South Africa’s agriculture sector is likely to have a downbeat start to 2023 as the gross agricultural value-added figures for 2022, which will be released in March, will probably show a small contraction.
This would be a shift from two consecutive years of solid growth, with the sector expanding by 14,9% year-on-year (y/y) in 2020 and 8,8% y/y in 2021. Shallow declines in the harvests of major crops such as maize, production challenges in the sugar industry, trade friction in the fruit, vegetable, beef and wool industries, and widespread outbreaks of foot-and-mouth disease weighed on the sector’s performance last year.
In a slightly more technical sense, the strong growth of the past two years has created an exceptionally high base, setting the scene for some pullback.
THE BIG ISSUES
This year, some of the challenges that dominated the agricultural calendar in 2022 will again surface. Here are some that I believe will be part of discussions, especially in the first half of this year:
The need for expansion of agricultural export markets
South Africa’s agriculture sector exports about half of its products in value terms. Organised agriculture groups are consequently pushing to expand export markets to accommodate the growing volumes of produce.
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