A year ago—eight years after retired nurse, Jamela Mogodi, started farming—the only satisfaction she was getting from all the effort she was putting into her 28-hectare farm was growing her own food. Every now and again, there was a little entrepreneurial excitement as she sold her tiny surplus at the nearby market for pocket change.
To take her green beans, butternuts, green peppers, dry beans and tomatoes beyond her remote Julesburg town was a wish the 70-year-old thought would perhaps come, for someone else in her family, long after she was dead. She had never imagined that on a fine August morning in 2012, she would be the toast of one of the world’s biggest retailers.
And there she was, before a few dozen journalists who had traveled 427 kilometers from Johannesburg, to her Limpopo growing fields. Walmart, the retail giant from the States, had bussed-in the scribes to witness what it called the first harvest of a multi-million dollar farming-assistance flagship project, called the Ezemvelo Direct Farm Program.
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Established last year through an initial investment of R15 million ($1.8 million), it is Walmart’s idea of fending off or disproving its critics who have vowed to oppose the company’s entry into the lucrative South African market. By the way, two of Africa’s richest 25 people—billionaire Christo Wiese and multi-millionaire Raymond Ackerman—made most of their money from supermarket chains and discount stores. Their South African retail empires Shoprite and Pick ‘n Pay—rank one and two respectively in terms of size, while Walmart’s partner, Massmart—the parent company of Game, Dion Wired, Makro and Builders Warehouse—is the third largest.
Despite the fact that it is a done deal and already growing vegetables in Limpopo, the Congress of South African Trade Unions (Cosatu) has vowed to oppose Walmart’s Massmart takeover, until the bitter end. In submissions to the country’s Competition Commission, Parliament and the courts, the union federation cites a litany of allegations: a so-called anti-union attitude; a ruthless approach to keeping down wages; a poor health and safety record; gender, racial and other forms of discrimination; job losses; and the alleged bullying of farmers, manufacturers and suppliers.
Walmart was of course quick to counter the accusations, announcing a five-year world vision and global commitment to selling $1 billion in food sourced from 1 million small to medium farmers like that of Mogodi of Limpopo. The merger has since been approved.
In South Africa alone, through Ezemvelo—which means from the earth—the company has said it intends to spend R15 million ($1.8 million) over the next three years and to assist between 30 and 50 smallholder farmers with finance, pack-house refurbishment, skills development as well as sourcing fresh produce directly from small farms and cooperatives run by women and previously disadvantaged black people. Benefits to farmers include: the transfer of knowledge and skills on sustainable growing techniques; reduction of waste, environmental impact and input costs; as well as growing their income. You could argue that this is the kind of thing that governments normally do.
The most senior Walmart official during the tour of Limpopo was Donald Frieson, who goes by the title of chief integration officer. He says he’s been in South Africa for more than a year overseeing “the integration process”—which he says entails aligning Massmart’s merchandizing, sourcing and back office systems with those of the new parent company.
It’s all been working quite nicely, he says.
“The foundational phase is done and the focus is now on the pulling phase.”
Apparently this entails bringing on board some of the best practices found in countries similar to South Africa.
What about the unions?
“We don’t find that to be a barrier, we have no issues at all,” he says.
Frieson says the talk is largely due to misconceptions.
“When you are big there’s plenty of room for speculation. You may not be founded in that community, but you can be part of that community. We think globally, but act locally. Once we are in the market, people begin to understand the value we bring. The business case is there. We make economies and societies better.”
As for the big fight with Walmart, that Pick ‘n Pay founder Ackerman promised in the July issue of FORBES AFRICA, all Frieson is prepared to say is: “We think competition helps the customer. Everyone wins. The marketplace wins. Competition makes you better.”
Whatever the attitudes of other retailers and of organized labor, if that of senior politicians is anything to go by, African National Congress ministers seem prepared to kiss Walmart and spit at their union allies.
Insisting on saying something at the end of the one-day tour—there were no unionists around—agriculture, forestry and fisheries minister Tina Joemat-Pettersson declared that “the marriage is working”, and called the journalists witnesses in church.
She and her Cabinet colleagues, among them the ministers of finance and of trade and industry, are awaiting the outcome of a study to be conducted by, among others, Nobel laureate and former World Bank chief economist Professor Joseph Stiglitz. This follows a March judgement of the Competition Appeal Court, that such a study be commissioned but only to “determine the most appropriate means together with the mechanism by which local South African suppliers may be empowered to respond to the challenges posed by Walmart’s arrival.
Very little, it would seem, is now going to stand in the way. The Cabinet ministers’ last statement on the matter read in part: “The ministers believe that Professor Stiglitz will add depth and global know-how to the work of the panel and can assist the parties to identify an appropriate and constructive remedy to the potential negative public interest effects identified by the Competition Appeal Court.”
This means that Mogodi will realize her wish sooner, rather than later—she wants to run her farm independently within a year, but not before she raises enough money to fence it to keep animals and trespassers at bay and throw away those broom bushes that presently define the boundaries.

Tag: green peppers

FORBES AFRICA SOCIAL MEDIA

Walmart Tries To Be Down To Earth