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Opinionista

There is robust employment in South African agriculture, and more growth is possible

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Wandile Sihlobo is the chief economist at the Agricultural Business Chamber of SA and a senior fellow in Stellenbosch University's Department of Agricultural Economics. His latest book is “A Country of Two Agricultures”.

The Agriculture and Agro-processing Master Plan offers a framework to grow the agriculture and agro-processing sector, build competitiveness, attract more investment, improve inclusion, and create jobs.

While South Africa’s agriculture has had a rough start to the year, characterised by El Niño-induced drought, the employment conditions remain encouraging. The data released by Statistics South Africa last week shows that employment in primary agriculture lifted by 6% year-on-year to 941,000 in the first quarter of 2024. This is also up 2% from the last quarter of 2023.

Admittedly, the significant drought damage has been concentrated on the summer grains and oilseed regions, not across all agricultural subsectors, which somewhat explains the resilience in job data. Another consideration is that there could also be a lag in fully accounting for agriculture’s financial pressures resulting from the drought and the impact on employment afterwards.

We can observe from the current data that jobs generally increased across most subsectors of agriculture in the first quarter compared with the corresponding period last year. The decline in employment was only in the production of organic fertilisers, fishing, and fish hatcheries.

Again, this could indicate the potential delay before the subsectors heavily impacted by the mid-summer dryness fully reflected the financial impact and subsequent jobs effect. We may have a complete picture of such in the second quarter jobs data.

Read more in Daily Maverick: Thirty years into democracy, how has SA’s agricultural sector performed?

From a regional perspective, the Eastern Cape, Northern Cape, North West, Gauteng, and Mpumalanga were behind the annual uptick in agricultural employment. These provinces broadly comprised various agricultural commodities or value chains. Thus, the uptick in jobs is not primarily on the back of a particular value chain but spread across a range.

Surprisingly, the Western Cape, KwaZulu-Natal and Limpopo are among the provinces that recorded a mild decline in employment in the first quarter compared to 2023. These provinces are among those that hold significant shares of horticulture production, which benefitted from irrigation throughout the harsh mid-summer season.

Meanwhile, the mild reduction in employment in the Free State could be somewhat explained by the province’s vast grains and oilseed production and the expected decline in production because of the drought.

Growth needed for jobs to bloom

As we look in years ahead, the agricultural sector remains crucial for employment creation in South Africa’s rural communities. 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 the recent El Niño induced drought that devastated the summer grains and oilseed regions, and some distressed farmers may require government support.

Moreover, the positive momentum in resolving the port inefficiencies should continue. The sector also struggles with poor rail and road infrastructure and worsening municipal service delivery. Rising incidents of crime, lingering animal disease challenges, and increased geopolitical uncertainty remain top-of-mind challenges for agribusinesses.

In a survey we conducted in March 2024 covering businesses operating in all agricultural subsectors across South Africa, the respondents raised the above challenges as the most troubling issues they face. Therefore, the South African government and the private sector should work collectively to address these issues, particularly the ones on the domestic policymakers’ reach to support long-term growth.

Post-elections policy to boost jobs in farming

These issues should be the starting point for the new administration after the elections.

Post-election, the South African agricultural sector needs a sharper focus on implementing the existing programmes. The sector does not need a new policy proposition.

The focus should be primarily on the execution of responsibilities of the various directorates at the national and provincial levels of the Department of Agriculture, Land Reform and Rural Development.

The agricultural sector has an ambitious and unifying plan to boost inclusive growth which is achieved through the Agriculture and Agro-processing Master Plan (Aamp), which was launched in May 2022. Indeed, the Aamp is imperfect, and some aspects were contested during its drafting stages.

The divisions of opinions about the Aamp are to be expected, given the breadth of social partners involved in crafting it — government, business, organised agriculture, and labour.

Still, most social partners, such as the business community, government, and labour, agreed that the Aamp offers a framework to grow the agriculture and agro-processing sector, build competitiveness, attract more investment, improve inclusion, and create jobs. These prospects would help to address South Africa’s socioeconomic challenges, particularly in rural areas and small towns.

Thus, after the elections, the focus should be on the relentless implementation of policies and programmes; there is no time or need for the stakeholders to return to the drawing board. DM

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