Skip to content

Agricultural Employment Crisis in South Africa

Literature › Works

Tracey Simbi; Michael Aliber (2000). Agricultural Employment Crisis in South Africa. TIPS Working Paper 13_2000. Trade and Industrial Policy Strategies (TIPS).
Type working paper
Scope Post-1994 South African economy
Method mixed
Period studied 1988–2000
Regions South Africa, Northern Province (Dendron, Tzaneen), commercial farming sector
Themes agriculture land, labour markets wages, inequality poverty unemployment, transition post apartheid, business and state, politics ideology elections
Citation key simbi2000

Argument

Commercial agriculture shed about 140,000 regular jobs between 1988 and 1998 and is shifting from permanent to casual labour. The authors argue that this is only superficially the standard mechanisation response to rising relative labour costs. Real wages and labour's cost share have not risen much, and farmers cite fuel, chemicals and the weak Rand as the cost drivers. They argue that farmers' collective shedding is driven largely by 'non-economic' fears: losing land control to resident workers under ESTA and other legislation, a possible minimum wage, and a sense that workers are harder to manage in a democracy. The evidence is preliminary and qualitative: 41 farm worker interviews and 29 telephone interviews with agricultural institutions, alongside published wage and employment data. The policy conclusion is that government can do little to halt shedding, so it should address farmers' fears and strengthen compensatory measures such as public works and land redistribution.

Evidence and method

Stats SA October Household Survey 1998/1999; Stats SA/NDA Agricultural Surveys and Employment Trends in Agriculture (1988-1996 wage series); Reserve Bank Quarterly Bulletin; 1996 Census; 41 structured interviews with farm workers in Dendron and Tzaneen (Northern Province); 29 structured telephone interviews with staff of cooperatives, producer organisations and input suppliers; secondary literature (de Klerk, Lipton, Marcus, Thirtle et al., Newman et al.).

Findings

  • Commercial farming shed about 140,000 regular jobs between 1988 and 1998, with casualisation under way. (p. 4)

    During the 11 year period from 1988 to 1998, for example, the commercial farm sector shed a staggering 140 000 regular jobs, a decline of roughly 20%.

  • Farm work is the largest single category of rural black employment. (p. 4)

    As of 1998, agricultural employment represented 30% of all employment for rural blacks living in South Africa (excluding self-employment).

  • Labour costs rose only trivially as a share of farm production costs, contradicting Agri SA's claim. (p. 10)

    While labour costs have indeed risen, they have only trivially risen as a share

  • Accelerated shedding in the 1990s, with more than 10% of commercial farm jobs lost in 1992-1995. (p. 9)

    The rate at which agricultural employment declined accelerated in the 1990s, with over 10% of jobs on commercial farms being lost between 1992 and 1995 alone

  • Farmer-reported wages differ sharply from worker-reported wages, and the 1994 jump in the farmer series is doubtful. (p. 12)

    We conjecture that in fact the significance of 1994 had more to do with wages that farmers reported, than with wages they paid.

  • Institutional respondents rarely cited labour as a source of rising costs; fuel and fertiliser dominated. (p. 24)

    Importantly, labour was rarely mentioned as a factor in the overall increase in costs: only 3 out of the 29 interviewees even mentioned it when prompted about trends in input costs.

  • ESTA is seen as the factor most responsible for reduced permanent employment, and farmers adapt by not replacing resident workers or by resettling them. (p. 26)

    Across the board, the factor that is perceived to be responsible for the largest decrease in permanent employment, is ESTA.

  • A minimum wage would accelerate mechanisation among grain and mixed farmers, though not high-value crop farmers. (p. 27)

    for grain farmers and mixed crop-livestock farmers, the prospect of a minimum wage for farm workers strongly reinforced the existing trend to mechanise and reduce the size of the workforce.

  • The authors find little evidence that relative factor costs explain labour-displacing technology adoption. (p. 32)

    The evidence that farmers are adopting labour-displacing technologies on account of movements in relative factor costs is not strong

  • Mechanisation in high-value crops can virtually eliminate seasonal labour demand, as in grape harvesting. (p. 26)

    grape harvesters can reduce a farm's peak season labour demand from 100 to 2 workers, effectively displacing all seasonal workers.

  • Workers in Dendron report increased workloads, insecurity and worse treatment as farmers do not replace retrenched workers. (p. 19)

    Fifteen of the seventeen respondents indicated an ever-increasing sense of insecurity.