POLICIES - Agriculture: The Impact of Agriculture on Other Economic Sectors

18.2 - The Impact of Agriculture on Other Economic Sectors
Of further importance to the economy is the linkage effect of the agricultural sector with other sectors.
The secondary importance of the agricultural activity must not be disregarded.
According to the ABSA survey, agricultural purchases and sales expressed as a percentage of gross agricultural income is extremely insightful. It shows that industries benefit most from agricultural spending [47.9% of gross income].
The second single largest benefit flowing from the agricultural sector goes to labour, with wages making up no less than 20.2% of gross agricultural income spending, according to records provided by the Central Statistics Services. It is clear from the above that a large part of the industrial sector is dependent on agriculture.
About 25% of our total industrial production sources basic raw material inputs from the agricultural sector.
More than 60% of total gross agricultural production is delivered to the manufacturing sector for further processing.
As provider of employment, the contribution of the agricultural sector is very significant. An estimated 850 000 workers are permanently employed in agriculture. Still, the need for greater levels of mechanization in order to achieve optimal production and the rising cost of labour are the main reasons for job opportunities declining in South Africa.
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POLICIES - Agriculture: Agricultural Production

18.1 - Agricultural Production
• The growth in population, especially in the last five decades, has outstripped the increase in real agricultural production. This aspect needs serious consideration for the future.
• If we allow the current surplus to decline into a shortfall, the cost to the average South African will be considerable. This situation will result in greater amounts having to be spent on imported agricultural produce.
• An ABSA survey of the agricultural sector highlights the fact that South Africa sells its agricultural produce internationally. These sales are in markets where the levels of agricultural subsidization are substantially higher than in South Africa. This in turn has meant that domestic price increases in agriculture have to be limited in order to remain internationally competitive. South Africans have benefited at the expense of the farming community.
• The ACDP in principle is not in favour of the large-scale granting of subsidies agricultural or otherwise, but wisdom has to be employed in ensuring that the necessary growth be stimulated in the agricultural sector.
• The ACDP will endeavour to encourage the necessary growth in output by employing the necessary medium to long-term incentives.
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