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SSEECCTTOORRAANNAALLYYSSIISSAAGGRRIICCUULLTTUURREE
June 2010
Prepared for submission to the
Department ofHigher Education and Training
by
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Table of contents
SECTION1: THEAGRICULTURALLANDSCAPE................................................................................1
1.1 SizeandshapeoftheAgriculturalsector.................................................................................1
Overview............................................................................................................................................
1
Distributionofagriculturalproduction.............................................................................................3
ThestructureoftheagriculturesectorinSouthAfrica...................................................................6
Categoriesoffarmingenterprises....................................................................................................8
Employmenttrends...........................................................................................................................9
Employmentcategoriesandremuneration...................................................................................11
StakeholdersintheAgriculturalsector..........................................................................................13
Nationalgovernmentdepartments...........................................................................................13
Sectorrepresentatives................................................................................................................14
1.2 FactorsimpactingdevelopmentintheAgriculturesector...................................................15
Futuresector
economic
growth
and
development
.......................................................................
16
SouthAfricansectorgrowthplans(IPAP2)................................................................................16
InternationalTrade......................................................................................................................16
Globalrecessionandriseinfoodprices.....................................................................................17
Landreform......................................................................................................................................17
Relianceonimports.........................................................................................................................19
Water................................................................................................................................................19
Thelabourmarket...........................................................................................................................20
Consumertrends.............................................................................................................................21
HIV/AIDS...........................................................................................................................................22
Farmsafety
and
security
.................................................................................................................
23
BroadbasedBlackEconomicEmpowerment................................................................................23
Conclusionsandscenarios...................................................................................................................24
SECTION2: DEMANDFORSKILLS..................................................................................................27
AgriSETAregisteredemployersandemployeecoverage..............................................................27
EmployeecoverageintheAgriSETA...............................................................................................28
2.1 Skillsdemand...........................................................................................................................31
TheNationalEducationandTrainingStrategyforAgriculture(AETStrategy).............................31
AGRISETAsectorskillsplanningdemanddata(20082009).........................................................31
AgriSETAWSPanalyses...................................................................................................................37
Skillsdemand
in
the
commercial
agricultural
sector
.................................................................
37
SkillsdemandforecastingbyAgriSETA...........................................................................................38
Researchneedsgoingforward........................................................................................................39
SECTION3:SkillsGapsandscarceskills..............................................................................................40
ScarceskillsattheDAFF..................................................................................................................40
Scarceskillsinthecommercialsector............................................................................................40
Supplyofskills..................................................................................................................................42
APPENDIX1:SkillsdemandintheDepartmentofAgriculture,Forestry&Fisheries(2008/09).....45
Appendix2: AgriSETAregisteredlearnerships..............................................................................46
REFERENCES.........................................................................................................................................47
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Agriculture:SectorAnalysis 1
SECTION 1: THE AGRICULTURAL LANDSCAPE
SouthAfricasagriculturalsectorischaracterisedbydualism:amoderncommercialfarming
sectorusinghiredfarmworkersalongsidesmallscalefarmers,mostlyintheformerhomeland
areas.Inaddition,landreformiscreatingthousandsofnewfarmingopportunitiesforemerging
blackfarmersthroughoutthecountryandacrossthescalefromlargecommercialtosmallholder
production.1
Theagroprocessingsectorcomprisesahighlydiversegroupofsubsectorsandindustries.The
majorsubsectorsinclude:
Foodprocessing
Beverages
Aquaculture
Horticulture
Medicinal,aromatics
and
flavourants
Theagroprocessingsectorhasparticularlystronglinkagesbothup anddownstream.Up
stream,thesectorlinkstoagricultureacrossawidevarietyoffarmingmodelsandproducts.
Downstream,thesectorsproductsaremarketedacrossbothwholesaleandretailchains,aswell
asthroughadiversearrayofrestaurants,pubs,shebeensandfastfoodfranchises.
Moreover,thefoodprocessingsectorisnowthelargestmanufacturingsectorinemployment
termswithsome160,000employees,thisincreasestomorethanamillionjobsoncethe
upstream(primaryagriculture)isincluded.2
1.1 Size and shape of the Agricultural sector
Overview
TheSouthAfricanagriculturalsectorisadiversesectorcomprisingseveralbranches,namely:field
crophusbandry;horticulture;animalproduction);dairyfarming,fishfarming,gamefarmingand
agroprocessing.Withinthesebroadbranchesare39subsectorsthatareclassifiedaccordingto
agriculturalandeconomicfocusasfollows.Thesectorencompassesbothprimary(resource
production)andsecondary(primaryprocessing)activities.
Table1:ActivitieswithintheagriculturalsectorbyinternationalSICcode
Subsector
Code
Description
Coffee/Tea 30493 Processingandmarketingofcoffeeandteaincludingcoconuts,cocoa,nuts,olives,dates,etc.
Fibre 30118 Grading,ginningandpackingofwoolandcottonrawmaterial
Fruit 30132Fruitpackedincartons,fruitjuiceconcentratedrummedandfruitjuiceincontainerreadyfor
consumption
Fruit 30133 Fruitexportersandimporters
Grain
30300 Manufactureofgrainmillproductsandstarches
30313 Handlingandstorageofgrain
61502 Wholesale&retailtradeinAgriculturalmachinery
62111 SaleanddistributionofAgriculturalrawmaterialsandotherfarminginputs
Milling 30311 Manufactureofflourandgrainmillproducts,includingriceandvegetablemilling,grainmill
1SETAreestablishmentanddemarcationAsynthesisoftheAgriSETAlandscape,AgriSETAJune2010
22011/122012/13IndustrialPolicyActionPlan,DTI,February2010.Emphasisadded.
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Subsector Code Description
residues
30330 Manufactureofpreparedanimalfeeds
30331 Manufactureofpetfoods
30332 Manufactureofstarchesandstarchproducts
Pest
control
99003
Pest
Control
Poultry 30114 Poultryandeggproductionincludingtheslaughtering,dressingandpackingofpoultry
Primary
11110 GrowingofCerealsandothercrops(notelsewhereclassified)
11120 GrowingofVegetables,Horticulturalspecialtiesandnurseryproducts
11121GrowingofVegetables,Horticulturalspecialties(IncludingOrnamentalHorticulture)and
nurseryproducts.
11122 Sugarplantationincludingsugarcaneandsugarbeetetc.
11130 Growingoffruit,nuts,beverage,andspicecrops.
11210 Farmingofcattle,sheep,goats,horses,asses,mules,andhinnies;Dairyfarming.
11220 Otheranimalfarming,productionofanimalproducts(notelsewhereclassified)
11221 Ostrichfarming
11222 Gamefarming
11300
Growingof
crops
combined
with
farming
of
animals
(Mixed
farming)
11301 Growingofcoffeeandteaincludingcoconuts,cocoa,nuts,olives,dates,etc.
11400 Agriculturalandanimalhusbandryservices,exceptveterinaryactivities
11402 Otheranimalfarming(notelsewhereclassified)
12109 Growingoftreesassecondcropbyfarmers
13000 Fishing,operationoffishhatcheriesandfishfarm
RedMeat
11141 Productionandanimalproducts(notelsewhereclassified)
30111 Slaughtering,dressingandpackingoflivestock,includingpoultryandsmallgameformeat.
30115 Production,sale&marketingofAgriculturalbyproducts(e.g.bones,hides)
30117Slaughtering,dressingandpackingoflivestock,includingsmallgameformeatandprocessing
ofostrichproducts
61210
Wholesaletrade
in
Agricultural
raw
materials
and
livestock
74136 Transportoflivestockassupportingactivity
87120 Agriculturalandlivestockresearch
Seed 11140 Seedproductionandmarketing
Sugar 30420 Manufactureofsugarincludinggoldensyrup andcastorsugar
Tobacco 62208 Processinganddispatchingoftobacco
Source:AgriSETA
Thecontributionofprimaryagriculturetothegrossdomesticproduct(GDP)isabout2.5%andits
contributiontoformalemploymentisabout5%3
.However,agriculturehasstrongbackwardand
forwardlinkagesintotheeconomy.
Theagroindustrialsectorhasahighercontributionofabout12%toGDP4.
Primaryagriculturecontributed2.3%totheGDPin20095
.
ThefigurebelowshowstherelativelysmallproportionofGDPcontributionfromprimary
agriculture.Itneedstobenotedhoweverthatprocessingisnotincludedinthe2.3%asitis
includedinmanufacturing,andotherfarmingactivities.Forexample,farmslinkedtoleisure
facilities,arelocatedunderTradeandAccommodation.
3
National
Treasury,
2010
4GCIS,2010
5NationalTreasury,2010
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Figure1:ContributionofagriculturetonationalGDP
Source:NationalTreasury,BudgetReview2010
SouthAfricaisoneofthetopglobalexportersofsomeagriculturalproduce,whereitisranked
firstinthreeproducts.
Table2:SouthAfrica'sworldrankinginselectedproducts
ExportItem SouthAfricasworldranking
Avocados 1st
Clementines 1st
Ostrichproducts 1st
Grapefruit 2nd
Tablegrapes
3rd
Plums 3rd
Pears 5th
Source:DTI,February2010
Distributionofagriculturalproduction
SouthAfricahas2.76millionhectaresofcultivatedland,ofwhichnearly10.45millionhectares
(82%)isusedforcommercialpurposes.Atotalof0.79millionhectares(only6.19%)is
permanentlyundercultivation,andmorethan10.83millionhectares(85%)israinfed.Morethan
0.7million
hectares
of
land
are
degraded
and
left
bare
by
sheet
and
gully
erosion.
About
4.61
millionhectaresofnaturalvegetationaredegraded,mainlyinindigenousforests,woodlands,and
grasslands;afurther0.19millionhectaresaredegradedbyminetailings,wasterockdumpsand
surfacebasedmining.Landuseinurbanareascomprisesmainlyformalresidentialsuburbsand
townships(1millionha)andinformalsettlements(0.23millionha).Savannas(woodlandsand
bushlands)andgrasslandscover25.70%and19.92%ofSouthAfrica,respectively(Departmentof
EnvironmentalAffairs).
Although80%ofSouthAfricanlandisusedforagricultureandsubsistencefarming,only12%is
arable,andtherestisusedforgrazing.Themainagriculturalactivitiesarecropproduction,mixed
farming,cattle
ranching
and
sheep
farming,
dairy
farming,
game
ranching,
aquaculture,
beekeeping,andwinemaking(GCIS,2010).SouthAfricaisthelargestproducerofmaize,the
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staplefoodintheSouthernAfricanDevelopmentCommunity(SADC)aswellasthemain
ingredientforanimalfeed.Thetablebelowgivesanindicationofthegeographiclocationof
productionofspecificagriculturalproduceaswellastheannualvolumeproduced.
