Socio-Economic Dynamics of the South African Agricultural Sector

This briefing by the South African Institute of International Affairs provides an overview of the socio-economic and political state of South Africa's agricultural sector between 1994 and 2004. It details the transition from apartheid-era protections to a deregulated, liberalised market, the persistent dualism between commercial and smallholder farming, and a strategic shift in trade from bulk commodities toward value-added horticultural exports.

• South African agricultural policy underwent significant deregulation and liberalisation between 1994 and 2004. The Marketing of Agricultural Products Act, No 47 of 1996, ended the statutory regulation of most agricultural products, opening the sector to world market influences. Other key policy shifts included land reform, the Water Act of 1996, and the introduction of four major labour laws (Labour Relations Act 1995, Basic Conditions of Employment Act 1997, Skills Development Act 1998, and Employment Equity Act 1998) which led to a minimum wage for farm workers.
• The agricultural sector remains deeply dualistic. The commercial sector is capital-intensive and globalised, operated by approximately 46,000 farmers who control 87% of agricultural land and contribute 8.4% of total export earnings. In contrast, the smallholder sector is impoverished and labour-intensive, with up to 2.5 million households farming on 13% of the land located in former homelands.
• While South Africa is food secure at a national level—with a Daily Energy Supply (DES) of over 2950 calories per capita per day, compared to the African average of 2250—significant malnutrition persists at the household level. Approximately 1.5 million children suffer from malnutrition, with stunting rates reaching 38% among the poorest 20% of households.
• Commercial agriculture has seen a decline in the number of farming units and employment. Between 1993 and 2002, the number of farming units dropped from 57,980 to 45,818, and employment fell from 1,161,912 to 986,842. This is attributed to industrialisation and consolidation, where larger farming units are required to maintain profitability.
• There has been a marked shift in production and exports from field crops toward value-added horticultural products. Wine exports rose from the 18th largest agricultural export in 1994 to the 1st in 2003, earning R2.6 billion. Conversely, the area planted for maize declined by a third from 4.6 million hectares in 1994 to 3.6 million hectares in 2003, though total yields were maintained through improved technology.
• Europe is the primary destination for South African agricultural exports, absorbing nearly 50% of them. The African market is the second largest at 26%, followed by Asia at 18%, while North America (US and Canada) accounts for approximately 7%.

APA

Kirsten, J. (2006). Socio-Economic Dynamics of the South African Agricultural Sector. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2008/04/Briefing_10.pdf

Chicago

Kirsten, Johann. Socio-Economic Dynamics of the South African Agricultural Sector. South African Institute of International Affairs, 2006. https://saiia.org.za/wp-content/uploads/2008/04/Briefing_10.pdf.

Wikipedia

{{cite report |last1=Kirsten |first1=Johann |title=Socio-Economic Dynamics of the South African Agricultural Sector |publisher=South African Institute of International Affairs |date=January 2006 |url=https://saiia.org.za/wp-content/uploads/2008/04/Briefing_10.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{kirsten2006socioeconomic, author = {Kirsten, Johann}, title = {{Socio-Economic Dynamics of the South African Agricultural Sector}}, institution = {South African Institute of International Affairs}, year = {2006}, month = jan, url = {https://saiia.org.za/wp-content/uploads/2008/04/Briefing_10.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }