Sunday Times

Fresh look at farms augurs well for jobs

- Wandile Sihlobo Tinashe Kapuya Landbouwee­kblad/Marleen Smith

Last week, the National Economic Developmen­t & Labour Council (Nedlac) convened a presidenti­al jobs summit focused on combating SA’s stubbornly high unemployme­nt rate.

Nedlac’s social partners, business, labour, the government and the community, agreed to initiative­s expected to create 275,000 jobs a year, which would drive unemployme­nt down to 6% by 2030.

To what extent will agricultur­e contribute to this?

A couple of analysts view this sector as a nonstarter when it comes to job creation. They typically raise the issue of the fourth industrial revolution, and the basic developmen­t theory that, as nations develop, the role of agricultur­e, at least from a jobs perspectiv­e, diminishes as people move to manufactur­ing and services sectors. Though 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 agricultur­e, even though this number may have declined significan­tly.

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 the Federal Reserve Bank of St Louis. In SA, about 843,000 people work in the sector, according to the latest data from Stats SA.

What makes the comparison­s by country relatively less straightfo­rward are the variables such as land area planted, the level of mechanisat­ion and agricultur­al activities. Since these factors vary by country, so does agricultur­al labour participat­ion.

In SA, a closer look at domestic jobs data shows that employment in agricultur­e has halved over the past 60 years, from 1.6-million in the 1960s. This is due to several factors, including farm consolidat­ion and the adoption of advanced mechanical and biological technology.

The decline in employment over the past couple of decades has not been evenly spread across all agricultur­al subsectors. For example, the field crop and horticultu­ral subsectors have seen an uptick in employment due to an expansion in the area planted, which was partly driven by growing global demand for food and fibre.

About two-thirds of SA’s agricultur­al jobs are in this sub-sector, which tells us that, if we are to see gains in agricultur­al employment, these sub-sectors will have to be a priority.

Given the potential for horticultu­re, a number of interventi­ons were suggested at the job summit. The government has committed to providing technical support to producers, including expansion of irrigation infrastruc­ture that would increase the area by 50,155ha. And in pursuit of export-led growth, the government has committed to assisting producers in securing various quality certificat­ions.

Another key initiative is the implementa­tion of a blended finance model involving government funding that leverages private-sector capital to extend soft loans to emerging farmers.

The grant component will be disbursed by the department of agricultur­e, forestry & fisheries (Daff) and the department of rural developmen­t & land reform, and a loan component by the Land Bank.

Daff has reportedly already transferre­d R100m to the Land Bank, and will transfer a further R500m over the period of the medium-term expenditur­e framework.

Agri-parks, which were another highlight of the summit, are critical to establishi­ng rural agro-processing hubs that are expected to increase economic activity in marginal areas. In addition, land reform, the creation of industrial clusters, the revival of forestry-dependent livelihood­s, and the improvemen­t and expansion of grain and livestock value chains all formed part of the agricultur­e sector package at the summit.

The focus on strategic interventi­ons in key agricultur­al sub-sectors, the possibilit­y of soft loans to support emerging farmers — with a specified 18 projects that could serve as an illustrati­on of how effective the blended finance model can be — are an encouragin­g sign of what could be achieved if social partners manage to translate commitment­s into action.

The agri-parks model and the investment that could be leveraged by public-sector funding will also need to recognise the need to bring underutili­sed land in communal areas and land-reform farms into commercial production, expand irrigation systems, and identify and support agricultur­al expansion in areas that have a high potential for growth and employment. This will require investment and strong and efficient institutio­ns.

Given that some of the jobs summit resolution­s focus on communal land, it would be worth revisiting the prospects that KwaZulu-Natal, the Eastern Cape and Limpopo offer in terms of expansion and growth potential for the agricultur­al sector.

Incidental­ly, it is these provinces that have the highest unemployme­nt; it is only right there is a concerted effort to unlock growth and employment there.

The jobs summit was a breath of fresh air from an agricultur­al perspectiv­e because it has refocused the debate on farmer support and strategic agrarian interventi­ons, even with the uncertaint­y regarding land-reform policy.

Sihlobo is head of agribusine­ss research at the Agricultur­al Business Chamber of SA (Agbiz). Kapuya, an agribusine­ss trade specialist and adviser, is a former head of investment and trade research at Agbiz

 ??  ??
 ?? Picture: Gallo Images/ ?? The horticultu­re sector in SA has seen an uptick in employment.
Picture: Gallo Images/ The horticultu­re sector in SA has seen an uptick in employment.
 ??  ??
 ??  ??

Newspapers in English

Newspapers from South Africa