Contract farming, community development and the politics of production among small-growers in KwaZulu-Natal

African Studies Seminar series. Paper presented 4 March 1996As several scholars and policy institutions have shown, small-scale contract farming has become increasingly popular in recent years as a model for organising agricultural production at the margins of the international agro-food economy (Glover and Kusterer 1990; Little and Watts 1994; World Bank 1981). Broadly defined, contract farming refers to "arrangements between a grower and firm(s) (exporters, processors, retail outlets, or shippers, for example) in which nontransferable contracts specify one or more conditions of marketing and production" (Little and Watts 1994:4). Proponents of the model note that it underwrites a dynamic partnership between the processing company and the small-grower farmer, with strong advantages for both parties. The company takes on the risks of marketing but is able to relinquish to the grower the risks of production, including the management of a labour force which may be seasonal. The grower, on the other hand, gains a secure market and access to credit inputs and to the technical capacity of the company (Glover 1984; Levin 1988). In short, proponents argue, such contracts can bring wealth, entrepreneurship and employment to rural communities. In that respect, contract schemes might be regarded as vehicles for modernization.... The idea of a farming contract as a developmental institution is particularly provocative in parts of post-apartheid South Africa where the economic imperatives which press agribusiness companies to seek new opportunities for flexible accumulation are converging dramatically with the political imperatives of democratic transition. In rural KwaZulu-Natal, the first set of imperatives has invigorated sugar and timber milling companies to promote contract schemes with farmers occupying old bantustan land under 'traditional' tenure. Through these schemes the companies gain access to land outside of the freehold sector, and are able to reduce their labour costs. The companies see the contract operation as a commercial agreement which generates economic growth, employment and entrepreneurship in rural communities (a'Bear et al 1994). The second set of imperatives prescribes a restructuring of the state to re-link the old bantustans and their impoverished populations with the central state and the national political economy. The post-apartheid Government of National Unity (GNU) faces the massive challenge of increasing both the quality of economic opportunity and the quality of citizenship for rural people. At a minimum, this requires a new impetus and new institutions for rural development at the local level. But state-sponsored rural development agencies lack legitimacy and capacity, especially in the bantustans where apartheid administrative structures are strongly entrenched (Macintosh 1990; May 1993:23-24; Kotze et al 1987). Moreover, government agencies are frequently under-funded, unco-ordinated and inefficient at the local level, creating space for fluid local politics which deeply complicates government approaches to state construction. In this respect, South Africa faces the same structural development challenges as other post-colonial regimes (Munro 1996). The GNU has set out to address these constraints through a wide-ranging Reconstruction and Development Programme (RDP) based on a new 'social partnership' or 'social compact' which aims to eradicate perceptions of the state's overweening, dominant, or central role in society. A central objective of the RDP is to 'build the capacity' of community-based organisations to fill the void left by a retreating state.s As the government's first White Paper on the RDP argued (GNU 1994:48): The empowerment of institutions of civil society is a fundamental aim of the Government's approach to building national consensus. Through this process the Government aims to draw on the creative energy of communities. To facilitate effective involvement, the Government will introduce programmes that will enhance the capacity of community organisations. The government's Rural Development Strategy (GNU 1995) aims to combine economic development and political development on the basis of three (populist) objectives: entrepreneurship, employment and empowerment. The thrust of this approach is to bring governance closer to the people, mainly by expanding the role of local authorities in delivering basic services and spreading the responsibility for the distribution of public resources across communily-bascd organisations (CBOs), non-government organisations (NGOs) as well as state institutions. The approach is predicated on the capacity or propensity of rural communities to undertake developmental collective action. Among rural communities where none of these institutions are well developed, the developmental potential of growers' organisations stands out as particularly promising. It is in these circumstances that they have emerged as a potentially attractive focus for promoting 'community development and empowerment' (A'Bear et al 1994) as well as economic development. This paper aims to evaluate that vision by analysing the social relations of contract production among sugar and timber small-growers in KwaZulu. This approach derives from the perspective that the propensity of rural citizens to pursue developmental collective action is conditioned by local patterns of social conflict and local mechanisms to mitigate it. Thus, the underlying premise of the paper is that the capacity of contract farming to underwrite rural empowerment is determined ultimately by the political dynamics that structure the organisation of production under contract arrangements. Ultimately, an evaluation of the potential of contract farming arrangements must begin with the peculiar social structure of the contract farmer's enterprise which establishes a complex set of local-level power relations between farmers, agribusiness, local authorities and communities. This requires an examination of the social networks through which contract growers manage their access to the main social factors of production - land, labour and capital inputs. The main aim of the paper is to delineate the power relations that inform each of these dimensions of the farming operation in order to cast light on the political underpinnings of growers' organisations as an institutional focus for rural development. It shows that each of these dimensions generates flexible arrangements for resource-utilisation which shape local-level social conflicts. Any developmental institution building initiative that seeks to promote empowerment must be able to respond to these relations. The paper proceeds in three parts. The first section briefly outlines the structural political tensions that lie at the heart of a development vision based on economic entrepreneurship and community empowerment. The second analyses the cash-cropping enterprise and highlights incipient social conflicts that it generates. It shows that the factors of production are commoditised to different degrees, and that growers engage in distinct, though overlapping, social networks to manage their access to these factors. The third indicates the complexities of moving from contract to community in development thinking, given the incipient conflicts that structure the enterprise

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