By Mbali Hlophe
Johannesburg - South Africa’s agricultural sector has shown strong growth over the last decade. In a recent report by Statistics South Africa (StatsSA), the gross domestic product (GDP) grew by 1.6% in the third quarter of 2022, of which 0.5% of the 1.6% was a contribution by the agricultural sector.
Similarly, the agriculture sector recorded a growth of 19.2% for the third quarter of 2022. If the growth from 2020 to 2022 is considered, the agriculture sector recorded growth in 8 of the 11 quarters.
The agricultural sector outpaced the primary economic sectors, such as mining, manufacturing, and trade, and recorded growth in most quarters.
For example, in the second quarter of 2020, during the lockdown when the rest of the economy contracted by 51.0%, agriculture showed strong growth of 15.1%. Similarly, the agricultural sector contributed positively towards the GDP growth in almost all quarters since the beginning of 2020. Agriculture stubbornly defied the Covid-19 pandemic economic force of gravity.
The Covid-19 pandemic had close to a catastrophic impact on almost all sectors of the global economy. The global economy and markets contracted because of the disruptions caused by the worldwide lockdown. Countries in sub-Saharan Africa were not isolated from this negative global economic impact of the Covid-19 crisis.
Among many sectors, the food and the agriculture sector were the worst hit following the immediate lockdown and market shutdowns. However, stability was prevalent from the supply side.
A recent study by the World Bank (2022) shows that agriculture continued to be an important sector for economic growth, and in some countries in sub-Saharan Africa, the number of households involved in agricultural activities has increased since the levels prior to the pandemic.
The agricultural sector in most countries has shown a high level of resilience. Its positive contribution to South Africa’s GDP is evident, and the industry quickly adapted during the period of disruption in the global economy.
Furthermore, the sector managed to sail against disruptions in the South African economy, such as the floods in KwaZulu-Natal (KZN), and disruptions in the external economy, such as the Ukraine conflict.
The agriculture value chain is replete with economic opportunities.
When it comes to opportunities and contribution towards reducing unemployment, the sector has a significant role to play, especially for the rural, township, informal settlement and hostel (TISH) dwellers.
During the last decade, the agricultural sector contributed significantly towards employment creation in South Africa. The agricultural sector remains one of the job creation drivers, at a time when unemployment levels are worsening in South Africa. But the participation of the previously disadvantaged across the agricultural value chain remains a huge gap that needs to be closed.
Evidence suggests that farms and agro-processors created employment during 2020 and 2021.
In this context, the Quarterly Labour Force Survey (2022) showed that the number of employed persons in the agricultural sector increased from July to September 2020, from 808 000 to 873 000. The agricultural sector thus could create jobs in South Africa during a period when the rest of the economy showed increased levels of unemployment.
Jobs and employment should not be seen as the only existing opportunities in the sector; however, participation in the agri-economy is critical, especially for the previously disadvantaged, and small-scale farmers.
When people think about agriculture, they tend to think about farmers growing the fields, and looking after crops or livestock. The sector offers numerous opportunities in logistics, plant sciences, technology, the food sector and more
The large food and drink sectors rest on the back of the farming and agricultural sector, presenting opportunities for everyone between the farm and the shops. The growing population means more demand for food and drink.
Agriculture is a vital source of food for communities. And having a stable food supply can help to protect against food shortages and price spikes. It will further help to reduce poverty and malnutrition and improve overall economic stability.
More opportunities open up for small-scale farmers and commercial farmers with every challenge.
As an industry that depends on natural resources, future food production will depend on how well these resources are conserved and used.
Solving the problem of urban land expansion, competition for water demand with other sectors, and black farmer support will go a long way in mainstreaming the inclusive participation of black people in the industry.
In the long term, demand for agriculture is only going to rise. The positive economic performance reported recently is testimony to that. What remains critical is that everyone gets a fair and equitable chance to participate and exploit the economic opportunities this growing industry presents.
Overall, agriculture plays an important role in the economy by providing a stable source of food and income for communities.
- Ms Mbali Hlophe is a member of the Provincial Executive Council for the ANC in Gauteng. She also serves as the MEC for Social Development, Agriculture Rural Development and Environmental Affairs in Gauteng. She writes in her personal capacity.