(Siphiwe Sibeko/Reuters)
The effects of the recent El Niño-induced mid-summer drought are starting to show in South Africa’s agricultural jobs data. For example, the figures recently released by Statistics South Africa show that employment in primary agriculture was down 5% quarter-on-quarter to 896k in the second quarter of 2024. From an annual basis perspective, the performance is also weak, although up 0.2% from the second quarter of 2023. Still, the primary agricultural employment of 896 000 people remains well above the long-term jobs of 799 000 and generally reflects the harsh summer season we are leaving behind.
Some subsectors showing a decline in employment include field crops, livestock, and forestry. The job performance in these subsectors is unsurprising because the mid-summer drought has notably affected them, specifically field crops. Moreover, the livestock industry faces relatively higher feed costs and lingering animal disease, which all explain these subdued job data in the subsector.
The Western Cape, Northern Cape, North West and Gauteng are the provinces that showed significant quarterly job losses. Other provinces showed a mild improvement, which was insufficient to change the overall picture of a decline in employment in South Africa’s agriculture.
The Western and Northern Cape provinces do not have significant summer crop production, which means that the quarterly job losses in these particular provinces mirror the generally financially constrained environment in the farming businesses. The Western Cape has gone through periods of natural disasters, such as heavy floods in recent years, which all had a significant financial effect on the farming businesses.
Moreover, some farming businesses probably have not fully recovered from the temporary ban on wine sales during the Covid-19 period. Combined, these events, among others, explain the financially constrained environment businesses in the province find themselves in.
In the case of the Northern Cape, some farming regions remain in a dire operating environment, partly because of the drought. For example, a drive between the small towns of Carnarvon and Williston clearly shows the dry environment that confronts farmers. In conversations with farmers in this region in the first week of August, some told me that they hadn’t received notable rain in more than two years, and the grazing veld shows. Under such conditions, one can not expect a vibrant job environment.
That said, the mid-summer drought primarily added pressures in the country’s northern regions, particularly the summer rainfall regions. The Northern Cape’s situation is more long-term.
Beyond these high-frequency data, the agricultural sector remains crucial for employment creation. But the sector must be on a positive growth path to sustain and create new job opportunities. In the near term, a range of constraining factors for businesses require policymakers’ attention to resolve for the sector to grow.
These include continuing the momentum in resolving the port inefficiencies. The sector also struggles with poor rail and road infrastructure and worsening municipal service delivery. This must be an area of focus for the government of national unity. Rising incidents of crime, lingering animal diseases and increased geopolitical uncertainty remain top-of-mind for agribusinesses, as illustrated in the recent results of the Agbiz/IDC Agribusiness Confidence Index.
In a survey conducted in June 2024, covering some agribusinesses and farming enterprises operating in all agricultural subsectors across South Africa, the respondents raised the above problems as the most troubling issues they face.
Therefore, the government and the private sector should work together to address these growth-constraining factors, particularly those on the domestic policymakers’ reach, to support long-term agricultural sector prosperity and job creation.
Wandile Sihlobo is the chief economist at the Agricultural Business Chamber of South Africa and a senior fellow in Stellenbosch University’s Department of Agricultural Economics. His latest book is A Country of Two Agricultures.