Thoughts on South Africa’s agricultural jobs data for the first quarter of 2021

Thoughts on South Africa’s agricultural jobs data for the first quarter of 2021

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

South Africa’s agricultural employment down 8% y/y in Q4, 2020

South Africa’s agricultural employment down 8% y/y in Q4, 2020

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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South Africa’s agricultural employment down 8% y/y in Q4, 2020

SA agricultural employment held up in Q3, 2020, but there are disparities across provinces

South Africa’s agriculture economic data has been encouraging this year. Either one looks at output volumes, export performance or tractor & combine harvester sales, the picture has been positive. But the jobs data for the third quarter does not paint such a uniformly positive picture. Seemingly, the agricultural labour market performance depends on what region of the country one looks at and the specific agriculture subsector that is concentrated in those areas.

For those in field crops and general horticulture, the year has been fairly good, not to suggest that there haven’t been challenges brought by the pandemic. But for the wine industry (and to certain extent livestock, which is struggling with higher feed prices; but this is a discussion for another day), the good harvest that came in just before lock-down has been overshadowed, primarily because of the ban of sales during various periods of the lockdown.

Broadly, South Africa’s primary agricultural employment in the third quarter of the year improved by 1% from the previous quarter to 807 882. This slight quarterly recovery corresponds with the reopening of the economy and certain agricultural commodities during that period. This is important because while the majority of agriculture remained operational since the start of the lockdown period, the sector could not entirely avoid job losses as demand for some products in the sector was somewhat disrupted. When compared to the corresponding period in 2019, employment in this sector was down by 8%.

From a regional perspective, the pain points of the COVID-19 regulations are visible, as I’ve previously stated. The Western and Northern Cape provinces, who are the major producers of wine in South Africa, saw employment fall by 31% and 15% quarter-on-quarter, respectively. This corroborates the concerns that various wine producers expressed during the lockdown period. When viewed on an annual basis, the Western and Northern Cape’s primary agriculture employment fell by 37% and 8%, respectively. In the case of the Western Cape, agricultural employment was at the lowest levels since the last quarter of 2014, at 136 729.

Other provinces of the country experienced an uptick in employment in the third quarter compared to the previous, underpinned by increased activity as more sectors of the economy were progressively opening up. Nevertheless, on an annual basis, the North West and Free State joined the Western and Northern Cape on employment reduction.

From a subsector perspective, it is only the forestry industry that recorded an increase in employment in the third quarter of 2020, compared with the previous year. All other subsectors recorded a decline in employment. Worth noting, however, is that the dynamics from provincial level differ, as evidenced by the Eastern Cape, Gauteng, Mpumalanga and Limpopo where primary agricultural employment increased in the third quarter of this year compared with the same period in 2019.

The increased employment in these provinces can be attributed to increased activity in the fields as 2020 was a boom agriculture year in terms of output in almost all subsectors (horticulture, field crops and livestock). The country had its second-largest grains harvest in history. In the case of horticulture, South Africa has generally had a good fruit harvest this year, with the citrus industry recently noting a 13% year-on-year (y/y) increase in available supplies for export markets in 2020. There is also a broad recovery in the production of deciduous fruit with apple and pear production up by 5% y/y and 1% y/y respectively in 2020. There is also a general recovery in the livestock industry although this particular subsector was not as robust as other subsectors, and the higher feed costs present various challenges.

Had there not been a pandemic, agricultural employment would have increased notably in 2020 on the back of a large harvest. But the health protocols such that were put in place, and rightly so, led to the reduced workforce to comply with social distancing. Disappointingly, the ban of the sale of wine appears to have had a major impact on employment, specifically in the provinces of the Western and Northern Cape.

Looking ahead, the agricultural sector is poised for another good year on the back of an expected La Niña. This means that there will be increased activity in the sector, which would sustain employment, at least at levels above 750 000, in our view. I continue to worry about the financial conditions of the wine industry as the impact of the lockdown regulations will be far lasting on the industry. This, in turn, will have implications for primary agriculture employment, specifically in the Western and Northern Cape.

