Agriculture boosts economy

Khusta’s

THE expansion of the agricultural sector is a given quick win for South Africa’s battling economy. Our economic growth has stagnated in the last eight years. This stagnation has been influenced, among others, by the shrinking of both foreign and domestic fixed direct investment, rising unemployment, high interest rates and general uncertainty about policy direction. South Africa should look at agriculture as a primary foundation for social and economic development.

Our country has always enjoyed a comparative advantage in its erstwhile well advanced agricultural sector. This requires government to give full attention and support to the established commercial sector, small scale and subsistence farmers.

We cannot rely on the mining industry to grow our economy. We have lost our competitive edge on this sector.

Other countries are viewed as more lucrative, stable and profitable to extract minerals in than is the case in South Africa. Another annoying factor to investors is the unreliability of regulations.

Some business people say the unpredictability and policy application are some of the major constraints. If the mining sector is going to shrink, then we will have a serious problem in absorbing our growing army of unskilled labourers.

Agriculture is well-placed to kick-start our moribund manufacturing industry and to spur economic prosperity across the country. Small scale farming is a sector that tends to be stifled in many countries and yet this is one sector that needs promotion.

The number of farmers, including commercial ones, has dwindled in the last 20 years. The primary sector (the formal sector), according to Stats SA, contributed a meagre 12% to the GDP in 2012.

Agriculture declined from 10% of GDP in 1960s to 2% in 2009, according to the Depart- ment of Agriculture, Forestry and Fishing.

The surplus of unskilled labour that is found in our rural areas is being wasted through being idle year in and year out. The rural unemployed are not contributing to any output and they earn no income.

However, developing the agricultural sector for small scale farmers could go a long way in reviving this important sector to our people who have been detached from the land for decades. Before the discovery of diamonds and gold in the 19th century, almost all African people lived off the land.

This situation started to change when the mining houses started to demand cheap labour. It was at that point that a myriad draconian laws were enacted to restrict the self sufficiency of the African people.

The Land Act of 1913 left the African people with no option but to go to sell their labour to white farmers, while others had to go to the mines to survive. From there onwards the majority of black people started to work for wages.

Hence, their agricultural skill was lost. Reviving and reintroducing agricultural skill is not something that ought to take a decade, it can be done quickly.

Of the 4 000 British 1820 Settlers, most of them knew nothing about farming.

They were mostly scattered around the Albany area.

They were granted land. On top of all that, they were given free seeds, fertilisers and agricultural implements.

For their sustenance, each family was given a stipend.

Even that support did not make all of them successful farmers, hence hordes of them ab- sconded and went to resettle in places that were to be called Port Elizabeth, East London, Grahamstown and so on.

They started trades such as tailoring, barbering, shoemaking and general trading.

Very few of the original settlers managed to continue with farming since farming is a harsh activity.

Those farmers who stayed behind were well looked after by Cape governor Lord Charles Somerset. He even extended credit lines for them.

It can be argued that the industrial development of the Eastern Cape was driven by the efforts of a few farmers.

Farming is a backbone for any industrialisation, especially if your economy is developing from a very low base.

Many economists argue that the cost of industrialisation depends substantially upon low food and raw material prices. This analysis is based on the view that, since the industrial wages would depend upon food prices, a steady food price is supposed to be imperative for achieving economic development.

During my Vietnamese trip, I noticed that most people were well fed and properly nourished. Once I stepped out of the urban areas, I saw how serious that nation was about agriculture.

The vibrancy and the conscious promotion of small scale farmers was driven by the government.

One could see that every citizen must have enough food to eat.

The government assisted the poor peasants to embark on a programme called integrated farming system.

They make their small plots viable within six months to two years from the start. The farming system is highly intensive. The farmer is doing food gardening, fish rearing and animal husbandry in an integrated way.

The point of the strategy is to diversify the efforts of the farmer and minimise the risk by diversification.

Most of South Africa’s land is semi-arid. Hence, new farmers on their own will find it extremely difficult to survive without strong government assistance.

The case to expand small scale farming is strong for the process of capital formation.

Some economists argue that a well developed and expanded agricultural sector will assist to expand the size of the home market.

They say this can be achieved by enlarging the monetary and real incomes of the farmers which will increase the demand for industrial goods and thus act as a stimulus to industrialisation.

To support small scale farmers the government must provide: ý Technical assistance; ý Adequate incentives; ý Treat small farmers the same as the big ones; ý Give them access to fertile land; ý Extend favourable credit lines; ý Assist small scale farmers in marketing their produce;

ý Provide them with modern transport and storage facilities.

South Africa should look at agriculture as a primary foundation for social and economic development