The estate sector

In order to consider the ways in which HIV/AIDS affects not only the small farm sector but also the commercial sector, studies were carried out on several estates in Zambia and in Tanzania. In particular, a detailed analysis was made of the Nakambala Sugar Estate (NSE) in Zambia. This forms the basis of the present chapter.

The aims of the study of NSE were to determine the present position on the estate vis a vis HIV and to make projections for the future; to assess the knowledge and attitude towards HIV/AIDS among NSE employees as well as the social implications of the disease; and to consider the present economic impact in terms of costs caused by HIV/AIDS in affected departments and make projections for the near future.

5.1 About the Nakambala Sugar Estate

The Zambia Sugar Company is the sole producer of sugar in the country. The head office is in Lusaka while all the sugar cane is grown at NSE. The Estate is situated near Mazabuka, in Southern

Province where good soil and climatic conditions exist for growing sugar-cane under irrigated conditions. Rains falling between mid November and March result in an effective cultivation season between April and October. The Estate has experienced several periods of expansion and now has a nominal capacity of 140 000 tonnes of sugar per year with some 10 000 hectares under cane cultivation. In addition, 1785 hectares of sugar cane is provided by the Kaleya Smallholders Scheme, where 140 smallholders manage 560 ha and the remainder is run as an estate. Two neighbouring farmers own 450 ha of sugar cane which they deliver to Nakambala for processing.

Employment structure on the Nakambala Estate
Some 22 000 people live at Nakambala Estate (Census 1993). It is estimated that a further 10 000 people, who live outside Nakambala, derive their livelihoods from the sugar estate.

The Nakambala Sugar Estate provides permanent employment to 3 250 people. Seasonal employees bring the total to 8 100 during certain periods of peak operation. Fourteen expatriates also work at NSE mainly in senior management positions.

The labour force is strongly male-dominated; women are overrepresented among the seasonal workers and underrepresented among the unionised employees. Altogether women make up about 12 percent of the workforce, and are mostly in low paid positions.

At present the company is not able to provide housing for all employees. but the aim is eventually to house all permanent employees. There are five townships on the estate and a senior staff housing area. Nakambala provides utilities and community services such as water, refuse collection, electricity and community halls. There are fifteen churches dotted around the estate. The estate employs two doctors and operates one main clinic and several subsidiary ones in the townships. The clinics are inevitably one of the most heavily used facilities provided on the Estate, frequently seeing 300 patients per day.

HIV/AIDS care and education at Nakambala Estate

Medical staff at the estate currently carry out HIV/AIDS education at the clinics and also conduct seminars on AIDS for a limited number of more senior employees. Condoms are distributed free of charge at the clinic on demand. Two officers with clinical experience in the running of the Chest and Skin/STD clinics had also lately recruited. Pre-employment testing is not practiced by Zambia Sugar Company. HIV/AIDS is treated as any other life threatening illness. Employees continue to work as long as they are able to do so. After retirement on medical grounds or death they or their families receive the same benefits as any other employee.

5.2 Socio-economic conditions

Women are in an especially vulnerable position to contract the AIDS virus. At Nakambala as in the rest of Zambia, women have an inferior economic and social status to men. The majority are economically dependent on men. Some women at NSE have the possibility to cultivate vegetable gardens and thus earn a small cash income, but others in other townships have limited possibilities to generate income. Economic dependence may also determine with whom a woman has sex. The women at NSE reported that the first reason to have sex with a "boyfriend" is money. Single women are especially at risk, but married women often have to use sexual relations to supplement their incomes because men at NSE do not always share their earnings with their families. This limits the ability which women have to control their sexuality and to protect themselves. In interviews women said that they cannot determine the terms under which they have sex, including whether a condom is used and whether their partner is sexually faithful. While infidelity is by no means exclusive to men, it is more acceptable for a man to have more than one regular partner. Therefore it happens that women who are infected are monogamous and have contracted HIV from their nonmonogamous partners

Migration is a factor which may often be associated with the spread of HIV. Although Nakambala Sugar Estate is a rural area, a lot of migration and movement takes place. People looking for work, such as cane cutters, are recruited seasonally from other parts of Zambia and many truck drivers pass Nakambala daily on their way along major communications routes. In any case, the tradition of labour migration which has become a pronounced feature of Zambian life in the last seventy years, with long separations and frequent breakdown in family patterns, contributed to a rise in prostitution and the incidence of STDs long before HIV appeared. Migrants who contract HIV may infect their spouses when returning home.

