Examining Agriculture's Role In Labour-Intensive Growth

Another year has come to an end, and although one hopes that each year will be better than the previous one, these hopes do not always materialise. This year certainly had a few highlights, but it was also clear that all was not always well in South African agriculture.

- Dr Frikkie Mare

It is easy to fixate on everything that went wrong in the country this year. Some regions experienced devastating drought, foot-and-mouth disease once again left its mark on livestock production, red meat prices declined, and the summer crop was characterised by grading problems. In addition, the economy is struggling to recover, the political scene continues to create more questions than answers, and state-owned enterprises persist in demonstrating disappointing performances.

Every so often things go wrong in life and there is nothing that can prevent it. Nevertheless it is important to have a plan to get back on track. The saying ’n Boer maak ’n plan (a farmer makes a plan) is generally true and is proven in practice – visit any farm and you will know. The question is, however, whether the government has a plan for all the challenges South African farmers have to face.

A plan to tackle problems

The National Treasury published a plan in the form of an economic discussion paper, Economic transformation, inclusive growth, and competitiveness: Towards an economic strategy for South Africans, in August. This paper is the result of three colloquiums during which academics from South African universities and Harvard, economists, government, the South African Reserve Bank and producers shared their ideas.

The paper highlights South Africa’s key economic challenges and states that the way forward lies in an immediate focus on policies that will realise South Africa’s potential growth. The policy suggestions are categorised into five main sections:

Modernising network industries.

Lowering barriers to entry and addressing distorted patterns of ownership through increased competition and small business growth.

Prioritising labour-intensive growth: the role of agriculture and services.

Implementing focused and flexible industrial and trade policy.