AGRICULTURAL SECTOR SKILLS PLAN - 2018-2019 Prepared on behalf of the Sector by AgriSETA for submission to the Department of Higher Education and ...
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AGRICULTURAL SECTOR SKILLS PLAN 2018-2019 Prepared on behalf of the Sector by AgriSETA for submission to the Department of Higher Education and Training August 2017
AUTHORISATION AND OFFICIAL SIGN-OFF We, the undersigned, hereby certify that this Final Draft Sector Skills Plan: • Was developed by the management of AgriSETA under the guidance of the AgriSETA Accounting Authority and in consultation with the Department of Higher Education and Training • Was informed by extensive literature reviews, data analysis and research • Takes into account all the relevant policies, legislation and other mandates for which AgriSETA is responsible • Involved representative stakeholder consultations • Accurately reflects the findings in terms of scarce skills and skills gaps within documented limitations to inform strategy planning and performance priorities. Date: Mr J S Madiba Chief Executive Officer: AgriSETA Date Mr T KaPlaatjie Acting Chairperson: AgriSETA Accounting Authority For more information, please contact: AgriSETA Address: 529 Belvedere St, Arcadia, Pretoria, 0002 Phone: 012 325 165 Fax: 012 325 1677 Email: info@agriseta.co.za i
FOREWORD S outh Africa has a dual agricultural economy spanning subsistence and commercial interests. These two constituencies have differing skills requirements and AgriSETA is required to serve both. In order to accurately serve the skills needs of the Agricultural sector, AgriSETA requires an updated Sector Skills Plan (SSP) for 2018/2019, including a scarce skills and skills gaps list which is aligned to government priorities and strategic frameworks. This document lays out these priorities and identifies the skills needs of the sector. It was found that commercial farmers require high level technical skills for managerial positions, and improved Adult Education and Training and Recognition of Prior Learning (RPL) for their unskilled workforce. Co-operatives require partnerships (with big business, government departments, other SETAs and industry bodies) that are targeted at helping co-operatives develop into proper businesses with access to finance, corporate governance and business management skills. The skills mismatch identified in this SSP points out that neither of these constituents outlined above currently fully benefits from existing AgriSETA learnerships. Unskilled workers are, on the whole, not eligible for lower level NQF AgriSETA learnerships because they do not have the requisite basic literacy and numeracy skills, or require RPL to be launched onto a career development path. This unskilled workforce spans commercial and subsistence farming. AgriSETA provides sufficient lower level NQF interventions, but commercial enterprises require technical skill for managerial and scientific positions, which should be catered for in the form of mentorships and bursaries. The research supporting these findings is contained in the following document. Date Mr T KaPlaatjie Acting Chairperson: AgriSETA Accounting Authority ii
ABBREVIATIONS AND ACRONYMS AFASA African Farmers’ Association of South Africa AGOA African Growth and Opportunity Act AgriSETA Agricultural Sector Education and Training Authority APAP Agricultural Policy Action Plan ATR Annual Training Report BMI Business Monitor International DAFF Department of Agriculture, Forestry and Fisheries DHET Department of Higher Education and Training DRDLR Department of Rural Development and Land Reform DTI Department of Trade and Industry FETMIS Further Education and Training Management Information System GDP Gross Domestic Product HEMIS Higher Education Management Information System HTFVs Hard-to-fill vacancies HSRC Human Sciences Research Council IDGP Integrated Growth and Development Plan IDP Integrated Development Plan IPAP Industrial Policy Action Plan IRR Institute of Race Relations KZN KwaZulu-Natal LED Local Economic Development MAFISA Micro Agricultural Financial Institution of South Africa NAFU National African Farmers Union NDP National Development Plan NERPO National Emergent Red Meat Producers Organisation NGP New Growth Path NEETS Not in Employment, Education or Training NSDS III National Skills Development Strategy III NSFAS National Student Financial Aid Scheme QLFS Quarterly Labour Force Survey QCTO Quality Council for Trades and Occupations RPL Recognition of Prior Learning SACAU Southern African Confederation of Agricultural Unions iii
SADC Southern African Development Community South African Institute for Vocational and Continuing Education and SAIVCET Training SAQA South African Qualifications Authority SDA Skills Development Act SIP Strategic Integrated Project SIC Standard Industrial Classification SSP Sector Skills Plan SIZA Sustainability Initiative of South Africa StatsSA Statistics South Africa TAUSA Transvaal Agricultural Union South Africa TVET Technical Vocational Education and Training WSP Workplace Skills Plan WTO World Trade Organisation iv
TABLE OF CONTENTS Authorisation and official sign-off ......................................................................................... i Foreword .......................................................................................................................... ii Abbreviations and acronyms .............................................................................................. iii TABLE OF CONTENTS .......................................................................................................... v LIST OF TABLES AND FIGURES ............................................................................................. vi Executive Summary.......................................................................................................... vii 1. RESEARCH PROCESS AND METHODS ................................................................................................ VIII 2. DOCUMENT REVIEW ......................................................................................................................... VIII 3. SCARCE AND PIVOTAL LIST FORMULATION ........................................................................................ IX 4. SUMMARY OF KEY FINDINGS .............................................................................................................. IX Chapter 1: Sector Profile ..................................................................................................... 1 1. INTRODUCTION .....................................................................................................................................1 1.1. SCOPE OF COVERAGE .........................................................................................................................1 1.3. ECONOMIC PERFORMANCE ...............................................................................................................5 1.5. LABOUR MARKET PROFILE .................................................................................................................8 1.6. CONCLUSION ................................................................................................................................... 