Table3:Volumeofagriculturalproductionbyproductandlocation
Agriculturalproduct
Dominant
production
locations Average
annual
volume
produced
Maize NorthWest;FreeState;Mpumalanga 13,2metricton
Wheat WesternCape;FreeState 2.1metricton
Barley WesternCape 192000ton
Groundnuts FreeState;NorthWest;NorthernCape 88800ton
Sunflowerseeds FreeState;NorthWest;Mpumalanga;Limpopo 872000ton
Soyabeans FreeState;Mpumalanga;KwaZuluNatal
Sorghum FreeState;Mpumalanga;Limpopo;NorthWest 255000ton
Canola WesternCape;NorthWest;Limpopo 30800ton
DrybeansMpumalanga;FreeState;Gauteng;NorthWest;
KZN;Limpopo;WesternCape;NorthernCape60000ton
Sugar EasternCape;Mpumalanga;KwaZuluNatal 20metricton
DeciduousfruitWestern
Cape;
Eastern
Cape;
Free
State;
Mpumalanga;Gauteng
Wine WesternCape 403.3millionlitresexportedin2009
Citrusandsubtropical
fruit
Limpopo;Mpumalanga;EasternCape;KwaZulu
Natal;WesternCape;NorthernCape46896tonsubtropicalfruit
Potatoes
NorthWest;NorthernCape;KwaZuluNatal;
Limpopo;FreeState;Mpumalanga;EasternCape;
WesternCape
1853000ton
TomatoesLimpopo;Mpumalanga;KwaZuluNatal; Eastern
Cape;WesternCape459217ton
Onions Mpumalanga;WesternCape;FreeState 417579ton
Cabbages Mpumalanga;KwaZuluNatal 138161ton
CottonMpumalanga;Limpopo;NorthernCape;KwaZulu
Natal;NorthWest
Tobacco Mpumalanga;Limpopo;NorthWest 10200ton
Tea WesternCape;EasternCape
Flowers WesternCape
Livestock Allprovinces Largestagriculturalsector
DairyFreeState;NorthWest;KwaZuluNatal;Eastern
Cape;WesternCape;Mpumalanga3129metriclitres
BeefCattleEasternCape;FreeState;KwaZuluNatal;Limpopo;
NorthWest;Mpumalanga;NorthernCape
SheepandgoatsEasternCape;NorthernCape;FreeState;Western
Cape;
Mpumalanga
Poultryandpigs Allprovinces
930000tonbroilers
2.6millionpigsslaughteredfrom
August2007toAugust2008
Fish WesternCape;EasternCape
GameLimpopo;NorthernCape;EasternCape;Western
Cape
Beekeeping WesternCape;KwaZuluNatal 2000ton
Source:GCIS,SAYearbook2009/10
Agricultureplaysanimportantpartinprovincialdevelopmentandformostprovincesprovidesa
sourceofemploymentaswellasbeingapotentialfocusforincreasedemploymentand
sustainablelivelihoods.
Agriculture
therefore
features
as
akey
focus
for
economic
development
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andgrowthintheallprovinces.AgriculturalcontributiontoprovincialGDPvaries,withtheFree
Statesagriculturalsectorcontributingthemost,asreflectedbelow.
Table4:Agriculture ContributiontoProvincialGDP
Province PercentagecontributiontoGDP
FreeState
9.2
Limpopo 3
KwaZuluNatal 5.5(2004)
WesternCape 4.5(2003)
Mpumalanga 6.1Source:ProvincialGrowthDevelopmentStrategies
Theprovincesallhavedifferentfocusesintheirdevelopmentstrategiesforagriculturealthough
theunderlyingprincipleistheimprovementofthelivesofthepeoplethroughemployment
creationinagricultureandprovisionoffoodsecuritythroughinvestmentinagriculturalprocesses
andtechnologiesthatenhanceefficiency.
FreeStatesfocusonagriculturedevelopmentisagriculturediversificationandagribusiness.
Diversificationinvolvesidentifyingcropswithadefinedmarketinlinewithnewandinnovative
agriculturalpractices.Agribusinessextractsvaluefromprimaryagriculturethroughprocessingof
rawmaterialsandprovisionofservicestoaddvaluetoproduce6
.
TheobjectivesoftheLimpopoprovincewithregardstoagriculturaldevelopmentaretriplingthe
sizeofagricultureby2015,increasingthevalueofagriculturethroughenterprisediversification,
investinginwatersavingtechnologiesandaddingvaluewithintheagrovaluechain7
.
Inthe
Eastern
Cape,
two
thirds
of
the
population
live
in
rural
areas
and
the
development
of
agricultureisakeyfactorinthedevelopmentofthepeoplessocioeconomiclivelihood.
Developmentofagriculturewillprovideemploymentandanincometomanyfamilies.Thefocus
ofthegrowthanddevelopmentstrategyistopromotehouseholdfoodsecuritythrough
expandedsmallholderproduction,developmentofcommercialagriculturethroughoptimaluse
ofagriculturallandinthehomelands,focusonlandredistributionandtenure,andintegrationof
homelandsagricultureintomainstreamprovincialagriculturalactivity8
.
KwaZuluNatalsfocusonagricultureintheGrowthDevelopmentStrategyispovertyalleviation,
asmostareasofpovertyintheprovincearerural.Theplanistolinkupruralsubsistence
agriculturalactivity
with
commercial
agriculture
so
as
to
develop
subsistence
agricultural
projects
intocommercialones.Theotherfocusistolinklandreformprojectstokeyprovincialagrarian
revolutionprogrammessoastomakelandtransferaneconomicgrowthopportunity.The
agrarianrevolutionstrategyinvolvesenablingaccesstomarkets,farmerdevelopmentthrough
thesetupofagribusinesses,improveroadinfrastructuretoimproveaccesstomarkets,and
expeditingthelandreformprocess9
.
6FreeStateGrowthDevelopmentStrategy,20042014
7
Limpopo
Growth
Development
Strategy,
2004
2014
8EasternCapeGrowthDevelopmentPlan,2004 2014
9KZNGrowthDevelopmentStrategy,2006
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NorthernCapesfocusisthedevelopmentofagroprocessing(NorthernCapeGrowthand
DevelopmentStrategy).TheNorthWestisfocusingonenablingaccesstomarketsandassisting
financiallyininfrastructuredevelopmentandmachineryacquisitionaswellasinvestinginagro
processingtechnologyandskills,aswellaspromotingefficientlanduse10
.
Agricultureholds
employment
growth
potential
in
Mpumalanga
province.
It
accounts
for
18.1%
ofprovincialemployment,withforestrybeingthemainagriculturalactivityintheprovince.About
38.3%oftheprovinceslandisusedforforestry.Agricultureisidentifiedasakeyfocusareato
achievethestrategicgrowthdevelopmentstrategyofprovidingabetterlifeforallintheprovince
througheconomicdevelopment.Growthpotentialisthroughagriculturalinvestment,production
andbeneficiationsoastoincreaseagricultureGDPcontributionfrom6.1%to10%bytheendof
the2008/2009financialyear.Otherstrategicobjectivesaretoincreasesustainableemployment
intheagriculturalsectorfrom18%to20%bytheendof2015,improvefoodsecurityby50%by
2014,improvesustainabilityinagribusinessenterprisesby20%,andincreaseparticipationof
historicallydisadvantagedinagriculturetomeetnationalAgriBEEtargets(MpumalangaGrowth
andDevelopment
Strategy,
2004
2014).
ThestructureoftheagriculturesectorinSouthAfrica
TheSouthAfricanAgricultureSector,primarilybasedinruralandperiurbanareas,is
characterisedbyadualagriculturaleconomycomprisingwelldevelopedcommercialfarming,
withanestablishedsupplychain,andsmall(subsistence)basedproduction. TheGeneral
HouseholdSurveyof2009(StatisticsSouthAfrica)andtheCensusforcommercialfarms,2007
(StatisticsSouthAfrica)provideaninsightintothesizeofthesubsistenceandcommercialsectors.
Precisedetailsinrelationtononcommercialandsemicommercialfarmingarenotavailable.
In2009,20.7%ofSouthAfricanhouseholdswereengagedinsomeformofagricultural
production.Table1reflectshouseholdagriculturalproductionpatternsintheprovincesand
showsthatthelargestproportionsofhouseholdsengagedinagricultureareinLimpopo,Eastern
Cape,FreeStateandKwaZuluNatal.
Table5:SouthAfricanhouseholdsinvolvedinagriculturalactivitiesbyprovince(1,000s)
ActivityProvince
TotalWC EC NC FS KZN NW GP MP LP
Involvedin
agricultural
production
39 643 35 274 697 108 248 205 580 2832
2.7%
37.3%
11.4%
31.9%
26.8%
11.4%
7.1%
21.1%
43.4%
20.7%
Livestock
production
* 312 22 26 230 34 27 21 99 778
17.5% 48.5% 62.1% 9.6% 33.0% 31.0% 10.7% 10.4% 17.1% 27.5%
Poultry
production
* 349 11 35 256 23 22 11 146 853
1.8% 54.3% 31.0% 12.9% 36.7% 21.1% 9.0% 5.1% 25.1% 30.1%
Grainsandfood
crops
* 389 * 21 316 34 31 128 465 1390
2.7% 60.5% 12.2% 7.8% 45.4% 31.5% 12.5% 62.5% 80.1% 49.1%
Industrialcrops0 * 0 * * 0 * 0 * *
0.0% 0.2% 0.0% 0.1% 0.6% 0.0% 0.5% 0.0% 0.1% 0.3%
Fruit&vegetable
crops
30 220 * 232 330 40 175 141 173 1350
75.9% 34.2% 25.2% 84.7% 47.3% 36.8% 70.5% 68.8% 29.8% 47.7%
10NorthWestGrowthandDevelopmentStrategy
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ActivityProvince
TotalWC EC NC FS KZN NW GP MP LP
Foddergrazing/
pasturegrass
animals
* * * * 14 * 11 * * 53
11.2% 0.5% 3.8% 3.5% 2.0% 2.0% 4.3% 2.0% 0.7% 1.9%
Forestry
*
*
*
*
*
0
*
*
*
10
1.2% 0.1% 0.5% 2.1% 0.1% 0.0% 0.4% 0.4% 0.2% 0.4%
Fishfarming/
Aquaculture
* * 0 0 0 0 0 0 0 *
1.5% 0.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Gamefarming* * * 0 * 0 0 0 * *
2.2% 0.2% 1.3% 0.0% 0.1% 0.0% 0.0% 0.0% 0.2% 0.1%
Other0 * 0 * * * * 0 0 *
0.0% 0.2% 0.0% 0.3% 0.4% 0.3% 0.3% 0.0% 0.0% 0.2%
*Numberssmallerthan10000aretoosmallforreliableestimates
Aparticularhouseholdcanbeinvolvedinmorethanoneactivityandpercentagesthereforedonotaddupto100%
Source:StatisticsSouthAfrica GeneralHouseholdSurvey,2009(p.318)
In2007,therewere39982commercialfarms11
inSouthAfricaasopposedtothe45818
registeredin2002.Therehasbeenacleardownwardtrendinthenumberofcommercialfarming
enterpriseswhichunderscorestheneedstogrowthecommercialagriculturesectortomaintain
SouthAfricasfoodsustainabilitypotentialandsupportinterventionstodevelopskillsacrossthe
agriculturalsector,especiallyfortransformationanddevelopmentofthesmallandemerging
agriculturalsector.
