AGRICULTURE'S CONTRIBUTION TO THE SOUTH AFRICAN ECONOMY

Abstract

Agriculture's contributions to the food supply, foreign currency earnings, provision of employment, supply of raw materials to other sectors and its role as a market and contributor to the gross domestic product (GDP) will be briefly explained, followed by a discussion of the impact made on the economy as a whole by changes in production and prices in the agricultural sector. A review of selected sectoral multipliers concludes this article. Agriculture's percentage share in South Africa's economy is relatively small and is constantly dropping as the latter expands and diversifies. Agriculture's most important contribution is obviously that of providing employment. Each sector is differently affected by changes in agricultural production and prices. Another important consideration is that the overall impact of a change in agricultural production, for example as a result of drought, is almost twice as great as its direct impact, therefore confirming the strong forward and backward linkage of the agricultural sector with other sectors in the South African economy. If the multipliers are taken into account, it is clear that the agricultural industry should enjoy a high priority in the allocation of South Africa's relatively scarce available capital, especially where the provision of employment is an important aim.

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