Agric sector jobs down, but great potential still exists…

Elaine Krouts drives a tractor on her Elands farm near Ennerdale. Photo: Timothy Bernard/ANA

The creation of decent work remains the most effective way to deal with poverty and inequality. It is through stable and secure employment as well as fair labour practices that the majority of people can be uplifted from poverty.

The South African government has prioritised the creation of employment as one of its key priorities, with key sectors expected to play a central role in driving job creation for more equitable and inclusive growth. As the primary economic activity in rural areas, the National Development Plan (NDP) identifies the agricultural sector as having the potential to create close to one million new jobs by 2030, placing it front and centre as the leading contributor to the overall employment target.

As ambitious as the one-million jobs target by 2030 may seem, there can be no doubt about the strategic potential of the agricultural sector to contribute to economic growth and job creation. A recovery in the sector has seen agricultural GDP grew from 22% quarter-on-quarter (q/q) in the first quarter of 2017 to 33.6% q/q in the second quarter, helping to lift the economy out of a technical recession. While there have been noted contractions in agricultural jobs this year, this recovery bodes well for the creation of more employment opportunities within the sector in the longer term.

Declines in context

The sector recorded 40,000 job losses in the second quarter of 2017 compared to 44,000 job losses in the first quarter of 2017. This puts the sector’s total labour force at 835,000 jobs, which is equivalent to 5.2% of the total labour force. Agriculture’s share of the total labour force is still above other sectors such as mining, and almost on par with the transport industry. (Source: Stats SA Quarterly Labour
Force Survey, 2017) 

 The Western Cape, Kwa-Zulu Natal and Northern Cape provinces saw notable reductions in agricultural jobs in the second quarter of 2017. They lost 35,000, 18,000 and 11,000 agricultural jobs respectively during this period. The loss of jobs in the Western Cape was on the back of drought, which continues to affect the sector in that part of the country. Meanwhile, the Free State, North West, Mpumalanga, Eastern Cape and Limpopo provinces saw an increase in agricultural employment during this period. This could be attributed to the summer crop harvesting, especially in grain growing areas such as Free State, North West and Mpumalanga. (Source: Stats SA Quarterly Labour
Force Survey, 2017)

The decline in agricultural employment in the second quarter of 2017 is in line with the season’s trend, characterised this quarter by reduced activity in labour intensive agricultural sub-sectors, more especially in the horticulture sub-sector as well as in some field crops. In fact, the agricultural sector experienced a similar shock of a 44,000 decline in employment during the second quarter of 2016, a clear indication that the sector is characterised by reduced activity during this period.

The jobs cuts were recorded in all the major sub-sectors (i.e. agriculture, hunting and related services, forestry as well as fishing). The field crops industry was the major contributor to a decline in agricultural employment in the second quarter of 2017 as it recorded a massive decline of 49,000 jobs during this period.

Grain production represents a more stable employment picture, due mainly to the fact that very limited seasonal labour is used. Therefore, the decrease in employment in the field crops industry could be attributed to the job losses in the Western Cape (a major winter grain producing area) because of drought. The margins and profitability in the grain industry are currently low due to depressed grain prices, which would have an effect on labour in the long-term.

The 9,000 decline in jobs in the forestry sub-sector most likely reflected those workers who were employed as wattle bark strippers on seasonal basis. These workers are employed only during the summer months when the weather conditions make it easy to strip the bark. However, over the past five years, the domestic forestry sub-sector had a steady decline in the number of permanent jobs. This was largely due to a 48,900 hectares decrease in commercial forestry plantations in the country, combined with increased mechanisation in the sub-sector.

There is no doubt that permanent jobs in the forestry sub-sector would decline further in the near future, as the total plantation area continues to decrease as mechanisation increases. However, this will likely be offset by an increase in small-scale plantations owned by new entrants in the Eastern Cape and Kwazulu-Natal, especially in the Zululand area. The net effect on jobs in the forestry sub-sector would depend on how successful the small-scale sector could grow. (Source: Stats SA Quarterly Labour
Force Survey, 2017)

Quarterly recovery and sustained jobs growth

It is widely expected that jobs across the entire sector will bounce back in the third quarter of this year in line with seasonal trends. The boost is most likely to come from the horticulture industry, particularly seasonal labour participation. The anticipated favourable weather conditions in the western parts of the country between August and October is likely to boost horticulture industry, and as such, the industry will start realising increased activity that will result in seasonal labour participation.

While the drivers of these quarter-on-quarter fluctuations can mainly be attributed to prolonged drought and its resultant impact on both harvesting and production, the pace of the sector’s efforts to collectively boost jobs across the agricultural value chain in line with the NDP’s target has undoubtedly been slow. It is interesting to note that since the inception of the NDP in November 2011, the agricultural sector created approximately 201 000 jobs between 2012 and 2016, this according to Stats SA’s Quarterly Labour Force Survey.  Furthermore, the number of women employed in the agricultural sector decreased by 5% in the second quarter of 2017, while the number of men employed in the sector decreased by 4.4% during the same period.

In order for the sector to grow and safeguard the country’s food security, it must seize the opportunity to open up and become much more accessible to new entrants. More jobs for more people will also require a greater appetite amongst established players to reshape and transform. That women’s’ share of jobs in the agricultural sector is declining should be of great concern to those tasked with building a more equal and inclusive sector, and we need to fully understand the drivers behind this to appropriately respond. Inclusive participation will certainly lead to sustainable growth, ensuring that as many people as possible contribute and benefit from the economic benefits driven by the sector.

One of the most critical points to addressing this challenge is the creation of access to adequate financing opportunities across the board that will encourage transformative and inclusive growth. Equally as important is the transfer of skills from large commercial farmers to emerging farmers, including vulnerable groups such as women and youth if we are to develop viable and sustainable agricultural sector opportunities, including jobs.

This holistic approach requires greater collaboration between sector players in government, the private sector, established agri-businesses and institutions like Land Bank to ensure that new entrants to the sector become integrated into existing value chains with greater potential to create sustainable employment opportunities.

Mashabela is an Agricultural Economist by profession currently serving as a Research Analyst at Land Bank