AgriCulture South Africa (Agri SA) and the Agricultural Business Chamber of South Africa (Agbiz) have raised concerns following a sharp decline in South Africa’s agricultural performance in the third quarter of 2024.
This comes after a seasonally adjusted quarter-on-quarter decrease of 28.8%.
In a joint statement today, Agri SA and Agbiz said that a decline was anticipated due to a challenging mid-summer drought; however, the extent of the decrease was surprising.
“We requested the Bureau for Food and Agricultural Policy (BFAP) to conduct a detailed analysis of the data,” they said.
“BFAP, a renowned research organization with extensive knowledge of South African and African agriculture, has been publishing the BFAP Baseline for over twenty years and has recently issued quarterly research briefs on agricultural performance.”
The statement added that BFAP quickly assessed data from StatsSA and detailed accounts from the Department of Agriculture, Land Reform and Rural Development.
“The analysis indicates that the year-to-date (first three quarters of 2024) decline in real agricultural GDP should be between 5-6%, as opposed to the current official decline of 15.5%.”
The statement added that these results had been shared with the Department of Agriculture, which will engage officially with Statistics South Africa.
“To ensure better data quality going forward, the Department of Agriculture, Agri SA, Agbiz, and BFAP will form the "SA’s Agricultural Conditions Assessment Committee" starting January 2025.”
The BFAP report said that the latest GDP estimates for the South African economy, released by StatsSA, have caused considerable surprise among analysts and policymakers.
“The data indicates a notable contraction of 0.3% in real terms for the third quarter of 2024. Contrary to expectations that recent positive developments would drive substantial economic growth, the figures suggest otherwise. The figures also suggest that the agricultural sector experienced a significant decline of 28% in the past quarter and a year-to-date decline of 15.5%, making it the primary contributor to the overall economic contraction.”
Farming association TLU SA general manager, Bennie van Zyl, said that people needed to understand agriculture was a seasonal fluctuating environment.
“This is not surprising to me that we have a specific quarter in the year where we have a huge decline. At the end of the year, we have to look at the whole package,” he said.
“It can be that farmers delivered their produce because of late rain, and they delivered their produce in the next quarter, and that is why we find that growth is higher in the first two quarters and then may be lower in the third quarter.”
Van Zyl added that there were a lot of possible reasons that could have led to the decline.
“I don’t think that it's a big problem that there was a decline in the third quarter because we do have to look at the whole package on a year-on-year basis. We do note the quarterly growth, but at the same time, one quarter may be bad and the next quarter could see an increase in growth.”
Meanwhile, SA Canegrowers said that the 2024 sugarcane harvest was expected to be 10% lower than average, largely due to unusually drier conditions in the majority of KwaZulu-Natal’s growing areas.
“Since 2020, South Africa’s cane growers produce an average of 18 million tons of sugarcane per season. According to SA Canegrowers projections, this season will yield a crop of under 17 million tons.”
Higgins Mdluli, chairman of SA Canegrowers, said that the 2024 season’s reduced yield underscores the increasing vulnerability of the industry to climate pressures, particularly for the rain-fed growers.
“While we are fortunate to still meet local demand, the reduced export potential impacts our growers’ income and the broader economy,” he said.
BUSINESS REPORT