5.3 The incidence of HIV/AIDS on NSE

The Zambia Sugar Company has not yet developed a policy towards HIV/AIDS, but the management is very concerned about the development of the disease. However in view of the fact that the epidemic has spread rapidly in Zambia in the last decade, what was originally a more urban disease has now reached rural areas.

According to the medical records for 1991 and 1992, 75 percent of deaths in 1991 were attributed to HIV/AIDS as well as 70 percent of the medical retirements. In the medical report 1992/93 the causes of death are classified as tuberculosis/AIDS, gastroenteritis, pneumonia, malaria, malnutrition and others. In this classification only 45 % of deaths are attributed officially to TB/AIDS, but in reality it is suspected that many AIDS cases are hidden in other categories, such as "gastroenteritis" and "others". Therefore it is assumed that also in 1992193 probably as many as seventy-five percent of deaths were HIV/AIDS related.

As elsewhere, so also the Estate Sector, and as noted in Chapter 3, HIV/AIDS incidence has been age selective. Sixty-two percent of the deaths among company employees were in the age group 21 40 years in 1992-93. No employees died above the age of 50. This lends weight to the hypothesis that AIDS takes its toll from the younger age groups. The overall mortality rate among all company employees was 9 per I 000.

It was also observed that there was a marked decrease in AIDS-xrelated deaths between 1991 and 1992-93. While this may simply be attributable to the fact that the small numbers in total could be within the range of reporting and sample variation, another explanation is also possible. In Zambia the epidemic was initially more prevalent among the educated, well-off and mobile in urban areas. Most of these people are now relatively knowledgeable about the disease, thus they may well have adapted their behaviour accordingly. The basic knowledge about HIV/AIDS has only recently and or partially trickled down to the less educated or illiterate in remote areas. Most of those who die today were infected before 1987. It is possible that this particular group has already reached a peak of AIDS cases. In future, the death rate among staff may stagnate or decrease while the rate may increase among unionised and seasonal employees. But this is only a hypothesis which has not yet been confirmed by any research in Zambia. What is known is, that the gap between company professionals and the poor with regard to seroprevalence is narrowing fast.

In 1992-93 the mortality rate among staff and unionised company employees was 14.9 per 1 000 much higher than the rate among seasonal workers which stood at 3.9 per 1 000. The usual yearly rate of adult mortality in sub-Saharan Africa is about 5 per 1000. This does not necessarily mean that seasonal workers are less affected by HIV. One of the reasons for the difference between the groups could be that the seasonal workers are characterized by a high turnover rate and that they are hired every year anew. It is less likely that a very sick person will apply given that most of the seasonal jobs are physically very demanding. The company does not monitor the deaths of seasonal workers who have stopped working for the company, therefore many cases of AIDS in this occupational group will go undetected.

From January 1993 until September 1993, 16 employees were given early retirement on medical grounds due to HIV-related symptoms. Projections for the future indicate that the number of AIDS deaths and medical releases due to HIV/AIDS could increase by 70 percent from 1992-93 to 1995-96'. Even after 1996, the number of people with AIDS will certainly increase, but the longer these data are projected into the future, the more imprecise any forecasts become. The annual adult mortality rate due to the epidemic could rise to 28.2 per 1 000 for permanent staff members.

5.4 HIV/AIDS-related morbidity and absenteeism at NSE

Morbidity due to AIDS has a strong impact on a company like the Zambia Sugar Company. Once an individual develops AIDS, the average survival time appears to be between six months and two years. In cases of prolonged illness, the salaries of the permanent employees are paid for the obligatory three months, after which a further three months are paid at a reduced level. As shown in Table 5, the person-hours lost due to tuberculosis/AIDS account for 50 percent of cases. If gastroenteritis is added to this total, because it is often associated with HIV, the figure rises to 60 percent. Experience at NSE indicates that AIDS patients are variously in and out of their work places for one year. When they return to work they often cannot perform their duties as well as before. On average a person with tuberculosis is absent from work for 60 days a year.

