Economic review for 12 months that ended on 30 June 2000

Gross farm income from all agricultural products for the year that ended on 30 June 2000 is estimated to be 3,0% lower than that of the previous year. Gross farm income from field crops decreased by 18,1%, while the income from horticultural products increased by 3,3% and that from animal products by 2,8%.

Expenditure on intermediate goods and services increased by 11,5%, as against an increase of 6,1% the previous year. Farm feed remained the biggest expenditure item, accounting for 23,7% of total expenditure, followed by 14,1% for maintenance and repairs, 11,8% for fuel and 8,9% for fertilisers. The decrease of 3,0% in gross farm income together with an increase of 11,5% in intermediate expenditure resulted in a decrease of 17,3% in the gross margin.

Net farm income decreased by 53,4% as a result of an increase in factor payments such as labour, rent and interest, an increase in intermediate input prices and the decrease in gross farm income. This also contributed to a decrease of 43,5% in the cash flow of farmers.

Prices received by farmers for agricultural products increased by 3,4%, while prices paid by farmers for inputs increased by 9,5%, causing the terms of trade to decrease from 0,841 to 0,794. Prices of field crops increased by 2,5%, mainly because of increases in the prices of maize and wheat. On average, prices of horticultural products remained unchanged. The prices of fresh fruit decreased by 3,3%, while the prices of vegetables increased by 2,4%. Producer prices of animal products increased by 6,0%. The largest increases were for pastoral products and slaughter stock. The prices paid for farming requisites increased because of the relatively large increases in the prices of trucks, maintenance and repairs, and fuel.

Consumer prices of all items increased by 3,2%, compared to an increase of 5,9% for food items.

Volume of agricultural production

During 1999/2000, the estimated volume of agricultural production was 3,6% higher than in 1998/99. The volume of field crop production increased by 6,0% compared to the previous year and that of horticultural crops by 10,8%, while animal production decreased by 1,5%.

Gross value of agricultural production

The total gross value of agricultural production (total production at net producer prices) for 1999/2000 is estimated at R45 102 million (R45 441 million)—a decrease of 0,7%. This decrease can mainly be attributed to a decrease in the gross value of field crops.

The gross value of animal products, field crops and horticultural products respectively contributed 44,4, 29,3 and 26,3% to the total gross value of agricultural production. Broilers slaughtered made the largest contribution to the gross value of agricultural production with 18,0%, followed by maize with 11,4% and cattle and calves slaughtered with 8,2%.

Farm income

The gross income of producers (that part of production that was marketed, at net producer prices) for the year ended 30 June 2000 amounted to R41 577 million (R42 874 million)—a decrease of 3,0%. This decrease can mainly be attributed to a lower income from field crops.

The gross income from field crops decreased by 18,1%, from R12 181 million to R9 972 million, for the year ended 30 June 2000. This was mainly the result of a decrease in the income from sunflower seed, cotton and maize by 68,0, 40,7 and 19,7% respectively. The decrease in maize can mainly be attributed to the fact that the bulk of the maize crop was harvested after 30 June as a result of very wet conditions. The income from wheat increased by 16,0%, mainly owing to a larger crop.

The gross income from horticultural products increased by 3,3% to R11 913 million (R11 530 million).

The income from citrus fruit increased by 0,8% to R1 990 million (R1 974 million) and that of subtropical fruit by 2,3% to R667 million (R652 million). The income from deciduous and other summer fruit was 4,0% higher than during the previous season and amounted to R3 166 million (R3 045 million).

The income from vegetables amounted to R3 784 million (R3 510 million) which represents an increase of 7,8%. Potatoes, which maintained a contribution of approximately 40,0% to the gross income from vegetables, increased by 3,1%, from R1 468 million in 1998/99 to R1 513 million in 1999/2000.

The gross income from animal products was 2,8% higher and amounted to R19 692 million (R19 163 million). Producers earned R3 718 million (R3 261 million) from the slaughtering of cattle and calves—an increase of 14,0%. The producer price of beef increased by 6,5%. The income from the slaughtering of sheep increased by 11,5% and amounted to R1 055 million compared to the previous year (R946 million). The price of mutton increased by 7,6%. Income from poultry and egg production amounted to R9 486 million (R9 697 million)—a decrease of 2,2% from the previous year.

The net farm income (after the deduction of all production expenditures, excluding investment in capital goods) decreased by 53,4% during 1999/2000 and amounted to R3 557 million compared to the previous year (R7 629 million). Depreciation increased by 4,8% during 1999/2000. Payments for salaries and wages as well as interest, which represent 19,3 and 12,5% of the total farm cost, amounted to R7 381 million respectively.

Expenditure on intermediate goods and services

Expenditure on intermediate goods and services (inputs used in the production process) increased to an estimated R23 678 million (R21 228 million)—an increase of 11,5%. The expenditure on fuel showed a significant increase of 20,6% to R2 781 million compared to a slight increase of 1,5% during 1998/99. In the case of farm feeds and maintenance and repairs of machinery and implements, expenditure increased by 14,0% to R5 607 million and 13,3% to R3 341 million respectively. Expenditure on fertilisers increased by 4,0% to R2 098 million and packing material by 3,6% to R1 776 million. The expenditure on dips and sprays increased by 5,8% to R2 240 million.

Producer prices

Producer prices of agricultural products increased on average by 3,4% from 1998/99 to 1999/2000, compared to a decrease of 0,3% in the previous year.

Producer prices of field crops were 2,5% higher in 1999/2000 than during 1998/99. The prices of maize, wheat, dried beans and hay increased by 7,6, 18, 2,4, and 3,0% respectively, while the prices of oilseeds, cotton, tobacco and sugar-cane decreased by 15,2, 11,9, 16,2 and 3,3% respectively.

Producer prices of horticultural products remained unchanged. The prices of fresh fruit decreased by 3,3%, while prices of vegetables increased by 4,2% and that of viticulture remained unchanged.

Producer prices of animal products were 6,0% higher in 1999/2000 than in 1998/99. Prices of dairy, pastoral products, poultry, and slaughter stock increased by 5,0, 26,7, 4,0 and 7,7% respectively.

Prices of farming requisites

Prices of farming requisites increased by 9,5% during 1999/2000, compared to an increase of 4,8% during 1998/99. 

The price index of machinery and implements increased by 9,1%, that of requisites for fixed improvements by 8,2% and the prices of intermediate goods and services by 9,6%. Prices of trucks and implements showed increases of 14,0 and 6,4% respectively, as against increases of 6,6 and 7,8% during the previous year. Prices of tractors increased by 8,7%, compared to an increase of 13,3% in the previous year.

Terms of trade in agriculture

The terms of trade indicate the extent to which producer prices in agriculture keep pace with the prices of farming requisites.

The terms of trade in agriculture weakened from 0,841 in 1998/99 to 0,794 in 1999/2000. The terms of trade for field crops weakened by 6,3%, from 0,820 in 1998/99 to 0,768 in 1999/2000. In the case of horticultural and animal production, the terms of trade weakened from 0,923 to 0,843 and from 0,811 to 0,786 respectively.

Contribution of agriculture to value added at basic prices

The value added is the total value of output less the value of intermediate consumption.

The contribution of agriculture, fishing and forestry to value added for the year ended 31 December 1999 is estimated at R26 635 million. This represents 3,7% of total value added to the economy.

*  Figures for agriculture (excluding forestry and fisheries) have not been released by Stats SA yet at the time of going to press