An advancing economy will usually see a percentage of its agricultural labour force decline over time. This is a sign of an advancing population and an educational system that produces intellectual curiosity.
In advanced economies the services sector becomes the greatest employer because machines take over manual labour, thus expanding industrial sophistication. This is now a natural course.
Already in 1980, South Africa had over half of its labour force in the services sector. During this same time, over 65% of US labour force was employed in the services sector.
The decline of employment in the agricultural sector causes the rise of urbanization. Urbanization is an inevitable result of economic growth. In the free world where urban influx controls do not exist, urbanization creates difficulties for policymakers. Urbanization brings squatter camps or slums, electricity grid pressure and crime.
Whilst policy makers scramble to come up with solutions, new innovations and technological advancements may compound the difficulties. The advent of mobile cellular phones, for example, made it easier for governments to privatize telephony utilities but, at the same time, this great innovation created a demand for electricity like never before. Policymakers calculate the power requirements based on economic growth, urbanization, mortality rate and population growth. Technology that could increase demand on the electricity supply is rarely considered.
The less advanced an economy, the heavier the role of agriculture is in its total production output. Uganda, for example, gets over 45% of its GDP from agriculture.
It is estimated that SouthAfrica will have 80 million people by 2035. Should the current birth rate not be disturbed by urbanization, the country will gradually experience difficulties due to an the demand on resources.
One immediate challenge is that South Africa is second driest country in the world after Israel. What does this mean for food and water supplies? The odds of economic growth lead to little interest in agriculture. As climate change worsens, water projections are not very promising either.
In 1950, agriculture and fishing contributed 18% to GDP, this declined to 5.1% in 1993 and 2.4% a decade later. The trend of agricultural decline is not unique to South Africa. Most developed countries face similar challenges.
While agriculture will not spark any significant economic growth in the near future, the threat to food security is growing. In 15 to 25 years, taking climate change and water scarcity into account, food scarcity will increase significantly.
Making agriculture sector pay reasonably wages may contribute to slowing urbanization and food insecurity. There is a serious need to regulate minimum wages.
Another problem is middlemen who create investment products (gamble) with this basic human need. Therefore, without a proper regulatory body to oversee proper pricing of food commodities in markets, food prices will continue to soar.
Policymakers must consider establishing a regulator with wide powers to oversee and monitor the commodities market. Otherwise, inflation woes will not be arrested and farmers are not going to get their fair share. Consumers will continue to face shocking prices at the till. The country will run out of food producers.
The South Africa Competition Commission is not well geared to tackle price manipulation of commodities. It has its hands full with other aspects of antitrust laws.
The agricultural sector (with exception of fishing and forestry) has very thin profit margins. Therefore, matters around farming — such as wages and land rights for displaced black South Africans — require delicate handling. Eroding land value through uncompensated acquisition is not the most ideal way to properly secure food supply. Such actions add to the woes.
The pains of economic growth under a constitution that contains economic rights are extremely unique. It unclear whether the developing nations will be keen to follow the South Africa model for a supreme law.
Our Constitution provides for political and economic-economic rights. We often ignore the provisions for housing, education, healthcare, pensions and social security. This explain why some still say the Freedom Charter is ignored.