6 May 2026
South Africa's agricultural sector is often described as a quiet success story. Over the past three decades, it has more than doubled in real terms, built globally competitive export industries, and established itself as a reliable supplier to markets in Europe, Asia, and the rest of Africa. From citrus and wine to nuts and livestock, the sector has shown resilience in the face of climate shocks, rising costs and logistics challenges.
Yet behind this success lies a more uncomfortable reality. Agriculture has grown – but it has not created jobs on the scale that South Africa needs. Nor has it drawn most rural South Africans into its orbit of opportunity.
This is the central contradiction: strong growth and competitiveness on the one hand, limited inclusion and employment on the other.
tale of two farms
South Africa's agricultural structure remains highly unequal. A small number of large, commercial farms dominate production, income and exports. These farms are highly productive, well capitalized and integrated into global value chains.
At the same time, many South Africans engage in agriculture in very different ways. These are smallholders and subsistence farmers – often in former homeland areas – who produce primarily for home consumption with limited access to markets, finance or technology.
The difference is profound. Commercial farmers achieve much higher yields and incomes, while small producers remain trapped in low-productivity systems. The result is a dual agricultural economy: one globally competitive, the other largely excluded.
Why doesn't development mean jobs?
Part of the explanation lies in the historical foundation of the region, but part of it also lies in how agriculture has grown.
Modern farming is increasingly driven by technology, mechanization and efficiency. Farmers can now produce more with fewer workers. This is a global trend – but in countries where manufacturing and other sectors are expanding, workers leaving agriculture can find jobs elsewhere.
South Africa's economy has not followed that path. Manufacturing has struggled, and many new jobs are in low-productivity services. This means that workers displaced from agriculture are not easily employed elsewhere.
Labor costs also play a role. Evidence shows that minimum wage increases have not led to massive job losses, but they have slowed job creation. Faced with higher costs, farmers often invest in machinery rather than hiring more workers.
The result is a sector that continues to grow, but with no commensurate employment gains.
Are we at a turning point?
These trends raise an important question: has South Africa's agricultural development model reached its limits?
In many ways the field has already reached a mature stage. It is productive, export-oriented and technologically advanced. But this model was not designed to solve South Africa's employment crisis.
If the goal is to increase production and exports, it is working. But if the goal is to create jobs and reduce inequality, a new approach is needed.
Rethinking employment in agriculture
One important change is to expand how we define employment.
Agricultural employment is often measured by the number of workers on commercial farms. But this misses a big part of the picture. Hundreds of thousands of South African families are already engaged in agricultural work, even if only part-time.
The real opportunity lies in helping these families move from subsistence to viable economic activity.
This means improving productivity – better inputs, better livestock systems and better farming practices. This means connecting farmers with markets. And that means reducing risk, so farmers can invest and grow.
On a larger scale, this can transform agriculture into an important source of self-employment and rural enterprise.
Unlocking what we already have
Opportunities have also been missed that could have brought about meaningful change.
Many irrigation schemes in the former homeland areas are performing poorly or are in a dilapidated condition. Where they function well, they can significantly increase production, income and employment. Where they fail, they represent lost potential.
Similarly, in livestock systems, fundamental improvements – improved animal health, nutrition and reproduction – can increase productivity and incomes for rural households.
These are practical interventions that can have substantial impact if implemented effectively.
Missing Component: Institutions
The clearest lesson from South Africa's agricultural history is that markets alone are not enough.
The success of commercial agriculture was based on decades of investment in research, extension services, finance and infrastructure. These institutions enabled farmers to become productive and competitive.
Today, many of these support systems no longer exist in the same form – and importantly, they have never been fully replaced by new entrants.
If South Africa is serious about building a more inclusive agricultural sector, it will need to invest in modern versions of these institutions – ones that reduce risk, support farmers and link them to markets.
This includes access to finance, reliable infrastructure, strong extension services and effective market linkages.
A more inclusive development path
The challenge is not to abandon the existing model, but to build on it.
South Africa does not need to choose between competitiveness and inclusion. It needs a development path that provides both.
This means maintaining a strong commercial sector while intentionally expanding participation. This means creating opportunities not only on farms, but also in processing, logistics and agricultural services.
And it means recognizing that employment will come not only from larger farms hiring more workers, but also from people making livelihoods as farmers and entrepreneurs in the rural economy.
Why does it matter?
South Africa faces one of the highest unemployment rates in the world, especially among youth. Rural areas are particularly affected.
Agriculture alone will not solve this crisis. But this may be part of the solution.
With the right policies, investments and institutions, agriculture can play a huge role in creating jobs, generating income and supporting inclusive growth.
The question is whether we are willing to rethink the model and act upon it.
Kapuya is the Research Director of the Africa Network of Agricultural Policy Research Institutes (ANAPRI).
Sihlobo is the Chief Economist of the Agribusiness Chamber of South Africa (Agbiz).
This essay is a summary of a research paper prepared for the Economic Development Policy Paper Series of Economic Research Southern Africa (ERSA).