12 Chapter 2: Key Skills Issues ............................................................................................... 13 2. INTRODUCTION .................................................................................................................................. 13 2.1. CHANGE DRIVERS ............................................................................................................................ 13 2.2. ALIGNMENT WITH NATIONAL STRATEGIES AND PLANS ................................................................. 16 2.3. IMPLICATIONS FOR SKILLS PLANNING IN THE AGRICULTURAL SECTOR ......................................... 17 2.4. CONCLUSION ................................................................................................................................... 17 Chapter 3: Occupational Shortages and Skills Gaps ............................................................. 19 3. INTRODUCTION .................................................................................................................................. 19 3.1. OCCUPATIONAL SHORTAGES AND SKILLS GAPS ............................................................................. 20 3.2. EXTENT AND NATURE OF SUPPLY ................................................................................................... 30 3.2.2. SUPPLY CHALLENGES EXPERIENCED BY FIRMS ............................................................................ 36 3.3. PIVOTAL LIST ................................................................................................................................... 37 3.4. CONCLUSION ................................................................................................................................... 39 Chapter 4: Sector Partnerships .......................................................................................... 41 4. INTRODUCTION .................................................................................................................................. 41 4.1. EXISTING PARTNERSHIPS ................................................................................................................ 41 4.2. NEW PARTNERSHIPS ....................................................................................................................... 45 4.3. CONCLUSION ................................................................................................................................... 46 Chapter 5: Skills Priority Actions ....................................................................................... 47 5. INTRODUCTION .................................................................................................................................. 47 5. 1. FINDINGS FROM PREVIOUS CHAPTERS ......................................................................................... 47 5.2. RECOMMENDED ACTIONS .............................................................................................................. 48 5.3. CONCLUSION ................................................................................................................................... 51 Bibliography .................................................................................................................... 52 v
LIST OF TABLES AND FIGURES TABLES TABLE 1: RESEARCH PROCESS AND METHODOLOGY VIII TABLE 2: ACTIVITIES WITHIN THE AGRICULTURAL SECTOR BY SIC CODE 2 TABLE 3: KEY AGRICULTURAL ROLE-PLAYERS 4 TABLE 4: DISTRIBUTION OF EMPLOYEES BY PROVINCE IN AGRICULTURE, FISHERIES AND FRESTRY 9 TABLE 5: SMALL-EMERGING FARMERS AND CO- OPERATIVES HTFVS 20 TABLE 6: COMMERCIAL FARMERS’ HTFVS 21 TABLE 7: TOP EMERGING SUBSECTOR SKILLS GAPS AND FUTURE OCCUPATIONAL SHORTAGES 23 TABLE 8: GENERAL PRIORITY SKILLS FOR UNSKILLED LABOUR 25 TABLE 9: GENERAL PRIORITY SKILLS FOR SKILLED LABOUR 25 TABLE 10: SCARCE SKILLS AND SKILLS GAPS LIST 29 TABLE 11: EMPLOYEE TRAINED BY OCCUPATIONAL CATEGORY AND GENDER 32 TABLE 12: COLLEGES OF AGRICULTURE 35 TABLE 13: THE AGRISETA 2018/19 PIVOTAL LIST 37 TABLE 14: POLICY PROVISIONS SKILLS PRIORITY ACTIONS 49 TABLE 15: CO-OPERATIVE SKILLS PRIORITY ACTIONS 49 TABLE 16: MENTORSHIP AND CAREER PATHWAY SKILLS PRIORITY ACTIONS 50 TABLE 17: QUALITY OF SKILLS SUPPLY SKILL PRIORITY ACTIONS 50 TABLE 18: GREEN KNOWLEDGE SKILLS PRIORIT ACTIONS 50 FIGURES FIGURE 1: DISTRIBUTION OF AGRICULTURAL ENTITIES BY SUBSECTOR 3 FIGURE 2: CONTRIBUTION TO GDP BY SECTOR, Q1 2016 5 FIGURE 3: GROSS VALUE OF AGRICULTURAL PRODUCTS, 2016 6 FIGURE 4: PROVINCIAL DISTRIBUTION OF EMPLOYERS REGISTERED WITH AGRISETA 8 FIGURE 5: SUBSITENCE AGRICULTURAL ACTIVITY PER HOUSEHOLD, % 10 FIGURE 6: GENDER DISTRIBUTION OF LABOUR IN THE AGRICULTURAL SECTOR 10 FIGURE 7: EMPLOYEES BY RACE 11 FIGURE 8: EMPLOYMENT CATEGORIES WITHIN LARGE ORGANISATIONS FIGURE 9: UNIVERSITIES THROUGHPUT FOR AGRICULTURAL STUDENTS GRADUATING IN 2013-2014 31 FIGURE 10: NUMBER OF POST-SCHOOL GRADUATES IN AGRICULTURAL SECTOR 31 FIGURE 11: SKILLS DEVELOPMENT INTERVENTION 32 FIGURE 12: DISTRIBUTION OF AGRISETA LEARNERSHIPS 34 FIGURE 13: DISTRIBUTION OF SAQA REGISTERED AGRICULTURE QUALIFICATIONS 35 vi
EXECUTIVE SUMMARY A griSETA requires an updated scarce skills and skills gaps list, aligned to government priorities and strategic frameworks, in response to needs identified by the Agricultural sector. There is a need to understand how the current scarce skills and skills gaps list matches the needs of the Agricultural sector and how AgriSETA might facilitate relevant skills and educational opportunities to address skills gaps identified. This 2018 - 2019 Sector Skills Plan (SSP) aims to address five key objectives: 1. Provide a profile of the Agricultural sector which outlines economic indicators and trends in the sector, including employer and employee trends. 2. Identify key skills issues in the agricultural sector by highlighting the macro socio-economic factors that impact on the demand for skills. In this regard, change drivers were identified and their articulations with national policy and strategy elaborated upon. 3. Analyse the occupational shortages and skills gaps trends in the agricultural sector to identify potential skills mismatches. This analysis resulted in the formulation of the scarce and pivotal skills lists. 4. Agricultural sector partnerships were analysed to determine show they can be improved, as well as demonstrate ‘best practice’ with regard to partnering. 5. Synthesis of all the above mentioned objectives to establish skills priority actions. vii