Table 5: Person-hours lost due to major illnesses in 1990, 1991 and 1992 at NSE
Disease Year
1990 1991 1992
Malaria 36,024 25,268 20,060
Accidents & Injuries 28,232 17,224 12,346
Gastroenteritis 12,576 10,792 12,176
TB/AIDS 102,591 71,507 61,713
TOTAL 179,423 124,691 107,295
Total all diseases 266,752 162,584 122,567

Source: Medical Department, Zambia Sugar Company

Since 1990 there has been a continuing decline in the incidence of major illnesses affecting the employees on the estate. There could be different reasons for this decline. One, the health status of the employees may have improved due to better medical care and an improved sanitary infrastructure. Two, it is also possible that the criteria used for including employees on the sick-list have become stricter. Any absence from work is recorded officially under the following categories: paid leave, unpaid leave, sickness and absenteeism. Healthy employees are absent from their workplace for various reasons, which could be HIV-related such as caring for sick relatives. Furthermore, employees can leave the workplace for some hours at the discretion of their supervisor for special occasions such as funerals, medical reasons and other urgent matters. Thus, different types of absence can be influenced by HIV/AIDS but the quantity is difficult to estimate.

The overall rate of work due to illness was about two percent. This is a very low figure and even lower than in industrialized countries. By contrast, among nurses in a University Teaching Hospital in Lusaka, the rate of sickness is usually assumed at 8 percent, while the absenteeism rate is 16 percent. In England, the sickness-absence rate was 4.7 percent in 1989-90 (Foster, 1993). As stated above, 50 to 60 percent of recorded sickness cases can be attributed to HIV/AIDS.

In studying the records for NSE, it appears that as recorded by the company, funerals have become a major reason for employee absences from work. There is a strong social obligation to attend the funerals of near and distant relatives, friends and neighbours. Compassionate leave has been abolished for unionised employees in order to harmonize the working conditions with staff and unionised labourers. Thus employees must use their annual leave if they have to attend a funeral, which takes place some distance away. There its anecdotal evidence that some employees spend all their annual leave attending funerals and even have to take additional unpaid leave to meet their social obligations in this respect. In the case of the death of a company employee, at least 80 colleagues attend the burial and some are occupied with the preparations for several days.

The increasing incidence of Tuberculosis

Tuberculosis is increasing at NSE and Pulmonary Tuberculosis is part of the clinical case definition of AIDS. Tuberculosis is especially serious for the company because patients are absent from work for a minimum of 60 days. In 1991, for example, 73 cases of tuberculosis were registered as compared with 106 cases in 1992 and 141 in 1993. It should be noted, however, that this rise can also be partly attributed to better diagnostic facilities. By far the largest number of cases were reported in the age group 25-34, some 52 percent of cases, and compared to 27.8 percent and 11.3 percent for the age groups 35-44 and 45-54, respectively. The clinical staff do not know who among these patients is HIV-positive, because they do not have any HIV testing facilities. Patients presenting HIV-associated chest problems end up receiving treatment for suspected tuberculosis when they fail to respond to the usual antibiotics. This means that half of the patients are not treated appropriately due to the lack of testing facilities. However, currently available national data suggest that between 70 and 80 percent of tuberculosis patients are HIV positive. Although drugs against tuberculosis are distributed without cost at the NSE clinic, treatment for one patient costs US$ 175. Therefore the medical staff strongly expressed the need for HIV test kits.

Malnutrition

Malnutrition continued to be a problem; from July 1992 to March 1993, 19 children died of malnutrition at NSE. After pneumonia, it was the second highest cause of death among children. Malnutrition is considered more of a social than a medical problem. Social workers support women with malnourished children with High-Energy-Protein (HEPS) food. Presently they care for 68 severe and 194 non- severe malnourished children.

