Jobs in the agricultural sector have plummeted to 8% in the first quarter of 2021 – the lowest it has been since 2014. This is alarming, says Agbiz chief economist Wandile Sihlobo, because South Africa is not currently in a drought season.
The decline also comes amid the agricultural sector’s second consecutive year of good performance. This was supported by favourable rainfall and expansion in plantings. The sector is, however, forecasting better employment levels later this year.
Sihlobo says the decline in jobs seem to be concentrated within industries affected by the Covid-19 lockdown regulations. This includes horticulture (wine grapes, specifically) and game industries.
5 provinces affected
“The job losses were reported in the Western Cape, Northern Cape, Free State, KwaZulu-Natal and North West. The rest of the provinces registered an uptick from the first quarter of 2020,” he adds.
“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.”
At about 136 000 jobs, the Western Cape’s agricultural employment is now at its lowest levels since 2014, says Sihlobo.
“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.”
New minimage wage and job losses
Sihlobo further believes that non-wine producing provinces may have been impacted by social-distancing measures introduced to try and curb the spread of Covid-19.
“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.
“That said, it is important to mention that the different subsectors 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.”
Sihlobo anticipates that the employment data will be of even greater interest in the coming months.
This, after a 16,1% increase in the minimum wage for farmworkers came into effect in March. Many experts warned that this could lead to further job losses.
“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.”