1. RESEARCH PROCESS AND METHODS Mixed research design and methods were adopted, including qualitative and quantitative methods. TABLE 1: RESEARCH PROCESS AND METHODOLOGY Research Objectives of Research Nature of the Sample Data Time frame topics the studies method studies size collection of the study tool Occupational Establish the Qualitative Non- 5,878 Key Two Shortages and occupational research probability AgriSETA informant months Emerging shortages sampling stakeholde interviews (June-July Skills Needs and method was rs and desk 2016) emerging used to research skills needs identify The in the 11 stakeholder qualitative subsectors of from whom interviews the specific (primary agricultural information is data) and sector required. document analysis (secondary data). Skills Issues Identify the Quantitative Gathering 12% were Survey Three and key research empirical cooperati The months Demands occupational evidence ve quantitativ (August- shortages using farmers, e survey October and primary data 13% were gathered 2016). demands sources, as small and data on Data with regard well as emerging the analysis, to unskilled, undertaking farmers unskilled, synthesis skilled, theoretical, and 75% skilled and and generic desktop were generic triangulatio subsector research commerci occupation n followed occupations using al farmers al over a and secondary shortages period of emerging data and skills three skills needs sources. gaps months in the (November - agricultural January sector. 2017) 2. DOCUMENT REVIEW A document review was conducted to establish the economic performance and trends by subsector, geographic concentration and employers. Government policy and strategy documents, as well as the key statistical and industry publications, were reviewed and these are included in the bibliography. A thematic analysis was conducted to synthesise the key economic, policy and training issues affecting the agricultural sector, to identify key skills issues. viii
3. SCARCE AND PIVOTAL LIST FORMULATION The scarce skills, skills gaps and pivotal skills lists were arrived at through secondary data analysis and the numbers made available in previous Sector Skills Plans. 3.1. Scarce skills and skills gaps list was generated through: Identifying hard-to-fill vacancies based on the results of previous Sector Skills Plans, triangulated with 2015/16 and 2016/17 WSP data, as well as surveys sent to all the AgriSETA levy payers and agricultural sub-subsector committee members. Further information was obtained through interviews with the top levy payers and key industry stakeholders to corroborate these findings. An analysis of graduate completion rates compared against hard-to-fill vacancies identified through our stakeholder engagements. 3.2. Pivotal list was generated through: An analysis of employer commitment to train in specific occupational areas as per the WSP submissions, in comparison with the hard-to-fill vacancies, thus determining where additional training is needed that industry has not yet, or is unable to, respond to. These analyses corroborated the existing top ten scarce skills list and are discussed in chapter 3. They provide an indication of the imbalances in the sector at national qualification and occupational level. They also provide an indication of the volume of skills formation in the workplace and through training providers (Powell & Reddy, 2015). 4. SUMMARY OF KEY FINDINGS South Africa has a dual agricultural economy spanning subsistence and commercial interests. AgriSETA is required to fairly serve both these constituencies despite deriving the bulk of its income from top levy players who are a minor proportion of the sector as a whole. The top levy payers’ contributions justifies their skills needs be catered for, but there is also an equal democratic imperative to support subsistence farmers and rural development for the sake of improved livelihoods and food security. These two constituencies have differing skills requirements. Commercial farmers require high level technical skill for managerial positions, and improved AET and RPL for their unskilled workforce. While co-operatives require partnerships (with big business, government departments, other SETAs and industry bodies) that are targeted at helping co- operatives develop into proper businesses with access to finance, corporate governance and business management skills. These should be provided in the form of mentorships which fall beyond traditional SETA learnerships. It appears that the skills mismatch in the agricultural sector is that neither of these constituents currently fully benefits from existing AgriSETA learnerships. There are a group of unskilled workers who are not eligible for lower level NQF AgriSETA learnerships because they do not have the requisite basic literacy and numeracy skills, or require RPL to be launched onto a career development path. This unskilled workforce spans commercial and subsistence farming. AgriSETA provides sufficient low to medium level NQF interventions, while agricultural colleges and higher education institutions provide medium to high level skills required by commercial enterprises. ix
CHAPTER 1: SECTOR PROFILE 1. INTRODUCTION C hapter 1 provides an overview of the agricultural sector in South Africa by describing the five broad sections. The first section deals with the scope of the agricultural sector’s coverage. The second section describes the AgriSETA stakeholders and key role-players in the sector. The third section expands on the economic performance of the agricultural sector and details how the sector contributes to the broader South African economy. The fourth section explores the employer profile which is based on the submitted 2016 WSP/ATR data, supplemented with data from Statistics South Africa’s Quarterly Labour Force Surveys. Finally, the fifth section provides a labour market profile, where the number and demographics of people employed in the sector are provided. This chapter is intended to set the scene for the skills issues delved into in subsequent chapters. 1.1. SCOPE OF COVERAGE Agriculture, in relation to skills development in the sector, only includes agricultural activities concerned with resource production (primary) and some primary processing of food, aquaculture and growing of trees as a secondary crop by farmers (secondary). The sector is divided into 41 subsectors that are classified according to their agricultural and economic focus. Table 2 below highlights the 41 subsectors and their Standard Industrial Classification (SIC) codes, as well as their focus areas. 1
TABLE 2: ACTIVITIES WITHIN THE AGRICULTURAL SECTOR BY SIC CODE Subsector SIC Code SIC Description SEED 11140 Seed production and marketing PEST CONTROL 99003 Pest Control FIBRE 30118 Grading, ginning and packing of wool and cotton raw material 11142 Manufacture of tobacco products TOBACCO 62208 Processing and dispatching of tobacco 11220 Other animal farming, production of animal products (not elsewhere classified) POULTRY 11221 Ostrich farming 30114 Poultry and egg production including the slaughtering, dressing and packing of poultry AQUACULTURE 13000 Fishing, operation of fish hatcheries and fish farm Manufacture of flour and grain mill products, including rice and vegetable milling, 30311 MILLING, grain mill residues PET FOOD & 30330 Manufacture of prepared animal feeds ANIMAL FEED 30331 Manufacture of pet foods 30332 Manufacture of starches and starch products 11122 Sugar plantation including sugar cane and sugar beet etc. SUGAR 30420 Manufacture of sugar including golden syrup and castor sugar 11120 Growing of Vegetables, Horticultural specialties and nursery products Growing of Vegetables, Horticultural specialties (Including Ornamental Horticulture) 11121 and nursery products. 11130 Growing of fruit, nuts, beverage, and spice crops. 