Farming offers hope to troubled SA economy


Grape fields in South Africa

JOHANNESBURG, (CAJ News) THE resurgent agricultural sector is providing solace to South Africa’s depressed economy.

October is a busy period in the sector locally, as plantings for the 2021/2022 summer crop season begin.

The staple maize, sunflower seed, soybeans, sorghum, peanuts, dry beans, and a range of vegetables and fruit are to be planted.

The Agricultural Business Chamber (Agbiz) noted the weather outlook was favourable, with prospects of a weak La Niña, which means South Africa could see above-normal rainfall over various regions of the country.

Agbiz said the large tractor sales prior to the planting season signaled that farmers were encouraged by the prospects of another season of good weather.

Wandile Sihlobo, Agbiz economist, said farmers were bullish about their farming decisions.

“This is spurred by large harvests in the 2020/2021 production season, their (farmers’) improved finances, combined with higher commodity prices,” Sihlobo said.

Recent data from the South African Agricultural Machinery Association show that tractor sales were up 56 percent year-on-year (y/y) in August 2021, with 724 units sold.

Total tractor sales for the first eight months of 2021 were already 30 percent ahead of the corresponding period in 2020, with 4 658 units sold.

“Notably, 2020 was also a good year for tractor sales in SA (South Africa), so surpassing it is a testament to agriculture’s growing momentum in 2021,” Sihlobo said.

Favourable rainfall and expansion in area plantings of various field crops spurred agricultural production in 2020/21.

Major grains such as maize and soybeans saw production reaching 16,3-million and 1,9-million tonnes, respectively.

This is the second-largest harvest yet in maize and a record harvest in soybeans.

The South African Wine Industry Information and Systems forecast the 2021 wine grape crop at 1,5 million tonnes, 9 percent more than the 2020 harvest.

The Citrus Growers’ Association projects record exports of 163 million cartons in 2021, up from 146 million cartons in 2020.

The Bureau for Food and Agricultural Policy projects a 7,6 percent y/y expansion in South Africa’s agricultural gross value added.

Jobs in the sector also rebounded in the second quarter of 2021 to 862 000 (up 8 percent y/y).

Agbiz expects employment to remain at relatively firm levels around the medium average of 852 000. This in a country where unemployment has hit a record 34,4 percent.

“We have had a fair share of depressing news from various sectors of the economy, but the light that agriculture presents deserves some attention,” Sihlopo stated.

– CAJ News



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