Agricultural sector set to spur significant growth despite the COVID-19 disruptions

Data released last week has revealed that gross value added (GVA) in the agricultural sector expanded by 27.8% quarter on quarter seasonally adjusted and annualised basis, according to Absa Economist Miyelani Maluleke.

“This has added 0.5% to the final GDP growth rate,” said Maluleke.

A Senior Agricultural Economist at FNB Agri-Business, Paul Makube, also commented, saying: “Given the huge harvest outlook and activity in full swing for both the summer and winter grain and oilseed crops as well as citrus, it is expected that the current stellar performance from the sector will spill over into the subsequent quarters despite the COVID-19 disruptions.”

According to economists, a combination of good production conditions, including the weak rand and a rebound in exports, had economists predicting a “recovery year” for the agricultural sector.

“The high contribution of field crops and horticultural products was expected but the performance of animal products came in as a surprise given the foot-and-mouth disease outbreak in November and earlier in January, which resulted in some disruption to trading and auctions,” Makube explained. He continued by saying, “We expected the agricultural sector to show strong growth this year in light of the strong crop harvest expectations, but the Q1 print was a lot higher than our assumption.”

Agricultural Business Chamber Chief Economist, Wandile Sihlobo explained that despite the ongoing challenges presented by the COVID-19 pandemic, South Africa’s recent agricultural economic data has reaffirmed its view that this would be a recovery year for the sector following two consecutive years of declined fortunes.

According to Sihlobo, the pandemic has changed the employment trajectory. “The social distancing regulations introduced at the end of March to prevent the spread of the coronavirus could mean that farmers and agri-businesses might not increase employment, especially of seasonal labour,” he concluded.

Originally written by Mwangi Githahu , IOL

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