South Africa’s agricultural sector recorded significant decline in the first quarter

7th July 2023

By: Rebecca Campbell

Creamer Media Senior Deputy Editor


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The Bureau for Food and Agricultural Policy (BFAP) has highlighted, in a brief report, that, while the total South African economy avoided a technical recession during the first quarter of this year, with national gross domestic product (GDP) rising by 0.4%, the same could not be said for the agriculture, forestry and fisheries sector. This sector experienced a year-on-year decline of 5.4% and, quarter-on-quarter, dropped 12.3%.

As the detailed data on value-addition in each agricultural sub-sector was not published, disaggregated gross value of protection (GVP) data, which showed revenue contributions, had to be used as an indicator of relative performance. GVP is the price of an item multiplied by the quantity produced of that item. GVP data is compiled by the Department of Agriculture, Land Reform and Rural Development.

Of the sub-sectors of agriculture, the one that made the biggest contribution to total agricultural revenues was animal products, accounting for 56%. Quarter-on-quarter, animal products’ GVP grew by 9.4%. The components of the sub-sector which recorded the highest growth rates were pork (27%), milk (20%) and poultry (19%). In all three cases, this was due to higher prices for these products. On the other hand, the sub-sector components which saw the biggest declines were sheep, wool, and beef, which contracted by 11%, 9% and 3%, respectively. “Relative increases in all livestock inputs have been higher than that of livestock output prices, which implies that revenue gains did not translate into GDP gains,” cautioned the BFAP.

Field crops accounted for only 9% of total agricultural revenues. But this was because so little harvesting took place during each first quarter. Most winter crops were delivered during fourth quarters while the harvesting of summer crops started during second quarters. It should be noted, however, that the GVP for field crops during the first quarter of this year was down 10%, year-on-year.

Horticulture accounted for 35% of total agricultural revenues in the first quarter. Horticulture is basically the production of fruits and vegetables.   

“While the total revenue generated by the horticultural sub-sector did increase, this was insufficient to cover sharp input cost increases, resulting in a contraction in GDP performance from the sector,” reported the BFAP. “Loadshedding is likely to be one of the drivers of further domestic cost increases, with the direct and indirect impact of the conflict in Ukraine together with the weakening of the rand also playing a significant role. … [S]harp cost increases … together with the small gain in GVP suggests that horticulture was likely the biggest contributor to the total decline in agricultural GDP for the first quarter of 2023.”

Edited by Creamer Media Reporter



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