11301 Growing of coffee and tea including coconuts, cocoa, nuts, olives, dates, etc. HORTICULTURE 12109 Growing of trees as second crop by farmers Fruit packed in cartons, fruit juice concentrate drummed and fruit juice in container 30132 ready for consumption 30133 Fruit exporters and importers 30493 Processing and marketing of coffee and tea including coconuts, cocoa, nuts, olives, dates, etc. 62112 Service to nut farmers and companies 11110 Growing of Cereals and other crops (not elsewhere classified) 30300 Manufacture of grain mill products and starches GRAINS & 30313 Handling and storage of grain CEREALS 61502 Wholesale & retail trade in Agricultural machinery 62111 Sale and distribution of Agricultural raw materials and other farming inputs 11141 Production and animal products (not elsewhere classified) 11210 Farming of cattle, sheep, goats, horses, asses, mules, and hinnies; Dairy farming. 11222 Game farming 11300 Growing of crops combined with farming of animals (Mixed farming) 11400 Agricultural and animal husbandry services, except veterinary activities 11402 Other animal farming (not elsewhere classified) RED MEAT 30111 Slaughtering, dressing and packing of livestock, including poultry and small game for meat. 30115 Production, sale & marketing of Agricultural by products (e.g. bones, hides) Slaughtering, dressing and packing of livestock, including small game for meat and 30117 processing of ostrich products 61210 Wholesale trade in Agricultural raw materials and livestock 74136 Transport of livestock as supporting activity 87120 Agricultural and livestock research Source: AgriSETA, 2016. 2
These subsectors are classified into 11 subsector committees, which represent their industry interests to AgriSETA. They include: 1) Milling, pet food and animal feeds; 2) Seed; 3) Sugar; 4) Pest control; 5) Tobacco; 6) Aquaculture; 7) Grain and cereals; 8) Fibre; 9) Poultry; 10) Red Meat; 11) Horticulture subsector. The graph below indicates the relative size of membership numbers by subsectors, as captured in the AgriSETA member database for 2016. FIGURE 1: DISTRIBUTION OF AGRICULTURAL ENTITIES BY SUBSECTOR Red meat (45%) Horticulture (24%) Grains and Cereals (10%) Fibre (9%) Aquaculture (5%) Poultry (2%) Milling, Petfood, Animal Feed (2%) Pest control (1%) Seed (1%) Sugar (1%) Tobacco (0%) Source: AgriSETA member database, 2016 1.1.1. Revenue from Skills Development Levies AgriSETA generates its revenue from Skills Development levies. Currently, there are only 19,834 employers registered with AgriSETA, while there are reportedly over 40,000 commercial farmers registered for Value Added Tax (VAT) in the sector. This means that just under half of commercial farming units are contributing towards skills development in the sector, placing a fair degree of strain on available resources. In order for skills development interventions to reach a broader base, multiple resources need to be channelled into skills development interventions. 1.2. KEY ROLE-PLAYERS There are a number of public and private key role-players in the agricultural sector which contribute towards its functioning, including: national government departments, sector representatives and industry bodies. For the sake of brevity, the table below groups these role- players according to their strategic contribution to the sector. Please note that while as comprehensive as possible, this list is not exhaustive. 3
TABLE 3: KEY AGRICULTURAL ROLE-PLAYERS Department or Relevance to agricultural skills Strategic contribution organisation development Quality of education of entrants to labour Department of Basic market, Education career awareness programmes to expose agriculture as a possible career choice Responsible for TVETs, HETs, agricultural Skills Development Department of Higher colleges and skills development. Sets the and Research Education and Training national skills development agenda through regulation of SETAs. Provision of updated statistics on agricultural Statistics SA sector economics & labour force. Scientific research on agricultural production Agricultural Research Council issues. Department of Trade and Industrial strategy, international trade Industry & Provincial agreements, agricultural sector strategy and Departments of Economic policy implementation desk. Development Sector regulatory framework, strategy and Strategy and leadership, provision of extension services, Policy Department of Agriculture Broad Economic Empowerment funding of Forestry and Fisheries development interventions including provision of bursaries for scarce skills. Financial planning, incentives, accountability National Treasury & SARS of Land Bank, skills levies. Labour legislation, wage determinations, Department of Labour employment equity Department of Economic Sector economic strategies Development Identification of inter-departmental overlaps Planning National Planning Commission and gaps Policy and guidelines on environment Department of Environmental protection and natural resource management, Affairs partner in environmental education Department of Transport Planning for transport needs in rural areas Department of Rural Partnering with AgriSETA in mobilising funds Development and Land for capacity building of claimants. Rural Development Reform and Land Reform Department of Cooperative Linking agricultural and rural development to Governance and Traditional IDPs and LED, infrastructure and services to Affairs & Municipalities agricultural enterprises Department of Water Affairs Water Boards manage local irrigation schemes Department of Energy Strategy to supply electricity to rural areas Services Collaboration with agricultural community to South African Police Service address issues of farm security, including attacks, stock and property theft Land and Agricultural Financial services to commercial farming Credit and assistance Development Bank of South sector, agribusiness, and emerging farmers. Africa 4
Department or Relevance to agricultural skills Strategic contribution organisation development Micro-Agricultural Financial Production loans Institutions of South Africa to smallholder operators (Mafisa) Agricultural Union serving some 32 000 large Agri South Africa (AgriSA) and small commercial farmers. National African Farmers’ Represents black farmers to level the Union of South Africa (Nafu) field in all agricultural matters. Union and Sector The African Farmers’ Represents commercial African farmers to representatives Association of South Africa bring black commercial farmers into (Afasa) mainstream agribusiness. Transvaal Agricultural Union A national agricultural South Africa (TAU SA) union serving commercial farmers Fosters a favourable agribusiness Agricultural Business Chamber environment Conglomerate organisation providing Agribusiness commodity strategic support and services to Grain SA South African grain producers to support sustainability. Source: 2015 GCIS Handbook, Agriculture and AgriSETA SSP 2011-2016 1.3. ECONOMIC PERFORMANCE 1.3.1. Overview Agriculture on its own accounts for 2.4% of gross domestic product (GDP) and 4.4% of total employment (IRR, 2016).If the entire value chain of agriculture is taken into account, its contribution to GDP reportedly reaches about 12% of formal employment (GCIS, 2014/15). The pie chart and table below indicate the contribution of Agriculture, Fisheries and Forestry to the GDP relative to other sectors for the first quarter of 2016. Agriculture is not disaggregated as a separate sector in these figures. FIGURE 2: CONTRIBUTION TO GDP BY SECTOR, Q1 2016 Trade, catering and accommodation (34%) Manufacturing (30%) Mining & Quarrying (17%) Construction (9%) Agriculture, Forestry and Fishing (5%) Electricity, gas and water (5%) Source: StatsSA, 2016, Gross Domestic Product 5