Table6:Commercialfarmingenterprisesbyprovince 2002and2007
Province 2002 2007 Growth/Decline
EasternCape 4376 3896 10.97
FreeState 8531 7515 11.91
Gauteng 2206 2378 7.80
KwaZuluNatal 4038 3560 11.84
Limpopo 2915 2657 8.85
Mpumalanga 5104 3376 33.86
NorthWest 5349 4692 12.28
NorthernCape 6114 5226 14.52
WesternCape 7187 6682 7.03
Total 45818 39982 12.74
Source:StatisticsSouthAfrica,2008
WhilstthelargestproportionsofhouseholdsinvolvedinagricultureareinLimpopo,FreeState,
EasternCapeandKZN(Table1),itisintheFreeState,WesternCape,NorthernCapeandNorth
Westprovinceswherethelargestnumberofcommercialfarmsarelocated(Table2). Nodirect
11CommercialfarmsarefarmingenterprisesthatareregisteredwithSARSforValueAddedTax(VAT)andincometax.
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relationshipcanthusbedrawnbetweenthenumbersofhouseholdsengagedinagricultureina
provinceandthenumbersofcommercialagriculturalenterprises.AgriSETAWSPdataanalysis
revealsnodirectrelationshipbetweenthenumberofemployersinaprovinceandthenumberof
formallyemployedpersons.
Categoriesof
farming
enterprises
Dualism(Mhone, 2000),isausefulwayofdescribingtheagriculturalsector,bothintermsof
understandingtheeconomicsofthesectorandplanningskillsdevelopmentinterventions.This
termdescribesaformalsectorthatiswellestablishedandaninformaloremergentsector,with
thetwosectorsreliantoneachother,andoninterventionsbythestateforintegration.However
thesetwobroadcategorieshavetheirlimitations.Withinthecommercialsectortherearelarge
establishedfarmingbusinessesandsmalleronesthatstruggletosurvive,andwithintheless
formalsectorthereareemergentfarmersstrivingtoachievecommercialsuccess. Itisnecessary,
therefore,tounderstandtheagriculturalsectorascomprisinganumberofdifferenteconomic
entitiesall
operating
within
the
same
dualistic
economic
framework.
The
following
typology
for
theagriculturalsectorreflectsthecomplexityoftheagriculturalsector:
Table7:Typologyoftheagriculturalsector
ProductionUnit Turnover Ownership&Management NumberBinding
constraintSupportrequired
Largecommercialon
privateproperty>R2million
Familyownedbutincorporated
multiplefarms.
Rentinlandprofessional
management
5400Marketsize
Equitycapital
Exportmarketaccess
Financialmarket
innovation
Mediumcommercial
onprivateproperty
R300000to
R2million
Familyowned,couldbe
incorporated.Somerentinginof
landfamilymanagement
17,000Landcapital
management
Mortgagecapitalfor
landaccess
Managementtraining
Smallcommercialon
privatepropertyR300000
Communalownership
Developmentprojects
Privateownership
Capital
management
infrastructure
Grantsforlandaccess
Propertyrights
Comprehensivefarmer
support
Credit
Physicalinfrastructure
Emerging
commercialin
communalareas
20hectares
Communalownership
Smallfarmersindevelopment
projects
Privateownership
35000
Land
(property
rights)
Capitallabour
management
Employment
opportunities
Grantsforlandaccess
Propertyrights
Comprehensivefarmer
support
Physicalinfrastructure
Institutional
infrastructure
Subsistencefarmerin
communalareas
Allotments
Marketgardens
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significantchangesoccurring,mainlyduetotheglobaleconomicdownturnandthesmall
marginsthatmanyagriculturalenterprisesoperatewithin.
Itisparticularlyimportanttohaveanunderstandingofthecategoryofemergingfarmers:those
whomaybestrivingtomovefromsubsistencefarmingtoamorecommercial model; thosewho
havebenefited
from
land
reform
processes
and
want
to
establish
an
agricultural
enterprise
on
thelandthathasbeenallocatedtothem;thosewhohavemadeuseofBEEfundingtoacquirea
stakeinafarmandaretryingtoachieveprofitability.Theemergingfarmersectorisneither
establishedcommercialfarmingnorsubsistenceinnatureandisthefocusofmanyofthe
governmentseffortstoachievetransformationwithinthesectorasawhole.
Employmenttrends
EmployeenumbersisamoreimportantmeasureofsizeforthepurposeoftheSETAandskills
planning,eventhoughturnovermaybemoreimportantintermsofeconomicimpactor
contributionto
GDP.
The
cause
of
this
discrepancy
between
turnover
or
GDP
contribution
on
the
onehandandformalemploymentnumbersontheotherisdiscussedextensivelybyMhone
(2000)andotherssuchasWebster(2004).Labourabsorptionlevelsinanenclave(second)
economyarenotoptimal.Oneconclusionthatcanbedrawnfromthisisthatskillsdevelopment
willneedtobelinkedtootherchangeswithinthesectorifitistocontributemeaningfullytojob
creation.Mechanismsneedtobefoundthatlinkgrowthtojobsandthisisnotstrictlysomething
thattheSETAcanaddress.Howeveritisimportanttolinkskillsplanningtootherprocesses,and
opportunitiesforthesewillbeexaminedaspartoftheenvironmentalscanlaterinthissection.
Thepastfewyearshaveseenhugedepreciationinemploymentlevelsandaveryhigh
unemploymentratecurrentlyestimatedat31.1%.Theagriculturalsectorhasalsowitnesseda
decline
in
sector
employment
largely
linked
to
contraction
of
the
sector.
The
sector
is
characterisedbytheneedforhighlyskilledandqualifiedfarmmanagersandtechnicalstaffon
theonehandandlargenumbersofunskilledandsemiskilledworkersontheother. Many
managersofemergingfarmsaremainlyuntrainedandunqualified.
Agriculturereliesmoreonsemiskilledlabourthanotherservicesasreflectedinthetablebelow.
Thesectoralsoreliesonmigrant,casualandseasonallabour.
Table8:PercentageunskilledtosemiskilledlabourbyDTIindustry(economicsector)classification
Sector 1995 2008Growth/declinein
skilledlabour
Agriculture
99.0 94.1 4.9%
Mining 92.0 87.9 4.5%
Manufacturing 87.0 82.1 5.6%
Utilities 80.0 68.8 14.0%
Construction 90.0 88.3 1.9%
Trade 84.0 84.2 0.2%
TransportandCommunication 73.0 76.8 5.2%
Finance 62.0 59.5 4.0%
Communityandpersonalservices 54.0 49.8 7.8%
Total 78.2 73.8 5.6%
Source:NationalTreasury,2010
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EmploymentinthesectorisbasedonthosewhoworkinadministrationinDAFFandthosewho
workinproductionandprocessingatfarmsandinfactories.InMarch2009,DAFFhad3285
posts,with2735ofthesefilled.ThetablebelowshowstheemploymentprofileatDAFFby
occupation,race,genderanddisabilityasat31March2009.Thedepartmentemployed57%male
employeesand43%femaleemployees.ThereweremoreAfricanemployees,constituting69%of
theentire
department
workforce.
Very
little
progress
has
been
made
regarding
the
employment
ofpeoplewithdisabilities,whoconstituteonly0.4%oftheworkforce.Thisisinlinewithother
departmentacrossgovernmentwheresimilarlylittleprogresshasbeenmade.
Table9:Employeeprofile DepartmentofAgriculture,ForestryandFisheries
Occupational
Category
(SASCO)
African Coloured Indian White Totals
M F M F M F M F M F Total %
Legislators,
seniorofficials,
managers
15 14 2 2 8 3 25 19 44 1.6
Professionals
239
241
11
12
4
14
70
64
324
331
655
24.0
Technicians,
associateprof.190 153 38 19 9 4 86 57 323 233 556 20.4
Clerks 93 204 22 42 0 7 13 171 128 424 552 3.0
Serviceandsales
workers38 19 4 2 1 17 1 60 22 82 3.0
Craftandrelated
tradesworkers42 3 13 58 0 58 2.1
Plant,machine
operatorsand
assemblers
53 1 8 1 62 1 63 2.3
Elementary
occupations
484 96 94 28 1 6 5 585 129 714 26.2
Totals 1154 728 182 105 15 25 214 301 1565 1159 2724
Percentage 42.4 26.7 6.7 3.9 0.6 0.9 7.9 11.0 57.5 42.5 100
Peoplewith
disabilities1 1 1 2 6 4 7 11 0.4
Race 1882 287 40 515
Percentage 69.1% 10.5% 1.5% 18.9%
Source:DeptofAgriculture,ForestryandFisheries(2010)
Inrespectofoccupationsandskillsprofiles,themajorityoftheDepartmentsemployeesare
ProfessionalsandTechnicians/AssociateProfessionals(44.4%),followedbypeopleemployedin
elementaryoccupations
(26.2%).
Employmentacrosstheagriculturalsectorissubjecttogrowthanddeclinevariationsrelatedtoa
widerangeofconditionsandcircumstancesproduceprices,climateandenvironmental
changes,mechanisation,technology,andthelike.Since2002thetrendhasbeendownwards.
Thereareanumberofreasonsforthisincludingmechanisationandcasualisationoflabouron
largerfarms,theeconomicdownturnimpactingonsomesubsectors,andtheglobaltrade
situation,includingchangesintheforeignexchangeratesandthefailureofsuccessiveDOHA
developmenttalkstoaddressinequalitiesinaccesstoglobalagriculturalmarkets12
.
12
The
Doha
Development
Round
is
the
trade
negotiation
of
the
World
Trade
Organization
(WTO).
