by Wandile Sihlobo | Feb 23, 2025 | Agricultural Labour Market
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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by Wandile Sihlobo | Dec 1, 2024 | Agricultural Labour Market
The South African agricultural sector is closing one of the challenging seasons. The 2023-24 mid-summer drought led to poor summer grains and oilseed harvest. The livestock industry also struggled with animal diseases. These events weighed on the sector’s performance over the past quarters and will likely lead to a contraction in the sector’s fortunes this year.
Fortunately, we are seeing some improvement in the new 2024-25 season, which started last month. The rainfall prospects are positive, and this will support crop production and recovery of the grazing veld for farmers. Animal disease control is also showing progress, with most provinces having been cleared of the foot-and-mouth disease. This will support the red meat exports. The poultry industry, which also struggled with avian influenza, is recovering. These are all positive signs for a better agricultural performance in 2025.
Another critical indicator worth highlighting in the sector is employment. The number of jobs is also recovering in the sector. For example, Statistics South Africa’s recent data show that primary agriculture employment improved by 4% from the previous quarter to 935k jobs in the third quarter of 2024.
However, from an annual perspective, the performance is weak, down 2% year-on-year. Still, the primary agricultural employment of 935k people is well above the long-term jobs of 799k. The poor annual performance mirrors the harsh summer season we are leaving behind.
Some subsectors showing a quarterly increase in employment include livestock, horticulture, game hunting, and the production of organic fertilizers. Meanwhile, forestry and aquaculture recorded job losses from the year’s second quarter.
The Western Cape, Northern Cape, Eastern Cape, North West, Gauteng, and Limpopo showed significant quarterly job gains. The livestock and horticulture industry may have boosted the employment prospects in these provinces.
Meanwhile, the Free State, KwaZulu-Natal and Mpumalanga showed job losses in the year’s second quarter. The dominant types of agricultural activity in these provinces partly explain the job losses, especially in the Free State, primarily the grains and oilseed growing region.
Looking into 2025, if the agricultural sector generally improves, as I expect, the agricultural employment conditions will also show a more robust recovery.
The typically subdued employment annually this year is not necessarily a structural matter but is reflective of the challenging production conditions farmers faced in the past few months. The fact that we are already seeing a quarterly recovery in employment speaks to the prospects of a better and possibly faster recovery in agricultural employment in 2025.
We have already started receiving the La Niña rains, and summer crop planting is underway in various regions of South Africa. The recovery in the grazing veld will take some time. Still, with the possibility of a La Niña to last through to February 2025, we are convinced South Africa will receive excellent rain for much of the season.
The rains will also help improve the dam levels, which are critical for irrigation. All of South Africa’s horticulture – fruit and vegetables – are produced under irrigation. Moreover, about a third of the field crops are produced under irrigation. Therefore, the improved dam levels will be positive for agricultural production and jobs.
Beyond these near-term events, I believe South Africa’s agricultural sector remains crucial for employment creation in rural communities.
However, the sector must be on a positive growth path to sustain the current jobs and create new job opportunities. In the near term, we see various constraining factors requiring policymakers’ attention. These include resolving the port inefficiencies.
The sector also struggles with poor rail and road infrastructure and worsening municipal service delivery. This must be an area of focus for the Government of National Unity, along with addressing rising crime incidents in some areas of the country.
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by Wandile Sihlobo | Sep 13, 2024 | Agricultural Labour Market
The effects of the recent El Niño-induced mid-summer drought are starting to show in South Africa’s agricultural jobs data. For example, the figures recently released by Statistics South Africa show that employment in primary agriculture was down 5% quarter-on-quarter to 896k in the second quarter of 2024. From an annual basis perspective, the performance is also weak, although up 0,2% from the second quart of 2023. Still, the primary agricultural employment of 896k people remains well above the long-term jobs of 799k and generally reflects the harsh summer season we are leaving behind.
Some subsectors showing a decline in employment include field crops, livestock, and forestry. The job performance in these subsectors is unsurprising as the mid-summer drought has notably impacted them, specifically field crops. Moreover, the livestock industry faces relatively higher feed costs and lingering animal disease, which all explain these subdued job data in the subsector.
The Western Cape, Northern Cape, North West, and Gauteng are the provinces that showed significant quarterly job losses. Meanwhile, other provinces showed a mild improvement, which was insufficient to change the overall picture of a decline in employment in South Africa’s agriculture.
The Western and Northern Cape provinces do not have significant summer crop production, which means that the quarterly job losses in these particular provinces mirror the generally financially constrained environment in the farming businesses. The province has gone through periods of natural disasters, such as heavy floods in recent years, which all had a significant financial impact on the farming businesses.
Moreover, some farming businesses probably have not fully recovered from the impact of the temporary ban on wine sales during the COVID-19 period. Combined, these events, among others, explain the financially constrained environment businesses in the provenience find themselves in.
In the case of the Northern Cape, some farming regions remain in a dire operating environment, partly because of the drought. For example, a drive between the small town of Carnarvon and Williston in the Northern Cape clearly shows the dry environment that confronts farmers. In conversations with farmers in this region in the first week of August, some told me that they hadn’t received notable rain in over two years, and the grazing veld shows. Under such conditions, one can not expect a vibrant job environment.
That said, I must stress that the mid-summer drought primarily added pressures in the country’s northern regions, particularly the summer rainfall regions. The challenges of the Northern Cape are more long-term.
