Agriculture outlook positive, says Gordhan

Agriculture output is expected to increase as South Africa recovers from a crippling drought, which National Treasury is hoping will boost job creation in the sector.

According to the 2017 budget review tabled by Finance Minister Pravin Gordhan on Wednesday, two successive seasons of drought had led output falling for seven consecutive quarters.

The outlook had, however, changed, as rains returned to parts of the country.

According to a table in the review illustrating the relationship between demand, output and employment, “for every R1-million of extra output in agriculture, the economy creates 3.9 unskilled jobs and one skilled job, and overall output in the economy increases by R1.7-million”.

Although the outlook on agriculture was mostly positive, treasury explained the importance of the containment of the current spread of fall armyworms, which if overlooked, could threaten cereal crop production.

Over the next three years, government would spend more than R5.5-billion on comprehensive agricultural support programme conditional grants to provide around 435 000 subsistence and smallholder farmers with equipment, fencing, fertilisers, seedlings, improved extension services and repairs to flood-damaged infrastructure.

Gordhan said: “Expenditure is expected to grow to R29.8-billion by the 2019/20 financial year, at an average annual rate of 4.7%, accounting for 1.9% of total government spending over the Medium Term Expenditure Framework period.”