It is well understood within South African agricultural circles that inclusive expansion in production in the coming years needs to prioritize labour-intensive and globally sought-after products. Pursuing this goal requires effort, but not much in the way of new ingenuity as the country is already on this trajectory. It is quite encouraging to note that about two-thirds of the 880 000 primary agricultural jobs in the third quarter of 2019 were in horticulture and field crops, which are labour-intensive agricultural sub-sectors.
What’s more, the top value agricultural exports over the past five years were also within the horticulture and field crop subsectors. These were namely; citrus, wine, table grapes, apples and pears, maize, wool, nuts, sugar, fruit juices and animal feed products. These products accounted for a 52% share of the average US$9.5 billion worth of agricultural exports in the period between 2014 and 2018.
Some may ask if there has been growth in the exports of these products at least over the past five years or they have stagnated, which warrants a shift in focus? Aside from wine, apple and pear exports, most products registered a notable uptick in export revenues over the past five years. But the contraction in wine, apple and pear export values over the observed period has not been caused by softer global demand. Rather, it is because of lower domestic production in the case of wine and flat output in apples, both because of unfavourable weather conditions in the Western Cape. About 80% of the apple production in South Africa is from the Western Cape, therefore, the drought and its spillover effects have had a negative impact on apple output. The same is true for wine, where 93% of production is in the Western Cape.
Aside from the aforementioned top-10 products, other agricultural products that are still relatively small in terms of export values, but with higher growth rates over the past five years are figs, pineapples, avocados, guavas, mangoes, strawberries, raspberries, blackberries, black, white or red currants, gooseberries, and beef. Most importantly, these are also products that are labour-intensive and their expansion would be in line with South Africa’s broad agriculture vision as these generate much need support to various communities.
The expansion of these industries should not mainly be in traditional agricultural provinces such as the Western Cape, the Free State or Mpumalanga, but rather in former homeland areas (KwaZulu Natal, the Eastern Cape and Limpopo). It is within these areas that increased agricultural activity would have a comparatively greater impact on communities. Investments within this initiative, of course, should be guided by agroecological endowment and land governance precepts.
Another important observation from the agricultural trade data is that within the aforementioned top-10 exported agricultural products, there are a few value-added products, aside from wine, fruit juices, animal feeds, and sugar. On this note, it is important to remember that to attain a million potential agricultural jobs mentioned in chapter six of the National Development Plan, the value-chains of these industries need to mature in as far as agro-processing is concerned.
There now needs to be a deliberate effort to expand export markets, specifically on the African continent. South Africa’s relatively more developed agricultural value chains provide an advantage to pursue this goal. Fortunately, the Department of Trade, Industry and Competition are currently drafting an agro-processing Master Plan, which would serve the industry best if it focuses on processing for both the domestic and export markets.
It is encouraging to note that the current trajectory of agricultural production is in line with the broader vision of growing South Africa’s agriculture sector in export-led and labour-intensive industries. What is now essential is ensuring that provinces with underutilised land are also part of this broader agricultural development plan and investment in processing facilities is made in situ. This also requires a common vision for development amongst government, community and traditional leaders and businesses. And in this, land governance will be central in guiding essential investment to drive expansion in production and concomitant socio-economic benefits.
Written for and first published on Business Day on 26 November 2019
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