Its
objective
is
to
lowertradebarriersglobally.Talkshavestalledoveradivideonmajorissues,suchasagriculture,industrialtariffsand
nontariffbarriers,services,andtraderemedies..Themostsignificantdifferencesarebetweendevelopednationsled
http://en.wikipedia.org/wiki/World_Trade_Organizationhttp://en.wikipedia.org/wiki/World_Trade_Organizationhttp://en.wikipedia.org/wiki/World_Trade_Organizationhttp://en.wikipedia.org/wiki/World_Trade_Organizationhttp://en.wikipedia.org/wiki/World_Trade_Organizationhttp://en.wikipedia.org/wiki/Trade_barrierhttp://en.wikipedia.org/wiki/Trade_barrierhttp://en.wikipedia.org/wiki/Trade_barrierhttp://en.wikipedia.org/wiki/Trade_barrierhttp://en.wikipedia.org/wiki/Agriculturehttp://en.wikipedia.org/wiki/Tariffshttp://en.wikipedia.org/wiki/Non-tariff_barriers_to_tradehttp://en.wikipedia.org/wiki/Non-tariff_barriers_to_tradehttp://en.wikipedia.org/wiki/Non-tariff_barriers_to_tradehttp://en.wikipedia.org/wiki/Non-tariff_barriers_to_tradehttp://en.wikipedia.org/wiki/Non-tariff_barriers_to_tradehttp://en.wikipedia.org/wiki/Doha_Development_Round#cite_note-crs-2-0#cite_note-crs-2-0http://en.wikipedia.org/wiki/Developed_nationshttp://en.wikipedia.org/wiki/Developed_nationshttp://en.wikipedia.org/wiki/Developed_nationshttp://en.wikipedia.org/wiki/Developed_nationshttp://en.wikipedia.org/wiki/Doha_Development_Round#cite_note-crs-2-0#cite_note-crs-2-0http://en.wikipedia.org/wiki/Non-tariff_barriers_to_tradehttp://en.wikipedia.org/wiki/Tariffshttp://en.wikipedia.org/wiki/Agriculturehttp://en.wikipedia.org/wiki/Trade_barrierhttp://en.wikipedia.org/wiki/World_Trade_Organization8/10/2019 AGRISETA Sector Analysis 290610-Version 2
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Agriculture:SectorAnalysis 11
Itisanticipatedthatgrowthoftheagriculturalsectortomeetlocalconsumerdemand,
governmentinitiativestoexpandagriculturalnicheexportmarketsandthedevelopmentofan
aquaculturesubsectortocounterdepletionofnaturalresources,islikelytoleadtocreationof
employmentinthesector.
Table10:WorkforcechangesintheAgriculturalsector 2001to2010
Year Workers Yearonyeardifference Variation
2001 969000
2002 1153000 +184000 16.0%
2003 808000 345000 42.7%
2004 828000 +20000 2.4%
2005 778000 50000 6.4%
2006 886000 +108000 12.2%
2007
703000
183
000
26.0%
2008 764000 +61000 8.0%
2009 615000 149000 24.2%
2010* 650000 +35000 5.4%
*Quarter1
Source:StatisticsSouthAfricaSurvey(pp.210211)
Employmentcategoriesandremuneration
Itisdifficulttogetdetailedandaccurateyearlystatisticsonemploymentbytype(fulltime,
casual and seasonal employees) or on remuneration in the agricultural sector. The latest
available statistics on commercial agriculture are found in the 2007 Stats SA Census of
Commercial Agriculture. The following tables reflect survey data on the number of
permanent,casual and seasonal agriculturalsector employeesbyprovince aswell as total
remunerationperprovince.
Table11:Numberofpaidfulltimeagriculturalworkersandtotalremunerationbyprovince
Province
2002 2007 Growth/Decline
NumberRemuneration
R'000sNumber
Remuneration
R'000sNumber Remuneration
EasternCape 33718 329351 34253 510404 1.6% 55.0%
Free
State
57
607
580
888
53
944
737
796
6.4%
27.0%Gauteng 20815 344629 22979 534083 10.4% 55.0%
KwaZuluNatal 75799 763439 66685 968455 12.0% 26.9%
Limpopo 62635 525390 35728 625436 43.0% 19.0%
Mpumalanga 61603 599617 46520 853396 24.5% 42.3%
NorthWest 39914 409526 53741 574596 34.6% 40.3%
NorthernCape 31077 320598 26871 339948 13.5% 6.0%
WesternCape 98207 1378816 90943 2029275 7.4% 47.2%
Totals 481375 5252251 431664 7173389 10.3% 36.6%
Source:StatisticsSouthAfrica,Report12.02.01(p.1101)
byEU,USA,andJapanandthemajordevelopingcountriesledandrepresentedbyIndia,Brazil,China,andSouth
Africa.Considerablecontestationexistsoverthemaintenanceofagriculturalsubsidies,operatingastradebarriers.
http://en.wikipedia.org/wiki/Developing_countryhttp://en.wikipedia.org/wiki/Developing_countryhttp://en.wikipedia.org/wiki/Developing_countryhttp://en.wikipedia.org/wiki/Agricultural_subsidyhttp://en.wikipedia.org/wiki/Agricultural_subsidyhttp://en.wikipedia.org/wiki/Agricultural_subsidyhttp://en.wikipedia.org/wiki/Agricultural_subsidyhttp://en.wikipedia.org/wiki/Developing_country8/10/2019 AGRISETA Sector Analysis 290610-Version 2
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Table12:Numberofpaidcasual&seasonalagriculturalworkers&totalremunerationbyprovince
Province
2002 2007 Variance
NumberRemuneration
R'000sNumber
Remuneration
R'000sNumber Remuneration
EasternCape 30936 59680 30565 106497 1.2% 78.4%
FreeState 57871 69595 45150 98996 22.0% 42.2%
Gauteng 8722 20975 11957 93461 37.1% 345.6%
KwaZuluNatal 37602 103946 34383 154286 8.6% 48.4%
Limpopo 38614 107223 31833 124159 17.6% 15.8%
Mpumalanga 46480 86242 32826 176363 29.4% 104.5%
NorthWest 46078 62653 32008 75250 30.5% 20.1%
NorthernCape 68174 121613 47874 123723 29.8% 1.7%
WesternCape 124968 331406 98546 485108 21.1% 46.4%
Totals 459445 963331 365142 1437843 20.5% 49.3%
Source:Statistics
South
Africa,
Report
12.02.01
(p.1101)
ThetablesabovereflectthattheWesternCapewasthebiggestemployeroflabouron
commercialfarmsin2007,withamajorityoftheemployeesbeingcasualandseasonal.The
EasternCapeemployedtheleastnumberofcommercialfarmemployees.Thecomparatorfigures
for2002and2007wouldappeartoshowacontinuouscountrywidereductioninemployment
bothinpermanentemployeesandcasualandseasonalworkers.TheexceptionistheNorthWest
thathasexperiencedanincreaseinfulltimeemployees.
Thecurrentminimumwageforfarmworkers(February2010)isR1316.69permonth13
. Monthly
salariesdiffer
across
sub
sectors
with
highest
paid
workers
in
primary
production
in
the
fisheries
anddairysubsectors.
Table13:ApproximatemonthlywageratesinAgricultureforselectedsubsectors
Subsector PrimaryProduction Processing/Packhouse
Meat R2000
Dairy R2650
Wines R1100 R1400
Flowers R800 R1200
Fisheries
R5000
(crewman) R
1892
Source:DTI,201014
Vink&vanRooyen(2009)indicatethatbeforetheintroductionofminimumwagein2003,the
realcashremunerationforemployeeshadbeenincreasing.Howeverovertimetheunitcostof
labour(theratioofthetotalcostoflabourtothetotalvalueofoutput)hasbeenindecline,
includingasteepdropduringandaftertheintroductionofminimumwages.
13
Department
of
Labour,
2010
14Source:DTI:(DatasourcedfromSAMIC,DairyIndustryJAG,WOSA,SAFEC,SAPelagicFishIndustryAssociation)
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In1970,foreveryR1ofoutput,16centswasspentonlabour.By1980thishasdroppedto13
centsforR1ofoutput. By1994thefigurehadincreasedto19cents,decliningto17centsin1998
andto11.7centsin2001.By2007ithadreducedto10.8cents.Furtherresearchwillbeneeded
toestablishthecurrentsituation,butthereisreasontobelievethatthedeclinehascontinued,
withwagesbeingverylowbothintermsofunitcostsandinrelationtoothergroupsofworkers
inthe
economy.
StrictlyspeakingitisnottheroleoftheSETAtoengageinthecomplexregulatoryframeworkfor
theagriculturallabourmarket.ItisfortheDepartmentofLabourandNEDLAC,withtheir
employerandorganisedlabourstakeholderstofindwaysofbalancingtheneedforprotectionof
vulnerableworkerswiththeneedtocreateaframeworkthatencouragesthecreationofjobsand
improvedjobsecurity.Thereasonthatmoreresearchisneededinthisarea,andinparticular
detaileddiscussionswithindustryandlabourrepresentatives,istoestablish
Theextenttowhichskillsdevelopmentinterventionscanimprovetheprospectsforjob
creationand
improved
job
security,
and
Themechanismsthatcanbeestablishedtoenableuninterruptedskillstraining,inthe
contextofcasualisationanduseofcontractandseasonallabour.
StakeholdersintheAgriculturalsector
National government departments
ThereareanumberofnationalgovernmentDepartmentsandspheresinvolvedinthechallenges
oftheagriculturalsector.Thefollowingtablesetsoutthebroadcontributionthateach
departmentisintendedtomake.
Table14:GovernmentdepartmentrolesinrelationtoAgriculture
Department Role
DepartmentofAgriculture,Forestry andFisheries Agriculturalpolicyandsupport
DepartmentofRuralDevelopmentandLandReform LandReformandlandclaimssettlements
DepartmentofEconomicDevelopment Economicplanning
NationalTreasury Macroeconomicpolicy
DepartmentofTradeandIndustry Industrialstrategy(IPAP2)
DepartmentofWaterAffairs Themanagementofwatersupply
DepartmentofLabour Labourmarketpolicy
Department
of
Higher
Education
and
Training
HRD
and
skills
planning
and
SETAs
Inrelationtopublicspendingonagriculturetheagriculturalnationalbudgetconstitutesabout
0.5%ofthenationalbudget. Thefigurebelowreflectstrendsinnationalbudgetingforthe
agriculturalsectorbetween1996/7and2011/12.
Someanalysts15
havearguedthatstateexpenditureonagricultureshowslackofprioritisationof
thesector,especiallyconsideringthatthebudgetremainslowerthanitwasinthelate1980s,
whenitnowcatersforagreaternumberoffarmersthanitdidduringapartheidsegregation.
15Greenberg,2010,p.2
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Figure2:NationalbudgetsforAgriculture,19962011(adjustedforinflation)
Source:Greenberg,2010
TheDepartmentofAgriculture,ForestryandFisheries(DAFF)isresponsiblefortheagricultural
sector.Thedepartmentworkswithvariousorganisationstopromotetheinterestsofthesector:
ItregistersallSouthAfricanPestControlAssociation(SAPCA)qualifiedinspectors.
ItworkswiththeAgriculturalResearchCouncilforresearchtooptimisethecontrolof
migratorypests.
