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Trends and Policy Challenges in the Rural Economy: Four Provincial Case Studies and Overview

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Michael Aliber; Cobus de Swardt; Andries du Toit; Themba Mbhele; Themba Mthethwa (2005). Trends and Policy Challenges in the Rural Economy: Four Provincial Case Studies and Overview. Employment and Economic Policy Research Programme, Human Sciences Research Council. HSRC Press.
Type book
Scope Post-1994 South African economy
Method mixed
Period studied 1985–2004
Regions Limpopo, Western Cape, Eastern Cape, KwaZulu-Natal, former homelands (Lebowa, Transkei, Ciskei, KwaZulu)
Themes agriculture land, labour markets wages, inequality poverty unemployment, bantustans removals influx, transition post apartheid, methods data sources, origins segregation
Citation key aliber2005

Argument

The volume asks whether the rural economy can absorb labour after apartheid, using four provincial case studies plus national Labour Force Survey and agricultural census data. It finds that commercial agriculture has been shedding jobs, that subsistence and small-scale farming in the former homelands is declining or in flux, that rural micro-enterprise is small and fragile, and that government projects are tiny relative to need. The common thread is that rural sectors depend on formal-sector wages and remittances, so formal-sector stagnation undermines them. Farm labour shedding is read partly as farmers' response to perceived political and regulatory risk rather than to genuine labour costs. Social grants are the most effective intervention.

Evidence and method

Primary rapid-appraisal fieldwork (key-informant and focus-group interviews) in Limpopo and KwaZulu-Natal; a 2001 PLAAS/CRLS survey of 77 Western Cape wine and fruit farms; a 2002 Ceres chronic-poverty survey of 540 households; Mount Frere household surveys (733 households, with food and social security sub-surveys); national datasets including Labour Force Surveys (2000-04, linked panel of about 6,500 rural households), the 1993 SALDRU survey, agricultural censuses (1985, 1993, 2002) and the Stats SA Large and Small Scale Agriculture survey.

Findings

  • National commercial farm employment fell sharply between 1985 and 2002. (p. 97)
  • Farm job losses explain only part of rural unemployment; reversing them would help only modestly. (p. 98)

  • Labour shedding is attributed to perceived vulnerability and risk, not genuine labour scarcity. (p. 99)

    in South Africa the shift to labour-saving production technologies is only partially (if at all) a function of labour costs.

  • Western Cape farms are reducing permanent labour and externalising employment. (p. 22)

    Almost 60 per cent of respondents reported that they had reduced the number of permanent workers in their businesses during the previous three years

  • Regular employment per hectare fell between 1995 and 2000 while seasonal use rose in deciduous fruit. (p. 25)

    The comparison suggests significantly lower numbers of regular employees per hectare, with the use of off-farm seasonal labour significantly increasing.

  • Over half of surveyed farms used labour contractors, which weakens enforcement of labour law. (p. 28)

    More than half (53.2 per cent) of farm managements in the PLAAS study indicated that they used a labour contractor.

  • Farm housing is being abandoned, ending the traditional tied-housing arrangement. (p. 31)

    More than a tenth (11.6 per cent) of the housing stock on the farms surveyed by PLAAS was standing empty at the time of the survey

  • Ceres households depend heavily on insecure agro-food employment and suffer high food insecurity. (p. 37)

    Some 70 per cent of households indicated that they had experienced a shortage of food for a significant period of time during the previous year

  • Mount Frere households have land but are far from food self-sufficient and rely on grants. (p. 61)

    State social grants accounted for 46 per cent of total household incomes.

  • Participation in small-scale agriculture is highly fluid, with farming mostly a supplementary food source. (p. 102)

    only 20 per cent engaged in farming in both periods – or put another way, less than half of those who engaged in agriculture at all in either period did so in both periods.

  • Government rural projects are tiny relative to need, compared with social grants. (p. 115)

    around 4.9 million people receive some kind of social grant

  • Rural economic sectors are interdependent and the formal sector's stagnation drags down small-scale activities. (p. 118)

    The stagnation of formal sector employment is one of the main factors behind the stagnation of small-scale agriculture and the rural micro-enterprise sector.