by Wandile Sihlobo | Nov 20, 2023 | Agricultural Labour Market
The solid production conditions in South Africa’s agricultural sector continue to be reflected in the employment data. The Quarterly Labour Force Survey data released last week by Statistics South Africa showed that in the third quarter of 2023, about 956 000 people were employed in primary agriculture, up 10% year-on-year (and 7% quarter-on-quarter). This is well above the long-term agricultural employment of 793 000.
From a regional perspective, the Western Cape, Eastern Cape, Northern Cape, KwaZulu-Natal, North West and Gauteng significantly drove this uptick in sectoral employment. The Free State, Mpumalanga and Limpopo saw a decline in jobs.
As with the previous quarter, the robust production conditions of various field crops, forestry and aquaculture were behind the improvement in agricultural jobs in the third quarter.
Meanwhile, the livestock industry registered a decline, which is unsurprising as the industry is confronted by various animal diseases such as foot-and-mouth, avian influenza and African swine fever. Moreover, there was a notable decline in the game industry and production of organic fertiliser facilities.
This improvement in employment in the third quarter is unsurprising as South Africa has a robust field crop and horticulture harvest following favourable rainfall and farmers’ strategic interventions to adapt to load-shedding interruptions.
Hence, the 2022-23 maize harvest is estimated at 16.4 million, 6% higher than the 2021-22 season’s harvest and the second-largest harvest on record. Soybean harvest could reach a record 2.8 million tonnes. South Africa’s sugarcane crop is forecasted to be 18.5 million tonnes in 2023-24, up 3% year-on-year.
Other field crops and fruits also show prospects for decent harvests this season, which underpins the favourable job data.
Beyond the current jobs data, the sector’s broad problems are inefficiencies at the ports, rising geopolitical tensions, deteriorating rail and road infrastructure, weakening municipalities, rising crime and energy supply constraints.
If not addressed, these challenges, particularly the ones within South African policymakers’ reach, could negatively influence farm profitability and job prospects over the medium term.
The government and the private sector should address these issues to support long-term growth and job creation. The first step could be a revitalisation of the Agriculture and Agro-processing Master Plan and placing it in the centre of development and growth interventions for the sector, which would be the plan’s appropriate place.
Also worth highlighting is the prospects of a relatively mild El Niño in the 2023-24 summer season, along with better soil moisture across the country, which is comforting and suggest that the sector could have another decent agricultural season and possibly sustain healthy employment conditions.
Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za
by Wandile Sihlobo | Aug 15, 2023 | Agricultural Labour Market
In the second quarter of 2023, about 894 000 people were employed in South Africa’s primary agriculture, up 1% q/q and 2% y/y. This is the highest farm employment level since the last quarter of 2016 and is well above the long-term agricultural employment of 780 000.
From a regional perspective, the Western Cape, Eastern Cape, Northern Cape, and KwaZulu-Natal were the significant drivers of this employment.
The robust production conditions of various field crops, forestry and aquaculture were behind the improvement in agricultural jobs in the second quarter.
Meanwhile, the livestock industry saw modest improvement, which is unsurprising as the industry still deals with the tail-end effects of the rough period of foot-and-mouth disease and higher feed costs among the industry’s pressures. There was a notable decline also in the game industry and production of organic fertilizer facilities.
Overall, this notable improvement in employment in the second quarter is unsurprising as South Africa has a robust field crop and horticulture harvest following favourable rainfall.
At the start of the season, production was threatened by persistent load shedding. Still, the various interventions to ease the load-shedding burden on farmers, such as load curtailment, expansion of the diesel rebate to the food value chain, and most private sector investment in alternative energy sources, all supported the production conditions.
Hence, the 2022/23 maize harvest is estimated at 16,4 million, 6% higher than the 2021/22 season’s harvest and the second-largest harvest on record. Soybeans harvest could reach a record 2,8 million tonnes. South Africa’s sugar cane crop will likely increase by 3% to 18,5 million tonnes in 2023/24.
Other field crops and fruits also show prospects for decent harvest this season, which underpins these favourable jobs data. In the coming weeks, the focus will also be on the effectiveness of the recently announced Agro-Energy Fund and the application details.
The key challenges the sector faces are rising geopolitical tensions, deteriorating infrastructure, weakening municipalities, crime, and energy supply which all influence farm profitability and job prospects. The South African government, collectively with the private sector, should address these issues to support long-term in the sector.
El Nino’s forecast in the upcoming 2023/24 summer season is another aspect to keep an eye on, although we remain optimistic that it will have a mild impact on the sector and thus keep production at decent levels and, by extension, sustain decent employment.
Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za
by Wandile Sihlobo | May 16, 2023 | Agricultural Labour Market
The data released this morning by Statistics South Africa paints an encouraging picture of agricultural employment in the country. In the first quarter of 2023, about 888 000 people were employed in primary agriculture, up 3% q/q and 5% y/y.
This is well above the long-term agricultural employment of 780 000. From a regional perspective, the Western Cape, KwaZulu-Natal, and Gauteng were the significant drivers of this employment. At the same time, other provinces showed a slight decline compared to levels seen in the first quarter of 2022.
The robust production conditions of various field crops, fruits, forestry and aquaculture were behind the improvement in agricultural jobs in the first quarter. Meanwhile, the livestock industry saw a decline in employment, which is unsurprising given the pressures presented by the higher feed costs at the start of the year and animal diseases for much of 2022 and into 2023.
Admittedly, while the agricultural season, mainly field crops and fruits, is promising, the start of the year was on a rough patch. The excessive rains, high input costs, and persistent load-shedding presented various risks to farmers. As a result, crop planting in different regions of the country was delayed by roughly a month, threatening yield prospects. But the warm weather at the end of January and much of February helped improve conditions on the farms.
Moreover, various interventions to ease the load-shedding burden on farmers, such as load curtailment, expansion of the diesel rebate to the food value chain, and, most recently, the launch of the Agro-Energy Fund, all support the production conditions.
Hence, the 2022/23 maize harvest is estimated at 15,9 million, 3% higher than the 2021/22 season’s harvest and the third-largest harvest on record. In addition, the soybeans harvest is estimated at a record 2,8 million tonnes. South Africa’s sugar cane crop will likely increase by 3% to 18,5 million tonnes in 2023/24. Other field crops and fruits also show prospects for decent harvest this season, which supports better employment prospects in the sector.
From now on, the rising geopolitical tensions, deteriorating infrastructure, crime, and the general impact of these factors on trade are key issues we will monitor as they will influence farm profitability and job prospects.
An export-oriented agricultural sector like South Africa requires a favourable global environment, increasing investment, and efficient logistics to thrive.
Note: We sent out this note to Agbiz members, but I thought it would benefit the readers of this blog.
Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za
by Wandile Sihlobo | Mar 1, 2023 | Agricultural Labour Market
South Africa’s agricultural sector has had a broadly better-than-expected performance in 2022. The exports reached a record US$12,8 billion, and agricultural machinery sales, such as tractors, were at the highest level in 40 years.
This materialised despite the range of challenges that faced the sector, such as excessive rains at the start of the 2021/22 summer crop season, disease outbreaks in the livestock industry, trade barriers in fruits and wool, and logistical challenges at our ports, particularly in the first half of 2022.
The Quarterly Labour Force Survey data released this week by Statistics South Africa also paints a broadly comforting picture, showing that in the last quarter of 2022, there were about 860 000 people employed in primary agriculture, which is well above the long-term agricultural employment of 780 000.
Admittedly, some of the factors I mentioned did weigh on the sector as employment fell by 1% yearly and roughly the same rate from the third quarter of the year.
Except for summer crops and forestry, the decline in employment was in all subsectors with a significant decline in the livestock sector, which underscores the animal disease challenge we noted above. Furthermore, the higher feed cost was, and remains, an additional challenge for the livestock industry, along with a decline in red meat prices, all of which add pressure on farming businesses.
From a regional perspective, except for the Western Cape, Northern Cape, and Free State, all provinces registered a mild decline in agricultural employment in the last quarter of 2022 compared with the corresponding period in 2021.
While the previous years have delivered solid employment conditions in the sector, the outlook remains uncertain. The farming business is challenged by persistent load-shedding, which has increased input costs as some seek various means of energy generation that require extra capital.
Moreover, the recent increases in minimum wages are a concern, specifically for the fruit industry. The farming input costs, such as fertilisers and agrochemicals, although having moderated somewhat from levels we saw in much of last year, remain fairly higher. All these will be added pressures on the farmers that could weigh on employment conditions.
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by Wandile Sihlobo | Apr 10, 2022 | Agricultural Labour Market
On Tuesday, 29 March 2022, Statistics South Africa reminded us of the excellent agricultural season in 2021 when the primary agriculture gross value added expanded by 8,3% y/y (following a year of solid growth of 13,4% y/y).
The agency released the Quarterly Labour Force Survey data for the last quarter of 2021, which showed a similar positive reading of a 7,1% y/y increase in primary agriculture jobs to 868 000, which is well above the long-term agricultural employment of 780 000.
The increased activity on the farms in the last quarter of the year and generally improved financial conditions following excellent harvests were at the core of these robust employment conditions in the sector.