The social workers observe that a lot of malnourished children do not respond to HEPS, even after 4 weeks. Considering the high incidence of HIV at NSE it can be assumed that a number of these children are children of HIV positive mothers and themselves positive. Despite the efforts to combat malnutrition, these cases are likely to increase in the near future due to the epidemic.

5.5 The spread of HIV/AIDS infection at NSE

Polygamy is quite widespread in Zambia and is practiced by people living and working on Nakambala Estate. In addition, in a number of interviews, respondents reported high frequencies of change of sexual partners and multiple sexual partners. According to the Medical Department, the level of sexually transmitted diseases (STD) is high among the population of NSE. STDs are associated with the same behaviour that exposes individuals to potential HIV infection and greatly facilitates both the acquisition and transmission of the AIDS virus.

Some culturally enjoined sexual practices, in particular the tradition of "sexual cleansing" associated with the levirate may further contribute to the spread of HIV at NSE. But these traditions are starting to change. Group discussions with women in the townships showed that a lot of women would not agree any more to be sexually cleansed after the death of their husbands because of the existence of AIDS. Accordingly, other methods of cleansing, which do not involve sexual intercourse, are becoming more common.

5.6 Knowledge of HIV/AIDS at NSE

The level of knowledge among the population at NSE varies considerably. Everybody, who was interviewed at Nakambala had heard about HIV/AIDS, although people are differently informed. Generally men know more than women, because they have better access to information. One woman from a township asked: "Everybody speaks about AIDS, but what is it?". Women have heard about condoms, but some have never seen one. A survey which was conducted by the Medical Department at NSE on the subject of health issues showed the incomplete knowledge which respondents have about HIV/AIDS. Two hundred and sixty employees of different departments filled out questionnaires. Nearly all knew about HIV and that it is sexually transmitted. But 42 percent did not know that HIV also can be contracted through blood transfusion. The higher the level of education the greater was the understanding of the disease and the way it is transmitted.

Another finding of the survey was that willingness to use condoms is low. It should be a matter of concern that only 32 percent of the employees stated that they have ever used condoms, especially given that a lot of men are reputed to have extramarital affairs.

Witchcraft is still very strong in Zambia and is often given as the cause for sickness and death instead of AIDS. People indicated in interviews that they have a contradictory attitude towards witchcraft and AIDS. Some reported that they can identify a person with AIDS, but if a member of their own family or they themselves are concerned, they say it is witchcraft. AIDS cases which are attributed to witchcraft have already caused problems at NSE. The AIDS afflicted, or the relatives of people who have died of AIDS have reputedly accused colleagues of bewitching them for various reasons. This is a harmful phenomenon in any work environment, but it is even more so in one where places of work and residence are the same.

5.7 The social impact of HIV/AIDS at NSE

Although the company has to deal with the serious impact of the epidemic, HIV/AIDS-affected households carry the major burden.

These households have to care for the sick and face increasing medical expenses. They lose the income and entitlement to housing after six months after the employee's death. Seasonal labourers are in an even more vulnerable position than permanent employees, because they do not receive the full range of benefits. Although the estate is not concerned, because HIV-affected families leave the estate, the number of orphans in the villages around Nakambala is growing, with all the additional pressures that this places on relatives and the community at large.

5.8 The economic impact of HIV/AIDS.

5.8.1 Production loss
5.8.2 Costs caused by HIV/AIDS
5.8.3 Summary of the costs
5.8.4 Projections of the economic impact for the near future

The economic impact of HIV/AIDS is basically felt as a result of two factors; in the loss of production and by increasing costs.

5.8.1 Production loss

The production of sugar cane and sugar has increased continuously since the creation of NSE. In 1992/93, the sale of sugar reached its peak since the founding of NSE. It can be concluded that AIDS has not so far had a serious impact on production. The question arises however, how high can the number of AIDS cases rise without affecting production? What is the threshold?

In order to answer these questions, it is necessary to identify the most important and therefore vulnerable phase of the labour process of cane cultivating, harvesting, processing and selling, plus the support services to ensure smooth integration of these processes. According to senior management, the post of a farm officer is quite crucial for the development of the cane. Each farm officer is in charge of 200 ha of cane. Production levels depend very much on timely farming operations. Although some of the farm officers had developed AIDS in recent years, their absence was compensated for, and thus no serious impact on the cane yield occurred.

