This is according to Agbiz CEO John Purchase, who says the 17,4% decline in the second quarter came after the sector had already declined by around 16% in the first quarter of the year:

"With the 17% drop that we've had now we are technically in the agriculture sector in a recession. But we also know agriculture is very seasonal. It is so that we had a major drought last year and that drought is continuing in many areas. So the drought has played a major role in that drop in GDP and it probably could continue into the third quarter." 

*John Purchase - recession

He says environmental factors such as the drought are probably only partly to blame for the slowdown in agriculture.

"I think it's not just the drought. There are other issues around policy uncertainty, especialy around the land reform, which seems to go around in circles with certain pronouncements that just do not contribute to resolving the issue.

"I think there is uncertainty around certain trade agreements and there is onther uncertainty around the economy. which we have to address." 

*John Purchase - causes

Purchase says uncertainty in the sector in turn has a knock-on effect that causes declines in investments. He says this then results in lower outputs, places jobs under strain and finally results in higher food prices. 

He says it looks like the sector is in for tough times for at least the next year to eighteen months and is advising producers to manage risk very carefully going forward.

Sabrina Dean/OFM News