To appreciate the 2020/21 season’s output, consider the primary grains such as maize and soybeans, which saw production reaching 16,3 and 1,9 million tonnes, respectively. For maize, this is the second-largest harvest in the history of South Africa and a record soybean harvest. Other field crops also generated large yields in 2020/21.
The South African Wine Industry Information and Systems reported the 2021 wine grape crop at 1,5 million tonnes, 9,0% more than the 2020 harvest within the horticulture subsector. Citrus, deciduous fruits and various horticulture products also recorded large yields and a record export volume in the case of citrus.
At the end of 2021, the livestock industry was hit by biosecurity challenges, such as foot-and-mouth disease outbreaks and high feed costs. Still, the livestock subsector held relatively well and benefited from the improvement in the grazing veld. Thus, it is unsurprising that the jobs gains in the last quarter of 2021 were widespread in crops, livestock, forestry and horticulture. The aquaculture subsector saw a mild decline in employment compared with the fourth quarter of 2020.
From a regional perspective, Limpopo (-9% y/y), KwaZulu-Natal (-6% y/y), and Western Cape (-0,1% y/y) saw marginal job losses in the last quarter of 2021. These were overshadowed by gains in employment in other provinces. Hence, the overall primary agriculture employment increased by 7,1% y/y, as stated above.
These are historical reflections; the critical question some may ask is whether the coming quarters will likely maintain these robust farm jobs numbers? This is an important question as South Africa experienced a somewhat challenging start to the 2021/22 production season because of excessive rains.
As a result, I think that 2022 might be a break from the two consecutive years of high performance in the sector and possibly a slight decline in employment, specifically seasonal labour. The rising farming input costs such as fuel, fertilizers and agrochemicals will add pressure on farmers. This will also be in a season where field crop harvests could be lower than the 20220/21 season, albeit above the long-term level.
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by Wandile Sihlobo | Nov 30, 2021 | Agricultural Labour Market
This year, South Africa’s agricultural sector’s exceptional performance, which is reflected in robust production volumes for the 2021 season and export volumes in the first three quarters of this year, is also evident in the jobs data.
The Quarterly Labour Force Survey data released by Statistics South Africa today showed that in the third quarter of 2021, agricultural employment increased by 3% y/y to 829 000. This is well above the long-term agricultural employment of 780 000.
Admittedly, the third quarter of each year is typically not a busy period for agriculture; hence employment is down 4% from the second quarter – a busy harvesting period for field crops, with seasonal employment opportunities.
Four provinces underpinned the improvement in agricultural jobs in the third quarter, namely, the Western Cape (up 44% y/y), Eastern Cape (up 10% y/y), Northern Cape (up 19% y/y), and Free State (up 48% y/y). Meanwhile, the rest of the five provinces registered a decline in employment in the third quarter of 2021 compared with last year’s corresponding period.
The 2020 surveys were done at a period of heightened uncertainty with numerous harsh lockdowns that severely affected the Western and Northern Cape, where the wine industry is amongst the dominant employers. Hence, the employment numbers for these provinces should be read with the recognition that they are from a lower base.
The game industry, forestry, livestock, and fisheries were amongst the subsectors that registered a notable decline in employment compared to the third quarter of 2020.
In sum, South Africa’s agricultural sector is healthy, and its jobs market reflects optimism. The Western and Northern Cape agricultural employment has recovered following a slump in months after the temporary ban on alcohol sales. This speaks to a rebuilding effort that producer organizations have been undertaking over the past few months.
Notably, the employment data will remain of interest following the 16,1% increase in the farm minimum wage to R21,69 per hour with effect on 1 March 2021. At the time of its publication, various commodity groups indicated that the increase in the minimum wage would cause a further squeeze on cash flow and negatively influence hiring decisions.
But, the actual effects of the current minimum wage increase on jobs will only be apparent with a lag. The favourable agricultural conditions, combined with higher commodity prices, have also improved the farmers’ financial conditions and, thus, temporarily eased the pressure of minimum wage increase. We will continue to monitor the data.
Fundamentally, the agricultural economy is on a solid footing for a second consecutive year. In 2020, the sector’s gross value added expanded by 13,4% y/y. This year will likely also be another year of good performance, with the Bureau for Food and Agricultural Policy (BFAP) forecasting a 7,6% y/y growth.
Note: This not was drafted for Agbiz, but I figured it would benefit the readers of this blog.
Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za
by Wandile Sihlobo | Jun 1, 2021 | Agricultural Labour Market
In this blog post, I reflect on South Africa’s agricultural jobs data for the first quarter of 2021, drawing from insights I drafted as part of Agbiz official notes.
