The sector seems to be moving in the wrong direction {writer: Piet Coetzer}

Alarm bells should be ringing for South African policy-makers and stakeholders in the South African agricultural sector regarding some of the trends developing in the industry, which is so critically important for the well-being of the nation.

An authoritative report on the agricultural sector and future of food supply recently found that “agriculture provides not only food for households, but (is) also a very important means of broadly based income generation.

“Recent empirical evidence suggests that, compared with growth for other sources, growth in agriculture generates welfare gains that are much stronger for the poorest parts of the population.”

The report published at the end of January this year by the Foresight “Global Food and Farming Futures Project” (FGFFFP), sponsored by the United Kingdom’s Department for Environment, Food and Rural Affairs and Department for International Development, concluded that: “Cross-country econometric analysis, reported in the 2008 ‘World Development Report’, shows that a 1% gain in gross domestic product (GDP) originating in agriculture generates a 6% increase in overall expenditure of the poorest 10% of the population, while the equivalent figure for GDP growth originating in non-agricultural sectors is zero growth.”

While South Africa in recent years has moved from being a net exporter of food to being a net importer, a survey by the South African Institute of Race Relations (SAIRR) – published only days after the FGFFFP report – found that the number of people employed on commercial farms had dropped 27.1% between 1993 and 2007.

The survey has shed light on the urgency with which the government’s economic planning structures should address the country’s lack of a comprehensive agricultural policy, and the tension between its land reform programmes, creating sustainable black commercial farming operations, nurturing market-orientated smallholders, and the livelihoods for indigent rural dwellers.

The FGFFFP report, under the heading “Making agriculture work harder to reduce hunger”, states that in countries where hunger is most chronic (South Asia and sub-Saharan Africa), agriculture can make a major contribution to its eradication.

“For this to occur, agricultural development must be designed and incentivised, with hunger reduction as a primary goal.

“Food production, whether from terrestrial or aquatic sources, has a powerful triple role in ending hunger.”

This triple role is then identified:

• Production is essential for physical access to food. Technologies, institutions, infrastructure and information that support increased, sustainable productivity and which are equitable (i.e. are desirable, available and practical for the poorest farmers to adopt) can increase the supply of a diverse and locally desirable food at affordable prices;

• These technologies, institutions, infrastructure and information sources can improve economic access for all by raising farm income, generating employment on and off farm, and reducing food prices; and

• Production can address issues of social access by deliberately empowering women and other socially excluded groups.

The report concludes that there are grounds for optimism that agriculture could become a more powerful force for the reduction of hunger and poverty in the decades ahead – but agriculture needs to be repositioned within governments as a profession dedicated to multiple ends, of which hunger and poverty reduction is central.

“For many governments, the purpose of agriculture is seen primarily as food production. In reality, agriculture requires flexibility to adapt to multiple agro-ecological niches; social analysis to understand issues of equity and exclusion; environmental skills to, among other things, work within the climate change mitigation and adaptation agendas; and political resourcefulness to forge new alliances that enable the sector to leverage additional funding and influence,” it states.

“Food production is the means, not the end. Such repositioning would mean changing the formal and informal training of professionals in agricultural development, the ways ministries of Agriculture are located, organised and staffed, and how the media perceives agriculture.”

The SAIRR survey has found that employment on commercial farms in South Africa decreased from 1.1 million to 796 806, while the number of farms declined from 57 987 in 1993 to 39 982 in 2007. That is a decrease of 31%.

A presentation given at a seminar in September last year by Simphiwe Ngqangweni, a senior researcher at the National Agricultural Marketing Council, painted an even worse picture at the period between 2000 and 2010. It indicated that jobs in the agricultural sector decreased from almost 1.4 million in September 2000 to approximately 600 000 in March last year.

In 2000, the sector was the largest employer of all sectors in the country, but has fallen to the seventh position, and trends in employment and wages showed a “long-term absolute decline” in agriculture, he said at the time.

The opinions of experts in the sector differ regarding the reasons for this state of affairs, but have come to consensus on:

• Investment uncertainty created by land redistribution policies;

• Insufficient support of new entrants to commercial farming where redistribution does take place;

• ,The consolidation of smaller units aimed at economy-of-scale farming operations, in line with the current international trends; and

• Increased mechanisation on farms under cost and pressures, and in response to some labour and other regulatory measures.

International trade barriers play a role in dampening the job-creating potential of the agricultural sector.

The South African Olive Industry Association was recently reported as stating that this subsector has the potential to create an additional 20 000 permanent jobs and up to 80 000 seasonal jobs if the European Union import duties could be lifted to place the country’s industry on par with European producers.