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Abstract

The substitution of capital goods, including new technology, for land and labour has played an important role and has influenced the structure of Sout African agriculture. Farm labour-related trends in the summer rainfall grain-producing area of South Africa are considered. The amount of labour used, the remuneration of labour, the substitution of capital for labour and productivity trends are analyzed. Growth rates were obtained by fitting exponential functions with time as independent variable. The decline in the number of farm employees per 1000 hectares under cultivation since 1970 probably resulted from mechanization and thus capital- labour substitution in maize production, especially in harvesting. Tax concessions on new capital improvements, the subsidization of agriculture in general and the increasing rate of urbanization contributed to this trend. The scarcity of capital relative to unskilled labour, which has been reinforced by policy measures favouring capital intensity (capital formation has increased by 4.0% per annum between 1950 and 1980, compared with an increase of 0. 71% per annum in the number of farm employees in the same period); this implies that corrective policy changes are required to improve the present distorted situation. This will enable the commercial agricultural sector of South Africa to play a more meaningful role in the socio-economic development of the whole subcontinent.

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