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The wine industry employed 290 000 people and generated R55 billion as annual income. Sale of wine and other alcoholic drinks was banned during the lockdown.

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Sizwe sama Yende

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Loss of primary agricultural jobs by five percentage points in the middle of last summer can be attributed an El Niño-induced drought.

Agricultural economist, Wandile Sihlobo, said that the Western Cape, Northern Cape, North West, and Gauteng were the provinces that showed significant quarterly job losses.

Figures released by Statistics South Africa recently show that employment in primary agriculture was down 5% quarter-on-quarter to 896 000 in the second quarter of 2024.

“From an annual basis perspective,” Sihlobo said, “the performance is also weak, although up 0.2% from the second quarter of 2023. Still, the primary agricultural employment of 896 000 people remains well above the long-term jobs of 799 000 and generally reflects the harsh summer season we are leaving behind.”

Sihlobo said that other provinces showed a mild improvement, but it was insufficient to change the overall picture of a decline in employment in South Africa’s agricultural sector.

Some subsectors showing a decline in employment included field crops, livestock, and forestry, he said.

“The job performance in these subsectors is unsurprising as the mid-summer drought has notably impacted them, specifically field crops. Moreover, the livestock industry faces relatively higher feed costs and lingering animal disease, which all explain these subdued job data in the subsector,” Sihlobo said.

He said that the Western and Northern Cape provinces did not have significant summer crop production, which meant that the quarterly job losses in these particular provinces mirrored the generally financially constrained environment in the farming businesses.

Moreover, Sihlobo said, some farming businesses probably had not fully recovered from the temporary ban on wine sales during the COVID-19 period. These combined events and others explained the financially constrained environment businesses in the Western Cape found themselves in, he said.

The wine industry employed 290 000 people and generated R55 billion as annual income. Sale of wine and other alcoholic drinks was banned during the lockdown.

Sihlobo said that in the case of the Northern Cape, some farming regions remained in a dire operating environment, partly because of the drought.

“For example, a drive between the small town of Carnarvon and Williston in the Northern Cape clearly shows the dry environment that confronts farmers. In conversations with farmers in this region in the first week of August, some told me that they hadn’t received notable rain in over two years, and the grazing veld shows. Under such conditions, one cannot expect a vibrant job environment,” he said.

Sihlobo said that in the near term, a range of constraining factors for businesses require policymakers’ attention to resolve for the sector to grow.

“These include continuing the positive momentum in resolving the port inefficiencies. The sector also struggles with poor rail and road infrastructure and worsening municipal service delivery. This must be an area of focus for the Government of National Unity,” he said.

Sihlobo said that  improvement in this area would add much-needed positive momentum in South Africa’s agriculture.

“Rising incidents of crime, lingering animal disease challenges, and increased geopolitical uncertainty remain top-of-mind challenges for agribusinesses.”

In a survey Agribiz conducted in June 2024, covering some agribusinesses and farming enterprises operating in all agricultural subsectors across South Africa, 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 growth-constraining factors, particularly those on the domestic policymakers’ reach, to support long-term agricultural sector prosperity and job creation,” said Sihlobo.