The Eastern Cape is known as the land of the legends. It is the home of some of the key icons of South Africa’s political transition, including Nelson Mandela. It is also a land of significant agricultural potential. But that potential is not being fully realised, and the province still remains one of the poorest and suffers from endemic unemployment, write World Bank senior agriculture economist Hardwick Tchale and senior external affairs officer Lavinia Engelbrecht.
A sleeping giant of South Africa’s agriculture. Wandile Sihlobo, one of the well-known economic commentators on agricultural issues in South Africa, described the Eastern Cape as “the sleeping giant” of South Africa’s agriculture.
We feel he is right. The province has the largest share of the country’s livestock – 38% of the goats, 30% of the sheep, 25% of the cattle, and about 20% of the horticultural crops. It produces more than 15 million kilograms of wool a year and supplies more than half of the world’s mohair. The province also has 16% of the country’s milk producers and contributes 26% of the milk produced in South Africa.
Undoubtedly, the Eastern Cape contributes significantly to the domestic agro-industry and to exports. Such potential needs to be harnessed to translate into reduced poverty and increased employment for those in the province.
To achieve this, we suggest an inclusive approach to agricultural development should be adopted, to ensure that smallholder farmers benefit from the country’s agricultural sector, which is by far the most diverse and vibrant in Sub-Saharan Africa.
For smallholder farmers to be integrated into South Africa’s very advanced agricultural value chains, and in particular in the Eastern Cape, there is a need for consistent policy and programmes to address the challenges affecting these small producers.
Challenges to be addressed
There are myriad challenges that constrain smallholder agricultural development in the province. First, agriculture in the Eastern Cape is dominated by subsistence farming, which is less productive and intensive. This leads to unsustainable use of catchments and agricultural/grazing landscapes.
The agricultural and grazing landscapes are increasingly invaded by invasive plant species such as wattle (Acacia mearnsii Fabaceae). These plants reduce the land available for productive use (including livestock grazing) and also sap the water that is needed for agricultural production.
Furthermore, the rural economic infrastructure, such as rural roads and storage facilities, have been degrading due to inadequate maintenance and upgrading. This constrains farmers’ access to markets. The irrigation infrastructure is also dilapidated, reducing farmers’ resilience to drought and other climate change risks.
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A proposed investment framework to address the challenges
These challenges, among many others, need to be addressed by the government through deliberate policy and programmes aimed at promoting an inclusive approach to agricultural development in the province. Many empirical studies lend credence to the role of deliberate government support and leveraging of private sector investment to achieve inclusion of sectors of society that would otherwise remain in poverty even when a country achieves significant economic progress.
In China, for example, consistent policy support coupled with increased public spending was needed to achieve broad-based reduction of poverty. The value-proposition for an inclusive approach to agricultural investment in the Eastern Cape has multiple dimensions.
There are huge economic benefits in terms of increased incomes and jobs created in the rural space, which would thus contribute to rural poverty reduction, given that agriculture is the mainstay livelihood of over 65% of the population in the province.
Recent estimates (based on 2022 data) indicate that South Africa can earn more than R6.3 billion per year and employ nearly 75 000 small and new-era farmers’ households through such investment.
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The role of government and its partners
Over the past two years, the World Bank, the government of South Africa’s National Treasury, and provincial authorities have prepared an agricultural investment framework that could spur opportunities for greater inclusion of small and emerging farmers in several potential agricultural value-chains (including horticulture and livestock) through strengthened partnerships with agribusinesses, and improved watershed management.
The proposed agricultural investment framework also highlights the importance of focusing on rural connectivity (roads and storage infrastructure), irrigation revitalisation, and improving the delivery of public services for inclusive agricultural development.
The proposed investment framework aligns very well with the objectives of the Agricultural and Agro-Processing Master Plan (AAMP) adopted by the department of agriculture, land reform and rural development (DALRRD) in 2022. The master plan was adopted as a basis upon which to rebuild the sector’s competitiveness, recover from the effects of the Covid-19 pandemic, ensure food security, achieve inclusive growth and create sustainable, decent jobs in the rural space. The proposed agricultural investment framework in the Eastern Cape will contribute significantly to the implementation of the AAMP.
What’s next?
To move from a framework to action, there is need for the provincial government, in collaboration with its partners, to consider implementing some of the activities laid out in the framework, in a consistent way, over the medium to long-term.
Such action will lay a strong foundation for inclusive smallholder agriculture development in South Africa, and the lessons could inform the design of similar programs to scale up the inclusive approach in other provinces, such as Mpumalanga, Limpopo, and KwaZulu Natal where smallholder agriculture is also large.
- Hardwick Tchale joined the World Bank in 2005 and now works as a senior agricultural economist. Lavinia Engelbrecht is the senior external affairs officer in the external and corporate relations unit for Eastern and Southern Africa in the World Bank. The views and opinions expressed in this article are those of the author and do not necessarily reflect the views or positions of Food For Mzansi.
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