The survey, conducted by the Agricultural Business Chamber (ABC) and Industrial Development Corporation (IDC), showed that the index was 13% higher than the preceding quarter and 43% higher than the same quarter of the previous year. The index is measured by means of a quarterly survey among agribusinesses across the country, serving all the different agricultural industries.

Compared with last year, turnover and net operating income increased significantly as commodity and other agricultural product prices increased somewhat, as good summer grain harvests were expected in the 2010-11 season, and as exporters adapted to the strong rand and utilised the higher international demand.

Compared with the first quarter of last year, the increase in both turnover and net operating income was significant, but in the short run - comparing the fourth quarter of 2010 with the first in 2011 - income was lower and turnover increased only slightly.

"Even though the recovery is noteworthy, it is evident that the industry is cautious; hence dragging its feet out of the recession," the survey showed.

The probability for increased employment in the agribusiness sector was higher compared with last year, but, as income was not expected to increase in the short run, employment was not expected to either, according to the survey.

Capital investment was unchanged in the short run, and is considered to follow the same trend of expectations as in the case of employment.

Export volumes increased in the short and longer term, mainly due to increased international demand as the global economic recovery continued and global food supplies remained low.

"South African exporters adapted their planning and budgeting according to the persistently strong rand. It is, however, noteworthy that foreign earnings from export products, especially in the case of high value products, remained low. The fruit industry, entering their export period in the second and third quarters, indicated the expectation of significantly lower turnover this year, due to the strong rand," the data showed.

The cost of financing for agribusinesses increased substantially in both the long and short term. Even though interest rates remained relatively low during this period, agribusinesses' reserve funds declined and they were obliged to source more expensive external financing.

Credit was difficult to obtain, especially when taking into consideration the low repayment ability of farmers, hence the high debtor provision for bad debt over the past year.