After cutting 44 000 jobs in the first quarter of 2017, South Africa’s agricultural sector saw a further 40 000 jobs lost in the second quarter – putting the total labour force at 835 000 jobs.

However, it is worth noting that this is in line with the season’s trend due to reduced horticultural activity in the second quarter.

Taking a closer look at the provincial decomposition, it is clear that most job losses occurred in the Northern Cape, Western Cape, KwaZulu Natal and Gauteng provinces where the bulk of labour intensive crops are grown. Meanwhile, other provinces saw slight job gains.

In terms of sub-sector performance – The reduction in employment were in field crops and horticulture, forestry and aquaculture. Meanwhile, the other sub-sectors, such as the livestock, game farming, as well as mixed farming showed job gains.

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• The reduction in employment covered a number of provinces, but the case of the Western Cape province came as no surprise as the provincial government and the Bureau for Food and Agricultural Policy study already signalled a possibility of 30 230 agricultural job losses in the province this year due to drought. In the first quarter of 2018, the Western Cape’s agricultural employment declined by 3% y/y. With that said, the province remains a leading agricultural employer, accounting for a 25% share in the national agricultural labour market.
• Agricultural employment in KwaZulu Natal, Gauteng, Limpopo, North West and Mpumalanga provinces declined 19% y/y, 19% y/y, 7% y/y, 6% y/y and 3% y/y, respectively. Meanwhile, the Free State, Eastern and Northern Cape provinces saw job gains of 31% y/y, 4% y/y and 3% y/y, respectively (see Chart 2).
• In terms of sub-sector performance, the reduction in annual employment was recorded in almost all sub-sectors with the exception of forestry, logging and related services (see Chart 3).
• Looking ahead – The effects of the Western Cape province’s drought combined with the reduced area plantings in the summer crop growing regions of the country could potentially weaken the performance of the agricultural labour market in the coming quarters.
• In terms of policy development, the business sector has generally accepted the impending introduction of the National Minimum Wage, but it will affect some sub-sectors within the agricultural sector more than others depending on the labour intensity and average labour skill required. For example, the horticultural sector is one of the likely sub-sectors to be impacted by the introduction of the National Minimum Wage as it is labour intensive relative to other sub-sectors.

Read the full report by Wandile Sihlobo below:

SA agricultural employment down by 3% year on year in Q1, 2018

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• The improvement in employment in the aforementioned provinces was unsurprising, particularly the Eastern Cape and Limpopo, given that the second quarter coincides with the harvest process of both grains and horticulture.
• While grain production has somewhat declined from levels seen last year, the citrus production has slightly increased. Data from the United States Department of Agriculture shows that South Africa’s 2017/18 orange production could increase by a 2% y/y to 1.43 million tonnes due to expected large outputs in the Limpopo and the Eastern Cape provinces. The improvement in the Western Cape jobs came as a surprise as most horticulture sub-sectors recorded a double-digit decline in production due to drought. The province remains a leading agricultural employer, accounting for a 21% share in the national agricultural jobs.
• Agricultural employment in North West, Free State, Gauteng, KwaZulu Natal and Mpumalanga provinces declined 19% y/y, 11% y/y, 5% y/y, 1% y/y and 1% y/y, respectively (see Figure 2).
• In terms of sub-sector performance, the uptick in employment was in field crops and horticulture, game, forestry and aquaculture, whereas other subsectors recorded a reduction in annual employment (see Figure 3).
• Looking ahead – Whilst today’s data painted a fairly positive picture compared to the corresponding period last year, we believe that the tail-end effects of the Western Cape province’s drought combined with the reduced area plantings in the summer crop growing region of the country could potentially weaken the performance of the agricultural labour market in the coming quarters.
• In terms of policy development, our view remains unchanged, which is that the business sector has generally accepted the impending introduction of the National Minimum Wage, but it will affect some sub-sectors within the agricultural sector more than others depending on the labour intensity and average labour skill required. For example, the horticultural sector is one of the likely sub-sectors to be impacted by the introduction of the National Minimum Wage as it is labour intensive relative to other sub-sectors.

Click HERE to read the full report by Wandile Sihlobo

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