The reported number of commercial farmers in South Africa varies. AgriSETA (2016) reports that there are over 40,000 commercial farms registered for VAT with SARS. Of this number fewer than 2,500 reportedly produced more than half of gross farm income (Kane-Berman, 2016). This means as a sector, most agricultural enterprises are small in size, with a few large players making up the lion’s share of GDP contributions. Most commercial farms have an annual turnover of less than R1 million, which is borne out in the WSP data, which this year reports that of the 19 834 AgriSETA members, 17,475 are categorised as small, (1-49 employees) while only 698 members are categorised as large (more than 149 employees). The number of commercial farmers by racial breakdown is not readily available, but according AgriSA 700 of its black members are commercial farmers. Afasa says a third of its 10 000 members, spread across livestock, field crops, and horticulture, are “farming for the market,” but that only 2% of them are doing so successfully (Kane-Berman, 2016). Thus, many South African farms are hand-to-mouth operations, regardless of their categorisation as ‘subsistence’ or ‘smallholder’, and require significant support to become sustainable. Those farmers categorised as ‘emerging’ are attempting to graduate from small-scale farming to commercial, but again require support in the form of development finance, managerial mentoring and enterprise development. The reported number of emerging farmers ranges from 50,000 to 120,000 (IRR, 2016), and some of the biggest numbers of emerging farmers are in timber and sugar. These remarks point to the need for skills development in the agricultural sector, to bolster existing farming concerns, as well as bringing new skills into the industry. The effect of shifts in land reform for rural skills development will be taken up in chapter 2. The figure below indicates the gross value of agricultural products from 2010 – 2015. A sharp decline was observed from 2014 to 2015, a trend which is expected to continue into 2016, with drought as one of the major contributing factors to this decrease in value. FIGURE 3: GROSS VALUE OF AGRICULTURAL PRODUCTS, 2016 78 000 75 416 76 000 74 000 72 000 70 577 70 994 70 000 68 093 68 000 66 913 65 605 66 000 64 000 62 000 60 000 2010 2011 2012 2013 2014 2015 Rands (Millions) Source: Stats SA 2016 The value of South African exports of agricultural products increased on a steady pace between 2010 to 2013. A major increase in exports was in 2014 and a sharp decline in 2015. The agricultural sector is seen as a critical employer with larger scale farming operations not only creating many jobs in rural communities, but also being a catalyst in creating downstream business and employment opportunities within the agri-processing and manufacturing sectors (FEM, 2015). The agriculture sector has strong linkages with many sectors including tourism, manufacturing, wholesale and retail among others. Backward linkages in manufacturing are created during the purchase of fertilisers, chemicals and implements, and forward linkages are 6
established through the supply of agricultural raw materials to the manufacturing industry. Agricultural products such as vegetables, fruit, dairy products and meat are marketed through retail shops straight from the farm. The agricultural sector therefore directly and indirectly creates employment for a significant number of people. Statistics South Africa (2014) reported that more than 75% of all national farm operation costs were attributed to labour, reiterating the centrality of labour concerns to the sector. Such a labour intensive industry with linkages to many other value chains offers shared benefits for skills development in the sector. Partners up and down the value chain will benefit from improved operations and efficiencies while employees will have improved quality of life with improved skills levels. The South African food security will be enhanced through sustainable farming practices in small-scale and commercial farming alike. 1.3.2. Economic outlook for the sector Business Monitor International (July, 2016) holds a mixed outlook for the South African agricultural market. This is due to the effects of the drought and El Niño on corn and wheat. The weak rand, weather volatility and falling farm incomes are forecast to exert downward pressure on the market. However, in the longer term it is predicted that revenue in the sector will be boosted by a growth of about 40% from food consumption due to the growth of the middle class and disposable incomes. BMI estimates that annual food consumption revenue will reach over R609 billion in 2018. In the 2015/2016 financial year corn production was expected to decline by 38.8% and sugar production to decline by 20.2% due to the severe drought and El Niño. However, poultry production will increase by 1.2% and pork production will rise by 2.1%. The effect of the drought and climate change on skills development will be taken up in Chapter 2. 1.4. EMPLOYER PROFILE The AgriSETA members’ data base includes some 19,834 employers. When one looks at this data disaggregated by sector and province, the numbers do not add up exactly due to overlap of provincial or sectoral boundaries. 17,139 employers are categorised as small, (1-49 employees), 1,611 are medium (50-149 employees) while only 653 members are categorised as large (more than 149 employees). Among registered employers, there were 13,946 employers in the primary sector, most of them small companies. The primary sector constitutes 70 % of all registered employers, followed by fibre (11%) and red meat (6 %). The sugar, coffee/tea and tobacco subsectors have the fewest registered employers, jointly accounting for about 1% of all registered employers in the sector. The provincial distribution of employers registered with AgriSETA is reflected in the pie chart below, with provincial distribution by employer size in figure 4. 7
FIGURE 4: PROVINCIAL DISTRIBUTION OF EMPLOYERS REGISTERED WITH AGRISETA Eastern Cape Eastern Cape, 9% Freestate Freestate, 7% Western Cape, 29% Gauteng KwaZulu-Natal Gauteng, 17% Limpopo Mpumalanga Northern Cape, 8% North West North West, 3% Northern Cape KwaZulu-Natal, 14% Mpumalanga, 12% Limpopo, 1% Western Cape Source: AgriSETA members’ database, 2016 What we see in the figure above is that the Western Cape at 29% is the most represented province in the AgriSETA membership database, followed by Gauteng (17%), KwaZulu-Natal (14%) and Mpumalanga (12%), and the Eastern Cape, Northern Cape and the Free State 9%, 8% and 7% respectively. The lowest number of AgriSETA members ranged between 3 % for Northwest and 1% for Limpopo province. The AgriSETA database does not represent all farming enterprises in the country, and thus must be treated with a fair degree of caution when applying it to a national context. For instance, Limpopo is a known farming province, but is underrepresented in AgriSETA numbers. Nevertheless, there is significant number of stakeholders expressing an interest in skills development in the agricultural sector. What these figures reveal is that AgriSETA needs to meet the needs of two distinct constituencies: top levy payers and small-scale farmers. The needs of a large commercial farm differ from those of a subsistence farmer. There is a need to work towards supporting the skills development needs of top levy payers because of their large contributions and ability to absorb labour, but there is also a democratic responsibility towards ensuring that the large majority of small-scale farmers attain skills that make them sustainable for the sake of the food security of their communities. These issues are further taken up in chapter 2. 1.5. LABOUR MARKET PROFILE Turning from the employer profile, we will now look at the employee profile of the agricultural sector. The labour market trends presented here have largely been drawn from Quarterly Labour Force Survey (QLFS) data from StatsSA, supplemented with data from the AgriSETA WSP and membership databases. It is important to recognise the limitations of both these datasets so that unfounded extrapolations are not made. The QLFS data does not distinguish between employment figures for agriculture, fisheries and forestry or between the informal and formal sectors. Data for domestic workers is aggregated with 8
