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The Eastern Cape agricultural sector is a dynamic and livelihood sustainable sector. Approximately 1.7% of the Eastern Cape value added gross domestic product comes through agriculture and 2.9% of the population in the Eastern Cape is working in this sector. There is thus a need for macro-economic research in order to investigate potential and current challenges and opportunities. This paper examines several of these challenges namely demographic compositions, unemployment, income distribution, poverty and inequality. It will provide results from the Labour Force Surveys from 2000 until 2007 with a more in-depth look into 2007. Population and labour force statistics provide the foundation for further analysis. This paper indicates that unemployment is dominated by Africans and that employment in the Eastern Cape agricultural sector is on a decreasing trend, despite the increase between 2004 and 2006. It shows further that income distribution is highly skewed which leads to high levels of poverty and inequality. Agricultural incomes are lowest across all races compared to non-agricultural incomes except for the White farmers/farm workers who earn more than their counterparts in other sectors. Poverty is extremely high for African workers in the Eastern Cape agricultural sector but has decreased since 2000. One of the principal concerns is that of inequality. It shows no improvement since 2000, actually a widening in the inequality gap, with a high in-between race inequality and lower within race inequality in the Eastern Cape agricultural sector. Throughout the report the Eastern Cape agricultural sector is compared to the non-agricultural sector, Eastern Cape overall and South Africa for a better understanding of the Eastern Cape agricultural sector’s position. This report indicates that the Eastern Cape agricultural sector could benefit from intervention and support to correct the present state of decreasing employment, low income, and high poverty and inequality levels.


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