In less than 24 hours from now, South Africans will head to the voting stations to elect a political party or parties to government. After elections, the party with most votes will, through its majority in the National Assembly, determine who becomes president. The same process will be followed by provincial legislatures in respect of premiers.
An IPSOS poll suggests that the governing African National Congress will likely win a majority vote and therefore Mr. Ramaphosa will be the next president. Since becoming head of state in early 2018, Mr Ramaphosa has stressed the importance of re-igniting economic growth and job creation. So, what should he do to boost South Africa’s agricultural economy in the near term?
The starting point will be to articulate a clear policy framework on land reform and water rights which will create the necessary policy certainty to encourage investment in the agricultural sector while ensuring restorative justice, and that the underutilized tracts of land across the country are brought into full production to boost growth and employment. This must then be complemented by trade agreements that open up new markets to sell these products.
We have a challenge of high unemployment in this country, 27% on the narrow definition and over 50% for youth. The unemployed are largely unskilled and semi-skilled, and some reside in provinces that have underutilized arable land – think of KwaZulu Natal, Eastern Cape, and parts of Limpopo where there are over a million hectares of such land – the immediate focus should be on a policy environment that boosts South Africa’s agricultural economy, and hence provide job opportunities through agriculture in these provinces.
I have been punting the issue of potential agricultural employment for a while, with some pushback from a couple of analysts who view this sector as a non-starter when it comes to job creation. In their arguments, they typically raise the issue of the Fourth Industrial Revolution and the basic development theory view which states that as nations develop, the relative role of agriculture, at least from a jobs perspective, diminishes as people move to manufacturing and services sectors.
A general observation on the data supports the view, as employment in agriculture has declined over time, from levels of 1.6 million in the 1960s to the aforementioned 849 000 people. This decline in employment was due to a combination of factors, which include farm consolidation, in conjunction with the adoption of advanced technology in mechanical and biological inputs. A combination of these factors has ensured that the country produces more output with relatively less labour.
But what is also clear from the data is that the decline in agricultural employment over the past couple of decades has not been evenly spread across all agricultural subsectors – and this is important. For example, the field crop and horticultural sub-sectors have actually seen an uptick in employment due to an expansion in the area planted, which was partly driven by the growing global demand for food and fibre. About two-thirds of South Africa’s agricultural jobs are now in the field crop and horticultural sub-sectors. This alone tells us that if we are to see an increase in agricultural employment, these sub-sectors will have to be a priority – a key area of focus for our next president.
This process will require investment (infrastructure and human capital) as well as strong and efficient institutions at a regional level to carry out the task. This will also need private sector participation for both impacting skills, and making an investment through joint venture approaches into farming, blended finance methods, amongst other programs.
Therefore, I believe that the agricultural economy continues to have significant potential in South Africa and the new administration would do well to make it a critical aspect of its strategy for sustainable economic growth and much-needed employment creation.
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