agricultural data and the data only reflects the economically active population between the ages of 15 and 64. Where possible, this data will be compared to the AgriSETA WSP data, which is also limited in its scope in that it only represents about 10% of employers affiliated with the SETA. South Africa recorded an unemployment rate of 24.5 %in the fourth quarter of 2015 (narrow definition) (StatsSA, QLFS, Q4, 2015). If people who are no longer actively seeking work are included, the broad unemployment rate rises to 35.22% (StatsSA, QLFS, Q4, 2015). South Africa now has a NEET (not in employment, education or training) youth population of approximately 3, 4 million people. The sheer scale of the crisis demands each and every sector’s involvement and the particular impact of this youth bulge is addressed in chapter 2. Over the twelve-month period from January 2015 to January 2016, employment in the agricultural sector decreased from 891 000 to 877 000. Departing from this downward trend, the QLFS conducted by StatsSA in the first quarter of 2016 put the agricultural sector amongst the few industries that experienced a quarterly increase in employment levels (16,000 employment opportunities were observed). BMI has attributed some of this growth to huge sums being invested in the “Proudly South African” food campaign to encourage consumers to buy domestically grown and produced goods. 1.5.1. Provincial distribution of employees The table below indicates that the Western Cape has the highest number of agricultural employees at 228 000, this is followed by KwaZulu-Natal at 136 000 employees and Limpopo at 120 000 employees (StatsSA, 2016). TABLE 4: DISTRIBUTION OF EMPLOYEES BY PROVINCE IN AGRICULTURE, FISHERIES AND FORESTRY Province 2010 2011 2012 2013 2014 2015 2016 Western Cape 135 000 107 000 142 000 162 000 131 000 214 000 228 000 Eastern Cape 66 000 63 000 58 000 67 000 88 000 89 000 95 000 Northern Cape 54 000 57 000 48 000 45 000 60 000 43 000 40 000 Free State 63 000 62 000 62 000 70 000 54 000 64 000 72 000 KwaZulu Natal 114 000 95 000 98 000 96 000 102 000 141 000 136 000 North West 35 000 33 000 32 000 42 000 42 000 57 000 54 000 Gauteng 31 000 74 000 51 000 53 000 55 000 34 000 37 000 Mpumalanga 81 000 84 000 106 000 77 000 89 000 92 000 95 000 Limpopo 70 000 94 000 121 000 102 000 121 000 126 000 120 000 Total 649 000 671 000 718 000 713 000 742 000 860 000 877 000 st Source: Statistics South Africa, 2016. Quarterly Labour Force Survey.1 Quarter 2016 These employment statistics reveal a bias in AgriSETA WSP data, where Limpopo was shown to have a minimal employer profile. What this QLFS data indicates is there is room for substantial engagement with Limpopo, to up their provincial contribution towards skills levies, thereby increasing the skills resources pool across the board. This QLFS data is further broken down in the bar graph below, to examine the household levels of agricultural activity by province. 9
FIGURE 5: SUBSITENCE AGRICULTURAL ACTIVITY PER HOUSEHOLD, % 35 30 25 20 15 10 5 0 Eastern Cape Free State Gauteng KZN Limpopo Mpumalanga North West Northern Western Cape Cape Livestock Poultry Vegetables Crops Other st Source: Statistics South Africa, 2016. Quarterly Labour Force Survey.1 Quarter 2016 1.5.2. Gender Figure 6 below gives the breakdown of the agricultural sector by gender as reported in the first quarter of 2016 (StatsSA, QLFS, Q1, 2016). Figure 6: GENDER DISTRIBUTION OF LABOUR IN THE AGRICULTURAL SECTOR 80 70 60 50 40 30 20 10 0 Jan-Mar 2015 Jul-Sep 2015 Oct-Dec 2015 Jan-Mar 2015 Female Male 10
The male to female percentage for agricultural labour was found to be 33.5% for females and 67.5% for males, as indicated above. 1.5.3. Race WSP (2016) data reveals that black Africans comprise the majority of employees in the sector at 64%, followed by Coloured employees at 23%and whites representing 12% of the agricultural workforce. Asians only represent 1% of workers in the agricultural sector. FIGURE 7: EMPLOYEES BY RACE Africans Africans, 64% White, 12% Coloured Indian, 1% Indian Coloured, 23% White Source: AgriSETA WSP Submissions, 2016 WSP data from all the sub-sectors shows only 601 employees with disabilities out of 244,224 employees within large Agricultural enterprises were selected for training. 1.5.4. Age Half of the people employed in the agricultural sector by employers submitting WSP, are between the ages of 35 and 55. Young people below the age of 35 constitute 42% of people employed whilst 8% are above the age of 55. In total, 92% of the workers are below the age of 55. These demographic realities were validated in interviews with stakeholders, who all commented on the need for skills transfer from those exiting the workforce to those coming up the ranks. The issue of unskilled youth presents a difficulty for skills transfer, because some base level qualification is needed to enter the skilled workforce in the first place. This presents challenges for skills development, because of the double hurdle of experienced employees exiting at a rate not able to be matched by the numerous youth demographic. Analysis of WSP submissions by employers in 2016 shows that the majority of employees are in the primary sub- sector (48%) followed by the grain sub-sector (11%) and poultry at 19% each. Coffee & Tea, sugar and fibre sub-sector has the least representivity of workers. 1.5.5. Occupational categories This chapter concludes by looking at the reported existing skills levels in agricultural enterprises as reported WSPs for 2016. The necessary skills vary from highly skilled managerial and professional occupations to fairly low level skills for elementary occupations. The majority of the workforce comprises elementary occupations, while managers comprise 6% of the workforce. 11
