Socio-economic dynamics of the South African Agricultural Sector

This trade policy briefing overviews the socio-economic and political reality of the agricultural sector in South Africa. The first section discusses the policy environment and changes in agricultural polices over the past 10 years, referring to the state of agriculture in contemporary South Africa that cannot be understood without reference to agricultural policy and the resultant institutional framework under apartheid, which resulted in a skewed pattern of land ownership and forms of tenure. Deregulation and liberalisation dominated the agricultural sector during the 1980s and 1990s while a range of sectoral policies also impacted on the sector, especially the deregulation of agricultural marketing. The second section discusses the socio-economic importance of agriculture. South African agriculture is dualistic, consisting of commercial farmers and many subsistence farmers, and this remains the major challenge for future agricultural policy. While the commercial sector is capital-intensive, engaged in large-scale production and linked to global markets, smallholder farming is labour-intensive and impoverished. Although South Africa is self-sufficient in food production and national statistics reveal a food secure position at national level, this is not true at household level. The third section discusses shifting agricultural trading patterns and provides a ten-year statistical review of the agricultural sector, noting changes in the agricultural trade arena, shifts in trading pattern, and trends concerning exports and imports.