17 March 2021 – South African agriculture had a “remarkable year” last year, the Bureau for Food and Agricultural Production (BFAP) has reported. This was despite the Covid-19 pandemic, which caused all other sectors of the South African economy (except government services) to contract.
While the national economy as a whole experienced its greatest contraction since at least 1946, amounting to a decline of 7% in gross domestic product (GDP), the agricultural sector experienced an annualised real GDP growth rate of 13.1%. As agriculture had suffered from a decline during 2018 and 2019 (as it had during 2015 and 2016), as a result of drought and animal diseases, a degree of recovery in the sector had been expected for last year.
The BFAP’s modelling framework proved very valuable in handling the economic volatility and exogenous economic shocks experienced during 2020. Halfway through the year the Bureau was able to forecast that the country’s agricultural sector could grow by 13% – which proved to be almost exactly right – based on fundamental agricultural supply and demand drivers.
Total agricultural sector income rose by 7.3% last year. The biggest single driver for this increase was the maize sector, whose income increased by 2.8%. This was followed by the eggs sector, with 1.3% and then by the citrus sector, with 0.9%. The other agricultural sectors which saw their incomes increase last year (in order from greater to the least increases) were wheat, poultry meat, deciduous fruit, sunflower seed, barley, groundnuts, viticulture, soya beans, ostrich products, canola, other livestock, pigs, mohair, dried fruit, oats and sorghum.
However, some sectors within agriculture did experience contraction last year. From the least to the greatest decline, these were tobacco, cattle, milk, hay, vegetables, flowers, sugar cane, cotton and subtropical fruit. These sectors – notably cattle, flowers and tobacco – were directly affected by anti-Covid-19 regulations or by weak demand caused by the effects of the pandemic.
In terms of production volumes, good weather meant that field crops increased by 21% and citrus production rose by 14%. “[The year] 2020 was a good year for the citrus industry with the weak exchange rate and high demand as a result of Covid-19,” stated BFAP in its report. “In the case of citrus, the sector overcame many logistical challenges to export record levels, despite lockdown restrictions.” A number of small sectors also saw large production increases last year, these being oats, groundnuts, ostrich products, canola, mohair and barley. Source (Engineering News)