South Africa’s agricultural sector is in its second consecutive year of good performance supported by favourable rainfall and expansion in plantings. In 2020, the sector’s gross value added expanded by 13,1% y/y, and this year will likely also be another year of good performance. While we expect better crop harvests than 2020, the expansion could be 5% y/y because last year’s base is already quite strong.
Yet, the agricultural jobs data continue to disappoint. In the first quarter of 2021, South Africa’s agricultural jobs were down by 8% y/y, with 792 000 people employed. This is the lowest level since 2014, which was a drought year. But we are not in a drought season at the moment. The decline in jobs seems to be concentrated within industries affected by various regulations in the lockdown period, such as the horticulture (wine grapes) and game industries.
From a provincial perspective, the job losses were reported in the Western Cape, Northern Cape, Free State, KwaZulu-Natal and North West, with the rest of the provinces registering an uptick from the first quarter of 2020. To underscore our point about the provinces hard hit by the lockdown regulations being the ones that experienced a notable decline in employment, consider the Western Cape, where agricultural jobs fell by 47% in the first quarter of 2021 compared to the corresponding period the previous year. The Western Cape’s agricultural employment is now at its lowest since 2014, at 136 000. We suspect that the tail-end effects of the ban on wine and alcohol sales continue to constrain farmers’ finances. The same is true for the Northern Cape, which experienced job losses, albeit at a relatively lower scale than the Western Cape.
For other provinces that are not in wine production, it is also plausible that social distancing measures that are in place to limit the spread of the pandemic might have contributed to the decline in employment, especially for seasonal workers. We say this because the Free State, North West and KwaZulu-Natal are among provinces with good activity in field crop, horticulture, and livestock subsectors in a year of favourable rains that allowed for expansion in area farmed areas. That said, it is essential to mention that the different sub-sectors of agriculture have varying levels of labour intensity. The horticulture industries tend to be more labour-intensive, while field crops and livestock are relatively more mechanised.
The employment data will be of interest in the coming months following the 16,1% increase in the farm minimum wage to R21,69 per hour with effect on 1 March. Various commodity groups, especially those heavily affected by the lockdown regulations, have indicated that the recent increase in the minimum wage could cause a further squeeze on cash flow and negatively influence hiring decisions. Nevertheless, the actual effects of the current minimum wage increase on jobs will only be apparent with a lag.
Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za
by Wandile Sihlobo | Feb 23, 2021 | Agricultural Labour Market
Although South Africa’s agricultural economy performed robustly in 2020, possibly grew by between 10-13%, according to our and Bureau for Food and Agricultural Policy estimates, employment numbers remain disappointing. The Quarterly Labour Force Survey data show that South Africa’s primary agricultural jobs were down 8% year-on-year in the fourth quarter of 2020, with 810 209 people employed.
Exhibit 1 shows that there was a decline in employment across most provinces except for the Eastern Cape, Gauteng and Mpumalanga, which registered job gains from the last quarter of 2019. The most considerable headcount losses were in the Western Cape, amounting to about 51 000 below 2019. KwaZulu-Natal followed this, with jobs down by 21 000 compared to the last quarter of 2019.
Except for the Western and Northern Cape, we suspect that social distancing measures that were enforced to limit the virus’ spread might have contributed to the decline in employment. Some farmers that would have typically employed seasonal workers around this period of the year were discouraged. We say this because the Free State, North West, KwaZulu-Natal and Limpopo are amongst provinces with a good field crop and horticulture harvest in 2020. In the Western and Northern Cape case, the constrained cash flow following the ban of wine and alcohol sales at various intervals of the lockdown has possibly contributed to the decline in employment. The producers in the provinces expressed a similar view.
Exhibit 1: South Africa’s agriculture employment by province
Source: Stats SA and Agbiz Research
From a subsector perspective, only the forestry and fisheries industries recorded an overall increase in employment in the fourth quarter of 2020, compared with the previous year. All other subsectors recorded a decline in employment. Worth noting, however, is that the dynamics from the provincial level differ, as evidenced by the Eastern Cape, Gauteng and Mpumalanga, where primary agricultural employment increased in the fourth quarter of 2020 compared with the same period 2019.
Notably, the employment data will be of interest in the coming months following the 16,1% increase in the farm minimum wage to R21,69 per hour with effect on 1 March. Various commodity groups, especially those heavily affected by the lockdown regulations, have indicated that the recent increase in the minimum wage could cause a further squeeze on cash flow and negatively influence hiring decisions. Nevertheless, the actual effects of the current minimum wage increase on jobs will be apparent later this year.
From an agricultural conditions perspective, the outlook for 2021 is positive, with prospects of higher yields in horticulture and field crops and good performance in the livestock industry.
This post is part of our Agbiz notes.
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