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No ‘one size fits all’ solution for agriculture in SA

February 15, 2018

The agricultural sector in South Africa presents a paradox. The sector is at once marginal to the economy, as measured by its tiny (around 2%) contribution to gross domestic product, and central to economic policy – and employment creation in particular. Strategically, agriculture is key to national food security. Rising food prices (as a result of drought, for example) affect the poor more than the middle class; so efficient food production is important for poverty reduction.

‘Efficient’, in the modern world, is often interpreted to mean ‘large-scale and mechanised’ – and hence not employment intensive. The trajectory of commercial farming is generally towards fewer, rather than more, jobs. For some, this calls into question the optimistic scenario set out in the National Development Plan (NDP) that envisages one million new jobs in agriculture and agro-processing.

Can agriculture contribute to employment creation in our jobs-starved economy, or not? This question has been hotly debated at the Mandela Initiative’s national gathering on strategies to reduce poverty and inequality in South Africa.

In the midst of an extremely serious drought in the Western Cape, with 50 000 farmworker jobs in jeopardy, another key issue is climate change and its implications for agricultural employment. South Africa is a dry country, with only 10% of its land potentially farmable, and only 10% of that potentially suitable for irrigation.

Also complicating matters is government’s failing land reform programme. Two thirds of the land in the country is used for commercial agriculture. Beyond the important symbolic role of land reform, its contribution to the resolving the livelihoods crisis of the 55% of South Africans living in poverty is a key issue.

These questions were debated in a series of action dialogues convened by the Mandela Initiative over the past three years. Workshops were attended by practitioners from community-based and non-governmental organisations, researchers and government officials. The findings of commissioned research on rural job creation, funded by the National Research Foundation, were reported and debated.

Several key conclusions emerged, but space allows discussion of only four. Firstly, research reveals real potential to increase employment in agriculture, forestry and fisheries, partly in primary production and partly in downstream processing. However, government policies will have to underpin efforts to realise this potential – it will not happen by itself. For example, the citrus subsector has the potential to generate 24 000 new jobs through expansion of orchards, rehabilitation of orchards on land-reform farms, allocation of new water licences, and effective support to black farmers.

The forestry sector could expand employment by around 47 000 jobs, partly through innovations in downstream processing. But government must come to the party, by redistributing badly run state-owned plantations, and enabling community-owned plantations in communal areas and partnership arrangements with private sector companies.

Labour-intensive subsectors are key for job creation. In addition to citrus, these include small-scale farmers growing fresh produce under irrigation, horticulture in general, and small-scale livestock production. These findings thus support the optimistic view of the NDP.

Secondly, the category ‘farmers’ needs to be unpacked and disaggregated. Conventional views counterpose efficient large-scale commercial farming to inefficient (and so-called ‘backward’) smallholder farmers. For some, these categories are also racialised – as in: ‘commercial farmers are all white’, and ‘all black farmers are smallholders’. This is insulting to black commercial farmers – but sadly, racial stereotypes do correspond to reality to a degree, given that land reform has failed to effect much change in patterns of land ownership.

Beyond race, some famers, whatever the scale of their operations, are much more successful than others. A small segment of large-scale farmers (perhaps as few as 10% of the total) are responsible for the vast bulk of agricultural value, and many ‘commercial’ farms are only marginally viable enterprises. The latter could be redistributed through land reform with little risk to national food security, and the beneficiaries of redistribution could be smallholders operating labour-intensive farming systems.

Similarly, only some smallholder farmers are market-oriented. Most are not, producing supplementary food for home consumption. The former tend to supply loose value chains in the informal markets, and only some supply the tight value chains (governed by contracts) required by many processors and retailers.

Policies need to take account of these differences amongst farmers, and to design support programmes suitable for a wide range of production and marketing systems. One size does not fit all.

Thirdly, competition policies must focus on the high levels of concentration in agriculture. In addition to farming, a key focus must be agribusinesses that supply agriculture with inputs like seed, fertilisers and chemicals, as well as agro-processing companies and the retail sector. A few very large companies dominate these environments, and crowd out smaller competitors, with adverse impacts on employment. They also tend to promote unsustainable farming systems modelled on industrial processes.

Fourthly, agricultural policies must promote measures to mitigate the impacts of climate change. Water conservation and water-efficient farming systems remain priorities for research and extension. In addition, a sharper focus on sustainable methods of livestock production is urgently required, given that grazing is the most common form of land use in South Africa. Recent droughts reveal that indigenous breeds and species, such as goats, are better adapted to our increasingly uncertain climate than imported breeds.

These proposals suggest that agriculture, along with redesigned land reform policies, does indeed have a substantial contribution to make to both employment creation and the reduction of inequality and poverty in South Africa.

However, a word of caution: the extent and depth of poverty in rural areas, together with fundamental agro-ecological constraints, means that land and agricultural reforms, however well designed, are not a panacea. Job creation in the wider economy, much of it urban and industrial, is even more important.

Reports on the action dialogues on job creation in agriculture are available on the Mandela Initiative website.

Photo credit: Gallo Images / Landbouweekblad / Johan Norval

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