Table 6: Cost statement for the Nakambala Estate 1992-93
Description Labour Materials Total
(US $) % total (US $) % total
Agricultural costs 3143465 33.5 6229841 66.5 9373306
Cane purchase 0 0 6350007 100.0 6350007
Factory cost 932378 20.4 3636946 79.6 4569324
Business Dept. 151985 38.7 238262 61.3 390346
Purchase &Supplies 137556 50.4 134554 49.6 272110
Personnel Dept. 2111724 77.6 608481 22.4 2720206
Medical & Public Health 138091 49.5 140970 50.5 279061
Estate Services 321334 46.6 365642 53.4 686876
Total Dept. Costs 6936532 28.1 17704603 71.9 24641136
Depreciation 0 0 1252787 100.0 1252787
Insurance 0 0 364981 100.0 364981
Forward Crop
Adjustment 0 0 (3736835) 100.0 (3736835)
Total Op. Costs 6936532 30.8 15585537 69.2 22522069
Refinery Cost 40370 40.8 57649 59.2 98018
Packing Cost 469107 20.3 1.840682 79.7 2309789
Total Nakambala
Cost 7446008 29.8 17483867 70.2 24929875

Source: Business Department, Zambia Sugar Company

Overtime working is common at NSE to compensate for absences from the workplace. In some sections of the factory, overtime is not exceptional. Indeed employee complaints suggested that it appears to be all too common. According to interviews with management, the quality of work suffers under these circumstances. Unfortunately, it is not possible to quantify this possibly important factor.

5.8.2 Costs caused by HIV/AIDS

Material costs make up the major part of the costs while those caused by HIV/AIDS are mostly labour-related.

- Absenteeism and sickness

About 50 percent of the absenteeism at the company is due to sickness of which 2 percent can be attributed to HIV/AIDS. It is also assumed that one percent of the labour force is lost by leaving the workplace for some hours a day to attend burials, to go to the clinic and to attend to various other exigencies of daily life.

- Additional employment of expatriates

Zambia Sugar Company trains and promotes highly qualified Zambians to gradually replace expatriates. However, this process is now in danger due to the epidemic. In 1992-93, for example, one senior Zambian manager was supposed to substitute an expatriate. This person died of AIDS and the contract of the expatriate engineer had to be extended because there was no other Zambian who could have filled this position quickly. This is costing the company about US$ 60,000 per year.

- Medical care

It is difficult to assess how much of the medical budget goes towards caring for HIV/AlDS patients. According to the causes of sickness, 50 percent were HIV and AIDS related. Therefore it is assumed that 50 percent of the drugs are used for AIDS patients. Staff costs consume the major part of the medical budget. It is worth noting that the drugs for the treatment of tuberculosis, which are very costly, are presently free of charge. Otherwise, the cost of drugs for a single tuberculosis patient (September 1993) would have been US$ 175. In 1993, 141 tuberculosis patients were treated; it can be assumed that 80 percent of these were HIV positive. This means that a further US$19 740 in drug costs may be assumed, but the company does not have to pay for this. The company provides staff and, if necessary, the transport of the patients to the clinic.

The drug costs (without TB) for a single AIDS patient at NSE's clinic ranged between US$ 44 and US$ 83, which is comparatively low. Most of the opportunistic infections associated with HIV can be treated with cheap drugs during the early stages of the disease. Furthermore, it is estimated that 30 percent of the remaining medical budget is attributed to HIV/AIDS. Out of that, staff costs account for the major part. It is debateable whether without the epidemic the budget for the medical department would be lower. Instead it is likely that the medical service would have been improved. On the other hand, as noted above two clinical officers have recently been recruited both in relation to HIV/AIDS. Without the epidemic the recruitment of these officers would not have been so urgent.

