Agriculture's recovery phase shows promise for South Africa's GDP growth

The Agriculture sector is breathing a sigh of relief as it reports a commendable performance in its contribution to South Africa’s GDP, even as experts exercise caution over ongoing challenges.

According to Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa (Agbiz), the figures from the second quarter of 2025 indicate a gradual recovery within the sector, albeit more cautiously than expected.

Sihlobo highlighted that the agricultural gross value grew by 2.5% quarter-on-quarter (seasonally adjusted) during the second quarter, following a robust 18.6% growth in the preceding quarter.

This follows an 18.6% quarter-on-quarter growth in the first quarter of the year, primarily due to the improved performance of certain field crops and the horticulture subsectors.

Sihlobo said as the close observers of the sector know, the quarterly data tend to be somewhat volatile, influenced by times of harvest and crop deliveries, amongst other factors.

“It is particularly such an issue that the second-quarter growth figure was much softer compared to the start of the year. We experienced a delay in our summer grain harvest, with more momentum occurring at the start of the third quarter than is typically seen in the second quarter of the year,” he said.

Delays in the summer grain harvest have added a layer of complexity to this growth trajectory. Sihlobo explained, outlining that while an ample supply of summer grains and oilseeds—estimated at 19.55 million tons—was achieved, the harvesting was delayed by around a month and a half due to prolonged summer rains.

To compound the challenges, the sector is still grappling with outbreaks of foot and mouth disease and avian influenza, particularly in the second quarter. With the arrival of vaccines for foot and mouth disease at the end of the second quarter, hopes are flickering for a successful vaccination campaign.

“Farmers moved quickly to take advantage of the tariff pause window in the U.S., which allows for faster harvesting and adds to the general upside in the second quarter performance, although much softer than the start of the year.”

Despite these fluctuations, the overall sentiment within the agriculture sector remains optimistic, even as the Agbiz/IDC Agribusiness Confidence Index (ACI) dipped for the second consecutive quarter, recording a 2-point decrease to 63.

"With all these factors considered, the critical point is that we remain convinced that 2025 will likely be a recovery period for South Africa's agriculture," Sihlobo said.

Francois Rossouw, the CEO of the Southern African Agri Initiative (Saai), said the 0.8% GDP growth recorded in the second quarter was encouraging, particularly because agriculture, forestry, and fishing registered a solid 2.5% increase

“This performance was driven mainly by stronger output in horticulture and animal products, which shows resilience in the sector despite broader pressures on investment and trade,” he said.

Rossouw added that agriculture’s positive contribution was modest in percentage points, but strategically important: it demonstrated how primary production remained a stabilising force when other sectors, such as construction and transport, are under pressure.

“For a country like South Africa, where food security and rural employment are directly tied to farming, this kind of growth is not just about GDP numbers; it reflects the sector’s ongoing ability to support livelihoods and supply chains.”

BUSINESS REPORT