Representatives of the fruit and vegetable canning industry meet organised labour for talks on Thursday as the threat of layoffs looms large in the Western Cape.
This follows an announcement that an intersectoral task team has been set up to find ways of dealing with the growing crisis in the deciduous fruit industry in the province.
The crisis stems from the strengthening rand, which has had a crippling effect on the exports that make up a reported 90% of turnover in the R3-billion-a-year industry.
The industry says it needs an exchange rate of R8,50 to the dollar for survival: the current rate is just more than R6.
The chairperson of the South African Fruit and Vegetable Canners Association, Rudi Richards, said on Wednesday that the association is in the process of meeting fruit suppliers.
It met makers of cans — the biggest input cost — last week, is in discussions with sugar and coal suppliers, and will hold a ”brainstorming” session with the Food and Allied Workers’ Union (Fawu) on Thursday.
Reacting to a news report that an unnamed canner will start shedding staff on Wednesday, he said some canners are planning layoffs, but that as far as he knew this will not happen until after the discussions with Fawu.
He also said he was not aware that any canners have been dumping fruit: his own company, Tiger Brands, has however been diverting fruit to pulping for juice, or putting it into cold storage.
Fawu’s Western Cape general secretary, Barry Stemmet, said he has not been given details of what will come up at Thursday’s meeting.
”At this stage I cannot comment,” he said. ”I would want to see what the proposed agenda would be and give the other party the opportunity to put on the table whatever they want to discuss with us.”
Richards said the industry has ”been around for a number of years”, is competitive and focused on quality, and is respected around the world.
However, the volatility of the rand has pushed it into a short-term crisis and a ”quagmire of problems”.
In the longer term, if the inflation rate comes down, cost inputs will follow, but this will take time to work through the system.
”We need to find a way through the problem of the next year or two,” he said. ”That requires suppliers coming to the party [and] maybe some form of assistance.
”That’s what we’re at: short-term survival so we can readjust ourselves for the long term.”
He said the ”assistance” could be some form of government financial aid, and pointed to the European Union where there are compensation mechanisms for fruit that has to be dumped.
”These are all issues that the task team will be looking at,” he said.
Western Cape provincial minister of agriculture Johan Gelderblom met representatives of the association and farmers in Ashton on Monday.
He said in a statement on Wednesday that the stronger currency is putting the industry under ”tremendous pressure”.
”We view this situation in an extremely serious light, since the industry not only provides job opportunities to permanent workers, but also … for seasonal and casual workers [which] could be lost if solutions are not found.
”We need to implement and manage a process to limit the negative impact on the industries involved.”
He was also concerned about the impact it could have on social conditions in rural communities.
He said that at the Ashton meeting, a task team was formed to report back to his ministry by Friday with suggestions to help farmers.
The team is led by the head of his department, Dr Piet van Rooyen.
According to the department, two canning factories in Ashton alone pay R150-million a year in salaries and wages, and pay out R200-million to producers. — Sapa