TheDirectorateonMarketingworkswiththeNationalAgriculturalMarketingCouncil
(NAMC)onissuesrelatedtoequitableaccesstomarketsincludingpolicyformulation,
issuingofpermits,andcoordinatinginterdepartmentalrelationstoenhancemarketing.
HistoricallytheDepartmenthasemployedalargenumberofextensionofficerslocatedin
farmingcommunitieswhohavesupportedandadvisedfarmers.Thisservicehasbeenin
declineinrecentyears,butremainsanimportantaspectofstatesupporttothesector.
TheaboveroleswillbesubjecttosomereviewinthecontextofIPAP2andalsothedebates
aroundtheroleofthestateintheeconomy.Theissueisnotonlylevelsofspending,butalso
clarifyingthe
role
of
government
in
relation
to
the
business
of
the
sector.
Sector representatives
Therearethreemajorumbrellaorganisationsrepresentingtheinterestsoffarmers,AgriSA,
TLUSAandtheNationalAfricanFarmersUnionofSouthAfrica(NAFU).
AgriSAandTLUSArepresentsbothcommercialfarmersandcooperativesintereststhroughits
engagementatnationalandinternationallevel. AgriSAisamemberoftheSouthernAfrican
ConfederationofAgriculturalUnions(SACAU),aregionalfarmersunionforfarmersinSouthern
Africa. AgriSAhasstructuresinalltheprovinces,exceptLimpopo.
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NAFUisaunionforpredominantlypreviouslyhistoricallydisadvantagedsmallholderfarmerswith
amembershipbaseincludingfarmers,agribusinesses,farmersorganisations,corporationsand
individualswhosupporttheirgoals.NAFUisrepresentedbydifferentunionsinalltheprovinces.
ThereareotheremployerorganisationswhoarenotaffiliatedtoAgriSAandNAFUincluding:
AgriculturalIndustrial
and
Medium
Employers
Organisation
Agricultural,MiningandIndustrialChemicalManufacturersAssociation
AgrilaborEmployersOrganisation
AlgoaMeatTradersAssociation
EastCoastPoultryProducersEmployersAssociation
EastLondonandDistrictMeatTradersAssociation
FertiliserIndustryEmployersOrganisation
LandbouWerkgewersorganisasie(Workinfo.com)
RedMeatProducersAssociation
TheAgriculturalResearchCouncilisanautonomousstatutorybodythatprovidesresearchtoDAFFandtheprovincialdepartmentsofagriculture.FiguresavailableforSouthAfricas
investmentinagricultureresearchanddevelopmentshowthatSouthAfricawasabove
internationalnormsofinvestmentinR&D,whichare0.53%ofagriculturalGDPfordeveloping
countriesand2.36%fordevelopedcountries.InSouthAfrica,in2000,agriculturalR&D
investmentinrelationtoagriculturalGDPwas3.04%16
.
Therearesixmajorsourcesofcreditforfarmers:banks(50%),agriculturalcooperativesand
agribusiness(12%),theLandBank(21%),privatecreditors(8%),othercreditorsandfinancial
institutions(9%)andgovernment(1%)(GCIS,2010)
1.2 Factors impacting development in the Agriculture sectorSeveralinternationalandlocalfactorsimpactontheproductivityoftheagriculturalsectorandits
growth.Keyamongsttheseare:
GrowthoftheSouthAfricaneconomyandrisingconsumerdemand
Internationaltradeandtradeagreements
Theglobalrecessionandriseinfoodprices
Thelandreformprogramme
Relianceonimports Wateravailability
Changingconsumerpatternsanddemands(e.g.organicfoodstuffs)
Technologicalchangesandmechanisms
Qualitystandards
Farmsafetyandsecurity
Broadbasedblackeconomicempowerment
Legislation
Skillsdemandandsupply
HIV/AIDS
16Vink &vanRooyen,2009
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Thesekeyfactorsareclusteredanddiscussedbelow:
Futuresectoreconomicgrowthanddevelopment
South African sector growth plans (IPAP2)
The2010/20112012/2013IndustrialPolicyActionPlan(IPAP)identifiesfivestructural
challengesthatexistedintheSouthAfricaneconomybeforetheglobaleconomicdownturnand
whichhavebeenexacerbatedbytherecenteconomiccrisis.Thesechallengeswereevidenteven
duringthetimeSouthAfricawasexperiencingrelativelyhighgrowthratesbetween2005and
2007andhavecontinuedduringtherecession.Thesechallengesare:
1. Structuralimbalancesinthegrowthpathincludinggrowththatislaggingbehindother
mediumandlowincomecountries.
2. Unevenperformanceofthemanufacturingsectorwithsomedivisionsliketheautomotive
sectorexperiencing
exponential
growth
while
other
sectors
have
stagnated.
3. Employmentgrowthbeingsustainedbycreditextensionandconsumptionratherthanby
productivesectors,leadingtoalargecurrentaccountdeficit.
4. Lowprofitabilityofmanufacturing.
5. Lowsavingsandinvestmentfromfinancialsectorgrowth.Only5.2%ofprivatecreditwas
extendedtofixedinvestmentin2008.
KeysectorshavebeenidentifiedforIPAPsfocus,includingagroprocessing,whichhasadiverse
groupofindustriesandsubsectorsincludingfoodprocessing,beverages,aquaculture,
horticulture,medicinal,aromaticandflavourants.Keyactionplansfortheagroprocessingsector
areidentified
in
IPAP2
as:
DevelopmentofaNationalFoodControlAgencytoconsolidatethesector;
Developmentofaquaculturetosupplementdwindlingwildfishstocks;
Designatingspecificareasforutilisationofaquaculture;
Developmentoftheorganicfoodsector;
Developmentofthesmallmillingindustry;
Enhancingcompetitivenessinfruitandvegetablecanning;
ImprovingbeneficiationofRooibosandHoneybushproducts(IPAP2,2010).
International Trade
South
Africa
is
a
major
exporter
of
Agricultural
produce.
In
particular
South
African
fruit
and
fruit
derivedproductssuchaswineandfruitjuicearecompetitiveintheglobalmarket.Howeverin
manysubsectorswhereexportpotentialexistsgrainandmeatseriousproblemsfacethe
industry.AkeychallengeistheunevenplayingfieldexperiencedbySouthAfricanexporters.
MajorglobalcompetitorsincludetheUnitedStatesandthecountriesoftheEuropeanUnion,
wheregovernmentsubsidiesinvariousformsareinplace.NosuchsubsidiesareinplaceinSouth
Africamakingitdifficult,ifnotimpossibleforSouthAfricanagriculturalproducestoenter
developedcountrymarketsduetothepricesthattheyhavetoaskforproducts.I
Inaddition,thevalueoftheRandhasfluctuatedfromlevelsofaroundR10totheUSdollartoas
littleasR7tothedollar.WhentheRandisstrongexportbecomesdifficultbecauseitcostsmore,
inthecaseofthemovefromR10toR7a30%costincreasefortheimporter.Itisimpossibleto
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predictwhethertheWorldTradeOrganisationnegotiations,knownastheDOHARound,will
achieveprogressinthecomingyears.Historicalevidenceisthatduringperiodsofglobalrecession
developedeconomiesbecomemoreprotectivenotless,andsothecurrentoutlookisnotgood.
NorisitpossibletopredictthevalueoftheRand,thoughcurrentthinkingingovernmentisto
movetowardaweakerRandtoencourageexports.Thesearetwokeyvariablesthatwillneedto
befactored
into
the
different
sector
growth
scenarios
for
the
future.
Global recession and rise in food prices
EconomicgrowthsloweddownsignificantlyinsubSaharanAfricaandinSouthAfricain2009but
thereappeartobesignsofrecovery.GDPgrowthintheregiondeclinedfromabout6%in2004
2008toabout1.8%in2009/10.GDPgrowthinSouthAfricawas1.6%in200917
androseto4.6%
inthefirstquarterof201018
,thoughmuchofthisisrelatedtotheincomederivedfromthe2010
FIFAWorldCupandmaynotbesustained.Projectionsaregenerallyforaslowrevivalwithaset
backaftertheslightriseresultingfromtheWorldCup.Areturntothe6%levelsofthe2007/8
couldtakesomeyears.
TheglobalrecessionreducedthedemandforAfricanexportsandreducedcapitalflowstothe
regionbutitisanticipatedthatthedemandformineralresourcesbyAsianandWesternpowers
willresultinboththeexpansionofexportsandexpandedforeigndirectinvestment.The
competitionbetweenIndiaandChinaforAfricanmarketsisalsoexpectedtoboosttradetothe
benefitofAfricansuppliers.SouthAfricaisexpectedtoparticularlybenefitfromdirectforeign
investmentfromChinaandIndia.ChinahasalreadybecomeSouthAfricaslargestmarketfor
exportsandsupplierofimports19
.
Risingfoodpriceshaveforcedgovernmentsaroundtheworldtocontrolpricesofmaize,bread,
rice
and
dairy
products.
In
South
Africa,
food
price
inflation
between
December
2005
and
December2006averaged7.88%20
. Althougheffortsarebeingmadetoreducebarriersto
poorerfamiliesinrelationtobasicfood,therehasbeennomovetosubsidisefoodgenerally.This
maychange,thoughthespaceforsignificantlevelsofsupportisrestrictedbecauseofreduced
revenuefromincometaxesresultingfromtherecession.Theglobalcreditcrunchandrecession
havemeantareductioninpublicexpenditureandfunding,whichhasaffectedtheagricultural
sector21
.
Landreform
InSouthAfricaspecifically,landreformhasasignificantbearingonfoodsecurityandagricultures
contributionto
GDP.
The
objective
of
the
land
reform
programme
is
to
transfer
30%
of
agriculturallandtoblackownershipby2014(deferredto2025)toensuremoreequitableaccess
tolandbyhistoricallydisadvantagedpeopleandtoincreasetheirparticipationinagricultural
activities22
.Landreformhasbeeninformedbyfourprocesses23
17DepartmentofAgriculture,ForestryandFisheries,2010
18StatsSA,2010
19DepartmentofAgriculture, ForestryandFisheries,2010
20DepartmentofAgriculture,ForestryandFisheries, 20102011StrategicPlan
21
Economic
Commission
for
Africa,
2009
22
Xingwana,200823
CDE,2008
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Landrestitution,involvingreturninglandorprovidingfinancialcompensationtothose
whoselandwasdispossessedduringapartheid;
Landredistribution,transferringmorelandtothehistoricallydisadvantaged;
Tenurereform,modernisinglandtenurerulesandaccesstolandownership;and
Providingfinancialsupportforthedevelopmentofemergingfarmers.
Inrelationtoprogresswithlandreform,bySeptember2009,only6.9%ofagriculturalland(about
5.67millionhectares)hadbeentransferred,andamajorityofthebeneficiarieshavenotyet
occupiedthelandduetolackofinfrastructure,inputortechnicalsupport.Thefollowingtable
givesanindicationoftheprogressoflandreformsincetheinceptionofthefirstdemocratic
government.
