Today I will participate in a roundtable discussion in East London, organised by the Provincial Department of Rural Development and Agrarian Reform. My focus area will be to provide a brief update on South Africa’s agricultural economy with a key focus on the role that the Eastern Cape can potentially play going forward, particularly from a job creation perspective.
For context, South Africa has about 842 000 people working in the agricultural sector (the Eastern Cape accounts for an 10 percent share). About two-thirds of South Africa’s agricultural jobs are in the field crop and horticultural industries. The employment in these subsectors has slightly increased over the recent past, particularly horticulture. Meanwhile, other subsectors saw a marginal decline. This somewhat tells us that if we are to see an increase in agricultural employment, horticulture will have to be a priority (the rise of technology is not an immediate threat to jobs in this subsector due to its nature of production and harvesting – its labour intensive).
Given that the presence of underutilised land and water, there is a need to focus on communal land. The Eastern Cape will be one of the focus areas for agricultural expansion and growth in the South African agricultural sector over the coming years. A few things that are needed to achieve this are to bring underutilised land in communal areas and land reform farms into commercial production, expand irrigation systems, identify and support agricultural expansion in areas that have a high potential for growth and employment. This will require investment and strong and efficient institutions.
Amongst many things that I will present on, I will throw into the discussion ‘cannabis’ to get a sense of the province’s senior government leaders’ thinking about the prospects of doing a formal study on this crop and its potential economic benefits in the province. You will remember that about two months back the Constitutional Court ruled that the private use of marijuana is now legal.
I saw this long list of cannabis companies that are specialising in all range of issues, and it struck me that the Eastern Cape, specifically the former Transkei area has the right terrain and climate for cannabis production. This is according to the research paper presented by Stellenbosch University’s agricultural economist Heinrich Gerwel at the 2018 Agricultural Economics Association of South Africa’s Annual Conference in Summerset West in September.
Gerwel points out that about four States in the United States — Alaska, Colorado, Oregon and Washington — have legalised cannabis for personal use, followed by California legalising recreational use as of 1 January 2018. These could be key markets for South Africa in addition to other destinations where it has been legalised for medicinal purposes. Notwithstanding the potential unintended consequences, and the fact that legislation is still required to outline the conditions under which it could be commercially produced, I think it is worth considering whether there should not be some research on the possibilities of legalising marijuana for international trade purposes.
The Eastern Cape’s dagga-belt (cannabis-belt) has a high level unemployment and abundance of underutilised land. In the quest to explore high value crops (no pun intended), I think we shouldn’t leave dagga behind, particularly as there is now a growing international market for the product.
In fact, there should be discussions with the medicinal companies about prospects of breeding the right varieties of dagga that are needed in the market, and systems to train farmers to produce such products. Legalisation could allow the development and use of specific controls to ensure produce safety, whereas no such guarantees exist in the black-market trade. Instead of being associated with negative connotations – the formalisation of a dagga-belt for production to export markets deserves some consideration.
To clear, I am not endorsing cannabis here, the essential purpose of this article to to start a discussion about its commercial use.
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