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  • President Cyril Ramaphosa acknowledged that South Africa will not be able to reach the goal of reducing the unemployment rate to 6% by 2030 as outlined in the National Development Plan unless the country did something “extraordinary”.

  • Nearly a week has passed since South Africa’s 2018 jobs summit. The two-day gathering produced some useful agreements between the social partners: government, organised labour and business (essentially, big business).

  • South Africa’s primary agricultural employment improved marginally to 849 000 jobs in the last quarter of 2018 compared to the previous quarter. Although this data is encouraging in a climate where South Africa is exploring strategies that could unlock job creation in the agricultural sector, the country is still far behind its target of creating a million agricultural jobs by 2030 as envisaged in the National Development Plan.

  • The South African Poultry Association (SAPA) said on Thursday it was concerned about what it called irresponsible claims by a consumer protection body and a new organisation for black chicken importers and exporters in support of predatory trade from Brazil, at the expense of local jobs.

  • The fear of robots coming for your job is one of the many challenges confronting 21st-century workers, but the machines aren't ready to take on every industry just yet.

  • South Africa is due to hold parliamentary and provincial elections on Wednesday, amid frustration with a lack of progress 25 years after the ANC swept to power at the end of apartheid.

  • As the 2019/20 production season begins in a number of countries in the northern hemisphere, the United States Department of Agriculture (USDA) recently released its initial global production forecasts of major grains.

  • Now that the elections are behind us, the broader economic discussions are likely to remain focused on two crucial subjects – growth and jobs. In this, agriculture has a role to play and President Cyril Ramaphosa made this point clear in his 2019 state of the nation address.

    One of the key reasons for increased emphasis on the role of agriculture is its potential to boost rural economic growth, and absorb unskilled and semi-skilled labour with a relatively high multiplier -the number of jobs created for every rand invested in the sector.

    Unemployment in SA rose to 27.6% in the first quarter of 2019, with youth unemployment at a staggering 55.2%. Agriculture can make a substantial contribution to job creation in rural areas.

    We have been punting potential agricultural employment for a while, with some pushback from a couple of analysts who view this sector as a non-starter when it comes to job creation. In their arguments, they typically raise the issue of the fourth industrial revolution, and the basic development theory view, which states that as nations develop, the relative role of agriculture, at least from a jobs perspective, diminishes as people move to manufacturing and services sectors.

    Employment in agriculture in SA has fallen over time, from 1.6-million in the 1960s to the current 837,000 people, as shown in Figure 1 below. This decline in employment is due to farm consolidation and the adoption of advanced technology.

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    Figure 1: SA primary agricultural jobs

    In our view, the key levers available to the president are a clear and articulate policy on land reform and water rights, a strategic and targeted subsector investment boost, agricultural finance and support for emerging farmers.

    Clear and articulate policy frameworks on land reform and water rights not only encourage investment, but bring restorative justice while ensuring that underutilised land in the former homelands, and some land-reform farms, are brought into full production to boost growth and jobs.

    From the land reform perspective, there is work underway through the Presidential Advisory Panel on Land Reform and Agriculture that should provide some ideas on striking a balance between economic growth and restorative justice.

    In terms of water rights, there is a need to clarify the policy framework to deal with the issuance and security of water-use rights, incentives for the private sector to invest in water infrastructure and measures to improve water quality.

    The state owns about 70% of the dam capacity in SA. Investment cannot come from the state alone but a clear policy framework will be required to incentivise private investments.

    WWF SA expects water demand to increase by 32% by 2030 due to population growth and industrial development. The agriculture sector will thus face more competition for water allocations so the focus must be on improving the efficiency and security of supply.

    It is increasingly important for robust policy frameworks to be in place with respect to water rights.

    The unemployed are typically low skilled and some reside in provinces that have underutilised arable land – KwaZulu-Natal, the Eastern Cape and parts of Limpopo, where there are more than a million hectares of such land. The immediate focus should be on a policy environment that boosts the agricultural economy and provides jobs.

    The decline in agricultural employment over the past couple of decades has not been evenly spread.

    For example, the field crop and horticultural subsectors have seen an uptick in employment due to an expansion in the area planted. About two-thirds of SA’s agricultural jobs are now in these subsectors – which will have to be a priority for our next president.

    A large number of agricultural enterprises are both under-insured and under-financed. Data from the South African Insurance Association suggests that penetration ratios for multi-crop insurance are as low as 17% of the planted area.

    Limitations to deeper agricultural finance include lack of collateral in communal land, high transaction costs due to the remote nature of agricultural enterprises, and inadequate tools to price for and manage agricultural sector risks and often fragmented value chains, particularly among smallholder farmers.

    Agrifinance support is important for food security and driving competition to ensure continued investment in the sector. It also creates growth opportunities for emerging farmers and industrialists, giving them tools and resources that will enable them to effectively participate in mainstream commercial value and supply chains.

    All the proposals above need effective private- and public-sector participation for improving skills and making investments through joint-venture approaches to farming, as well as blended finance methods, among other programmes.

    We cannot emphasise enough how the agricultural economy continues to have significant potential in SA and, as such, the new administration would do well to make it a critical aspect of its strategy for sustainable economic growth and much-needed employment creation.

