Western Cape Drought Weighs On Broader Economy

When it comes to agriculture, Western Cape is essential – not only because of its production of fine wines, but also for its contribution to South Africa’s agricultural labour market and the broader economy.
The province is a leading employer in primary agriculture, commanding a share of 20 percent of the country’s total agricultural labour force in the third quarter of 2017.
It is thus clear that when the province’s agriculture encounters headwinds, a lot will be at stake; the current unrelenting drought is no exception.
Of the 25,000 job cuts in South Africa’s agricultural sector in the third quarter, about 84 percent were in Western Cape.
There was reduced agricultural activity in the summer crop production areas at that time of the year.
Overall, South Africa’s total agricultural labour force was estimated at 810,000 jobs, which is the lowest since the fourth quarter of 2014.
South Africa’s agricultural labour market was relatively more vibrant in the 2015/16 season, despite the El Niño-induced drought in many parts of the country at the time.
This is because Western Cape was not hit as hard as the other provinces had been, and was able to continue absorbing labour.
In terms of the overall agricultural economy, the sector performed robustly in the past three quarters of 2017, supported by a recovery in summer crop production following several seasons of drought in some areas, as well as the low base effect.
Western Cape’s horticultural sector also performed relatively well in 2017, contributing to the good performance of the sector.

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