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South Africa agriculture jobs up in Q4, 2019

South Africa agriculture jobs up in Q4, 2019

We don’t normally bombard you with emails (or posts, for those reading this online), but since our note this morning previewed South Africa’s primary agricultural jobs situation (see here), we deem it appropriate to provide an update. Data released this morning by Statistics South Africa shows that the country’s agricultural jobs were up 1% (or 5 000) from the third quarter of 2019 and up 4% (or 36 000) from the last quarter of 2018, estimated at 885 000.

The notable jobs gains were in the Western Cape, KwaZulu-Natal, Free State and Limpopo. This was largely in the horticulture and field crops and livestock subsectors.

We believe that the Western Cape, Limpopo and KwaZulu-Natal jobs were mainly in horticulture and field crops subsectors (specifically winter crops), while the livestock subsector job gains might have mainly been in the Free State. The Eastern Cape, Northern Cape, North West, Gauteng and Mpumalanga agricultural sectors registered job losses, but this was offset by improvements in other provinces. Hence, on balance, the country’s agricultural sector registered employment net gains from the previous quarter and the corresponding period in 2018.

We are generally optimistic about the near-term agricultural jobs outlook. The potential improvement in summer crops production, following an 8% expansion in area plantings, coupled with the expected increase in wine grapes production and other fruits could lead to an increase in employment, albeit some of this could be seasonal.


Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

It’s Jobs Day

It’s Jobs Day

We have important data this morning. Statistics South Africa will release its results of the Quarterly Labour Survey for the fourth quarter of 2019. To recap, the third-quarter data showed that South Africa’s primary agricultural employment jumped by 4.5% y/y from the corresponding period last year to 880 000, as illustrated in Exhibit 1 below.

This came as a surprise as the third quarter of each year is usually a quiet period on farms in most parts of the country. These jobs gains were mainly in the livestock, horticulture, field crops, as well as aquaculture subsector.

We think this could have largely been underpinned by the replanting in parts of the horticulture fields following a drought season that caused damage in the fields in provinces such as the Western and Eastern Cape. Other provinces that showed job gains are KwaZulu-Natal, Gauteng and Mpumalanga. Meanwhile, the Northern Cape, Free State, North West and Limpopo saw a reduction in agricultural employment.

Today’s numbers could show mild improvement or remain stable at levels around 880 000 jobs supported by the horticulture industry. While there has been an 8% y/y increase in South Africa’s area planted for summer crops, we doubt that this led to primary agricultural jobs gains in the fourth quarter of 2019 as plantings are typically through highly mechanized tractors that require minimal labour involvement. If anything, the summer crop growing areas could lead to jobs gains in the second quarter of the year which will be harvesting time.

Long-term view

South Africa’s agricultural sector has the potential to contribute to employment creation, as clearly shown in Chapter six of the National Development Plan. But this will require a combination of factors to materialize. These include a boost in agricultural productivity, an improvement in the rural investment climate, expansion of export markets, promotion of labour-intensive agriculture subsectors, investment in irrigation, and expansion of area farmed where possible.

Exhibit 1: South Africa’s primary agriculture employment
Source: Stats SA, Agbiz Research


Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

Thoughts on South Africa’s agricultural jobs data

Thoughts on South Africa’s agricultural jobs data

I just went through Statistics South Africa’s Quarterly Labour Force Survey data for the third quarter of 2019. The primary agricultural numbers were a pleasant surprise, showing a 4.5% y/y uptick to 880 000. I say “surprise” because the third quarter of each year is usually a quiet period on farms in most parts of South Africa.

These jobs gains were mainly in the livestock, horticulture, field crops, as well as aquaculture subsector. I think this could have largely been underpinned by the replanting in parts of the horticulture fields following a drought season that caused damage in the fields in provinces such as the Western and Eastern Cape. Other provinces that showed job gains are KwaZulu-Natal, Gauteng and Mpumalanga. Meanwhile, the Northern Cape, Free State, North West and Limpopo saw a reduction in agricultural employment.