Beyond these high-frequency data, the agricultural sector remains crucial for employment creation in South Africa’s rural communities. But, the sector must be on a positive growth path to sustain and create new job opportunities. In the near term, a range of constraining factors for businesses require policymakers’ attention to resolve for the sector to grow.
These include continuing the positive momentum in resolving the port inefficiencies. The sector also struggles with poor rail and road infrastructure and worsening municipal service delivery. This must be an area of focus for the Government of National Unity. The improvement in this area would add much-needed positive momentum in South Africa’s agriculture. Rising incidents of crime, lingering animal disease challenges, and increased geopolitical uncertainty remain top-of-mind challenges for agribusinesses, as illustrated in the recent results of the Agbiz/IDC Agribusiness Confidence Index.
In a survey we conducted in June 2024, covering some agribusinesses and farming enterprises operating in all agricultural subsectors across South Africa, the respondents raised the above challenges as the most troubling issues they face.
Therefore, the South African government and the private sector should work collectively to address these growth-constraining factors, particularly those on the domestic policymakers’ reach, to support long-term agricultural sector prosperity and job creation.
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by Wandile Sihlobo | May 14, 2024 | Agricultural Labour Market
While South Africa’s agriculture has had a rough start to the year, characterised by El Niño-induced drought, the employment conditions remain encouraging. The data released by Statistics South Africa today shows that employment in primary agriculture lifted by 6% year-on-year to 941 000 in the first quarter of 2024. This is also up 2% from the last quarter of 2023.
Admittedly, the significant drought damage has been concentrated on the summer grains and oilseed regions, not across all agricultural subsectors, which somewhat explains the resilience in job data. Moreover, there could also be a lag in fully accounting for agriculture’s financial pressures and the impact on employment after that.
We can observe from the current data that jobs generally increased across most subsectors of agriculture in the first quarter compared with the corresponding period last year. The decline in employment was only in the production of organic fertilisers, fishing, and fish hatcheries.
Again, this could indicate the potential delay before the subsectors heavily impacted by the mid-summer dryness fully reflected the financial impact and subsequent jobs effect. We may have a complete picture of such in the second quarter jobs data.
The Eastern Cape, Northern Cape, North West, Gauteng, and Mpumalanga were behind the annual uptick in agricultural employment. These provinces broadly comprised various agricultural commodities or value chains. Thus, the uptick in jobs is not primarily on the back of a particular value chain but spread across a range.
Surprisingly, the Western Cape, KwaZulu Natal and Limpopo are amongst the provinces that recorded a mild decline in employment in the first quarter compared to 2023. These provinces are amongst those that hold significant shares of horticulture production, which benefitted from the irrigation throughout the harsh mid-summer season.
Meanwhile, the mild reduction in employment in the Free State could be somewhat explained by the province’s vast grains and oilseed production and the expected decline in production because of the drought.
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by Wandile Sihlobo | Feb 20, 2024 | Agricultural Labour Market
After a notable jump in the third quarter of 2023 to 956,000, South Africa’s primary agricultural employment fell by 4% quarter-on-quarter to 920,000 in the last quarter of 2023. Jobs declined mainly in the Eastern Cape, Western Cape, Gauteng, Mpumalanga and Limpopo.
Still, when we view the agricultural jobs annually, these provinces employ many people. The last quarter of 2023 was still well above 2022 levels, except for Mpumalanga, where we saw a marginal decline in primary agricultural jobs. Notably, the 920,000 jobs in primary agriculture in the last quarter of 2023 is 7% up year-on-year and well above the long-term agricultural employment of 793,000.
The general annual improvement in jobs mirrors the robust agricultural season of 2022/23 across most subsectors of agriculture. More specifically, the excellent production conditions of various field crops, forestry and aquaculture were behind the improvement of farm jobs in the last quarter of 2023.
Meanwhile, the livestock industry registered a slight decline, which is unsurprising as the industry was confronted by various animal diseases such as foot-and-mouth, avian influenza and African swine fever in 2023. The tail-end of these challenges continues to weigh on the industry. The production of organic fertilizer facilities also registered an annual decline in employment.
Beyond this quarterly jobs data, the primary agricultural sector’s broad challenges, such as the inefficiencies at the ports, rising geopolitical tensions, deteriorating rail and road infrastructure, weakening municipalities, rising crime, and energy supply constraints, are the significant constraints to long-term growth and employment prospects in the sector.
Therefore, the South African government and the private sector should work collectively to address these issues, particularly the ones on the domestic policymakers’ reach, to support long-term growth.
The first step could be a clear roadmap of the implementation of the Agriculture and Agro-processing Master Plan, with the government leading the way in easing up the regulatory matters that the industry has raised, such as the need for modernization of Act 36, addressing cost challenges associated with government utilization of assignees, capacitating the Registre’s offices, amongst other aspects.
A clear focus on the above regulatory matters would help revive the confidence of stakeholders and ease any doubts about the government’s commitment to the sector. Launching the Land Reform Agency and policy pronouncement on releasing state land to beneficiaries with title deeds would also profoundly boost sentiment on aspects of inclusive growth in the sector.
Overall, these interventions would all be positive for medium to long-term employment. For the near term, the negative impact of scant rains on the harvest of various crops is worth monitoring as the outcome would have near-term implications for jobs, particularly in 2024.
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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.
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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.
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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.
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