Low-hanging fruit in South Africa’s agriculture sector

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In "Africa’s Path to Growth: Sector by Sector", published in 2010, global consultancy McKinsey argues for a sectoral approach to development in Africa.

It notes, however, that the continent’s agro-ecological potential is far larger than its output — as are its food needs. "While more than one-quarter of the world’s arable land lies in this continent, it generates only 10% of global agricultural output," the authors argue. "So there is huge potential for growth in a sector now expanding only moderately, at a rate of 2%-5% a year. "

A decade after the publication of the article, agricultural economist Wandile Sihlobo expounds on this approach in Finding Common Ground: Land, Equity & Agriculture, in which he speaks directly and incisively to SA’s specific issues.

In this, his first book, Sihlobo lends important insights on how we can foster employment by looking at agriculture not as one uniform conglomeration of crops and livestock but as subsectors that represent particular opportunities.

First, Sihlobo makes the point that investment is important if we are to reap the employment benefits of the agriculture sector. He prefaces this with a deep and nuanced discussion of the thorny issues of land ownership in SA.

Second, he takes the discussion to a practical level, referring to underutilised land in the former homelands, as well as subsectors that could deliver results.

Sihlobo argues that, using the goals of the National Development Plan, which set out to target "labour-intensive sectors" of the economy, we should focus on horticulture and field crops, which employ two-thirds of SA’s primary agriculture labour force. Again, this is a clear and practical way of thinking about the sectors of the economy.
SA should focus on horticulture and field crops, which employ two-thirds of its primary agriculture labour force
It’s not a difficult proposition to understand, given that we are not yet close to having sophisticated machines that replace hand cultivation practices and manage particular plants. However, it presents an opportunity we should not sleep on.

In his state of the nation address in February, President Cyril Ramaphosa indicated that the government he leads will adopt a sectoral approach to economic development when it comes to state interventions.

I found this particularly refreshing, as it is an approach I have argued in favour of for some years.

Sihlobo is a member of the president’s council of economic advisers, and perhaps he argued his views on the matter in that council.

Sihlobo’s book also takes a practical view when it comes to using export markets in pursuit of growth, pointing to the growing global demand for beef, for example, driven in particular by China. He writes: "All of this presents an opportunity for SA to partially address its twin challenges of rural unemployment and low economic growth."

Here he is referring to the idea that our agricultural landscape varies, and that there are areas where the environment does not permit horticulture or field crops, but is suitable for livestock. An optimal approach to land use would thus take into account these various opportunities and subsectors of agriculture and farming.

Time to reap rewards

According to the latest statistics, the agricultural sector in SA represented 2.2% of GDP in 2019. This was down from 2.5% in 2014, due to difficult conditions over the past few years, the drought in particular. However, agriculture represents 5.4% of SA’s employed. With the right focus, it could do much better to help solve our problems of employment and growth.

Sihlobo is probably the most important economist writing on issues of agriculture in SA today. His book is as insightful as it is practical, giving policymakers a lens through which to consider the pressing economic challenges the country faces. SA has never been so desperate for the well-thought-out, research-based, experience-orientated and practical approaches to growth and development that Sihlobo offers.

Payi is the founder of Nascence Advisory & Research