    [i] Sihlobo is chief economist of the Agricultural Business Chamber of SA (Agbiz). Skenjana is a financial economist and founder of Afra Consultants

  • The future of work is increasingly becoming today’s reality for millions of workers and companies around the world.

  • The thing that seems to worry people most about the next phase of automation is the sense that no one will be safe. This time it isn’t just factory workers and typists on the chopping block, we are told, it is taxi drivers, accountants and lawyers.

  • While automation should boost the economy as a whole, it is likely to create greater inequality as employment losses are concentrated in certain industries and countries. Manufacturing could lose 20 million positions by 2030, making the sector 8.5% smaller than “if robots were not remaking the market,” according to the research firm’s report.

  • No one knows what the jobs of the future will look like, so it has become immensely difficult to solve the challenge of deepening unemployment.

  • Persistent unemployment has become synonymous with the youth experience across South Africa.

  • Powerful new technologies are emerging that will continue to affect individuals in multiple ways.

  • The latest Quarterly Labour Force Survey data (Q2: 2019) show that South Africa’s primary agricultural employment fell by 0.2% from the corresponding period last year to 842 000 .  The subsectors that faced a notable reduction were mainly field crops, the game industry and forestry. In the case of field crops, the reduction in employment was unsurprising following a reduction in activity in the fields on the back of a poor harvest in the 2018/19 season, all of which is underpinned by unfavourable weather conditions earlier in the season. From a regional perspective, a notable decline in employment was recorded in the Northern Cape, Free State and Limpopo, whilst other provinces saw a marginal uptick. 
    Will there be a change in the current jobs’ trajectory?
    The near-term agricultural jobs trajectory will be influenced by, amongst other factors, weather conditions, and levels of investment in the agricultural sector. As best as we can tell, there are prospects for good weather conditions in the coming months which could support agricultural activity and subsequent employment. But this might not assure levels of employment which far outpace the trends we have witnessed over the past few years, as illustrated in Figure 1. On an investment front, the outlook hinges on the broader policy direction of the agricultural sector, notably land reform and water rights. There are a number of developments on the land reform front at the moment, but the final policy direction will be an important determinant of the direction that South Africa’s agricultural sector will be taking. The same is true for water policy, and infrastructure thereafter.
    Even if we assume positive outcomes from the aforementioned factors in the coming months, the effects on jobs may be marginal. Fundamental change is needed to break away from the current trend, and to reach the targets of the agricultural job that are envisaged in the National Development Plan.1 By using the word – fundamental change – we are referring to (1) a need for a boost in agricultural productivity, (2) an improvement in rural investment climate, (3) expansion of export markets, (4) promotion of labour-intensive agriculture, and (5) expansion of area farmed where possible.
    At a practical level, if the underutilised land in the former homelands, underperforming land reform farms, and other parts of the country are not brought into full production with a key focus on labour-intensive subsectors, notable job creation in South Africa’s agriculture sector might not materialise. Labour-intensive subsectors specifically refer to the horticulture and field crop subsectors which currently employ two-thirds of the primary agriculture labour force of 842 000. The other subsector – livestock – can also be prioritised, specifically in areas where environmental factors do not permit horticulture and field crops. This would all happen at a time where there is a growing demand for horticultural, and protein-rich diets in the global market which is underpinned by the changing consumer patterns towards healthier diets. Moreover, global beef demand is also gathering steam, particularly driven by China. All this presents an opportunity for South Africa to partially address its twin challenges of rural unemployment and low economic growth.
    South Africa is still lagging behind in its effort of meeting a target of creating a million agricultural jobs by 2030 as envisaged in the National 
    provinces containing former homelands that still have tracts of underutilised, arable land that can be prioritised for agricultural expansion are KwaZulu-Natal, the Eastern Cape and Limpopo.These provinces collectively have between 1.6 million to 1.8 million hectares of underutilised land, according to a 2015 study by McKinsey Global Institute.
    Also, worth noting is that these particular provinces are characterised by higher levels of unemployment and poverty, which in our view, would make sense for the government to prioritise them for agricultural development in the near term. As noted above, the starting point for this process would be to articulate a clear policy framework on land reform and water rights, which will encourage investment in the agricultural sector. Concerted investments would be required for land preparations and provision of irrigation infrastructure, amongst other aspects, to unlocking growth and employment, and associated positive welfare effects.
    The focus for provinces that already have extensive farming could be on ensuring that there are export markets for products being produced. Further, the ports infrastructure for delivering the agricultural produce to export markets should be part of the “fundamental change” to boost South Africa’s agricultural fortunes and jobs. This is specifically the case to, but not limited, the Western Cape. The province is a leading agricultural jobs creator, but for that to be sustained, there must be market access for the produce of the province. Animal and plant health as key pillars of trade need consistent attention. The effects of animal health were felt earlier this year in the livestock sector, specifically in the wool and beef industries, where a lapse in biosecurity controls severely compromised the industries' export potential. Overall, the quest for boosting employment in South Africa’s agricultural sector will need various interventions. Fortunately, many of these are within the policymakers’ reach.

  • The South African agricultural sector, and specifically the expansion in the sector over the recent past, is heavily reliant on exports.

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