The damage caused by the ongoing drought on the Western Cape’s agricultural sector is already estimated at R14 billion.

 DECIDUOUS FRUIT AND VEGETABLES

• Both the fruit and vegetable industries have been hard hit by the drought and water restrictions.
• In the Ceres area, the limited water supply resulted in 50% less onions and 80% less potatoes being planted this season. This impacts on food production and wage losses of millions of rands for seasonal workers. The current water supply is allocated to the higher value crops to take them through the drought.
• It may also potentially influence the consumer in price increases.
• The value chain needs raw product from producers and if it can’t be provided, there is a negative domino effect on the total community. Two tomato canning factories in Saldanha Bay ceased operations, resulting in potential job losses between 4 000 to 6 000 job losses in the West Coast town and surrounds.
• The tomato puree factory in Lutzville gave notice that they will not open this season due to no production.
• Hundreds of hectares of citrus trees have been cut back and hundreds of hectares of orchards have been pulled out in an effort to save water.
• Buds trimmed off vines and trees to reduce the water need.
• Indications currently are that the deciduous fruit crops will be 20% smaller.
• Plums: 10% smaller yield expected, peaches and nectarines: 5% – 6% smaller yield expected, apricots: 16% yield expected.
• This means less seasonal workers will be employed for a shorter period of time: an estimated 50 000 seasonal workers will have below than normal income or no income at all.
• Table grapes: indications in the Olifants-region: crop will be 23% smaller than last year.
• The fruit industry is also the largest contributor, by value, to South African agricultural exports. The industry has a high job-multiplier effect and creates thousands of jobs in the value chain.
• The industry is also an important generator of very valuable foreign currency inflows, which is now also under pressure.

WINE GRAPES

• 9% – 18% lower yield expected.
• Impact of every 5% smaller crop is R175 million at farmgate.
• Nursery vines orders for new planting are being cancelled and kept in cold storage.

GRAIN

• Grain yields in the winter producing regions have been far below average.
• Approximately 180 000 tonnes less harvested in the Swartland
• In some areas north of Moorreesburg, producers had no yield at all.
• Producers between the Metropole and Moorreesburg had average to below average yields.
• Between Moorreesburg and the Sandveld: no yields at all and far below average yields.
• Rooi-Karoo area: no yields at all or far below average yields.
• Gross income: R600 – R650 million down.
• Crops 40% to 50% below average in the Metropole region
• Average crop despite little rain in areas in the Overberg, but canola yield was very low with substantial losses for some producers

LIVESTOCK

• The red meat producers in the province have been totally reliant on drought relief since Nov 2015.
• No more roughage is available in the Western Cape.
• Grazing and feed shortages resulted in massive culling, causing local red meat supply to tighten, and meat price increases as a result of the drought-induced supply shortages.
• Up to date 5% of livestock and 22% of sheep herds have been slaughtered in the Western Cape.
• The remaining female animals will not produce the normal calf and lambing percentages because of the lack of feed during mating season.
• The end result is a shortage of lamb and weaners for feedlots.
• Only one third of normal silage may be available, this impacts on the dairy sector.

WATER RESTRICTIONS

• Agriculture’s water supply has been curtailed by between 60% and 87%. In the Lower-Berg River region, producers’ water quota has been depleted.
• No water is available for the after-crop irrigation of orchards and vineyards. This will have an effect on next year’s harvest.
• This puts pressure on the socio-economic and economic wellbeing of the rural areas and the value chain, which in turn puts pressure on the coffers of National Treasury.
• The present work streams on drought and water supply are in a process of quantifying the effect on the economy as a whole.
• Value chain stress regarding inputs from the rural areas will be under severe pressure, as well as financial losses, including tax and VAT.
• We are grateful for the Western Cape Department of Agriculture who realises the severity of the situation and who are doing everything they can to assist both the emerging and commercial farmers in the province.

SOCIO-ECONOMIC

• The agricultural sector is the main employer in rural areas.
• The sector is labour intensive as agriculture employs more people per unit of value created than the mining and manufacturing sectors.
• While this bodes well for job creation in good production years, it also means that the sector will shed more labour per unit decrease in the value of production.
• During drought periods, producers experience constrained cash flows as farm revenues are diminished but operating costs remain high.
• The decline in farm incomes will result directly in lower government tax revenues.
• Government revenue will be negatively affected (albeit indirectly) by the lower profits of business enterprises related to the agricultural sector.
• Government expenditure on drought relief efforts is expected to rise. Significant fiscal provision will have to be made to aid the sector’s recovery.
• Depending on how the National Treasury juggles competing priorities, the drought may significantly increase real government expenditure or have a negative impact on the budget deficit.
• Less people employed can result in:

1. Humanitarian needs in the rural areas.
2. Increasing Metro populations.
3. Rural safety will be compromised with increased criminal activities.
4. Potential health risks.
5. Support to producers, their wives, children, farmworkers and their families in respect of:

– Emotional needs,

– Spiritual well-being,

– Physical needs – food, water, shelter, etc.

In conclusion: we have not yet grasped what tsunami is going to hit us on a variety of issues, and the huge negative effect on the migrating work force that will put further stress on the country’s infrastructure as a whole.

• Support to producers, their wives, children, farmworkers and their families in respect of:
• – Emotional needs to manage their situation
• – Spiritual well being
• – Physical needs – food, water, shelter, etc.