Agriculture sector: Cultivating jobs is aim
Great potential needs to be translated into tangible gains
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 most people can be uplifted from poverty. The government has prioritised the creation of employment as one of its 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 a million new jobs by 2030, placing it front and centre as the leading contributor to the overall employment target.
As ambitious as the target might 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 gross domestic product grow from 22% quarter-on-quarter (q/q) in the first quarter of the year 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.
The sector recorded 40 000 job losses in the second quarter of the year compared to 44 000 job losses in the first quarter. This puts the labour force at 835 000 jobs, equivalent to 5.2% of the total labour force. Agriculture’s share of the total labour force is above other sectors such as mining, and almost on par with the transport industry.
The Western Cape, KwaZulu-Natal and the Northern Cape saw notable reductions in agricultural jobs in the second quarter. They lost 35 000, 18 000 and 11 000 agricultural jobs respectively. The loss of jobs in the Western Cape was on the back of a drought, which continues to affect the sector in that part of the country. Meanwhile, the Free State, North West, Mpumalanga, the Eastern Cape and Limpopo provinces saw an increase in agricultural employment. This could be attributed to the summer crop harvesting, especially in grain-growing areas such as the Free State, North West and Mpumalanga.
The decline in the second quarter is in line with the season’s trend, characterised 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 last year , a clear indication that it is characterised by reduced activity during this period.
The jobs cuts were recorded in all the major sub-sectors (that is 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 – a massive decline of 49 000 jobs during this period.
Grain production represents a more stable employment picture, due mainly to the fact that 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 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 probably reflected the workers who were employed as wattle bark strippers. They are employed only during summer when the weather makes it easy to strip the bark. However, over the past five years, the forestry sub-sector had a decline in the number of permanent jobs. This was largely due to a 48 900 hectares decrease in commercial forestry plantations, 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 plantation area continues to decrease as mechanisation increases. However, this will probably 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 effect on jobs in the sub-sector would depend on how successful the small-scale sector could grow.
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 in the western parts of the country between last month and next month will probably boost the 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 harvesting and production, the pace of the sector’s efforts to boost jobs across the agricultural value chain in line with the NDP’s target has been slow. It is interesting to note that since the NDP’s inception in November 2011, the agricultural sector created about 201 000 jobs between 2012 and last year. Furthermore, the number of women employed in the agricultural sector decreased by 5% in the second quarter of the year, 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 more accessible to new entrants. More jobs for more people will also require a greater appetite among established players to reshape and transform. That women’s share of jobs is declining should be of great concern to those tasked with building a more equal and inclusive sector, and we need to understand the drivers behind this to appropriately respond. Inclusive participation will 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.
The holistic approach requires greater collaboration between sector players in the 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. (Source: Statistics South Africa Quarterly Labour Force Survey, 2017)