Opinion Piece

Agriculture mitigates the fast rising unemployment rate in South Africa

Since Statistics South Africa began the quarterly labour force survey in 2008, the country has reportedly hit a new record of unemployment rate of 34.4% in the second quarter (April-June) of 2021. This means there are 58 000 people who lost their jobs between April and June 2021 and this compounded the already worse unemployment situation in the country.

As a result, there are now 7,8 million unemployed people in the country. The main sectors contributing to job losses were the Finance (-278 000), followed by Community and social services (-166 000) and Manufacturing (-83 000).  The devastating economic impact of corona virus pandemic together with the low economic growth and investments in South Africa contributed to the shedding of jobs.

Agriculture playing its part to create new jobs

Despite the overall economy losing 58 000 jobs, the agricultural sector was among those sectors that managed to create new jobs. The agricultural employment accelerated by 8.7% (+69 000) in second quarter compared to the previous quarter. The sub-sectors that experienced a notable increase in employment were the horticulture and grains. This was mostly attributed to the seasonal jobs that were created during the harvesting of deciduous, grapes and citrus fruits as well as grain products.

In terms of provinces, notable gains in agricultural jobs were recorded in the North West, followed by Western Cape and Free State provinces, which showed an increase of 77.4%, 36.2% and 34%, respectively. These are major fruit and grain producing Provinces, hence, they employment figures went up with improved harvesting activities during quarter two.

What to expect in the next quarter?

The agricultural employment data shows a fairly positive picture amidst of covid 19 regulations and other factors such as wage increase in April 2021 compared to the overall employment figures and corresponding period last year in the sector. Good weather and agility of farmers to maintain and expand production and trade during difficult times of Covid-19 pandemic will ensure employment is not lost in the sector.

However, it is important to note that while the majority of agriculture activities remained operational since the start of the lockdown period, the sector could start feeling the impact of the pandemic as demand for food reduces because of job losses in other sectors.

The recent riots that took place in July, mainly in KwaZulu Natal and parts of Gauteng were not covered in this quarter and their impact could be felt in the coming quarter three. Lastly, agricultural is one of the key sectors expected to play a central role in unlocking jobs and inclusive growth as the economy recovers from the pandemic and recent unrests. As such, it is important the sectoral plans such as the Agriculture and Agro-processing Master Plan are finalised so they can be a guiding light for the sector in the coming quarters.

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