Farmworker shareholder model beset with problems, research finds

Corruption Watch researchers interviewed 35 members of eight farm businesses located in the Western Cape and each discussed their experiences of the farm worker equity schemes, with many articulating a number of serious issues.
Corruption Watch researchers interviewed 35 members of eight farm businesses located in the Western Cape and each discussed their experiences of the farm worker equity schemes, with many articulating a number of serious issues.
Image: 123RF/ZYCH

The ambition of farmworker equity schemes, aimed at incorporating workers into farm businesses and socially uplifting them, has not been fulfilled 

This is one of the findings by Corruption Watch in its report on the intersection of land corruption and discrimination. 

Corruption Watch said this year it interviewed 35 members of eight farm businesses in the Western Cape. Each participant discussed their experiences of FWES, with many articulating a number of serious issues.

Researchers said the novel design of the scheme, which sought to redress historic harms by democratising agricultural systems, represented the best of South African ingenuity. 

“But governance failures, including a lack of transparency, oversight, resourcing, and effective implementation means that the ambition of the scheme has not been fulfilled.

“Instead, workers feel as though they have been failed. The result of this failure is that patterns of discrimination persist.” 

The report said perceptions of corruption among beneficiaries were high, and despite initial hopes the intended equality benefits were yet to be felt. 

Though the exact terms of each scheme differ, beneficiaries under the schemes are expected to receive dividends, corresponding to their share. 

However, several participants reported seeing few or no benefits. In one case, it was reported workers received a payment in the mid-2000s and did not receive a second until 2022. 

In other cases, dividends were paid seldom and irregularly. Despite raising concerns, beneficiaries at several farms did not receive an explanation for the low rate of payment. 

The research found while some interviewees were occasionally provided financial statements (displayed on screens during meetings and presentations) this was a rare occurrence. When workers raised their concerns, they were often ignored, being told that “business was not looking good” and that they should sell their shares if they were unhappy. 

Several participants interviewed expressed concern regarding a lack of transparency and access to information relating to the running of the business.

In one case, participants explained that they were never told the details of their scheme.

“They simply received papers, which they were told to sign so that the farm owner could receive government funding. Beneficiaries also lacked clear guidance from public officials on how the schemes were intended to operate.

“Once workers had agreed to participate in a scheme, they rarely received information on the financial status of their shares, despite their legitimate concerns.” 

A range of participants indicated they had been excluded from shareholder meetings and were unable to participate in decisions that affected the running of the business. On one farm, shareholder workers nominated four trustees who would attend meetings on their behalf.

However, when the farm went bankrupt, the trustees and shareholders suspected they had not been given access to all the relevant information, which resulted in many workers signing over their shares without fully understanding the causes and consequences of the bankruptcy.

Researchers said some of those interviewed believed that farm owners benefited from government grants without providing the support and payments they should have under the terms of their agreement.

However, a lack of oversight and regulation means these terms are often obscured: individuals do not know what the farm owners’ obligations are, and have few avenues to report their concerns, beyond internal channels. 

Researchers said farmworker equity schemes were designed to uplift disadvantaged workers, but few participants felt their situation had changed.

While some had received dividends when times were good, conditions on the farm remained hard, and labour rights violations were reported. 

Unsafe working conditions, including a lack of protective clothing and equipment, was highlighted by one participant, and several reported the unavailability of trained medical support.

In one case, a worker explained that they had to wait several days for an ambulance to arrive after a medical incident. Where transport to nearby medical facilities was provided, it was only available on certain days and at certain times. 

One of the biggest concerns raised by participants related to land and housing. While accommodation was regularly provided as part of one scheme, it was only temporary, and workers explained there was no guarantee they could stay on the land after they finished working. 

There was also no possibility of family members inheriting the home, and living conditions were said to be poor.

In several interviews, the ability for family to visit and reside on participants’ property was said to be limited. One worker reported they had to pay for their children to live with them and several others explained they needed to register visitors who, if they failed to do so, would be removed. 

Across the board, individuals appeared unsure of their entitlements, or whether they were being treated fairly in relation to their housing situation. Because the schemes typically grant beneficiaries a share in the business (rather than the land they work), tenure security remains weak. 

As many shareholder workers are formally employed by the farms they work on, they are entitled to legal protections under the Employment Equity Act. However, a lack of knowledge of their legal rights means many felt they had nowhere to turn when abuses took place.

Corruption Watch said while farmworker equity schemes have been around since the early 1990s, public information on them is limited.

It said an unpublished government report obtained by Corruption Watch showed hundreds of equity schemes have been rolled out, a majority of which are located in the Western Cape.

By 2013 almost R700m had been paid to privately-owned farms, and almost 24,000 hectares of land had been redistributed.



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