Industrial relations in agriculture examined

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Agriculture remains an important part of the Dutch economy, accounting for around 10% of GDP . The sector is currently undergoing major changes in terms of production, markets and technology, with important implications for employment. This article examines industrial relations in agriculture, looking at the social partners, the unique system of bipartite 'commodity boards', collective bargaining and the key issues of casual labour and health and safety.

Despite the Netherlands being a highly industrialised country, agriculture still forms an important part of the economy. At present, the Netherlands is the third-largest exporter of agricultural products and foodstuffs in the world. While the relative share of agriculture in exports has fallen in recent years, the trade surplus for agricultural products is still growing, thanks primarily to the export of horticultural products. According to data from the Ministry of Agriculture, Nature Management and Fisheries, the agriculture sector is responsible for some 10% of GDP (EUR 35 billion), and around 20% of the total value of exports from the Netherlands is in agricultural trade. According to the Central Statistical Office (Centraal Bureau voor de Statistiek, CBS), 9% of all jobs in the Netherlands were in the 'agro-food' sector in 2001.

Changes in agriculture - such as new technologies, changes in international conditions of trade, and changes in the perceptions and demands of the population with regard to the environment, nature, landscape and animal welfare - have resulted in economies of scale and specialisation in the primary agriculture sector (ie production) in particular, as a result of which the number of companies fell dramatically by 25% between 1990 and 2001. Employment levels fell during this period by 5%, though the number of female employees in the primary sector rose by 5%. Despite the increases in scale, the vast majority of businesses in the sector still have only a few or even no employees.

Businesses in the agro-food processing and supply sector include companies which can be deemed world market leaders. Traditional farmers’ cooperatives also operate alongside these multinationals in the processing industry. Many of the developments in the agriculture sector, including those in the area of industrial relations, should be viewed in the context of the nature of the highly integrated 'agricultural chains' and the development within these from supply-driven production to market-driven production (a 'reversal of the chain'). This article focuses on two 'subchains'- horticulture and meat production.

Industrial relations in agriculture

Many of the businesses in the primary agriculture sector are small and operate using many family members (although their number is dwindling) and either no employees or only a few. The number of employees is therefore relatively small. In the processing industry, a distinction can be made between the traditional cooperative companies owned by farmers, which operate largely at national level, and - for the past few decades - private sector companies which are often part of large multinational conglomerates and which therefore operate internationally. By far the largest proportion of agro-food jobs is in the processing industry.

The cooperatives operate across the entire chain, in other words from production to distribution, and the farmers/suppliers have a great deal of influence on policy. Although companies are being managed more professionally than they were in the past, this management from the production side is still noticeable. Cooperatives are geared primarily towards processing the goods the farmer-owners produce and less towards the market. Due to the often complicated control structures and the high level of focus on the basic interests of the farmers, the businesses are less manoeuvrable in the marketplace. In industrial relations, this is reflected in a 'battle between farmhands and bosses'. Although this polarity is not as strong as it used to be, the contrast between farmers on the one hand and employees in the processing industry on the other still regularly rears its head. Farmers get involved in collective bargaining conflicts, for example, as was the case in the summer of 2002 in the dairy industry, when angry farmers threatened striking dairy workers. Traditional industrial relations are also expressed in the nature of the subjects included in collective agreements. These are often basic matters such as job evaluation systems and pension provisions.

In contrast with the cooperatives, the private multinational companies in the agro-food processing industry are more market-oriented. Industrial relations are often subject to international and/or European influences, and the companies usually have a European Works Council and often a framework collective agreement, with the details established local level.

Social partners' structure

In the primary agriculture sector, the employers are represented by the Netherlands Agriculture and Horticulture Organisation (Land- en Tuinbouworganisatie Nederland, LTO), which maintains close contacts with the two other major employers' organisations - the Confederation of Netherlands Industry and Employers (Vereniging Nederlandse Ondernemers-Nederlands Christelijk Werkgeversverbond, VNO-NCW) and the Dutch Federation of Small and Medium-sized Enterprises (Midden- en KleinBedrijf-Nederland, MKB-Nederland) - and is a member of various government advisory bodies, such as the Social and Economic Council (Sociaal Economische Raad) and the Labour Foundation (Stichting van de Arbeid). In the rest of the agro-food chain, relevant member organisations of the main employers' associations are active, alongside some smaller business organisations which focus on specific areas. On the employee side, workers are represented by member unions of the main federations.

In addition to the social partners, there is another player with an important role in the agriculture sector in the area of industrial relations - the 'commodity boards' (productschappen).

