The release by Statistics South Africa (Stats SA) of better-than-expected quarter one (Q1) Gross Domestic Product (GDP) results has been widely welcomed, with the economy having accelerated at an annualised rate of 4.6% (1.1% quarterly). This is better than the 2.5%-3% expected by many economists.
And while eight industries recorded positive growth in the first three months of the year, with the star performers being finance, mining and trade industries, achieving upticks of 7%, 18.1%, and 6.2% respectively, the agri industry recorded a lacklustre performance.
After the positive 2020 figures, which saw agricultural exports jump by 18.1% compared to 2019 and imports by 6% in value terms, the latest StatsSA results show agricultural GDP shrinking 3.2% and contributing -0.1% to GDP growth.
But there are good reasons. This decrease, says Agri SA, can be attributed mainly to the lower production of field crops and animal products.
“This was to be expected as the first quarter of the year is generally quiet on activity. A great deal of agricultural GDP is concentrated in field crops The planting of summer crops takes place after the first rains of the season, which is around October,” a spokesman points out.
Planting normally continues until January, with harvesting kicking off in May (April for early harvest).
“Similarly, winter crops are planted mainly in the second quarter of the year and crops are limited in size compared to the summer crop. Harvesting usually occurs in the third and fourth quarter of the year. These seasonality factors underpin the lower GDP contribution.” Agri SA believes the second quarter should see a rebound, particularly anchored on the positive yield estimates for summer crops.
Animal production has also been negatively affected by the continuing drought in some pockets of the country and diseases in other parts. “However, as herd rebuilding continues, a positive outcome can be expected during the latter part of the year.”