Table14:Landtransfersandbeneficiaries 1994to2009
ProvinceRedistributionandtenure Restitution Total
# Hectares Beneficiaries Claims Hectares Beneficiaries Hectares Beneficiaries
EasternCape 675 353357 25633 16201 94834 215201 448191 240834
FreeState 799 350291 7721 2662 47615 40893 397906 48614
Gauteng 286 34513 7328 13159 9476 70179 43989 77507
KwaZuluNatal 690 547414 67761 14752 642447 433168 1189861 500929
Limpopo 291 91235 7403 3382 513024 220227 604259 227630
Mpumalanga 444 322839 13950 2694 399876 225877 722715 239827
NorthernCape 271 952744 2773 3682 539620 100554 1492364 103327
NorthWest 300 268566 40539 3709 373642 172963 642208 213502
WesternCape 223 122304 12750 15546 3769 118165 126073 130915
Total 3979 3043264 185858 75787 2624303 1597227 5667567 1783085
Source:Greenberg,2010
Achievementof
the
30%
land
reform
target
is
being
made
difficult
by
land
prices.
Under
the
willingbuyerwillingsellerscheme,thegovernmentwillneedR74billiontobeabletopurchase
enoughland.Whileresourcesmaybeavailable,therearesuggestionsoflackofcapacity.The
DepartmentofRuralDevelopmentandLandReform(DRDLR)wasabletospendonly31%ofits
landreform2009/10budgetinthefirstsixmonthsofthefinancialyear.Goingforward,this
Departmentneedstoidentifywhattherealchallengesarewiththepaceoflandreformdelivery
sothattheycanbemitigatedtomeetthe2025target.Apriorityistheretentionofskills,skills
transferandskillsdevelopmentduringthetransferofland,aswellasretentionofnationalfood
productiontoavoidlossofproduction.
Supportfor
new
beneficiaries
of
land
to
ensure
sustained
productivity
is
derived
from
two
main
sourcesoffundingtheBroadeningAccesstoAgricultureThrust(BADAT)andthe
ComprehensiveAgriculturalSupportProgramme(CASP).CASPisaconditionalgrantfromthe
DepartmentofAgriculture,ForestryandFisheriestoprovincialdepartmentstosupportemerging
farmerdevelopment.ProvincialfarmingbudgetsdedicatedforfarmersupportinMpumalanga,
theFreeState,NorthernCapeandtheWesternCapehaverisensignificantlyandthosein
KwaZuluNatalandGautenghavewitnessedaslightincrease.EasternCapeandLimpopo
agriculturalbudgetshavebeensteady.TheNorthWestistheonlyprovincewheretherehasbeen
asharpdeclineintheshareofthebudgetdedicatedtofarmersupport24
.
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Agriculture:SectorAnalysis 19
Relianceonimports
OveralltheAgriculturesectorcontributespositivelytothebalanceofpayments.
SouthAfricaremainsfoodsecure.Thevalueofourexportsincreasedby46.4%from
R33656millionin2007/08toR49278millionin2008/09.Duringthesameperiod
theestimated
value
of
imports
rose
by
12
%,
from
R34
009
million
to
R38
401
million,
resultinginapositivetradebalance25
SouthAfricadependslargelyonworldmarketsforseedproductionandagrochemicals.Regarding
seedproduction,thereareonlythreecommunityseedproductionschemesinLimpopoand
Mpumalangabeingpilotedwithstatefunding. Tentoplargecompanies,includingtwoSouth
Africancompaniesandmultinationals,haverightstoovertwothirdsofregisteredseedvarieties
inSouthAfrica. Despitethedominanceofgeneticallymodifiedandhybridseedinsomesub
sectorslikemaize,sunflowerandsorghum,openpollinatedvarietieshavebeenresilientinSouth
Africa,enablingthepossibilityofalternativeseedsourcesnotdependentontechnological
processes26.
Inrelationtoagrochemicals,deregulationandliberalisationinthefertilisersectorledtothe
shutdownoflocalproductioncapacity,andSouthAfricabecameanimporteroffertiliserforthe
firsttimein2000. Therearethreelargeplayersinthefertilisersector,SasolNitro,Yaraand
Omnia.SouthAfricaimportsanestimated70%offertilisersandpesticides.Fertiliserpricesrose
byover200%between2006and2008,butdroppedsomewhatafterthat.However,thishike
signifiedthevolatilityoftheagrochemicalsindustryandSouthAfricasdependencyonimports,
andthepotentialriskforemergingfarmersandfoodproductionofthisdependenceonimports,
asthecountrycannotcontroltheprices,makinginputsbothdifficulttobudgetforandinmany
casesunaffordable.
The
price
of
agrochemicals
is
also
particularly
influenced
by
the
prices
of
oil
andtheexchangerate.
ThegeneralunderstandinginrelationtojobcreationisthataweakerRandwillimproveexports
andthereforeenablejobcreation.Ofcoursethedownsideofthisstrategyisthatimports
becomemoreexpensive.Sowhatmaybeanadvantageforthosesubsectorswhoareexpanding
theirexportvolumes,thoserelyingonimportedagrochemicalswillbeunderincreasedpressure.
Water
Waterisbothanessentialandscarceresourcefortheagriculturesectorandisbeingthreatened
byclimatechanges.Cropproductionreliesheavilyonwaterandyetaccesstowaterisnotbeing
addressedinasystematicwayinthelandreformprocesses.Greenbergsuggeststhatthe
relationshipbetweenlandreform,agriculturalsupportandwaterresourceprovisionis
inadequate,andawaytoaddressthiscouldbeestablishedbylinkingwaterprovisiontoland
transferorinvestinginirrigationforbothcommercialandresourcepoorfarmers. However,
investinginirrigationinthecontextofwaterscarcityandclimatechangemaynotbethebest
option.Whatcouldbeneededisfindingwaystomaximiseefficiencyofthe60%ofSouthAfrican
25DepartmentofAgriculture,ForestryandFisheries,StrategicPlan2010/11
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waterusedforirrigation,by,forexample,usingmethodssuchasdripormicroirrigation,which
areexpensivetosetupbutwhichreducewaterwastageby510%27
.
TheDepartmentofWaterAffairsisresponsibleformanagingwatersupplyandhastogive
authorisationforagriculturalprojectsandotherdevelopments.Thedepartmentneedstobeseen
asan
important
stakeholder
in
the
agricultural
sector.
Thelabourmarket
SouthAfricarecordedanunemploymentrateof24.3%in2009(narrowdefinition).Ifpeoplewho
arenolongeractivelyseekingworkareconsidered,thebroadunemploymentraterosefrom
26.7%to31.3%,illustratedinthefigurebelow.Asadirectconsequenceoftheglobaleconomic
downturnin2008,870000formaljobswerelostin200928
.Othershavequotedafigureofover1
million.
Figure3:
Official
unemployment
in
South
Africa,
2003
2009
Source:NationalTreasury,2010
Annualemploymentlossfollowedsectorgrowthpatterns,withagriculture,mining,
manufacturingandtradefacingthehighestjoblossesastheirsectorgrowthcontracted.
Unemploymentisespeciallyamajorproblemamonglowerskilledworkersandyoungerpeople.
Youthemploymentinthe1524yearagegrouphasfallenby219000(13.6%),and48.3%of
peopleinthisagegroupareunemployed.Employmentofsemiskilledandunskilledworkershas
contractedby
527
000,
and
male
employment
has
gone
down
by
550
000
(7.1%)
while
that
of
womenhasdecreasedby320000(5.2%).Thenumberofdiscouragedworkers,i.e.thoseno
longeractivelyseekingwork,hasincreasedfrom518000to1.7million29
.
Clearlytheexistenceofaverylargepooloflargelyunskilledunemployedworkershasanimpact
onthefarmingsector.Itdriveswagesdownandcreatesopportunitiesforcasualisationandthe
expansionoflabourcontractagenciesandbrokers.Inadditiontherearesignificantnumbersof
foreignnationals,mainlyfromZimbabweandMozambique,whoareseekingworkandoften
findingitonfarmsandinprimaryprocessingandpackagingplants.Therearebenefitstothe
27
Greenberg,
2010
28
NationalTreasury,201029
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Agriculture:SectorAnalysis 21
sectorwithskilledandsemiskilledworkerscomingintothelabourmarketandbeingabsorbed
intotheworkforceandhelpingraiseproductivitylevels.Howeveratthelowerskilledendofthe
markettheexistenceofthispoolbringsfurthercasualisationanddownwardpressureonwages.
Tensionsarelikelytoincrease,andfurtherprotestseitherintheformofxenophobicoutbreaksor
actionsagainstfarmersmaywellincrease.
Aviewoftenexpressedbyfarmemployersisthatcurrentlabourlegislationmakesdismissing
workersdifficultandsotheavailabilityoflabourwithoutenteringintocontractsofemploymentis
anattractivewayofavoidingthelegislationanditsobligations.OrganisedLabourisseekingto
restricttheseopportunitiesthrougheitherregulatingoreliminatinglabourbrokers,andefforts
arebeingmadetoregulatetheuseofforeignlabour.Howeverfortheforeseeablefuturethe
trendisforformallyemployedpeopletobereducedinnumber.
Inrelationtotheemergentsectortherewillalsobeareluctancetoenteremploymentcontracts
withworkers.Thefactthatmanyhouseholdsareengagedinsomeformoflargelyunpaid
agriculturalwork
means
that
there
is
significant
casual
work
dating
back
many
years.
Helping
changethissituationintoonewherecasualorunpaidjobsaretransformedintoformaljobswith
regularwageswilltaketime.Itisalsolikelythatassomeemergentfarmsbecomeestablished
theywillactsimilarlytoestablishedfarmsandinstituteaformofcasuallabourratherthan
expandingaworkforceforwhichtheywouldhavetotakealevelofresponsibility.
FromanAgriSETAperspectivetheselabourmarkettrendsmeanthatwhilstlevyincomecanbe
directedatarelativelysmalllabourpool,onethatismanageableintermsofplanningand
implementation,thesizeoftheinformal,casualandunemployedlabourforceinthesector for
whomnolevyispaidandwhohavenoemployertoplanfortheirskillsneedsisverylargeand
itsneeds
almost
unlimited.
Clearly
the
relationship
with
the
National
Skills
Fund
(NSF)
becomes
criticalinrespectoftheentirenonlevyincomesector.Againthelevelofsupportavailablefrom
nonlevyincomesourceswillbeanimportantvariableinlookingatfuturesectorskills
developmentscenarios.
