Agriculture is one of the sectors that will help create employment and economic activity in rural South Africa. I have argued in the previous blog entries that the South African government should instead recast its vision of agricultural development using Chapter Six of the National Development Plan as a point of departure. This specifically applies to the former homeland regions and underutilised land reform farms, as these are the areas that still carry the potential for agricultural expansions.
As I have previously mentioned elsewhere, this developmental ambition will require that South Africa confront various infrastructure and governance constraints that have hindered development and growth of agriculture over the past two decades. These include, but not limited to; (1) Market failures (high transaction costs, remote location); (2) Government failures (inefficiencies, poor service delivery and corruption); (3) Community failures (poor local institutions, vested interests of traditional leaders); and (5) Poor land governance (lack of secure tenure). This also includes trivial politics and divisions amongst various stakeholders that contribute to slow progress in this sector (see here).
Chapter Six of the of the National Development Plan highlights that the labour-intensive and high-value products such as those in horticulture should be prioritized (this message is still very relevant even today, eight years since its publication). But of course, in areas where horticulture can’t thrive, field crops and livestock and other activities such as agricultural tourism should be explored.
The additional insights that today’s blogpost brings comes from a paper written in 2019 by the Western Cape Department of Agriculture agricultural economists — Louw Pienaar; Mzwanele Lingani and Philip Swart. Their paper zoomed into the horticulture industry and highlighted the fruitfulness of high (value) growth and labour-intensive horticultural crops. This ties in with the broader agricultural development message I have been writing about elsewhere (and, briefly, in the first three paragraphs of this post).
Here is a synopsis borrowed from the Pienaar, Lingani and Swart paper, which is relevant to the message I want to highlight today:
Exhibit 1 below illustrates multiple attributes amongst the leading horticultural crops grown in South Africa with regards to their relative size in gross value of production (size of the bubble), their five-year annual growth in value from 2013 to 2018 (y-axis) and the employment potential in the form of the number of jobs needed per hectare planted (x-axis).
From an employment perspective, each hectare of blueberries planted results in the direct employment of 2.64 fulltime equivalent workers, on average. This is the highest employment intensity amongst the major fruits grown in South Africa. Other industries with high employment potential were table grapes (2.2), flowers (2.1) and cherries (1.9), whilst pome (apples & pears) and stone fruit (apricots, plums, prunes, peaches & nectarines) created 1.1 jobs per hectare planted. At the lower end of the spectrum, crops such as nuts, sub-tropical fruit and citrus have employment multipliers of around 0.5.
In terms of economic growth, the blueberry industry has significantly outperformed other fruit industries by growing its gross value of production from an estimated value of R15.8 million in 2008 to R1.25 billion in 2018. This phenomenal growth has led to the creation of more than 4 000 jobs and has created economic opportunities for exporters, input suppliers and various sector providing goods and services to support these farming activities.
Meanwhile, other good performers over the same period were table grapes and nuts have been performing well, expanding in value by 24% and 21% respectively per annum. Pome and stone fruit had moderate growth over this period with 6% per annum, whilst the wine grape industry came under severe pressure lately with annual growth of 0.8%.
Exhibit 1: Comparison of growth and jobs in crop industries
Source: Louw Pienaar; Mzwanele Lingani and Philip Swart (2019)
Acknowledgement: The last three paragraphs and the chart are drawn from Louw Pienaar; Mzwanele Lingani and Philip Swart (2019). The full paper is available here.
Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za
