South Africa’s agricultural sector has been largely insulated from the Covid-19 shock as it has remained in operations since the onset of the lockdown.
The favourable weather conditions in 2020 meant that agriculture would continue registering positive growth in the near term. We currency forecast 10% y/y growth in South Africa’s gross value-added in 2020. Other analysts such as the Bureau for Food and Agricultural Policy are even more optimistic than us, forecasting a 13% y/y growth.
The underpinning drivers of this growth are across the subsectors. For example, South Africa had its second-largest grains harvested in history in 2020. In horticulture, South Africa has generally had a good fruit harvest in 2020, with citrus exports reaching exported a record 146 million cartons. There was also a broad recovery in deciduous fruit production, with apple and pear production up slightly by 5% y/y and 1% y/y respectively in 2020. We also observed a general recovery in the livestock industry, although this particular subsector was not as robust as other agriculture subsectors.
Of course, some sub-sectors had a more challenging 2020. The agricultural industries such as wine, tobacco, and floriculture experienced a ban on sales at various stages of the lockdown; hence, the broader agriculture optimism is not the reality of these subsectors.
The favourable weather conditions that underpinned higher agricultural output in 2020 have continued into 2021. For example, the data recently released by the Crop Estimates Committee show that South Africa’s 2020/21 summer grain and oilseed production could increase by 5% y/y to 18,5 million tonnes. While this is still the first production estimate for this season, with eight more to follow, this would be the largest on record if it materializes. Moreover, estimates from the South African Wine Industry Information and Systems (SAWIS) and Vinpro suggest that South Africa’s wine grape crop could be somewhat larger than in 2020.
In the fruit industry, there is also optimism for continued growth in output in 2021. The United States Department of Agriculture analysts in Pretoria note that “the production of South African citrus, mainly soft citrus, new orange varieties, lemons and limes is forecast to continue its strong growth in the 2020/21 Marketing Year, based on the increase in area planted, improved yields, high level of new-plantings coming into full production, and the minimal impact of COVID-19 on labour and input supply.”
Essentially, this provides the basis for another year of substantial growth in South Africa’s agriculture. We believe that South Africa’s agriculture gross value-added could expand by 4% y/y in 2021. The base effects contribute to a slightly muted growth rate this year compared to 2020. We will most likely update this data as more production field crop and horticulture production data become available.
South Africa’s agricultural policy view
South Africa’s agricultural sector continues to be viewed as one of the sectors that could stimulate economic growth and employment in rural South Africa. This message is reflected throughout the South African government’s policies, from the
Reconstruction and Development Programme, Accelerated and Shared Growth Initiative, the National Development Plan, and more recently, the Reconstruction and Economic Recovery Plan of President Ramaphosa.
In the near term, South Africa’s government has focused on four broad policy guiding themes to drive inclusive growth, job creation and the eradication of hunger, namely;
Transformation and redistribution;
Addressing inefficiencies;
Agricultural growth and expansion
Coordination of policies and investments for an integrated rural economy
In these focus areas, the participation of women will have to be more pronounced than has been the case in the past. To achieve South Africa’s ambitious growth targets, gender inclusion must be prioritized. We know from research by the University of the Western Cape that men have typically been the primary beneficiaries of land reform. In farm labour, men continue to dominate, with women making up only 31% of the 810 000 people working in agriculture in the last quarter of 2020. There is also a need to improve gender diversity in private sector agriculture, especially in leadership positions.
Boosting gender diversity will have greater benefits for organizations and society, from the enhancement of economic growth to the creation of greater social cohesion, amongst other things.
From a policy perspective, the Beneficiary Selection Criteria for land reform that were first suggested by the Presidential Advisory Panel on land reform is a first step in ensuring gender diversity. The policy proposes that the government should have a bias towards women and youth in its land reform process. In the 700 000 hectares of land that the government is in the process of releasing, we will be able to judge if women and youth are genuinely prioritized.
There is also value to awareness programmes that celebrate women’s success to inspire young women to join the sector rather than agriculture viewed as a “backward men dominated sector”. This Corteva Agriscience session that we are in is one of such sessions, and the government also has some programmes, such as the Female Entrepreneur Awards and the Young Professional Development Programme, amongst others.