Consumertrends
SouthAfricacurrentlyproducesenoughfoodtomeettheneedsofitspopulation.However,
consumptionofthreemainstaples,maize,wheatandvegetableshasbeenvolatilesince1985
andremainsbelow1990levels.ConsumptionofmaizeandvegetablesbySouthAfricansis17%
and
32%
less
respectively
than
in
1985
30
.
Themainreasonsforthislieinthegrowinglevelsofpovertyandthedifficultiesthatfamilieshave
inpurchasingnutritiousfood.Whilstgovernmenthasincreasedthelevelsofsocialgrantsand
increasedthenumberofpeoplereceivinggrantstoaround13million,theincomesofpoor
familieshavebeenbadlyhitbyarangeoffactors,includingjoblossesandrisesinfoodprices.The
approximately1millionpeoplewholosttheirjobsin2008/9meantalossofincomeformany
millionsofdependents.Risesinfoodpriceshavealsohadadisproportionateimpactonthepoor.
Whilstfoodisavailableitisoftennotaccessibletofamiliesontheincomelevelsthattheyhaveto
managewithin.Theresultisthatless,andlessnutritious,foodispurchased,whichinturn
impactsontheabilityoffarmerstoselltheirproductslocally.
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Whilstthereisnoevidencethatgovernmentwillreduceitseffortsinrelationtopovertyreliefand
socialbenefits,includingsuchprogrammesasschoolfeedingschemesandfoodparcelsduring
periodsofdrought,thestateofpublicfinancesmaynotenabletosupportthepovertythatgrips
manyruralareas.Ifrealincomelevelsforthepoorweretoriseitcouldhaveasignificantimpact
onthe
economy
of
the
agricultural
sector.
Equally
an
improvement
in
the
rural
economy
with
increasedagriculturalproductionandjobs,woulddramaticallyimpactonthecapacityofpeople
tobuynutritiousfood.Achievingapositivegrowthpathinruralareasisahugechallengefor
government,andonethatiskeytogovernmentsMediumTermStrategicFrameworkand
IndustrialPolicyActionPlans.
HIV/AIDS
SouthAfricahasahighprevalenceofHIVandAIDS.TheHIVprevalenceamongpeopleagedtwo
andabovewasestimatedat10.9%in2008.
Table15:EstimatedHIVpercentageprevalencebyagegroup(20022008)
Age 2002 2005 2008 Change
Children(214years) 5.6 3.3 2.5 3.1
Youth(1524years) 9.3 10.3 8.7 0.6
Adults(25andolder) 15.5 15.6 16.8 1.3
1549yearolds 15.6 16.92 16.9 1.3
Total(ages2to49) 11.4 10.8 10.9 0.5
Source:Avert,2009
Thetable
above
shows
that
HIV
prevalence
is
highest
amongst
those
aged
25
years
and
older.
Givenyouthlabourmarketanalyseswhichpointtopeoplefrompreviouslydisadvantaged
backgrounds,mainlyAfricanmales,accessingformalemploymentforthefirsttimeatage2527,
thispopulationcanbeheldtorepresentpeopleinemployment.Research31
hasestimatedthat
by2020,thepandemicwillhaveclaimedatleast20%ofemployeesintheagriculturalsector
SouthernAfrica.
in
HIVandAIDShavesignificantramificationsintheagriculturalsectorforbothcommercialfarming
andsubsistencefarming.Theimplicationsinclude:
Decreaseincultivatedland
Focuson
less
labour
intensive
crop
and
animal
production
Decreaseinwomensagriculturalproductivityastheytakeonamorecaregivingrole
Lossofskills
Increaseinabsenteeismfromwork
Decreaseindailyworkoutput/productivitybecauseworkersareweakerfrominfections
TherearesuggestionsthattheimpactofthepandemicinSouthAfricademandssectoral
intervention,althoughthismaybedifficultintheagriculturalcommercialsectoras:
Seasonalworkers,whoseemtobemorevulnerabletoinfectionbecauseoftheirlow
socioeconomicstatus,arenotinoneplacelongenoughforcareprograms.Further,
31IngeloziManagementSolutions, 2008
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farmersandemployersmaynotfeelresponsibleforseasonalworkersinthesameway
theywouldinvestintheirpermanentemployees.
TheremaybeuncertaintyaroundlandreformwhichmayputHIVinterventiononfarms
onthebackburner.
TherearenopoliciesthatenforceHIVeducationandcareonfarmsinthesamewaythat
legislationlike
BEE
does
for
ownership.
As
aresult,
HIV
intervention
may
be
left
to
goodwillandemployersmayfeelitismoreimportanttocomplywithissuesthatare
monitored.
Farmsafetyandsecurity
SouthAfricahasbeenplaguedbyunacceptablyhighlevelsofviolentcrimeandmurderformany
yearsnow.Farmshaveexperiencedthisandthoselivingonfarmsfeelandareextremely
vulnerable.TheSouthAfricanChamberofCommerceandIndustry(SACCI)hasarguedthat
"UsingthenominalGDPfigurefor2009ofR2.4trillion,a3.22percentcontributionof
agricultureto
GDP
and
an
estimate
of
39,982
farms
(as
at
2007)
in
South
Africa,
the
cost
ofamurder/attackonafarm,totheeconomy,wasR1,932,869perannum."
SACCIacknowledgesthatthisestimateisflawedasitdoesnottakeintoconsiderationthefact
thatfarmingunitscontributedifferentlytoGDP,andthatnoteveryattackormurdercontributes
tofarmshutdownorlossofproductivity.However,ifnotaddressed,theseattackscouldleadto
lossoffarmingsectorsasfarmersmigratetosaferregions.ThiswillaffectemploymentandGDP
contributionofthesector.Theneedforsafetyandsecurityonfarmsmayalsoshiftfarmersfocus
inskillsdevelopmenttoincludepersonnelwhohaveskillsinsafetyandsecurity.
Broadbased
Black
Economic
Empowerment
TheaimoftheAgriBEECharter(gazettedin2008)istoincreasetheinvolvementofblackbusiness
inagriculturethroughownershipandcontrolasexecutivesandseniormanagersofnewand
existingagriculturalbusinesses.TheextenttowhichAgriBEEistransformingthesectorisnot
known,asitistooearlytotell,butarecentsurveyconductedbyABCandtheIDCshowedthat
amongtheABCrespondents,in200746%ofenterpriseswerebusyconstructingaBEEstrategy,
and46%claimedtobeimplementingaBEEstrategy.
AsurveyofthedairyindustryintheWesternandEasternCapein2008showedthatonly6%of
firmshadaBEEstrategyinplace.Italsoseemsfromsurveydatathatcompaniesarefocusingon
theskillsdevelopmentandsocioeconomicaspectsofBEEratherthanonownership32.Itwould
appearthatalthoughtherehavebeensomesignificantBEEpurchasesofviablefarms,andsome
employeeempowermentprojects,includingsomequitehighprofileonesintheCapeWinelands,
theextentofownershipchangehadbeenlimited.Oneofthefactorsistheveryhighlevelof
singlepersonorfamilyownershipintheagriculturalsector.BEEismorestraightforwardinthe
corporateworldwheresharescanbeexchanged.Forafamilybusinessitisamatterofsellingoff
partoralloftheland,andthetendencyistoselloffthoseareasofthefarmthatareexpendable
fromabusinesssustainabilityperspective.
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Whilstthereisdiscussioningovernmentabouttheendingofthewillingbuyer,willingseller
concepttheConstitutionitselfprovidesforpropertyrights,andsoalthoughsomepressuremay
beexertedthroughlegislationandregulationtheextentandspeedofchangemaynotbefast.
Themechanismsforencouragingthetransferofsignificantlevelsofownershiphavenotyetbeen
created.ThefocusoftheSETAisthereforelikelytobemorethebeneficiariesoflandreform,and
emergentfarmers,
though
projects
of
aBEE
nature
can
be
targeted
as
they
arise.
Conclusions and scenariosItisusefulwhenlookingatpossiblescenariostoexaminethekeyvariablesoruncertaintiesandto
projecthowvariationsonewayortheotherwillhaveanimpactonthedevelopmentandgrowth
ofthesector.Fromthesectoranalysisandfactorsthatarecontributingtochangeinthesector
therearesomekeyfactorsthatseemtoemerge.
Firstappearstobetheeconomyandrelatedissuesofthelabourmarketandthechallengesof
labourabsorptioninanenclaveeconomy.Thesefactorsdetermineontheonehandwhether
therewill
be
growth
and
development,
and
on
the
other
whether
such
improvements
will
result
inimprovedemploymentopportunitiesandthecreationofavirtuouscycleofdevelopment.
Secondistheroleofthestateandthevariousgovernmentdepartmentswhoseplansandwork
impactontheagriculturalsector.Relatedtothisislandreformthatisinevitablydrivenbythe
stateandnottheownersoflandorthelandless.Theviewexpressedbymanyengagedin
agrarianreformisthatthestatemustplayasignificantrole.Itbecomesclearthatasuccessful
agriculturalenterpriserequiresanumberoffactorstobeinplacetobesuccessful.Theseinclude
accesstoland(DepartmentofRuralDevelopmentandLandReform),agriculturalsupportwithin
asupportiveagriculturalframework(DepartmentofAgriculture,ForestryandFisheries),accessto
consistentwater
supply
(Department
of
Water
Affairs),
access
to
finance
(Department
of
Trade
andIndustry,variousstateagencies),conducivelabourmarketregulation(Departmentof
Labour),soundindustrialpolicy(DepartmentofTradeandIndustry),economicplanningand
macropolicy(DepartmentofEconomicDevelopment,NationalTreasury),andappropriate
education,trainingandskillsdevelopment(DepartmentofHigherEducationandTraining,the
HumanResourcesDevelopmentCouncil,NSAandtheSETA).Thereareothergovernment
departmentsaswellasprovincialandmunicipalstructuresthatalsoplayarole.
Thefollowinganalysesshowhowthefourvariables
economicgrowthanddevelopment;
roleof
the
government;
labourmarketchanges;and
landreform)
impactpositivelyornegativelyonthegrowthofthesectorandthedemandforskills.
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HHIIGGHHGGRROOWWTTHHSSCCEENNAARRIIOO
Theeconomicsofthesector Roleofgovernment
TheeconomyinSAandgloballycontinuestorevive,
albeit
slowly
for
the
next
few
years
Rolesandintegrationofnationalgovernment
departmentsareclarified.Specificfunctionsare
agreed,
processes
put
in
place
and
personnel
appointedwiththerequiredskills
Internationaltradeagreementsarestillweightedin
favourofUSandEUbutprogressisbeingmadeand
specificblockagesareaddressedinbilateraltalks
TherolesofDepartments(DWA,DAFF,DRDLR,DoL,
DTI,DED,DHET)areclarifiedwithappropriatejoint
plansandcoordinatingstructures
Theruraleconomygraduallyimproveswiththe
buyingpowerofthepoorincreasingandmorestable
marketscreatedforlocalproduce
Foreachofthefunctionsagreedineachofthe
relateddepartmentsappropriatestructuresand
systemsareputinplaceandstafftrained
ExportsincreaseinkeyareasidentifiedinIPAP2,and
theRandexchangeratestabilisesatalevelnottoo
muchdifferentthanitistoday
Specificcapacityisputinplaceatlocallevelto
supportimplementation oflandreformandrural
development
Thereisagrowingunderstandingoftheconceptof
dualismand
the
need
to
intervene
with
labour
absorptionanddevelopmentmechanisms
Landclaimsareallfinallysettledandownershipand
tenureis
resolved.
