How to unlock SA’s agriculture potential post-COVID-19

Industries across the South African economy have been battered by the COVID-19 pandemic. The South African economy recorded its third consecutive quarter of economic decline, falling by 2 per cent in the first quarter of 2020. However, the one sector that has outperformed other sectors is agriculture. Paul Makube, Senior Agricultural Economist at FNB Agri-business, shed light on the impressive performance of the Agriculture Sector in the first quarter of 2020 during a recent interview with CNBC Africa. Makube attributed the stellar performance of the sector to favorable production conditions in South Africa, particularly in the summer grain areas. The sector experienced a seven percent year-on-year increase, with staple foods like maize increasing by 13 percent year-on-year. The demand for South Africa's produce has also been strong, especially from neighboring countries and regions like East Africa, where locust infestations devastated crops. Makube highlighted that a weaker exchange rate further boosted exports, particularly for fruits and maize, leading to impressive export revenues. Looking ahead, Makube expressed optimism for the continued success of the Agriculture Sector. The second quarter showcased high activity in harvesting and planting winter grain crops, particularly in the Western Cape, where improved production conditions have set a positive tone for the upcoming harvest. Despite the challenges posed by COVID-19, Makube remains confident in the sector's resilience and its potential for sustained growth in the coming quarters. Weather conditions, a crucial factor in agricultural production, are forecasted to be favorable, signaling another promising season for South African agriculture. With neutral to La Nina weather conditions expected, farmers can anticipate bumper harvests and increased productivity across crops and livestock. Makube emphasized the need for continued investment in the agriculture sector to fully unlock its potential. While the sector currently contributes around 2.5 percent to South Africa's GDP, its indirect impact through forward and backward linkages extends to more than 10 percent of the economy. Makube highlighted the importance of infrastructure development, such as ports and railways, to facilitate the smooth export of agricultural products and boost the sector's value chains. As South Africa grapples with economic challenges and rising unemployment rates, the Agriculture Sector presents a valuable opportunity for economic growth and job creation. By supporting and prioritizing the sector, South Africa can leverage its agricultural strength to drive economic recovery and enhance social stability amidst the ongoing crisis.