Wool Sheep Farming A Vehicle for Socio-economic Development and Job Creation Leon de Beer NWGA Congress Wednesday 28 May 2013
Introduction Primary Agriculture GDP: 2.5% Forward/Backward linkages: Agro-Industrial 12% GDP Includes processing, leisure facilities, etc. Formal Employment: 5% (down from 10.5% in 2001) Agriculture important: Provincial development strategies Job creation
Provincial contribution to GDP Province % to GDP (Agriculture) Free State 9.2 Mpumalanga 6.1 Kwazulu-Natal 5.5 Western Cape 4.5
Provincial Agric. Strategy Focus Province Focus Free State Diversification & Agribusiness Limpopo Tripling Agric. by 2015 Eastern Cape Livestock production Kwazulu-Natal Link commercial with subsistence Northern Cape Agro processing North West Infrastructure & market access Mpumalanga Agriculture & forestry
Commercial farming enterprises Province 2002 2007 Change Eastern Cape 4 376 3 896-10.97 Free State 8 531 7 515-11.91 Kwazulu-Natal 4 038 3 560-11.84 Mpumalanga 5 104 3 376-33.86 Northern Cape 6 114 5 226-14.52 Western Cape 7 187 6 682-7.03 Total 45 818 39 982-12.74
Structure of Agricultural Sector In 2009: 20.7% SA households in agricultural production 27.5% involved in livestock 45 818 commercial farms in 2002 vs. 39 982 in 2007 Downward trend in commercial farmers Larger farms? ± 35 000 emerging farmers Beneficiaries of LRAD BEE programs Communal Focus of Government
Workforce changes in Agriculture Year Workers Year on year diff. Variation 2001 969 000 - - 2002 1 153 000 +184 000 16.0% 2003 808 000-345 000-42.7% 2004 828 000 +20 000 2.4% 2005 778 000-50 000-6.4% 2006 886 000 +108 000 12.2% 2007 703 000-183 000-26.0% 2008 764 000 +61 000 8.0% 2009 615 000-149 000-24.2%
Paid full time Agric. Workers Number of employees 481 375 in 2002 431 664 in 2007 Remuneration R5,3 billion in 2002 R7,2 billion in 2007 Netto result -10,3% in number of employees +36,6% increase in remuneration Source: Stats SA
Casual and seasonal Agric. Workers Number of employees 459 445 in 2002 365 142 in 2007 Remuneration R0,96 billion in 2002 R1,43 billion in 2007 Netto result -20,5% in number of employees +49,3% increase in remuneration Source: Stats SA Vink & Van Rooyen: Real cash remuneration increased before 2003 (by 8%) Introduction of min. wage; unit cost of labour declined (Labour cost vs. value of output).
Wool Industry: FBMIS Year Wool Prod. Labour/SSU Total Labour Cost Number Workers 2008/9 41 438 438 R35.13 R438 306 916 35 501 2009/10 42 255 046 R36.59 R465 519 401 31 496 2010/11 40 756 969 R41.77 R512 581 764 32 441 2011/12 40 117 290 R46.78 R565 052 242 34 222 Wool sheep producers remuneration 20-30% above minimum wage.
Wool and Emerging Producers Year Kilogram Auction Value (R) Work opportunities 1997/98 222 610 1 502 908-2008/09 2 666 933 43 149 706 3 299 2009/10 2 807 161 64 676 989 4 376 2010/11 3 027 276 71 749 104 4 541 2011/12 3 555 077 113 015 898 6 845
Job creation: Communal farmers Income from mutton: Work opportunities 2-3 times higher! Casual labour expenses is R4-78 to R10-89/sheep (NWGA FBMIS) Spend estimated R14,3-R32,7million/annum Job security for up to 2 000 casual workers Has the potential to at least double!
Socio-economic impact Income from sales of wool and mutton: 47 % internal income in 2004 Increased to 59% (2006) and 65% (2009) Social indicators (2004 to 2009): Children going to bed hungry (43,1% to 27,3%) Households savings accounts (56,9% to 77,3%) Borrow money school fees: (78,4% to 52,3%) Study to be repeated in 2014
Vision 2030 Convert some under-used land in communal areas and land reform projects into commercial production: NWGA T&D program: Infrastructure development Training and mentorship Market access Resource utilisation Beneficiaries for LRAD Pick and support commercial agriculture sectors and regions that have the highest potential for growth and employment: Wool!! Risk factors: Also mutton Established commercial production in support of emergent producers Wool has successful track record since late 1800 s Export product
Importance of Commercial Production Job creation and job security Training and mentorship Research: The smaller scale of production; the better the practices and efficiency of management are needed. Established market Commitment to development support
Challenges Labour unrest Productivity and skills Unrealistic expectations in wage increases Land tenure, security of ownership and land use Bio-security Development partnerships, i.e. Government Research: capacity and institutional memory Corruption! Lack of skills and experience at various levels Infrastructure: Production, roads, communication, etc. Competitiveness of processing in the world.
Recommendations Industry involvement in negotiations with role-players to state the position of the industry: Affordability, risk, realism. Accredited and credible training and mentorship that improve skills and productivity of farmworkers and emerging producers. Organised and skilled casual labour i.e. fencing, borehole maintenance, control of noxious plants, etc. LRAD: Commodity involvement and support. Biosecurity: National Animal Health Forum, SSHAB. Research capacity and focus on new technology. Rural Infrastructure- access to information and markets. Appropriate support to existing processing infrastructure.
Conclusions Wool is an export commodity. Wool production may increase; market will be able to absorb! Wool earns foreign currency for the most extensive and rural populations in SA. Wool has the potential to initiate, stimulate and maintain rural economies Thank you!!