Cape agriculture takes R4.9bn hit due to crisis

THE government has raised red flags over an estimated R4.9 billion fiscal loss and about 30 000 jobs that are at risk as the drought hammers the province’s vital agricultural sector.

Alan Winde, MEC for Economic Development, Tourism, and Agriculture, said he always had positives to speak about in press conferences. “This time around, I find it very difficult to do that,” he said.

The gross value added of the Western Cape economy is estimated to lose R4.9bn and the record wheat losses coupled with the strengthening rand impacting export prices.

“The estimated number of job losses in the sector remains at 30 000. Stats SA jobs data released last month indicated that we had actually gained jobs in the agriculture sector over the last quarter. However, if we compare the past quarter to the same period last year, we see the severe impact that this drought is beginning to have on jobs and livelihoods,” he said.

Winde said the R4.9bn loss represents an average production decline of 20%. He also said the agriculture losses were due to the water restrictions.

“As a result, there has been a significant decline in farm output as farmers prioritise crops with high-profit margins, such as fruit, and abandon vegetables and other crops. There was a reduction of about 1 000 hectares of area planted for both potatoes and onions. Smaller export volumes have resulted in income losses,” Winde said.

He said wheat production losses were at a record high with production decreasing form 1.1 million tons last year to 586 tons this year. “This 47% decline is higher than anticipated and represents a loss of R2.4bn in the grain sector. Other grains such as canola and barley were also affected, resulting in a total loss in the grain sector of R2.8bn,” he said.

The total losses record for grapes were estimated at R787 million, Winde said. He said wine grapes recorded losses of R591m, pome (pears and apples) fruits lost R898m and stone fruit lost R458m.

“The citrus harvest has not commenced yet. Early predictions suggest a modest decline of 7.7%, resulting in losses of R259m. If good rains fall in the next two months, citrus farmers may be able to improve these outcomes,” Winde said.

He also called on new Water and Sanitation Minister Gugile Nkwinti to speed-up augmentation projects.

Johan Boonzaaier from the Bureau for Food and Agricultural Policy said the drought would also have medium to longer term effects on perennial crops that could place agricultural businesses at risk of bankruptcy even after the end of the drought.

“A survey done in 2017 confirmed that 6% of all farmers indicated they would not be able to continue farming if water allocations were cut by 60%,” he said.

Louw Pienaar, agricultural economist at Western Cape Department of Agriculture, said there are 6 653 large-scale commercial farmers and 9 480 emerging farmers. Another 50 000 families have backyard farms and they use municipal water for irrigation, he said.

“The majority won’t be able to produce food during the drought which will impact on their food security,” he said.