Agricultural GDP shrinks due to seasonability factors

Agriculture remains a star performer in the economy, but still needs government support.

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Statistics South Africa released the quarter one Gross Domestic Product (GDP) figures for 2021, reflecting that while the economy grew by 4,6% (1,1% quarterly), the agricultural GDP has retreated.

While eight industries recorded positive growth in the first three months of the year, the agricultural sector’s GDP has shrunken by 3,2%. The star performers include the finance, mining and trading industries with upticks of 7,%, 18,1%, and 6,2%, respectively.

“The recent higher commodity prices and increasing global demand gave a good indication before the release that recovery from Covid-19 related impacts could be more pronounced than initially anticipated,” said Agri SA via a statement.

“Worth noting, and further adding impetus to the positive GDP number, was household consumption that jumped 4,7% in the same period under review. This comes a week after the country’s unemployment rate rose to a record 32,6%.”

Lower field crop production

This decrease in the agricultural sector’s GDP was attributed mainly to the lower production of field crops and animal products.

“This was to be expected as the first quarter of the year is generally quiet on activity. A great deal of agricultural GDP is concentrated in field crops The planting of summer crops, planting takes place after the first rains of the season, which is around October. Planting normally continues until January, with harvesting kicking off in May (April for early harvest),” the organisation added.

Similarly, winter crops are planted mainly in the second quarter of the year and crops are limited in size compared to the summer crop.

Summer crops

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Harvesting usually takes place in the third and fourth quarter of the year.

These seasonality factors contribute the lower GDP contribution. Agri SA predicts, however, that the second quarter should see a rebound, which hinges on the positive yield estimates for summer crops.

“Animal production has also been negatively affected by the continuing drought in some pockets of the country and diseases in some other parts. However, as herd rebuilding continues, a positive outcome can be expected during the latter part of the year.”

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