Agriculture featured prominently in the state of the nation address (sona) by President Cyril Ramaphosa on Thursday night. The focus was the sector’s ability to absorb labour, and also untapped opportunities to ensure inclusive, export-led growth.
I have previously discussed the role of agriculture in job creation, 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 that as nations develop, the role of agriculture, at least from a jobs perspective, diminishes as people move more to manufacturing and the services sectors.
While that sentiment has some validity, it’s worth noting that many emerging markets and developed countries still have a huge chunk of people working in their agricultural sectors — even though this number may have declined significantly as a share of overall employment and in absolute terms.
For instance, Turkey’s agricultural sector employs more than 5.5-million people, the US’s more than 2.5-million, and Mexico’s more than 6.8-million, according to data from the Federal Reserve Bank of St Louis. In SA, we have about 842,000 people working in the agricultural sector, according to the latest data from Statistics SA.
What makes the comparisons relatively less straightforward are the country-specific differences in area planted, level of mechanisation, and agricultural activities in the aforementioned reference examples. All these factors vary, which partially explains the difference in agricultural labour participation.
A closer look at the domestic jobs data shows that employment has declined over time, from levels of 1.6-million in the 1960s to the aforementioned 842,000. This decline in employment is due to a combination of factors, which includes 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.
What is also clear from the domestic data is that the decline in employment over the past couple of decades has not been evenly spread across all agricultural sub-sectors. 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 has been partly driven by the growing global demand for food and fibre.
About two thirds of SA’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 — and that is precisely what the president’s speech prioritised.
From a regional perspective, given that there is room to focus on under-utilised land and communal land, KwaZulu-Natal, the Eastern Cape and Limpopo would potentially be focus areas for expansion and growth in the SA agricultural sector. In fact, there is evidence that suggests these provinces have vast tracts of unused arable land that could potentially boost the agricultural sector. Therefore, the president’s ambitions to expand agriculture should be in these provinces.
To achieve this, among the things needed is to bring under-utilised land in communal areas and land-reform farms into commercial production, is expanding irrigation systems, and identifying and supporting agricultural expansion in areas that have a high potential for growth and employment. This will require a well-crafted plan, investment and strong and efficient institutions.
The president partially reflected on this by referencing the comprehensive producer support policy and advisory panel on land reform and agriculture, which is set to table a plan in March.
Overall, 2019’s Sona spoke to the key issues of the agricultural sector; now the task is at the implementation level. As the president said, the success of SA rests on the shoulders of all of us; therefore, participation of the private sector to ensure the success of the agricultural sector will be key.
• Sihlobo is head of economic and agribusiness research at the Agricultural Business Chamber.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.