Jobs, Growth, and Structural Changes in South Africa’s Agriculture – Wandile Sihlobo | Substack

Assessment of South Africa’s Agricultural Growth Model: A Sustainable Development Perspective

Introduction

At the Economic Research Southern Africa (ERSA) and South African Reserve Bank conference held in Stellenbosch, a significant paper titled “Redefining the Path: An Assessment of South Africa’s Agricultural Growth Model” was presented by agricultural economist Tinashe Kapuya and the author. The discussion involved key stakeholders including Prof Johann Kirsten, Executive Director of the Bureau for Economic Research (BER), and Mr Ramasodi from the Department of Agriculture.

Overview of South Africa’s Agricultural Sector Trajectory

The paper critically examines the agricultural sector’s development over the past thirty years, evaluating the adequacy of the current growth model in addressing broader development challenges aligned with the Sustainable Development Goals (SDGs).

Key Findings and Sustainable Development Goals Alignment

1. Strong Productivity and Export Growth

   South Africa’s agricultural output has more than doubled in real terms, driven by technological advancements, improved farm management, and expansion of high-value horticultural exports. The commercial farming sector has become globally competitive, sustaining a consistent agricultural trade surplus.

   • SDG 8: Promotes sustained economic growth and productive employment through increased agricultural productivity.
   • SDG 9: Encourages innovation and infrastructure development supporting agricultural competitiveness.
   • SDG 12: Supports sustainable consumption and production patterns via efficient resource use.

2. Limited Employment Growth Despite Productivity Gains

   The sector’s shift towards capital-intensive production, with increased machinery and equipment investments, has resulted in higher output but fewer jobs. This poses a challenge in a country grappling with high unemployment rates.

   • SDG 1: Highlights the need to reduce poverty through inclusive employment opportunities.
   • SDG 8: Emphasizes the creation of decent work and economic growth.
   • SDG 10: Calls for reduced inequalities by ensuring equitable access to employment.

3. Structural Dualism in Agricultural Production

   The sector remains characterized by a divide between large commercial farms and emerging or smallholder farmers. The latter group faces persistent productivity gaps due to limited access to extension services, finance, technology, and markets.

   • SDG 2: Aims to end hunger and promote sustainable agriculture by supporting small-scale farmers.
   • SDG 5: Encourages gender equality and empowerment of all farmers.
   • SDG 10: Focuses on reducing inequalities within the agricultural sector.

4. Infrastructure and Governance Constraints

   Challenges such as logistics bottlenecks, electricity instability, deteriorating rural roads, and weaknesses in biosecurity systems are undermining sector competitiveness.

   • SDG 9: Stresses the importance of resilient infrastructure and sustainable industrialization.
   • SDG 11: Supports sustainable cities and communities through improved rural infrastructure.
   • SDG 16: Promotes effective, accountable, and inclusive institutions.

Recommendations for a More Integrated Agricultural Growth Model

The paper advocates for a holistic agricultural growth model that integrates productivity, competitiveness, and inclusion to better contribute to employment, rural development, and inclusive economic growth.

• Strengthening institutions to support sustainable agricultural development (SDG 16).
• Investing in infrastructure to alleviate bottlenecks and improve rural connectivity (SDG 9, SDG 11).
• Accelerating technology diffusion to enhance productivity and sustainability (SDG 2, SDG 9).
• Integrating emerging farmers into value chains to promote inclusion and reduce inequalities (SDG 10, SDG 8).
• Unlocking underutilized agricultural land to increase production and support rural livelihoods (SDG 15, SDG 1).

Implications for Policy and Implementation

These insights inform the author’s new role as the Presidential Envoy on Agriculture and Land Reform, with a focus on driving implementation that aligns with the SDGs to foster sustainable and inclusive agricultural development in South Africa.

1. Sustainable Development Goals (SDGs) Addressed or Connected

1. SDG 2: Zero Hunger – The article discusses agricultural productivity, food production, and the need to support emerging and smallholder farmers, which are central to ending hunger and achieving food security.
2. SDG 8: Decent Work and Economic Growth – The article highlights employment challenges in agriculture, capital intensity, and the need for inclusive economic growth through agriculture.
3. SDG 9: Industry, Innovation, and Infrastructure – Infrastructure constraints such as logistics bottlenecks, electricity instability, and rural roads are mentioned, pointing to the need for resilient infrastructure and innovation.
4. SDG 10: Reduced Inequalities – The structural dualism in agriculture, with income and production concentrated among large commercial farms and limited access for smallholder farmers, relates to reducing inequalities.
5. SDG 12: Responsible Consumption and Production – The emphasis on improving farm management practices and technology diffusion aligns with sustainable production patterns.
6. SDG 17: Partnerships for the Goals – The call for strengthening institutions and integrating emerging farmers into value chains implies the importance of partnerships and collaboration.

2. Specific Targets Under Those SDGs Identified

1. SDG 2 Targets
   • Target 2.3: By 2030, double the agricultural productivity and incomes of small-scale food producers, including through secure and equal access to land, technology, and markets.
   • Target 2.4: Ensure sustainable food production systems and implement resilient agricultural practices.
2. SDG 8 Targets
   • Target 8.3: Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, and innovation.
   • Target 8.5: Achieve full and productive employment and decent work for all, including young people and persons with disabilities.
3. SDG 9 Targets
   • Target 9.1: Develop quality, reliable, sustainable, and resilient infrastructure to support economic development and human well-being.
   • Target 9.5: Enhance scientific research, upgrade technological capabilities, and encourage innovation.
4. SDG 10 Targets
   • Target 10.2: Empower and promote the social, economic, and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, or economic status.
5. SDG 12 Targets
   • Target 12.2: Achieve the sustainable management and efficient use of natural resources.
6. SDG 17 Targets
   • Target 17.17: Encourage and promote effective public, public-private, and civil society partnerships.

3. Indicators Mentioned or Implied to Measure Progress

1. SDG 2 Indicators
   • Indicator 2.3.1: Volume of production per labor unit by classes of farming/pastoral/forestry enterprise size.
   • Indicator 2.3.2: Average income of small-scale food producers, by sex and indigenous status.
   • Indicator 2.4.1: Proportion of agricultural area under productive and sustainable agriculture.
2. SDG 8 Indicators
   • Indicator 8.3.1: Proportion of informal employment in non-agriculture employment, by sex.
   • Indicator 8.5.2: Unemployment rate, by sex, age, and persons with disabilities.
3. SDG 9 Indicators
   • Indicator 9.1.1: Proportion of the rural population who live within 2 km of an all-season road.
   • Indicator 9.5.1: Research and development expenditure as a proportion of GDP.
4. SDG 10 Indicators
   • Indicator 10.2.1: Proportion of people living below 50% of median income, by age, sex, and persons with disabilities.
5. SDG 12 Indicators
   • Indicator 12.2.1: Material footprint, material footprint per capita, and material footprint per GDP.
6. SDG 17 Indicators
   • Indicator 17.17.1: Amount of United States dollars committed to public-private partnerships.

4. Table: SDGs, Targets and Indicators

Source: wandile.substack.com