Opportunities for strategic intervention in the South African agricultural sector: trade and employment

Opportunities for strategic intervention in the South African agricultural sector: trade and employment

There is scope for a number of strategic interventions by the South African government to support agro-industrial production. These could make a significant difference to the country’s foreign trade and its domestic employment record. This policy brief outlines the potential impact that a more labour-intensive agriculture sector, which is also focused on high value-added products, could make in reducing the balance of payments constraint and support transformation and employment, particularly in rural areas. The policy brief makes a case for agriculture’s central role in growth, transformation and empowerment.

Recommendations:

  • reallocating resources to promote a rapid rate of growth of high-value, agriculture-derived exports would make a substantial contribution to addressing foreign exchange constraint on growth and the challenge of generating higher rates of employment
  • designing a set of policies and refining existing policies and institutions to support large-scale, export-oriented agribusiness has the demonstrated merit of being able to address the balance of payment and the unemployment constraint
  • industry incentive schemes need to reconsider the exclusion of activities that are deemed non-industrial when it is obvious that export-orientated agribusinesses are highly sophisticated operations that involve integrated and inter-dependent activities in farming, manufacturing, processing and distribution
  • far higher levels of investment are required in advanced (water efficient) irrigation systems, in agricultural inputs such as fertiliser being supplied into the market at competitive prices, in transport infrastructure, in agricultural research and development, in associated tertiary education and training, in phyto-sanitary certification, and in monitoring capabilities
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