National Development Plan - Vision 2030: What role will agriculture play?

1. National Development Plan - Vision 2030: What role will agriculture play? Johann Kirsten Department of Agricultural Economics University of Pretoria

2. Contents • Short overview of the National Planning Commission proposals for the agricultural sector • The place and role of the agricultural industry in KZN in the proposals • The role of organised agriculture and commodity organisations in achieving Vision 2030

3. National Development Plan

4. National Planning Commission • National Development Plan – released 11 November 2011; expanded version August 2012 • Approved by Cabinet – 10 September 2012 • Charting a new path to eliminate poverty and reduce inequality by 2030. Objectives include: • Reduce the number households earning below R419 per month by 2030 from 39% to zero • Ginicoefficient to fall from 0.69 to 0.6 by 2030 • Create 11 million jobs by 2030 • Raise per capita income from R50 000 in 2010 to R120 000 by 2030 • National income of bottom 40% to increase from 6% to 10% • Education- all children in grade 3 to be able to read and write • Affordable access to quality health care • Household food and nutrition security • Increase investment in labour-intensive sectors-incentives to employ youth • Vision 2013 for rural economy: • rural communities have greater opportunities to participate fully in the economic, social and political life • Driving force – expansion of irrigation, unutilised arable land • Agriculture has the potential to create 1 million jobs

5. Employment in South African agriculture: 1911 -2010 Source: GF Liebenberg, 2011

6. Agriculture has the potential, but SA needs to:… • Expand irrigation agriculture. There is evidence that the current 1.5 million hectares under irrigation (which produces virtually all of South Africa’s horticultural harvest, and some field crops, i.e. well over a third of total output) can be expanded. • Bring some of the under-used land in the communal areas and under land reform projects into commercial production over a period of time that is commensurate with the aims and objectives of the land reform programme and South Africa’s food security needs. • Expand commercial agriculture.

7. SA needs to….. • Pick and support ‘winners’ from commercial agriculture – those sectors and regions which have the highest potential for growth and specifically for employment-creating growth. • Support employment creation in the upstream and downstream industries. The potential for employment creation will come from the growth in output that will result from the first three strategies. • Find creative combinations between these opportunities. This will include: • greater emphasis on land that has the potential or that has already been serviced with irrigation infrastructure, • giving priority to successful farmers in the communal areas as land reform beneficiaries, • and giving targeted support to industries and areas of high employment creation potential in order to maximise collaboration between existing farmers and land reform beneficiaries, etc. • And… we assume “All appropriate policy frameworks, fiscal allocation for infrastructure development etc. are in place”

8. Total cultivated area Source: GF Liebenberg, 2011

9. Underutilized land • From 2 previous maps, a further expansion potential of some +- 3m ha potential arable land (maybe 2m ha conservatively) • …..yes, some of the marginal land has been taken out of production • Some of this is high potential landin the former homelands. • Plus reports that a majority of the land reform projects have failed- on 5.9 million haof land

10. Potential for expansion of irrigation agriculture Total upper limit of irrigation potential additional 707 000 ha. More realistic estimate 500 000 ha. Over baseline period realistically not more than 145 000 ha. Ground water 270 000 ha.

11. More efficient irrigation practices • Although SA still has some potential to expand irrigation, there are major constraints with respect to investment and infrastructure. • ….not to mentioned the fact that less water could be allocated to agriculture in future • Most of this potential expansion can be achieved as a result of savings through water loss control & improved irrigation efficiency. (Water Research Commission) • Technical efficiency levels for irrigation practices:

12. The identification of “winners” Three approaches to identify industries that can contribute to significant growth in employment: • Large export industries with high labour requirements. • High volume imports that can be substituted with locally produced goods. • Growing small industries with high labour requirements.

13. The employment creation matrix

14. Export Industries Source: Abstract of Agricultural Statistics, 2010

15. Import Industries Source: Agricultural Abstract of Statistics, 2010

16. Smaller Industries • Macadamias • Olives • Avocados • Pecan nuts • Figs • Herbs • Organic Rooibos Tea • Cherries • Berries

18. Non-labour intensive

19. Livestock

20. KWANALU and the Vision 2030 • Which are the relevant aspects in the National Development Plan for KWANALU and commodity organisations in KZN? • “Develop strategies that give new entrants access to product value chains and support from better resourced players” • “Convert some under-used land in communal areas into commercial production” • “Job creation in downstream industries” • “effectiveness of extension officers need to improve” • “White commercial farmers, agribusinesses and organised agricultural industry bodies can help bring these objectives to fruition”. • “Innovative means for agricultural extension and training by the state in partnership with industries should be sought” • NPC argues that non-labour intensive livestock industry can create an additional 40 000 primary jobs and 25 000 secondary jobs.

21. Commodity organisations and the Vision 2030 • Commodity organisations are critical in achieving the vision • Many commodity organisations are already doing good work in the spirit envisaged by the plan. • Aspects that could receive further attention: • greater support for innovative public-private partnerships • expand innovative market linkages for small-scale farmers in the communal and land reform areas • improve and extend skills development and training in agricultural sector – including a new-cadre of extension officers • continue the work on new farmers’ associations – will provide greater collective power to poor producers, better skills and greater income • expansion of commercial agriculture in current commercial agricultural system is limited – needs to happen elsewhere.

22. Will SA farmers and agribusinesses invest in agriculture? • Sentiment critical • Security of expectations over political and economic future • Leadership in agriculture and politics • Need clear agricultural policy and policy on land. • Smart subsidies and incentives to encourage employment and investment.

23. We can learn a lot from China… • ..on how to be serious about rural and agricultural policy • Chinese Central Government each and every year chooses one area to be addressed by their first policy document – dubbed “the No. 1 Document“ - Top of China’s Agenda • In the past 9 consecutive years, the topics are all about agricultural and rural development • These documents carry budget implications for the Central Government, and huge investment and subsidies are now flowing to the agricultural and rural sectors

24. Objectives in the ‘no 1 document’ in China

25. Closing remarks • The NDP provides some hope that SA government recognises the potential role of the agricultural sector in achieving Vision 2030 • Suggests that we are serious about agriculture and issues of rural poverty • But… can DAFF, DRDLR and PDAs implement the programmes and remove the chaos and uncertainty to make this a reality? • There still remains an important task for organised agriculture: Unity and one farmer association.