Commodity boards are public bodies, established by the SER at the initiative of the sector concerned, the task of which is 'to promote business operations by the businesses for which it has been established which serve the general interest, and to represent in general the collective interests of the businesses and the persons involved' (article 71 of the Industrial Organisation Act [Wet op de bedrijfsorganisatie] 1950). They bring together businesses which work with the same product, from raw material to end product (ie vertical organisation of the production chain). Apart from the commodity boards, there are also industry boards (bedrijfschappen) that organise businesses which have the same function in the economic sphere, such as retail or catering businesses (ie horizontal organisation). The boards of control of these boards are made up of equal numbers of representatives of employers' organisations and of trade unions.

Commodity boards may be established in all sectors, but the majority of them are still in the agriculture sector. This may have something to do with their task of implementing legislation. Agriculture in particular has to deal with a huge amount of EU Directives and Regulations. Thanks to their specific expertise, commodity boards (and other industry boards) are not only involved in the preparation of EU legislation, but also in converting it into national regulations and the implementation of these regulations in their sector.

The commodity boards in the agriculture sector have increasingly been gaining prominence as the place where the collective interests of the sector are represented. The boards are also focusing increasingly on social policy with regard to employees in the sector, rather than simply the economic interests of employers. It is worth noting that it is often not the social partners as such which take the initiative in the area of employment conditions in the agriculture sector, but the commodity boards - not just by means of research or policy, but even to extent of realising collective agreements.

This prominent role for the commodity boards may be explained by their financial position. The commodity boards can impose levies by decree on the businesses for which they were established (under article 126 of the Industrial Organisation Act). The boards are characterised by their obligatory nature. All the businesses involved are covered by the appropriate board, and must comply with the rules of that board. This also applies to levies. This makes it impossible for a business to obtain a 'free ride'.

In order to understand the important position of commodity boards in employment conditions policy and consultations in the agriculture sector, however, the nature of the relationships between the social partners should be examined. These have traditionally been regarded as fairly defensive and confrontational. The commodity boards have provided a platform on which discussions on industrial relations matters can be conducted in a more detached manner, with cooperation by the employee side of the commodity boards with economic policy often being used as a 'bargaining chip' against the social policy of the boards.

The boards are a typically Dutch phenomenon, which fit into the 'polder model' of consultation. There are organisations in other countries with similar responsibilities to those of the boards, but these are usually agencies of the state, as in France, or bodies set up by business organisations, as in Germany. A bipartite structure such as that in the Netherlands occurs almost nowhere else.

Collective agreements and other matters

As there is relatively little systematic information available, it is not possible to provide a concrete picture of industrial relations across the agriculture sector. It is possible, nevertheless, to sketch a global picture. The content and nature of collective agreements is discussed below, along with regulations on casual labour and the issue of working conditions.

Collective agreements

The subjects of flexibility and job evaluation as the basis of the wage structure have an important place in the collective agreements in non-primary agro-food sectors. There is less attention paid in the collective agreements to training, despite the fact that an increasing demand for training is certainly an issue in the sector. The treatment of these subjects has changed in nature in recent years as the sector has operated in an increasingly market-oriented fashion. The 'reversal of the chain' (ie from supply-driven to market-driven production) and the accompanying increased focus on quality rather than quantity has resulted in other requirements in terms of the qualities of employees (job content and education/training), but also in other forms of flexibility. Job evaluation systems have been developed both in horticulture and in the meat sector. Training mainly takes the form of on-the-job training, and most businesses do not yet have a systematic policy in this area. With regard to training, it is seen as important that developments in the area of computerisation, implemented partly in the context of improving quality (with less dependence on human work and therefore a greater guarantee of constant product quality) are included in the policy.

Regulation of casual labour

Work in the 'chains' of the various agricultural sectors is by definition seasonal and is often accompanied by - sometimes unpredictable - peaks. A great deal of the work has traditionally been seasonal, and other forms of temporary work, including agency work, are also often used for dealing with the peaks. Recent figures from the horticulture sector commodity board (Productschap Tuinbouw) provide an indication of the scale of this phenomenon (Arbeidsmarktmonitor Tuinbouw[Horticulture labour market monitor], 2002). Approximately one in three employees in the primary part of the sector has a temporary contract, and one in seven in the non-primary part. Various forms of illegal or semi-legal work occur frequently, and illegal work forms a large problem in the agriculture and horticulture sectors, as well as in the meat-processing industry.

The Minister of Social Affairs and Employment, Willem Vermeend, tightened up controls on illegal work at the start of 2002. A seasonal work project was started in cooperation with the Ministry of Agriculture, LTO Nederland and the Centre for Work and Income (Centrum voor Werk en Inkomen, CWI). The project supports market gardeners in their recruitment of seasonal staff and is also targeted at ending illegal work by means of a certification system for businesses which abide by the rules. These businesses are inspected twice a year and, if they meet all the requirements, are included in the Agricultural Casual Work Register (Register Inleenarbeid Agrarisch, RIA), an initiative of LTO Nederland. The latter has a considerable interest in working with businesses which employ only legal employees, in view of the fact that businesses can get into serious financial problems if the tax authorities later come to collect unpaid contributions and taxes. Employers also run the risk of a fine imposed by the Labour Inspectorate (Arbeidsinspectie), as this option is now included in the Aliens Labour Act (Wet arbeid vreemdelingen, WAV). This risk has increased since Minister Vermeend has considerably expanded enforcement activities regarding illegal work, initially in the horticulture sector, and then in the meat processing sector, among others.