FIGURE 8: EMPLOYMENT CATEGORIES WITHIN LARGE ORGANISATIONS Managers 6% 3% 6% Professionals 51% 5% Technicians and Associate 4% Professionals Clerical support workers 12% Service and Salesworkers Skilled Agricultural and related Trade workers 13% Plant and Machine Operations Elementary Occupations Source: AgriSETA WSP Submissions, 2016 1.6. CONCLUSION Having a firm sense of the agricultural sector’s contribution to the economy in terms of production and employment, we can now more readily identify key skills issues that speak to this economic reality. The remainder of this document covers the following issues that speak to Sector Skills Planning. Chapter 2 identifies key skills issues as framed by government legislation, policies and frameworks, and identifies key macro socio-economic and environmental factors that function as key change drivers in addressing skills development in the agricultural sector. Where Chapter 2 offers a high-level overview and Chapter 3 becomes much more granular. In chapter 3, the mismatches between the demand and supply of skills in the sector are examined by drawing on the views of industry stakeholders and validating these views through secondary data analysis. Chapter 4 points to key partnerships in the sector, examines existing partnerships and asks what future partnerships might be necessary to address the skills gaps identified in Chapter 3. The final chapter draws together these macro and granular skills issues and asks what the key skills priorities should be for AgriSETA over the next five years. These priorities will act as a guiding set of objectives that will inform the planning processes of the AgriSETA’s annual performance and strategic plans, where they will be quantified and operationalised. 12
CHAPTER 2: KEY SKILLS ISSUES 2. INTRODUCTION H aving outlined the agricultural sector profile in chapter one, this chapter is concerned with two specific areas that shape the key skills issues in the agricultural sector Firstly, this chapter identifies factors that drive change in the sector, influencing the need for the particular skills. Secondly, the agricultural sector is aligned with national strategies and plans providing a snapshot of the key policy and planning documents that shape skills planning in this sector. 2.1. CHANGE DRIVERS In this section key themes and issues driving change and influencing skills demand and supply in the agricultural sector are addressed. These change drivers were identified through a thematic synthesis of internal stakeholders’ views, policy documents, existing research and stakeholder engagement, and pertinent current affairs issues reported in the media over time. 2.1.1. Legislative loopholes affecting skills development Wiltshire (2016) has drawn attention to a legislative loophole with regards to skills development in the agricultural sectors. She notes that employers receive no subsidies for training temporary farmworkers, which comprise a large part of the agricultural workforce. This is because “the Skills Development Act defines learners dichotomously as either (fully) employed learners (18.1) or (fully) unemployed learners (18.2). This means that temporary (partially) employed learners are not specifically catered for”. This has a detrimental effect on temporary farmworkers who will not receive any skills development while they are employed or unemployed, because “skills development legislation is premised on the assumption of labour market security and does not recognise the growing numbers of casualised workers in South Africa (52%)” (ibid). This 13
research points to the need to support temporary workers with skills especially needed for crop production, livestock farm workers and harvesters. These required skills are supported by data obtained from the 2017 WSP/ATR submissions. 2.1.2. Land and agrarian reform The government places high value on the need for land reform as a form of redress for historical issues of dispossession. There is a target of transferring 30% of agricultural land to black ownership by 2025 (Xingwana, 2008). However, the success of land reform to date has been limited with no increase in production or economic growth. This is because many beneficiaries lack the necessary production skills and business acumen to farm effectively. The DRDLR’s 2012 Midterm Review highlighted the need for mentors and strategic partners to help emerging farmers succeed. However, it was reported in July 2016 that land reform had the potential to “deter investment in agribusiness activities” and that the “growing exodus of South African farmers” could have a “detrimental impact on the agribusiness sector, depriving it of knowledge and skills” (BMI, 2016). The 2014 APAP noted that small commercial farmers, of which land reform beneficiaries are a subset, are disappearing “at an alarming rate”, with smaller farms being taken out of the market by bigger producers who survive because of economies of scale. These findings, supported by research and already existing programme interventions, point to the urgent need to retain existing skills in the sector, to mentor emerging farmers in management skills and enterprise development in the field (Kane-Berman, 2016, stakeholder interviews, 2014, CDE, 2008). 2.1.3. Agricultural co-operatives It was reported by BMI that 80% of farmers in sub-Saharan Africa are smallholders. It is argued that, in the long term, African farming will have to move away from subsistence agriculture to be competitive and profitable in the genetically modified farming sector (BMI, 2016). For this reason, “partnerships with food companies, the development of co-operatives and greater access to credit” are needed to develop the sector more generally (BMI, 2016). Agricultural co-operatives are explicitly mentioned in the policy documents outlined above as requiring support to ensure their sustainability. Indeed, there have been calls for a new rural development subsector to be established to cater specifically for the needs of co-operatives, in response to both stakeholder needs and the policy directive contained in the NSDS III (Internal Consultation, Internal Stakeholder, 2015-16). These co-operatives face the dual challenge of needing technical production skills as well as corporate governance skills. Smaller agricultural co-operatives do not stand a competitive chance in the market, with major retailers buying directly from commercial farms in both urban and rural areas (Kane-Berman, 2016). Furthermore, collective ownership often entails disputes and conflict which works against efficient management of business concerns (ibid; Internal Stakeholder, 2015-16). Supporting these observations, in stakeholder engagements with primary agricultural co-operatives in Katlehong in Johannesburg’s East Rand in 2014, it was noted that technical skills training was badly needed, as well as corporate governance and financial management skills. 2.1.4. Climate change, drought and food security The 2015/2016 drought, a result of the worldwide El Niño effect, is said to be the worst to hit the country since 1992, and has shifted the domestic maize market into a net important situation (BMI, 2016, GrainSA, 2015, AgriSA). Maize production is expected to decline by 38.8% year-on- year, while sugar production will decline by 20.2% 2015/16 (BMI, 2016). Already only 45.6 % of South Africans are food secure (HSRC, 2014), and the drought could have further deleterious effects on food security. The drought, along with other challenging environmental factors, could act as a disincentive from pursuing an agricultural career. National food security depends on a 14
