A jumpstart for sector productivity

Between 2004 and 2005, agriculture’s real output grew at 4,1%, although employed labour was down by 10,9%. The National Productivity Institute (NPI) wants to develop a culture of productivity, and plans 39 turnaround solutions for 2007, impacting on more than 9 000 jobs. NPI’s corporate services executive Bongani Coka spoke to Cornelia du Plooy

How does the NPI support the role of agriculture in the South African economy?
Agriculture contributes more than 2% to the GDP and is an important part of our economy. Therefore we aim to accelerate sector transformation through improving productivity and enhancing global competitiveness. We provide high-quality services such as practical interventions to improve logistics, knowledge management and skills development, to both the public and private sectors.

How does the NPI monitor South Africa’s agricultural productivity?
The NPI Knowledge Management and Research Institute conducts extensive research on productivity and releases productivity statistics annually. For example, between 1996 and 2006, the agriculture sector’s real output grew by 1,5%, following a 2,5% growth in multifactor productivity. Labour productivity and capital productivity grew by 3,6% and 2,1% respectively, achieved by declines in employed labour (-2,1%) and fixed capital inputs (-0,6%).

Has agricultural productivity improved?
Until now the sector has performed favourably compared with the previous period (1989 to 1995), which registered declines in real output, multifactor productivity, labour productivity, capital productivity, employed labour and fixed capital inputs. Available statistics for the period 2004 to 2005 show that real output in the sector has grown at 4,1%. This was accounted for by huge increases in multifactor productivity (8,4%), labour productivity (16,8%) and capital productivity (4,9%).

How has this impacted on labour?
The huge increase in productivity indices was largely achieved by a 10,9% decline in employed labour and an 11,3% increase in the capital-labour ratio. It is apparent that the sector is becoming less labour-intensive and more capital-intensive, which doesn’t bode well for employment generation and poverty alleviation in rural areas.

What productivity intervention plans has the NPI launched in the industry?
Our aim is to ensure efficiency and productivity and to empower the agriculture labour force through training. An example of this is the Valpré project in KwaZulu-Natal, which stressed the benefits of efficiency and productivity and provided training and business knowledge. The Valpré operation was turned around to become commercially competitive, and literacy was increased among members of the local rural community.

We’ve encouraged collaboration between industry players such as senior productivity advisors and market leaders to strengthen collective competitiveness globally. We’ve drawn up rules and standards for the correct loading of trucks in KwaZulu-Natal, and the sugar industry has been working with us on a collaborative programme to improve the logistics of transporting sugarcane from the fields to the mill. By endorsing the concept of clustering, the NPI is enabling groups to become globally competitive as collectives and to reach international markets. One example is the Bethlehem Farmers’ Trust in the Free State. This farming collective was on its knees a few years ago, but has now made positive strides in profit and sustainability.

What are some of your goals for improving productivity?
Our agricultural projects this year involved over 39 turnaround solutions, spread over seven provinces. Last year’s turnaround solutions impacted on 9 046 jobs, created 10 learnerships in partnership with the Agricultural Sector Education Training Authority, and R6 million was approved by the Free State Department of Agriculture to fund a project business plan. This year we’ll make over 40 interventions through project clustering, and impact on over 9 000 jobs. Contact the National Productivity Institute on (011) 848 5300 or fax (011) 848 5544.