International Journal of Agricultural Economics and Extension ISSN 2329-9797 Vol. 5 (3), pp. 266-276, March, 2017. © International Scholars Journals

Full Length Research Paper

Effects of drought on South African Agriculture

Gary Villiers Tambo1*, Winnie Nadine Els2, Hansie Shaun Neil2, Jonty F. Barnard 3 and Justine Morgan1

1Department of Public Enterprises, University of Pretoria, South Africa.

2National Agricultural Marketing Council, South Africa.

3Department of Agriculture, Forestry and Fisheries, South Africa.

 Email: gary.tambo@yahoo.com

Received 10 February, 2017; Accepted 19 March, 2017

Abstract

South Africa’s agricultural sector is comprised of livestock, field crops and fruit in their order of size, in gross value terms. Agriculture in South Africa accounts for a relatively low share in the economy (3% of gross domestic product - GDP), 6% of employment and about 10% of exports (over R144 billion in 2015). Currently (2015/16), South Africa is experiencing the worst drought in over 100 years, which has resulted in significant effects on agriculture, with eight of the nine provinces being declared disaster areas. The motivation of the study was to understand the severity of drought on agriculture as well the impact on the whole economy (to quantify the economy-wide effects/losses emanating from the drought). To quantify these effects a single-country computable general equilibrium (CGE) model was used. Four scenarios were developed: Impact of field crops losses; impact of livestock losses; impact of aggregated agriculture losses; and impact of aggregated agriculture losses plus drought relief. The analysis shows that all scenarios led to a negative impact on GDP, employment and exports while the drought relief was found to have saved some jobs, albeit not significantly.

Key words: Drought, computable general equilibrium (CGE) model, field crops, livestock and fruit, GEMPACK