living accommodation has been improved.

Fairtrade has strengthened working conditions for women in several ways. It has helped to improve contracts for permanent workers, which now stipulate that mothers are permitted time-out to breastfeed their babies. The Fairtrade premium has enabled Vuki to upgrade the crèche and provide excellent childcare facilities.

Fairtrade premium use

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Since 2006, the Joint Body at Vuki has received approximately R1,042,573 (£90,659) in premiums. It has used the funds to finance a diverse range of projects, including:

• Educational bursaries to enable students to study beyond secondary school, which would  normally be financially unaffordable
• Payment of salaries of aftercare and crèche teachers
• Funding of a clinic and part-time nursing sister
• Sponsoring sporting activities and upgrading the football and rugby field
• Supporting a women’s group to produce crafts
• Organising children’s outings 
• Supporting the running of government-sponsored Adult Basic Education and Training classes, giving workers a chance to finish their education
• Vouchers for parents of school age children to buy books, uniforms, and other equipment, which are major expenditures for parents
• Satellite TV and pool table for the recreational hall
• Covering the administrative costs of the Joint Body. 
   

Do imports of apples from South Africa affect UK and EU farmers?

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UK apple production had been in long-term decline before experiencing something of a revival in recent years in response to strong consumer interest in buying local and seasonal produce. However, it still only supplies around 20% of domestic demand with retailers relying on imports to supply the relatively stable demand for apples. 

UK apples are available from July to the following spring with the main harvest season from September to November. French and other Northern Hemisphere apples are available for a similar period, continuing from cold storage until March/April, while UK apples are generally unsuitable for storage.

Supermarkets specifically source apples from the Southern Hemisphere to fill the spring/early summer supply gap in order to offer year-round availability to their customers. Southern Hemisphere apples are simultaneously available with EU apples at some times of the year and are stocked by supermarkets to extend the range of varieties on offer.

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Fairtrade Foundation July 2010