Drought has had ‘devastating impact on agriculture sector’ - Treasury

22 February 2017

Pretoria - The nationwide drought has had a devastating effect on the agriculture sector and its value chain, Finance Minister Pravin Gordhan said in his 2017 Budget Speech.

The Department of Agriculture, Forestry and Fisheries expects to spend R644m on infrastructure projects over the medium term, R75.4m of which is allocated for the maintenance and erection of fences along the borders of the Kruger National Park.

Crop and livestock production dropped sharply in the 2016/17 financial year, while maize production fell by 24%, from 7.54 million tonnes in 2015/16 to 5.7 million tonnes in 2016/17.

Higher yields are expected in 2017/18 as the drought is predicted to end.

The finance department and the private sector are working on initiatives to ensure higher agricultural production, efficient water licensing, the facilitation of agricultural exports, and increased efficiency to increase agriculture’s contribution to gross domestic product.

The erection of these fences plays a critical role in the management of the incidence and the spread of foot-and-mouth disease, which has a negative impact on the export of red meat products.

Gordhan however said that the abatement of drought conditions in most of the country is a favourable trend which is expected to contribute to somewhat higher growth in the coming year.

This article first appeared on Fin24, see here.