Western Cape an exception amid signs of recovery in agriculture
Drought is serious enough for the provincial government to declare a disaster area
It is often said the macroeconomic standing of the agricultural sector has diminished, an argument supported by the sector’s declining share of GDP, which fell from 4.2% in 1996 to 2.3% in 2015. However, what is not captured in this narrative is that the value of the agricultural sector has grown 40%, from R50.5bn to R71.4bn over that period. This translates to a fairly modest average annual growth rate of 2.1% over the past two decades, which explains why agriculture’s relative share to the economy has been declining. Agriculture is not becoming insignificant — it is just that other sectors, particularly the services sector, have grown at a faster rate from a lower base. The sector has just come out of one of the worst droughts in history, following two successive years of progressively drier seasons. Consequently, the 2015-16 period resulted in the agricultural sector entering a protracted recession, enduring eight successive quarter-on-quarter GDP declines. The contraction of the...
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