SA’s agricultural sector is likely to be spared from heavy job losses anticipated in most sectors due to the economic shock of Covid-19 because it mostly remained open during the lockdown and expects a bumper grain harvest, a key industry body has said.
The pandemic has left the global economy reeling and stocks plummeting amid fears of a jobs bloodbath.
On Monday, President Cyril Ramaphosa said the economy was in the throes of the anticipated fallout from the global health crisis.
“The predictions of businesses shutting down and jobs being lost are materialising,” Ramaphosa said.
The virus, reported to have originated in China's Wuhan city, has also led to a decline in Asia’s agriculture demand and falling agricultural commodity prices. SA’s agriculture is export-orientated, with exports of roughly $10bn in 2019. China, with 8% of global agricultural imports, is the second-biggest importer in the world.
The SA government sees agriculture as a key sector for pushing growth and addressing unemployment, while increased agricultural exports are seen as a potential boost for local industry. The industry contributes about 3% to GDP, and employs close to 900,000 people.
Wandile Sihlobo, head of agribusiness research at the Agricultural Business Chamber (Agbiz), said there could be some resilience in agriculture compared to other sectors of the economy because of two major reasons. First, the sector was largely operational even during the strict level-5 lockdown, except for a few subsectors, such as the wine, tobacco, wool and floriculture industries, among others, Sihlobo said.
The subsectors subsequently opened when the country’s lockdown moved to levels 4 and 3, except for the tobacco industry, whose sales remain prohibited, while harvest and fieldwork are permitted.
Second, SA expects its second-largest grains harvest in the 2019/2020 season, a harvest process that started recently, Sihlobo said.
“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,” he said.
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,” Sihlobo said.
He said growth and job creation in agriculture hinged 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.
“In a nutshell, we expect the agricultural sector to 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,” Sihlobo said.
“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.”
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