Better season coming for agricultural sector

The agricultural sector is expected to enter an even better season should predicted weather conditions hold, despite the pandemic, farm attacks and devastating fires on farms in the Free State.

According to the National Treasury’s medium-term budget policy statement issued this week, the industry was the only sector that saw a significant increase in its economy during the first half of this year. The sector’s GDP grew by 28.6% and 15% in the first and second quarters of 2020, respectively.

The net farm income significantly grew by 27.5% year-on-year to R115.67 billion for the period ending June 2020, said senior agricultural economist at FNB Paul Makube.

“We expect a stellar performance in the remaining quarters of 2020 due to a combination of good crop harvest, strong agriculture exports and unseasonably high commodity prices,” Makube said.

The anticipated La Nina climate event, which is characterised by above-average rainfall over the summer months, would improve the financial conditions of the sector, said AgriSA’s agricultural economist, Kulani Siweya.

“If demand holds at elevated levels, commodity prices remain sticky as we have observed of late and the local currency remains favourable, farmers will greatly benefit and for some, may recover from the effects of the recent drought conditions,” he said.

While outrage and protests against farm attacks and murders shook the country in recent weeks, the impact of such attacks on the sector’s finances had not yet been quantified, said Makube. Up to 49 farm murders had been recorded in the 2019-20 financial year. Siweya also confirmed that no data was available that directly attributes the impact of farm murders.

“However, we firmly state that agriculture plays a significant role in terms of sustainable investment in rural development – and once again reach out to encourage coordinated pragmatic investment; to facilitate growth and assist emerging farmers; and to get rural economies on track in order to improve the quality of life of all people in rural areas and bring about prosperity on an inclusive basis.”

But the blazing fires in the Free State, which engulfed large parts of land for several days, did significant damage in terms of loss of feed and animals for farmers.

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