Here is Sihlobo....

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He says despite the ongoing challenges presented by the Covid-19 pandemic, South Africa’s recent agricultural economic data have reaffirmed the view that this year will be a recovery year for the sector following two consecutive years of declining fortunes. Data released last week by Statistics South Africa, showed gross value added (GVA) in agriculture expanded by 27.8% on a quarter-to-quarter (q/q) basis . 

Together with that primary agricultural employment increased by 3% (27 000 jobs) from the corresponding period last year to 865 000 (albeit down, marginally, by 2% q/q). However, allied industries such as agricultural machinery sales painted a mixed picture. Positively, combine harvester sales were up 14% year-on-year (y/y) in the first quarter.  However, tractor sales were down 17% y/y.

He says nonetheless, across all major sub-sectors of agriculture, including livestock, field crops and horticulture production, activity is a lot more buoyant this year compared to the past two seasons. This is all mainly on the back of favourable weather conditions.

Sihlobo is of the opinion that the second quarter data will continue to paint a robust picture of the agriculture GVA and it is maintained that the country's annual growth forecast will be at 10% y/y. This is compared to -6.9% y/y last year.

He says there is, however, somewhat of a downbeat about the agricultural employment data for the second quarter of the year. The social distancing regulations introduced at the end of March this year to prevent the spread of the coronavirus could mean farmers and agribusinesses might not increase employment, especially of seasonal labour, in the same way they would have done it in the absence of the pandemic. Farm workers may have increased the hours at work to compensate for the reduced workforce in a year where there is a bumper harvest of many crops.

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