Chapter four: Economic governance and management African Growth and Opportunity Act (AGOA). This gives Lesotho duty free, quota free access to the United States (US) textile and clothing market. Lesotho is the largest exporter of garments to the United States of America (USA) in sub-Saharan Africa and exports 30 per cent of the total value of garments from sub-Saharan Africa. However, this trade is mostly in cut, make and trim and, as a result, the main value added is in labour input. 100 343. Although AGOA has been extended until 2015, the current global economic meltdown is reducing US domestic demand for textiles. This is severely affecting Lesotho’s growth prospects. This calls for a change of strategy. That change is reflected in the draft Industrialisation Master Plan, which emphasises market and product diversification. The aim of the market diversification strategy is to use Lesotho’s comparative advantage (such as trainable labour, security, social facilities and tax incentives) in order to induce South African industries to locate in Lesotho. Product diversification is aimed at moving away from textiles to other products, like electronics. 344. The general objectives of the Industrialisation Master Plan are to: • Promote further industrial activity in Lesotho’s economy in order to ensure that the sector plays its part in achieving the national Vision 2020 goals. • Maintain levels of garment exports to the US market, despite the threats and overreliance on one market, in order to sustain the large number of jobs already created. • Diversify the activities of the textile sector. • Diversify and promote investment in the nontextile and garment industrial sector. • Develop the indigenous private sector. 345. Agriculture. Arable land accounts for only 9 per cent of the total land area of Lesotho (30,355 square kilometres). Even this tiny percentage is declining over time as a result of erosion and settlement on productive land. Agricultural output is erratic over time and its share of national output is declining. At independence, the contribution of agriculture was about 50 per cent. While this stabilised at about 17 per cent in the mid-1990s, it had fallen to about 9 per cent by 2007. On average, however, its contribution was 12.6 per cent between 2003 and 2007. Crop production dominated, averaging 6.8 per cent, while the contribution of livestock averaged 5.4 per cent for the same period. 346. There are several reasons for including agriculture in the growth strategy. One is that it offers scope for pro-poor growth. About 76 per cent of the population is rural and more than 50 per cent of this depends wholly or partially on agriculture for its income and food security. Secondly, arable land is available for production and to create employment. No alternatives to agricultural activities have been found to use the arable land better. Finally, a comparison of productivity levels with countries in similar conditions suggests that there is significant potential that could still be exploited in the sector. 347. The performance of the sector has, however, been constrained by a host of factors. These include drought, soil erosion, poor access to credit, poor integration into markets, inadequate extension services, land ownership, and especially problems associated with grazing land. It has also been noted that cross-border theft of livestock on grazing land has become a problem.