Human capital must lead South African ag, says Karaan

More News Opinion Top Stories
Human capital must lead South African ag, says Karaan

The South African government has set its growth sights high under the nation's National Development Plan, announced in February of this year. By 2030, the policy seeks to double the current GDP growth rate to 5% and create 11 million jobs - many of which are expected to come from agriculture. However, University of Stellenbosch professor Mohammed Karaan questioned whether the nation would have the human capacity to build the sector and reach development goals.

Speaking at the Produce Marketing Association's (PMA) Fresh Connections: Southern Africa event last week, the agrisciences dean explained that this highly complex sector  - marked by growth as well as social unrest – would provide one of the greatest areas of work potential, if it could develop its human capital.karaan

"Whether we are creating jobs or market growth or becoming more sustainable or more labor intensive, the critical challenge is, how do we do it?" Karaan asked the audience of almost 350 people in Cape Town.

"It’s not just a matter of execution. Our most critical challenge is to answer the question - do we have the people to make the place work?"

Karaan pointed out the importance of building infrastructure, improving government and industrialization. Above all, however, the professor emphasized investment in young people and talent must come first.

"We’ve got to do all of those things but actually doing those things is the easy part of the job. The difficult part of the job is you can’t fix the place until you fix the people," he said.

"We do not have the people with which to industrialize our economy. We do not have the people with which to improve the performance of government. We do not have the people with which to execute our policies."

Although agriculture comes with its risks, highlighted by its tendencies toward poverty and marginalization, he said that this sector is where South Africa must see its investment in the future.

"The argument that won the day is that simply most other advancing nations – take BRICS nations or Turkey, Indonesia, Mexico – all have built their advancing economies on a healthy agricultural sector," Karaan said.

"They changed their agricultural policies to intensify those sectors. If you’re going to follow the example of the advanced economies and want to be an advanced economy too, you need a healthy, job-absorbing agricultural sector."

The ability to follow on this trajectory becomes even more difficult given pressure on South Africa to increase the farm worker minimum wage. In February, the South African Ministry of Labour increased the wage from R69 (US$6.90) a day to R105 (US$10.50).

Although the wage increase was lamented by many South African producers as too steep, Karaan emphasized the importance of a decent salary.

"Can we still create a million jobs when we just increased the wage? The answer was, of course not but we have to. In other words, the fact that we increased the wage rate, we were lucky we did it at a time when agriculture could afford it. We had two or three exceptionally good years from an exchange rate point of view, markets and yields," he said.

"It’s more important to ensure that what we do in agriculture is humane than to create jobs. We need a humane level of compensation and then we move from there."

Although the higher minimum wage is expected to encourage job losses, Karaan returned to the concept of investing in human capital.

"We should be asking, do we have the people that will command the economy 15 years from now? Do you have the people who will be able to run the company 15 years from now?

"I think the PMA's approach to South Africa and African development is a commendable one. There is a focus on human capital development," he said.

"I want to encourage business people to join our efforts to develop the human capital that is going to be critical to this sector 15 years from now."



Subscribe to our newsletter