There
is
aserious
drive
to
establisheffectiveagriculturalenterprises
Anunderstandingisreachedontheroleofagencies
andlabourbrokersandabuseiscurbed
The "willingbuyerwillingseller"approachisresolved
andenablesviablelandtobecomeblackowned
Somerelaxationoflabourmarketregulationsare
agreedthatmaintainsomeminimumstandardof
employmentbutassistabsorption
Landtransfertoblackandemergentfarmersisdone
inamannerthatintegratesthenintothesupply
chainsofthesector
Mechanismsarefoundtoaddressskillsneedsinthe
contextofcasualandseasonalworkpatterns
Financingoflandreformandtransferisdoneonthe
basisofagreeddevelopmentplans,includingskills.
Labourmarketreform Trajectoryoflandreform
LLOOWWGGRROOWWTTHHSSCCEENNAARRIIOO
Theeconomics
of
the
sector
Role
of
government
departments
TheeconomyinSAandgloballystagnatesatcurrent
levelsandtheeconomystrugglestopickupafterthe
temporary2010WorldCupboost
Alackofpurposeatgovernmentlevelmeanslimited
progressforanotherfiveyears.Landreformremains
acommitmentwithoutaplan
Internationaltradeagreementsarestillweightedin
favourofUSandEUandprotectionismincreasesasa
resultoftheglobalrecession
TherolesofDepartments(DWA,DAFF,DRDLR,DoL,
DTI,DED,DHET)areunclearandthereisnoproper
coordination
SAsGinicoefficientcontinuestoworsen,withrural
povertyincreasingandlocaleconomiesdeclining
Thereisalackofeffectivestructures,systemsand
processestoimplementpolicyacrossdepartments
Randvolatilitycausesproblemsforimportersand
exporters.Wellestablishedmarketsaremaintained
butexportsdecrease
Atlocallevelthedeclineintheagriculturalextension
officerfunctionscontinuesandlimitedpractical
supportisavailable
Understandingoftheruraleconomyissodiversethat
stakeholderscannotagreetheproblem,letalonethe
solutiontolowabsorptionlevels
Landclaimstaketoolongandlandreformprocesses
leavepotentiallyproductivelandpoorlydeveloped
andmanaged
Casuallabourandlabourbrokersremainsanissueof
dispute.Confrontationresultsinbitternessand
resentment
Theimpassecausedbyarigidinterpretationsof
propertyclausesintheConstitutioncontinuestostall
achievementofthe30%blackownershiptarget
Labourmarketregulationcontinuestobea
contributing factortoreducinglevelsofemployment
Blackownedfarmsfinditdifficulttobecomepartof
supplychainsandareunabletoperformadequately
Unstableemploymentpatternsinthesectormake
skillsinterventionsdifficulttomanageandlargely
ineffective
Financingoflandreformandlandtransfercontinues
tobewastedasitisnottiedtothebuildingof
appropriatecapacity
Labourmarket
reform
Trajectory
of
land
reform
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Theseanalysescanbetranslatedintofourpotentialgrowthanddevelopmentscenariosforthe
agriculturalsectorwhicharebasedontherequirementsforastrong,developmentstate:
Scenario3:Weakgovernmentsupport
andsoundeconomy
Economicfactorsglobally,nationallyandlocally
Scenario1:Integratedgovernment
supportandsoundeconomy
TheeconomicupturntriggeredbytheWorldCup
continuesandgloballythingsimproveenabling
anexpansionofexports.Thegovernment,
becauseofalackofintegratedpolicyplanning
andimplementation,provideslimitedsupport
forsectordevelopment.Thegainsgotothewell
establishedenterpriseowners,withfewgainsfor
emergingfarmersandlocalcommunities.
Governmentdepartmentscoordinatetheir
effortstoachievemaximumimpact.Thereare
favourableeconomicconditionsthatcreate
opportunitiesforadvance.Withinthispositive
environmenttheroleoftheAgriSETAbecomesa
centralcomponentofacomprehensivestrategy
forgrowthandskillsinterventionsaretargeted
toachievemaximumeffect.Resultsingrowthin
sustainableenterprisesandexpanded
employmentopportunities.
Governmentpolicyandsupport Governmentpolicyandsupport
Combinationofdisjointedgovernmentpolicy,
planningandaweakandincreasingly
marginalisedruraleconomy.Economic
conditionsresultinunsustainablefarming
conditionsandemploymentdeclinesalong
withproductivity.Foodshortagesandthelack
of
development
in
rural
areas
leading
to
increasingsocialtensions.Aviciouscycle
developswiththesectorgoingintolongterm
decline.
Governmentdepartmentscoordinatetheir
effortstoachievemaximumimpact.However
economicconditionshamperprogress.Efforts
bytheAgriSETAareunderminedbypoor
labourabsorptionandjobinsecurity.Some
significantsuccessesarerecordedincluding
some
NSF
funded
projects
that
result
in
sustainableenterprises.Aplatformislaidfor
futureimprovementswhentheeconomic
conditionsimprove.
Scenario4:WeakstateandeconomyScenario2:Strongstatebutweak
economy
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SECTION 2: DEMAND FOR SKILLS
AgriSETAregisteredemployersandemployeecoverage
In2009,
17
234
employers
were
registered
with
the
AgriSETA,
comprising
15394smallemployers(lessthan50employees)
1202mediumsizedemployers(50 149employees)and
638largeemployers(morethan150employees).
Consideringthattherearearound40,000commercialfarms33
,the17234employersrepresent
around43%ofcommercialfarms.Notwithstandingchangesinthesectorasaresultofland
reformandsectorshrinkage,thisisasizableproportionandisheldtobesufficiently
representativeforthepurposeofskillsdevelopmentplanning.
Howeverthis
paints
an
incomplete
picture.
It
understates
the
representative
nature
of
large
enterpriseregisteredwiththeSETAandoverstatestherepresentativenatureofsmallregistered
enterprises.4175(24.2%)oftheenterprisesarelevypayingmembers.Further,only1673(11%)
workplaceskillsplans(WSPs)weresubmitted..
Table16:Registeredemployersbysizeandsubsector
Sub
sectorDescription
Employers
Small Medium Large
Coffee/TeaProcessingandmarketingofcoffeeandteaincluding
coconuts,cocoa,nuts,olives,dates,etc.33 4 3
Fibre Grading,ginning,packingofwoolandcottonrawmaterial 1676 16 18
Fruit
Fruitpacked
in
cartons,
fruit
juice
concentrate
drummed
and
fruitjuiceincontainerreadyforconsumption271 36 57
Fruitexportersandimporters 6 0 1
Grain
Manufactureofgrainmillproductsandstarches 119 5 7
Handlingandstorageofgrain 67 7 23
Wholesale&retailtradeinAgriculturalmachinery 213 9 4
SaleanddistributionofAgriculturalrawmaterialsandother
farminginputs182 9 3
Milling
Manufactureofflourandgrainmill products,includingrice
andvegetablemilling,grainmillresidues120 15 11
Manufactureofpreparedanimalfeeds 110 19 0
Manufactureof
pet
foods
42
9
0Manufactureofstarchesandstarchproducts 7 1 1
Pest
controlPestControl 209 4 0
PoultryPoultryandeggproductionincludingtheslaughtering,
dressingandpackingofpoultry305 49 37
Primary
GrowingofCerealsandothercrops(notelsewhereclassified) 902 160 34
GrowingofVegetables,Horticulturalspecialties,nursery
products943 120 72
GrowingofVegetables,Horticulturalspecialties(Including
OrnamentalHorticulture)andnurseryproducts.11 5 0
Sugarplantationincludingsugarcaneandsugarbeetetc. 9 4 2
33SARSstatistics,2007
8/10/2019 AGRISETA Sector Analysis 290610-Version 2
30/50
AgriSETA June2010
Agriculture:SectorAnalysis 28
Sub Description Employers
Growingoffruit,nuts,beverage,andspicecrops. 1795 255 143
Farmingofcattle,sheep,goats,horses,asses,mules,and
hinnies;Dairyfarming.2252 59 18
Otheranimalfarming,productionofanimalproducts(NEC) 433 25 12
Ostrich
farming
5
0
0Gamefarming 16 0 0
Growingofcropscombinedwithfarmingofanimals(Mixed
farming)2920 256 109
Growingofcoffeeandteaincludingcoconuts,cocoa,nuts,
olives,dates,etc.2 0 0
Agriculturalandanimalhusbandryservices,except
veterinaryactivities438 22 9
Otheranimalfarming(notelsewhereclassified) 11 1 1
Growingoftreesassecondcropbyfarmers 126 18 4
Fishing,operationoffishhatcheriesandfishfarm 913 10 6
Redmeat
Productionandanimalproducts(notelsewhereclassified) 6 0 0
Slaughtering,dressing
and
packing
of
livestock,
including
poultryandsmallgameformeat.317 40 17
Production,sale&marketingofAgriculturalbyproducts(e.g.
bones,hides)61 2 0
Slaughtering,dressingandpackingoflivestock,including
smallgameformeatandprocessingofostrichproducts2 1 0
WholesaletradeinAgriculturalrawmaterialsandlivestock 193 7 10
Transportoflivestockassupportingactivity 224 0 0
Agriculturalandlivestockresearch 215 9 3
Seed Seedproductionandmarketing 149 12 6
SugarManufactureofsugarincludinggoldensyrupandcastor
sugar
45 5 21
Tobacco Processinganddispatchingoftobacco 46 8 6
TOTALS 15394 1202 638
Source:AgriSETA,WSPdata
Thelargestnumberofregisteredsmallandmediumenterprisesarefoundinthemixedfarming
subsector,whilemostlargeenterprisesareinthegrowingoffruit,nuts,beverageandspice
cropssubsector.
EmployeecoverageintheAgriSETA
Collectively,the
17
234
employers
registered
with
AgriSETA
employed
atotal
of
239
076
employees.Thisrepresents39%oftheagriculturallabourforcein2009.
The1673employerswhosubmittedWSPsin2009employed97898employees,representing
41%ofthetotalnumberofpeopleemployedbyregisteredemployers.Whilethenumberof
registeredemployerssubmittingWSPsissmall(11%),theyemployasizeablenumberof
employeesa