South Africa has a market-oriented agricultural economy that is highly diversified and includes the production of most major grains, oilseeds, deciduous and subtropical fruits, sugar, citrus, wine and most vegetables. There is also a competitive amount of livestock production throughout the country, which includes cattle, dairy, hogs, sheep, and even a well-developed poultry and egg industry.
With such activities, value-added services have also emerged in the agri-business sector, which includes slaughtering, processing and preserving of meat; processing and preserving of fruit and vegetables; dairy products; grain mill products; crushing of oilseeds; prepared animal feeds; sugar refining and cocoa, chocolate, and sugar confectionery (amongst other food products).
It’s not surprising that with such a mature industry, the agricultural sector contributed around 10% to South Africa’s total export earnings in 2018 at a value of $11.1 billion. Citrus, wine, table grapes, corn and wool accounted for the largest exports by value. South Africa also exports nuts, sugar, mohair, apples and pears.
The Western Cape’s Agri-Business Footprint
Agri-business is critically important for Africa’s future economic growth. In Cape Town, the sector is one of the most important components of the economy. About 45% of South Africa’s agricultural exports move through the province and the value-added in the sector amounts to more than R14 billion per annum. It certainly does also lead regional exports, second only to the petroleum sector, and lies at the heart of the region’s ability to drive economic development, literally contributing billions to the regional GDP.
Food and beverages exports from Cape Town and the Western Cape accounted for 41% of all provincial exports, valued at R45bn in 2014. This equates to 47% of South Africa’s total R94bn in food and beverage exports. In addition, the region exports 70% of all South African beverages and spirits, and 96% of its wine. The region produces 11 different commodities. Fruit, poultry, eggs, winter grains, viticulture and vegetables comprise more than 75% of total output.
The Western Cape also hosts many businesses that operate at various points along the agri-business supply chain, including inputs, production, processing, marketing and distribution of agricultural, forestry and fishing products.
“We must keep in mind that although agriculture only makes up around 4% of the sector when compared to other industries, the majority of agriculture production, in excess of 70%, gets used by the manufacturing industry and the Western Cape is a key contributor to this.” Dawie Maree (Head of Information and Marketing at FNB Agri Business)
Cape Town Agri-Business Competitive Advantages
The Western Cape is a province that houses an important part of the agri-economy in South Africa, contributing ±24% to the total GDP. But what is significant to note is that agriculture and agro-processing are responsible for 18% of employment opportunities in the province.
It’s not surprising that Cape Town provides a number of unmistakable advantages for investors and enterprises looking for success in agriculture:
- While Cape Town has emerged from the recent drought, the province’s winter rainfall in the Boland and year-round rainfall in the Southern Cape offers a unique climate for a diverse variety of crop mix and year-round production potential.
- The sector also benefits from the excellent road, rail, sea and air transport and cold-chain infrastructure and processing facilities. This is due to the city’s international airport offering air access and the Port of Cape Town’s popularity as a trade route.
- There are also two Cape Town based universities offering advanced programmes in food & cereal science, fruit technology, plant biotechnology and viticulture, offering a pool of talent and news skills for any operator in the sector.
Furthermore, the Western Cape Department of Agriculture also plays a pivotal role in delivering the following broad range of programmes and services:
- Technology, research and development for livestock and crop producers who are operating in the Western Cape.
- Agricultural advice and guidance are provided to the agricultural community and all users of natural resources within the region.
- Agricultural infrastructure for qualifying farmers and enterprises.
- Agricultural training, higher education as well as further education and training to encourage skilled labour in the sector.
- Analytical services at cutting-edge plant pathology as well as water and soil laboratories.
- Diagnostic and analytical services at leading veterinary laboratories.
- Sustainable resource management within the Western Cape.
- Veterinary services to local communities and farmers, as well as enterprises.
- Rural development support and programmes.
These services are delivered through several programmes and initiatives that support agri-business initiatives and activities in Cape Town, as well as the larger province. Contact us for detailed information about getting the support you need to invest in or even grown your own agri-business in the Western Cape!