Some people have issues with the agricultural figures in the Quarterly Labour Force Survey data. However, the data still provide a valuable picture of farming jobs in South Africa.
South Africa’s 2023-24 production season was challenging. The mid-summer drought and animal diseases added immense pressure to the sector. These two factors, among others, probably explain much of the decline in employment in the last quarter of 2024.
Still, the numbers paint a much milder picture than we anticipated. For example, primary agriculture employment fell by 1% from the third quarter to 924k jobs in the last quarter of 2024.
The field crops, game and hunting, and forestry are the subsectors that registered notable losses.
However, from an annual perspective, the employment was roughly unchanged from the last quarter of 2023. Positively, the primary agricultural employment of 924k people is well above the long-term jobs of 799k.
Given the resilience of recent quarters’ job performance, employment conditions may recover in 2025. South Africa’s agriculture is also on its recovery path, supported by favourable rainfall and progress in controlling the spread of animal diseases.
Of course, we assume no pressing trade-related challenges will affect the sector’s profitability in the near term.
The mild increase in the minimum wage this year, while challenging for some commodities and adding to already higher input cost pressures, may also not be a major hindrance.
With all this said, there is significant trade uncertainty, mainly in the African Growth and Opportunity Act (AGOA).
From a regional perspective, the Eastern Cape, Free State, and Limpopo are the only provinces registered quarterly job losses. Meanwhile, other provinces saw mild quarterly increases.
Overall, South Africa’s agricultural sector is recovering this year from a production perspective, but there are heightened risks associated with international trade.
We continue to watch closely the AGOA’s duty-free access to the US market and generally fractured geopolitics as they affect agricultural product exports, farm profitability, and, ultimately, the sustainability of agricultural jobs.
While South Africa’s agricultural exports to the US account for only 4% of the overall agricultural exports of US$13,2 billion, the industries concentrated in the US market are citrus, wine, grapes, nuts, and fruit juices.
Importantly, these are also mainly produced in the Cape provinces of South Africa (Eastern, Western, and Northern) and Mpumalanga and Limpopo. Therefore, duty-free access in the US market is valuable and offers South African products price competitiveness.
Of course, an exclusion would not necessarily mean a complete closure of the US market to South Africa’s agriculture, but we could face import duties of around 3% (at MFN rates).
This uncertainty demands that South Africa work on a post-AGOA sustainable trade arrangement with the US.
Anyway, I want to underscore that, in addition to global factors, port inefficiencies, poor rail and road infrastructure, crime and stock theft, and worsening municipal service delivery remain significant risks to agriculture’s long-term growth prospects.
This sector has great potential for job creation and growth. However, for this to materialize, the South African government must tackle these issues head-on, collaboratively with organized agriculture and the private sector.
We also need to focus all our energies on global trade issues and geopolitics without focusing on the local issues I highlighted above, as these directly impact farming, agribusiness, and other businesses in the small towns of South Africa.
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