The question I have received thus far from people was whether this optimism will hold given the current drier weather conditions?

One thing to point out is that while it is currently dry across the country and summer crop plantings have been delayed somewhat, there are prospects for favourable weather conditions in the near -term, which should support agricultural activity and subsequent employment. The South African Weather Service forecasts above-normal rainfall between November 2019 and January 2020. Be that as it may, a recovery in weather conditions alone might not lead to notable job creation in agriculture that far outpaces the trends we have witnessed over the past few years, hovering around 850 000 jobs.

The broader policy questions should be: how to ensure that South Africa’s agriculture sector delivers to the promise of job creation?

This will require a combination of factors. These include a boost in agricultural productivity, an improvement in the rural investment climate, expansion of export markets, promotion of labour-intensive agriculture subsectors, and expansion of area farmed where possible.

Also, the underutilised land in the former homelands and some land reform farms will also need to be revitalised to see an increase in employment. As my colleagues and I at Agbiz, have consistently pointed out, the provinces containing former homelands that still have tracts of underutilised, arable land that can be prioritised for agricultural expansion are KwaZulu-Natal, the Eastern Cape and Limpopo. These provinces collectively have between 1.6 million to 1.8 million hectares of underutilised land, according to a 2015 study by McKinsey Global Institute.


Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

Is it true that SA youth doesn’t like farming because it’s not sexy?

Is it true that SA youth doesn’t like farming because it’s not sexy?

It has become fashionable in conferences to say “let’s make agriculture sexy in order to attract the youth”.  I get where the sentiment comes from, after all, Africa’s farmers are ageing with an average age of 60. Here in South Africa, that number is estimated at 62.

But I have two difficulties with supporting this statement.

First, I don’t believe that agriculture is necessarily supposed to be made sexy for young people to want to join the sector — it needs to be valuable. In other words, if agriculture can have a greater reward as other sectors of the economy, young people might want to join in.

Second, I haven’t done my homework on this to actually assess if young people are really uninterested in agriculture. But there is anecdotal evidence that there are a large number of young people out there with agriculture degrees and diplomas who struggle to get jobs in this sector, specifically in the case of South Africa. I often receive emails with CVs from graduates from the universities of Limpopo, KwaZulu-Natal, Fort Hare, North West, etc.  in need of jobs within the agricultural sector.

Some agribusinesses and agriculturalists argue that vocational training institutions are not efficiently producing skills needed for agriculture today, and that might be part of the reason some young people are not finding work in this sector. This then calls for more alignment between the agricultural industry and training institutions.

These anecdotes contradict the view that “let’s make agriculture sexy to attract youth” which seems to suggest that there is the scarcity of labour or people to farm.

In the Agrekon Journal earlier this year, Luke Metelerkamp of Rhodes University, published a study which covered three provinces – KwaZulu-Natal, Limpopo and the Western Cape exploring this subject of “youth interest in farming”. The study concluded that the dominant notion that young people are turning their backs on farming seems to hold true, but not because of a lack of interest.

Young people interviewed in the study noted that “jobs in agriculture were either back-breaking and financially unappealing – at the subsistence level”.

Given these observations, I think those of us who are fortunate enough to be part of this sector should showcase opportunities and various possible careers within this sector so that people are not only exposed to the physically challenging jobs. Moreover, this could help young people to know where to knock for assistance and what to study that’s on-demand in the present moment.

The rise of technology use within agriculture can also play a critical role to ease the fears that agricultural jobs are back-breaking. (Yes, there are some jobs that might be physically demanding, but there are also services jobs that aren’t that way).

Moreover, it is important that the conversation also moves beyond actual primary production and more to the entire value chain. This is where potential job opportunities could also be created.

Overall, I think the conversation about youth in agriculture should rather be focused on ways to align them with potential opportunities in the sector rather than repeating the view that people have no interest in farming.  The latter leads to the situation where people spend time trying to make the sector look “attractive” instead of showcasing possible opportunities in it for young people to make their decisions if this is their desired path to follow or not.


Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

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