Wandile Sihlobo (supplied)
- The first quarter employment data is expected to be released by Stats SA on 23 June.
- Agriculture could see some resilience compared to other sectors of the economy.
- More productive use of land could further aid recovery.
One of the key questions that consistently
arises amid the Covid-19 pandemic impact on the economy is about the effects on
employment.
In agriculture, I think there could be some
resilience compared to other sectors of the economy because of the major two
reasons.
First, the sector was largely operational even
during the strict Level 5 lockdown, except a few subsectors such as the wine
industry, tobacco, wool and floriculture, amongst others.
These subsectors subsequently opened when the
country’s lockdown moved to Level 4 and 3, except for the tobacco industry
whose sales remains prohibited, while harvest and fieldwork are permitted.
Second, South Africa expects its second largest grains harvest in 2019/20
season, a harvest process that in fact started recently. Also, there is an expectation
of a record citrus harvest, general improvement in output in other fruits
following drought years, and also a recovery in wine grapes output.
This means that there will generally be
increased activity in the farming sector compared to the previous year. With
that said, the social distancing regulations introduced at the end of March
2020 to prevent the spread of the coronavirus could mean that farmers and
agribusiness might not increase employment, especially of seasonal labour in
the same way they would have in the absence of the pandemic. The impact of
these dynamics, however, will only be reflected in the second quarter labour
data, as well as the following quarters of the year.
Vibrant activity – until Covid-19
We expect the first quarter employment data, which is due for release by
Statistics South Africa on Tuesday, 23 June, to reflect stable jobs levels that
are roughly unchanged from the fourth quarter of 2019 employment of
885 000.
There was vibrant activity in the sector until
the coronavirus hit South Africa and the regulations to control it were
instituted at the end of the first quarter. This means the disruptions in the
sector from this pandemic should be minimal be if any on an employment
perspective in the first quarter.
Moreover, the horticulture and field crops,
which accounted for roughly a third of South Africa’s agriculture in the fourth
quarter of 2019 are the ones that are set for a record harvest in some crops
and general improvement in output in other crops and products. Hence, we are
inclined to believe that the numbers due for release this week should show
stable jobs in the agriculture sector.
Better use of land
With South African policymakers currently at a
stage of drafting the post-Covid-19 recovery phrase for agriculture and other
sectors of the economy, the focus is also on the drive for economic growth and
job creation.
Growth and job creation in agriculture hinges
on the level of investment in the sector, agricultural productivity, expansion of
export markets, promotion of labour-intensive agriculture subsectors,
investment in irrigation and an increase in the area farmed where possible.
The potential for the expansion in productive
farmland lies in the underutilised land in the former homelands and
underperforming land reform farms (I’ve highlighted the process of revitilising
these lands here).
By labour-intensive subsectors, I am
specifically referring to the horticulture and field crop subsectors. The other
subsector – livestock – can also be prioritised, specifically in areas where
environmental factors do not permit horticulture and field crops. This could
all happen at a time where there is a growing demand for horticultural, and
protein-rich diets in the global market which is underpinned by the changing
consumer patterns towards high protein and healthier diets.
The provinces containing former homelands that
still have tracts of underutilised, arable land that can be prioritised for
agricultural expansion are KwaZulu-Natal, the Eastern Cape and Limpopo. These
provinces collectively have between 1.6 million to 1.8 million
hectares of underutilised land.
The focus for provinces that already have
extensive farming could be on increasing productivity on restituted and
redistributed farms and ensuring that there are export markets for products
being produced.
South Africa has already advanced on this end,
as nearly half of the domestic agricultural products, in value terms, are
exported. This export drive as part of the post-Covid-19 recovery phase should
include a focus on ensuring that ports infrastructure is up to date and efficient
– an issue that has proven to be a challenge in the recent past, particularly
in 2019, with further glitches during the pandemic. This is an area that the
government infrastructure investment drive could also focus on.
In a nutshell, South Africa’s agricultural
sector could show some level of resilience from a jobs perspective this year as
the expected large output will mean labour will be required in the fields.
Those that typically participate in the sector
in the form of seasonal labour will, however, be affected by the social
distancing and other health regulations. This is a component of the labour
market that could lead to an overall decline in agriculture employment this
year compared to last year, albeit the share of the decline could be negligible
relative to other sectors of the economy.
Wandile
Sihlobo is chief economist of the Agricultural Business Chamber of South Africa
(Agbiz) and author of FINDING
COMMON GROUND: Land, Equity and Agriculture.