- Funerals

When a death occurs on the estate, the company's employees and their dependents are entitled to a coffin, firewood, foodstuffs and transport to the burial site. In 1992/93, there were 232 deaths among company employees and their dependents. The number of deaths has risen to such an extent, that the vehicle, which was assigned to transport the coffin, is no longer sufficient and the department has recently applied recently for a second vehicle.

As noted above, 75 percent of deaths at NSE can be attributed to HIV/AIDS. It is not known how many dependent adults and children have died of AIDS. But, according to medical statistics AIDS cases among dependents were lower. It can be estimated that at least 60 percent of the budget for funerals may be counted as costs generated as a result of AIDS.

- Medical retirement

In cases of medical retirement, an employee is entitled to a grant which is dependent on his or her salary and according to the amount of time the person has worked in the company. In cases of death the family are the beneficiaries. In 1992-93, it appears that four staff members died due to HIV/AIDS and two retired under the early retirement package. Among unionised employees, 36 died and 22 retired on medical grounds due to HIV/AIDS. It can be argued that these are not additional costs because employees go on retirement anyway and this entitlement depends on the time served. But in 199293, these costs have been generated by HIV/AIDS, which would not have otherwise occurred and furthermore their effective working life and the availability of their experience to their employer was truncated by the disease.

- Repatriation

In cases of medical retirement, the staff members and unionised workers are entitled to be repatriated. In case of death, the family of the deceased is taken back to their home areas. Transport costs take by far the major part of the repatriation allocation. There is a common budget for repatriation and recruitment. In general, recruitment is cheaper than repatriation. It is estimated that about 30 percent of the budget for staff and unionised employees can be costs attributed to repatriation due to AIDS-related death or retirement.

- Training

Nakambala is the only sugar estate in Zambia and ZSC has to invest substantially in training given the specialized nature of the work. This applies especially to cane growing activities, but also to areas in the factory. Once a highly skilled person is lost, he or she cannot be simply replaced from the Zambian labour market, because an already trained successor cannot be found. Added to this, ZSC competes on the Zambian, and increasingly on the Southern African, labour market with the mining industry for a limited number of engineers. The training process can take as much as two years during which the trainees are often sent abroad on special, and costly courses.

5.8.3 Summary of the costs

Table 7 shows that the largest portion of costs are associated with sickness. Nearly 50 percent of these expenses arise from the benefits which the company offers its employees. Companies in Uganda noted that morbidity has a higher impact than mortality (Pangs, 1992). At Nakambala, the costs of sickness (lost working days plus medical expenses) are about as high as the costs in the case of death.

In 1992-93, costs attributable to HIV/AIDS represented 1.9 percent of the total costs of Nakambala Estate. This appears to be quite low. Sales for 1992-93 for ZSC as a whole were about US$ 50.0 million. Even if US$ 2.2 million in head office costs are added to the Nakambala costs, the profit margin remains wide enough to cover the additional expenses arising from HIV/AIDS. The costs caused by HIV/AIDS make up about 2 percent of the profit.

Table 7: Costs generated by HIV/AIDS at Nakambala in 1992/93
Description Costs (US$) Costs (%)
Lost workforce 148, 920 31.8
Extension of expatriate
contracts 60,000 12.7
Medical Department 70,124 14.7
Funerals 24,314 5.1
Pension for deaths +medical retirements 75,184 15.9
Repatriation 59,448 12.5
Training 35,208 7.3
Total 473,198 100.0

Source: Haslwimmer, 1994

The following table provides an estimate of how the costs could be allocated between labour and materials.

Out of the total labour costs, 4.7 percent are due to HIV/AIDS, while only 0.7 percent of the total material costs can be attributed to the disease. This lends weight to the hypothesis that AIDS is predominantly a burden for the labour budget.

Table 8: Costs resulting from HIV/AIDS divided between labour and materials
Description Labour Materials
(%) (US $) (%) (US $)
Lost workforce 100 148920 0 0
Extension of
expatriates 100 60000 0 0
Medical
Department 50 35062 50 35062
Funerals 10 2431 90 21883
Pension for death+ medical
retirement 100 75184 0 0
Repatriation 20 11890 80 47558
Training 40 14083 60 21124
Total 73.5 347570 26.5 125627

Source. Haslwimmer, 1994