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In this article we take a look at the volatile growth rates of the agricultural industry in South Africa as well as take a look at the overall size of the sector in South Africa's economy. While it employs a large number of people in an informal and infrequent basis its overall contribution to the total economy of South Africa is minimal yet crucial
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Agriculture is volatile and small but crucial for South Africa
Agriculture is one of those industries that will never contribute a significant chunk to South Africa's overall economy but it is critical to South Africa as it is the main source of the country's food supply and therefore its food security. If the agricultural sector in South Africa were to collapse all basic foods will have to be imported which will lead to far higher costs. This will have a significant impact on South Africa as a whole but especially on the poor as they spend a far greater portion of their income on food than the middle class and the rich.
The problem with agriculture is the fact that it is to a large extent dependent on the mood of mother nature, which is extremely volatile and temperamental. South Africa is prone to suffer significant droughts which is usually followed by above normal rainy periods. This is because of the location of South Africa and the impact that el-nino and la-nina effects has on our country.
Due to the agricultural sector in South Africa being largely dependent on the weather it is by its very nature a volatile industry. The graphic below shows the quarter on quarter annualized growth rates in agriculture as well as the year on year (annual) growth rates in agriculture
The problem with agriculture is the fact that it is to a large extent dependent on the mood of mother nature, which is extremely volatile and temperamental. South Africa is prone to suffer significant droughts which is usually followed by above normal rainy periods. This is because of the location of South Africa and the impact that el-nino and la-nina effects has on our country.
Due to the agricultural sector in South Africa being largely dependent on the weather it is by its very nature a volatile industry. The graphic below shows the quarter on quarter annualized growth rates in agriculture as well as the year on year (annual) growth rates in agriculture
The blue columns above shows the quarter on quarter annaulised changes in the gross domestic product (GDP) of agriculture in South Africa from the start of 2016. The red graphic shows the year on year changes in the gross domestic product of agriculture in South Africa. And both measures shows that there is significant volatility in the movements of the economic contribution made by the agricultural sector. At has both significant periods of decline as well as significant growth.
The summary below shows the overall contribution of the Agricultural sector to the South Africa economy:
The summary below shows the overall contribution of the Agricultural sector to the South Africa economy:
- 2016 Q1: 2.6%
- 2017 Q1: 2.7%
- 2018 Q1: 2.6%
- 2019 Q1: 2.3%
- 2019 Q3: 2.8%
And while the agricultural sector remains a relatively small contributor to South Africa's total economic activity it does provide South Africa with most of its basic food needs as well as supplying thousands with jobs, even if a lot of it is part time employment. According to the quarterly labour force survey during the period July to September 2019 there were 880 000 people that were employed or that worked in the agricultural sector in South Africa, of which 269 000 (or 29.7% were females and 70.3% were males). In the first quarter of 2019 (January to March 2016) there were 869 000 employed in the agricultural sector in South Africa. So over the period of almost 4 years employment in the sector increased by just 1.27%.
The summary below shows in which the 880 000 people employed in agriculture during the 3d quarter of 2019 were working:
The summary below shows in which the 880 000 people employed in agriculture during the 3d quarter of 2019 were working:
- Western Cape: 215 000
- Eastern Cape: 96 000
- Northern Cape: 33 000
- Free State: 56 000
- KwaZulu-Natal: 143 000
- North West: 59 000
- Gauteng: 40 000
- Mplumalanga: 98 000
- Limpopo: 140 000