Research group reports low level of market concentration in SA agriculture

8th October 2021

By: Rebecca Campbell

Creamer Media Senior Deputy Editor

     

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In a recent brief report, the Bureau for Food and Agricultural Policy (BFAP) pointed out that, according to the available data, the agricultural sector was one of the South African economy’s least concentrated sectors. And while agro-processing was much more concentrated than agriculture itself, it was still far from being one of the most concentrated sectors of the economy.

BFAP established market concentration in an economic sector by taking the combined income of the 20 biggest enterprises in that sector and comparing it to the total income of all enterprises in the sector. The data was obtained from industry surveys conducted by Statistics South Africa. The inter-sectoral comparison excluded the key utilities – electricity, gas and water – because of a lack of data.

The bureau established that the level of market concentration in agriculture was 12%, making it, with financial services (also 12%), the least concentrated economic sector of all. This despite the fact the data included corporate producers of eggs, poultry and sugar. Of course, subsectors within the agricultural sector might be more concentrated than the overall sector, and levels of concentration might be increasing.

“Agriculture with its upstream and downstream linkages consists of more than just the input supply industries (fertiliser, seed, agrochemicals, mechanisation services) and the food and beverage sector,” it explained.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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