Cape Town - The damage caused by fires and drought has been estimated at R720 million in the Western Cape’s wine and fruit industries.
MEC of Economic Opportunities Alan Winde believes the impact on the entire agriculture sector could run into the billions.
Beverley Schäfer, the chairwoman of the Western Cape Legislature’s standing committee on economic opportunities, tourism and agriculture, said the province’s wine and fruit industries have suffered losses far greater than anticipated.
“The wine industry has suffered damage to the tune of R20m thus far, as around 82ha of vineyards have been lost due to drought and fires,” she said.
The standing committee was being briefed on the impact of drought and fires on agriculture in the province, with the industries reporting losses amounting to R720m.
Schäfer added the impact of the fires extended beyond the damage to vineyards and orchards.
“The international demand for South African wines has declined due to fears of smoke damage.
“This despite the fact that local winemakers have the facilities to treat the grape for smoke damage, thus eradicating the impact on the flavour.
“It is critical that the government communicates this to international consumers,” she stressed.
The wine producers and cellars organisation VinPro, said the country’s wine industry had seen a 15 percent drop in wine production last year. While wine producers have managed to keep the increase in the cost of wine production at 8 percent, the
committee heard that this would most likely rise by between 10 and 15 percent this year.
The drop in production and rise in production cost – added to the damage caused by fires and drought – were expected to result in further losses for the sector, which employs 300 000 people nationally and contributes 3.5 percent to the national GDP.
Fruit grower trade body Hortgro advised the committee that the R720m loss would have a devastating humanitarian impact as the most vulnerable would see food prices soar.
The committee was told that despite the grave losses suffered, there would not be an immediate threat to jobs.
Winde painted a grim picture, saying following the finalisation of a recent departmental assessment, the total loss to the industry would be between 5 and 10 percent of normal production output.
“Our agricultural industry is worth around R50 billion and we are looking at around R2bn to R4bn of what the impact could ultimately be on the industry,” he said.
Stressing that the figures were merely an estimate, Winde said some farms could yield smaller crops.
“They will have fewer volumes and smaller crops, because the heat and the drought mean the grapes are smaller,” he said.
Winde said each of the 90 agricultural commodities in the province, from grain to citrus, would be affected.
He said he was also concerned about the knock-on effects on the economies of rural towns.
Winde said the fire damage was localised to the Stellenbosch region.
“About R240 000 per hectare was lost and it would take years to get it back to standard.”
Cape Argus