The Agriculture sector is central to promoting economic growth, reducing poverty, and improving food security in South Africa. Investing in agriculture is not only one of the most effective strategies to improve food security and promote sustainability, it is also essential to many countries’ economic development. Let DTC develop your Agriculture business plan today!
South Africa has a highly diversified agricultural sector which includes the production of all the major grains (except rice), oil seeds, deciduous and subtropical fruits, sugar, citrus, wine, most vegetables, cattle, dairy, pigs, sheep, broilers, ostriches and eggs. The grain industry (barley, maize, oats, sorghum, and wheat) is one of the largest agricultural industries in South Africa, contributing over 30 % to the total gross value of agricultural production.
South Africa has a highly diversified, market-oriented agricultural economy that extends across various product ranges, including all major grains (except rice), oil seeds, deciduous and subtropical fruits, sugar, citrus, wine, most vegetables, livestock, and a well-developed poultry and egg industry. Value-added activities include the processing and preserving of fruit and vegetables, dairy products, livestock and grain mill products, amongst others.
The outstanding performance of the sector last year – with growth in all four quarters – was in sharp contrast to other sectors of the economy. Stats SA reported growth in agricultural GDP of 5.9% in the fourth quarter of 2020, bringing the overall agricultural GDP growth to 13.1% year-on-year (relative to a 7% economic contraction for the country as a whole). This out performance was underpinned by high levels of agricultural output following favourable production conditions; high commodity prices; strong export demand; and a favourable rand exchange rate. The sector was also classified as an essential service, allowing it to remain operational during the lockdowns.
In pertinence to the sector increasing job creation; the Quarterly Emploment Statistics (QES,Q3:2022) survey released by Statistics South Africa (Stats SA) articulated that total employment in the formal non-agricultural sector increased by 10 000 in the third quarter of 2022, bringing the level of total employment to approximately 10 million.
The agricultural sector in South Africa remains a net exporter, with exportable volumes of numerous commodities growing annually, subject to weather conditions. In 2020, South Africa’s agricultural exports hit $10.2 billion, a 3% increase from the prior year and the second largest level on record. At the same time, agricultural imports fell 8%, leading to a 26% annual increase in the agricultural trade surplus, which widened to $4.3 billion in 2020. The top 10 export products included citrus, grapes, wine, apples and pears, maize, nuts, sugar, wool and fruit juices, with Africa and Europe serving as the largest markets for SA agricultural exports (followed by Asia).
Citrus, as a sub-sector, experienced a noteworthy increase in demand due to the pandemic-related demand for Vitamin C. Citrus exports hit a record high in 2020, with South Africa securing its position as the second-largest exporter of fresh citrus in the world, after Spain. This follows a period of citrus production growth in response to a spike in international demand (especially for soft citrus and lemons) and the attractive investment returns and profit margins.
With this informative background on the sector, let us, at DTC, develop your Agriculture business plan to reap the benefits.
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