Western Cape agri shows resilience despite Covid-19

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Key highlights of the outlooks

Agriculture was the only sector that positively contributed to gross domestic product (GDP) growth in the second quarter. Consequently, the sector contributed to the province’s resilience against the Covid-19 pandemic.

The Western Cape has an advantage in agriculture and agro-processing products compared to the rest of the country. The agricultural subsectors, for example, food processing, beverages and tobacco, textiles and clothing leather, form a large share of exports in the Western Cape when compared to the rest of the country. Still, Covid-19 lockdown measures affected agricultural exports this year.

The most affected agricultural exports between January and June this year compared to the same period last year were cuttlefish and squid (-41%), cane or beet sugar and chemically pure sucrose (-39%), cider, perry, mead and other beverages (-35%), and beer made from malt (-35%).

Agriculture and agro-processed products comprise a large share of the Western Cape exports, which constituted 40,1% of all exports from the province in 2019.

In the same period, the province’s share contribution to national exports of agriculture products was 84% for table grapes, 60% for oranges, 87% for bottled wine, 84% for apples, 79% for soft citrus, 91% for pears, 49% for lemons, 95% for bulk wine, 99% for blueberries and 56% for grapefruit.

Western Cape agri sector will continue to grow

The agricultural sector is expected to grow by 14,7% in 2020 and contract by 7,2% in 2021. For 2020, agricultural jobs in the Western Cape are expected to increase by 4 680, which is a 2,2% growth rate with 2019 as a baseline year.

The annual investment (gross fixed capital formation) in the Western Cape agricultural sector for the period 2015 to 2019 showed a positive average contribution of 28,8%.

The Cape Winelands district accounts for 3,2% of the sector’s employment, followed by the West Coast district at 2,7% and Cape Metro region at 1,7%. The data is encouraging and clearly supports the view that agriculture will lead the economic recovery.

The Western Cape Government believes in evidence-based practice. It will therefore use the findings of the PERO and MERO to map the path to economic recovery and create jobs and dignity for the people of the Western Cape.