Young black farmers and the economy: A South African perspective.

Abstract

With over 80% of its total land area classified as agricultural land, South Africa boasts the most per-country in Africa, and of that share, 12.5% is suitable for crop cultivation while the remainder is used for animal production. Given these numbers, one would expect agriculture to comprise a sizable portion of South Africa's GDP. Black farmers in South Africa account for roughly 5% to 10% of the whole commercial agricultural production, even though constituting most of the population. However, the Black population still shoulders the worst of the employment problem the nation faces. Absorption of Black young people into farming occupation in South Africa is a sustainable strategy to curb Black people's unemployment rate, food insecurity and redistribution of wealth, yet amongst the challenges faced by young farmers are unequal land distribution, inadequate financial accessibility for agriculture, poor agricultural skills, and global market accessibility restrictions. Against this background, this thesis examined Young Black Farmers and the Economy: A South African Perspective and addressed three main objectives. First, the study assessed agriculture’s potential to provide work opportunities for young individuals. Using data from the National Income Dynamics Study (NIDS), covering Waves 1 to 5 (2008–2016), the analysis employed Ordinary Least Squares (OLS) and robust random effects models. The results revealed that while commercial farming does not consistently create jobs, access to finance significantly enhances the likelihood of employment creation in agriculture. Nonetheless, small-scale farmers continue to face structural limitations that hinder long-term employment potential. Building on the employment analysis, the second objective evaluated the impact of rising young Black farmer participation on agricultural price growth and market dynamics. This objective utilised Producer Price Index (PPI) and Quarterly Labour Force Survey (QLFS) data from 2012 to 2023, analysed through a Bayesian Vector Autoregression (BVAR) model. The findings indicated that increased participation of young Black farmers positively influences long-term sectoral performance through agricultural price growth, thereby contributing to overall economic growth. Shocks to the agricultural labour force, however, exert a prolonged negative influence on agricultural price growth. The consequences of food price inflation and the population of young Black farmers, by comparison, are more moderate. Overall, the analysis highlights that agricultural price growth is largely self-reinforcing, driven by internal sector dynamics.