“capital-intensive agricultural sector based on economies of scale” (Kane-Berman, 2016), and thus smaller producers are even more at risk during the drought – a difficult economic and environmental climate in which to take risks. Subsistence and smaller commercial farms should be offered support, but equally commercial farms need to attract those with “green” knowledge skills to ensure food security for South Africans generally. 2.1.5. The Green Economy There is an increasing emphasis on the “green economy” in government policy documents (see, NDP, NGP). In the agricultural sector, this refers to the use of environmentally sustainable farming practices. These sustainable practices require new knowledge and skills that cuts across farming enterprises of all sizes. The need for green knowledge is conveyed through industry-specific training interventions across different subsectors. Green knowledge, at this stage, is largely a higher NQF level skill. Research and development on the role of green knowledge in the agricultural skills sector should be conducted. For instance, there is need for the up-skilling of farm workers in energy-efficient methods, resource sustainability, agro-processing and other green technologies. This should also be done through coordination with other sectors, given the cross- cutting nature of environmental concerns (Environmental Sector Skills Plan, No date). 2.1.6. The youth bulge and skills development Youth, people aged 15 – 35, comprise 36% of the South African population, and 70% of the unemployed (StatsSA, 2016; Merten, 2016). It was reported that black Africans today, aged between 25 and 35, are less skilled than their parents would have been. This presents a huge challenge for skills development generally, and specifically for the agricultural sector, with a waning interest in agriculture and rapid urbanisation. Confirming this, Mr Jerry Madiba, CEO of AgriSETA, has commented that “young people do not find agricultural careers attractive” (Kane- Berman, 2016, p.6). The South African Confederation of Agricultural Unions (SACAU) has called on stakeholders to recognise agriculture as a “high skilled business with great opportunities for the youth” (AgriSA, 2016). But when youth are largely unskilled or undereducated, there needs to be major upskilling across the board before they can take advantage of available employment opportunities. Demographically, there is a generalised mismatch between the demand for skilled labour, and the supply of unskilled labour. 2.1.7. Technology and mechanisation Development and production concerns in agriculture place an emphasis on technological advancement, to increase productivity to keep up with increasing demands for food; however there has not been a concomitant focus on technological skills advancement in the sector. The threatening maxim of the sector is that “as agriculture becomes more mechanised, the unskilled labour force is replaced by a significantly smaller skilled labour force” (Employment Conditions Commission, 2013). However, BMI (2016) reported that, “the agricultural mechanisation rate in Africa is the lowest in the world”. Nevertheless, South Africa’s situation is somewhat different to the rest of Africa. For instance, South Africa, Morocco and Tunisia comprise the majority Africa's new tractor sales (BMI, 2016). Thus, to remain competitive globally, skills training in agriculture needs to keep up with technological progress. Internal consultation with AgriSETA staff reveals that there is an increasing demand for artisans and technically qualified workers in response to increased mechanisation in the sector. 15
2.1.8. Trade agreements Poultry Imports The African Growth and Opportunity Act (AGOA) is a US Trade Act that enhances market access to the US for qualifying Sub-Saharan African countries based on certain conditions (AGOA, 2016). To gain access to these markets, South Africa is currently negotiating a large US poultry import deal which would lead to the import of over 65 000 tonnes of US poultry a year (BMI, 2016), putting the South African poultry industry under severe pressure. The outcomes of this deal are being monitored by agribusiness experts, but the knock-on effect of this type of deal could have implications for skills development in the sector. Brexit& EU trade agreements While the effects of Brexit on South African agribusiness are yet to become clear, what is clear is that South Africa would have to renegotiate its trade agreements with the UK. Senior agricultural economist in Agricultural Business Chamber, Mr Wandile Sihlobo, commented that, “market access benefits that existed through the agreement would no longer apply” (Mchunu, 2016). Agricultural subsidies are one of the key issues related to Brexit. The UK is a critic of current European subsidies which have historically had an impact on African farmers’ export capacity (Sow &Sy, 2016). The outcome of renegotiated trade agreements will have to be monitored. 2.2. ALIGNMENT WITH NATIONAL STRATEGIES AND PLANS The following section draws attention to the national strategy and planning documents that frame AgriSETA’s mandate for skills development. The legislative and policy frameworks speak to AgriSETA’s constitutional mandate as a public institution governed by the Public Finance Management Act to develop skills programmes in accordance with the Skills Development Act, (1998), the Skills Development Levies Act (1999), and the National Qualifications Framework Act (2008). There are two seminal strategic documents that underpin AgriSETA’s mandate for skills planning, namely: the White Paper on Post School Education & Training (2013) and the National Skills Development Strategy III (NSDS III) (2011 – 2016). Both of these documents highlight the SETAs roles in developing clear, sector-specific linkages between education and the workplace through an analysis of the demand and supply of skills in their sector. These documents call for credible institutional mechanisms for skills planning, programmes that are occupationally oriented, and responsive higher and further education and training institutions. Furthermore, attention should be given to the needs of local, community enterprises, co-operatives and the like, with a focus on developing their skills capacities to meet the needs of their particular environments, thereby closing the gap between the rural and urban South African economies. The NSDS III is informed and guided by the following overarching government plans: The National Skills Accord as one of the first outcomes of the New Growth Path, the Industrial Policy Action Plan, 2013/14 – 2015/16 (IPAP), the Comprehensive Rural Development Programme, the Human Resources Development Strategy for South Africa 2030, the National Development Plan 2030 (NDP), and the Integrated Sustainable Rural Development Strategy (ISRDS). Collectively, these government plans and programmes recognise the need for correcting structural imbalances in the economy through “decent employment through inclusive growth”, “a skilled and capable workforce to support an inclusive growth path”, “vibrant equitable and sustainable rural communities contributing towards food security for all”, to “protect and enhance our environmental assets and natural resources”, with the support of “an efficient, effective and development-oriented public service” (NDP). All these priorities speak to the need for relevant and targeted skills provision that promotes economic sustainability in the agricultural sector, as well as 16
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