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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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.
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