Dark clouds gather for one of South Africa’s biggest employers

Employment levels in South Africa’s agricultural sector remained fairly stable in the last quarter, but trouble is on the horizon as the country’s economic woes continue to build and weigh on all industries.

This is according to the latest sectoral review by the Bureau for Food and Agricultural Policy (BFAP), analysing the results of the latest quarterly labour force survey from Stats SA.

The BFAP noted that agricultural employment levels have remained relatively stable, while national employment levels recovered somewhat to pre-pandemic levels in recent months.

The number of employment opportunities in the sector gained 2.4% in the second quarter of the year, building on the gains of 5.2% in the first quarter.

This means that the sector currently employs around 894,000 workers, a level that is close to surpassing the peak of 920,000 workers recorded in the fourth quarter of 2016.

“Farm workers are the most important category within the wider sector and their employment trends largely represent that of the sector as a whole,” the BFAP said.

Looking ahead, however, the picture is looking a bit darker.

Owing to the continued above-inflation minimum wage increases, continued and unrelenting load shedding disruptions, as well as the pressure on profitability in labour-intensive industries, the economic pressures on the agri sector is likely to diminish opportunities to create more jobs, the BFAP said.

More likely, these pressures could lead to job losses in the next year or two, it said.

While this reflects primary production sector on a farm, plantation and fisheries level, the agro-processing sector isn’t without its challenges.

This sector has also seen jobs grow, adding approximately 60,000 jobs to 248,900 people employed as at 2021.

The BFAP said this sector could be a lot bigger, given the difficulty defining when a worker is an agro-processing worker – for instance, a baker employed by a retailer in-store is more closely matched to agro-processing than the retail worker they are likely classified as.

While the overall picture shows growth in this sector, it depends on the type of processing being done.

The net gain in jobs is a result of good performance by industries such as other food, bakery, edible oil, and dairy, whilst poor-performing industries such as animal feed and sugar were shedding jobs over this period, the BFAP said.

“Agro-processing jobs are still highly concentrated in three provinces, which suggests that agro industrialisation still needs to extend into SA’s more rural and underdeveloped regions. For this to take place, significant investments in infrastructure are needed,” the group said.

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