SA agriculture saw notable job cuts in Q1, 2017

South Africa’s agricultural sector saw 44 000 job cuts in the first quarter of this year from the last quarter of 2016 - putting the sector’s total labour force at 875 000 jobs - Wandile Sihlobo, Agbiz economIst

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South Africa’s agricultural sector saw 44 000 job cuts in the first quarter of this year from the last quarter of 2016 - putting the sector’s total labour force at 875 000 jobs (see Chart 1). Notable job losses were on crops and horticulture, game farming, as well as livestock. In part, this can be explained by job losses in the poultry sector, as well as reduced activity in the horticulture industry. Taking a look at the provincial decomposition, it is clear that most job losses occurred in the Western Cape and Northern Cape provinces where the bulk of labour intensive crops were still showing the aftermath of the 2016 drought.

The job losses in the agricultural sector come as no surprise given the ongoing challenges in the poultry sector, and remaining effects of the 2016 drought in the horticulture industry.

There is generally minimal activity in the grains and oilseeds sectors between January and March of each year, which explains the decline in jobs despite the expected record harvest.

A close observation reveals that the Western Cape, Northern Cape, North West, Kwa-Zulu Natal and Eastern Cape provinces saw notable reduction in employment of 14% quarter-on-quarter (q/q), 10% q/q and 9% q/q, 3% q/q and 2% q/q, respectively. Meanwhile, Free State, Limpopo, Mpumalanga provinces saw jobs growth of 9% q/q, and 1% q/q, respectively (see Chart 2).

From a sub-sector perspective, job losses were in crops and horticulture, livestock and game farming. Meanwhile, the other sub-sectors performed well, such as the animal husbandry,Forestry, fisheries, as well as mixed farming – livestock and crops (see Chart 3).

Overall, agriculture’s share of total employment fell by 1% to 5% in the first quarter of this year compared to the last quarter of 2016. With that said, the sector’s share is still above sectors such as the mining, and almost at par with the transport industry.

1 Although Chart 1 shows that agricultural jobs are at relatively higher level of 875 000, it is worth noting that the change in the survey sample in the first quarter of 2015 might have an influence on this trend.

Looking ahead, the outlook for the South Africa’s agricultural jobs market remains positive as grains and oilseeds harvesting period could lead to an increase in activity and opportunities for seasonal jobs. With that said, the dry spell in the Western Cape province is a key concern as it could potentially reduce output in the horticulture industry, and in turn potential (seasonal) jobs.

Wandile Sihlobo (wandile@agbiz.co.za)

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