Apart from the accreditation scheme set up by LTO Nederland and the increased enforcement activities of the Labour Inspectorate, attention has also been paid to casual labour in a collective bargaining context. This subject has been put on the agenda by the trade unions, which want to combat misunderstandings in the area of illegal work and are apprehensive of the effect on the labour market. The intention is to bring casual work under sector-wide collective agreements and to promote compliance by developing an enforcement instrument at a sector level.

Health and safety

Working in agriculture is physically demanding. Much of the work is performed standing up, and there is a lot of lifting, static loads and repetitive movements. The risk of suffering repetitive strain injury (RSI) is therefore very high. A health and safety profile for the abattoir and meat-processing industry, drawn up at the instructions of the Labour Inspectorate, mentions an increased risk of RSI (including neck, shoulder, arm, elbow, wrist or hand problems) for almost one in three people employed in the meat sector (Arborisico’s in de branche Slachterijen en vleesverwerkende industrie[Health and safety risks in the abattoir and meat-processing industry], TNO Arbeid, Labour Inspectorate, 2003). RSI is thus the cause of almost 50% of sickness absence and new sickness benefit claims in the sector. Additionally, pressure of work and the accompanying stress is a risk factor, as the sector is subject to peaks and troughs. Exposure to hazardous materials, noise and low temperatures are the other main risks. There is also an above-average risk of accidents, which in the primary sector often involve tractors and agricultural machinery. Levels of sickness absence are therefore above average, both in the primary and non-primary sectors, as is the unemployment rate.

In addition to the evident health risks for employees, the agriculture sector’s poor image in terms of working conditions, and the problems this causes in the area of employment, forms another motive for preventive policy. The subject of working conditions also plays a role in the context of continuing computerisation: while the positive aspect is that it often makes the work lighter, one negative aspect is that the work can become more monotonous and repetitive.

Health and safety 'covenants' are now being entered into in various agro-food sectors. The agriculture sector health and safety covenant (Agro en Arbo werkt beter, 2002), entered into by the government, employers and employees, focuses on reducing the physical and mental load. It is a declaration of intent which relates to more than 250,000 people working in the agriculture sectors. A covenant was signed in 2002 in the meat processing industry by the government, social partners and the Cattle, Meat and Egg Commodity Boards (Productschappen Vee, Vlees en Eieren) to reduce sickness absence and new sickness benefit claims resulting from RSI and other shoulder, back and arm problems. A health and safety covenant has also been entered into in the flour processing industry, by the social partners, government and - as initiator and 'knowledge provider'- the Grain, Seeds and Pulses Commodity Board (Productschap Granen, Zaden en Peulvruchten), in order to reduce exposure to endotoxin (flour dust) which can cause asthma.

Commentary

The fundamental reforms implemented in agriculture during recent years make it necessary - more than has been the case in the past - to anticipate the consequences these will have for the workforce. Implementing a proactive employment conditions policy is of the utmost importance - not only for the employees themselves, in the context of a range of matters (from job security to changes in the content of the work, job evaluation and training, and protection of health and safety), but also for employers, whose quality policies are to a large extent dependent on the quality and stability of their staff.

The existence of an indirect consultation platform for the social partners in the form of the bipartite commodity boards, and the fact that the resources available to them enable them to carry out research and develop policy, would seem to have only positive aspects in the context of bringing about a more anticipatory employment conditions policy. (Marian Schaapman, HSI)

Other references

Arbeidsverhoudingen in de de Europese varkensvleesindustrie en vleeswarenindustrie. Een onderzoek van Food World in opdracht van de Productschappen Vee, Vlees en Eieren[Labour relations in the European pork industry and cold meats industry. A study by Food World commissioned by the Cattle, Meat and Egg Commodity Boards], A ven de Kasteele and P Elshof, Cattle, Meat and Egg Commodity Boards, report 0208, 2002.

Sectorprofiel Vlees 2001 met zicht op 2001[Sector profile 2001: Meat, looking at 2001], Cattle, Meat and Egg Commodity Boards, 2001.

Arborisico’s in de branche Voedings- en genotmiddelenindustrie.[Health and safety risks in the food, tobacco and alcohol industry], TNO Arbeid, Labour Inspectorate, 2000.

Arborisico’s in de branche Landbouw[Health and safety risks in the agriculture industry], TNO Arbeid, Labour Inspectorate, 2001.

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