Port Elizabeth and surroundings have a Mediterranean climate that enables growth of a diverse agricultural economy with more than 20 different products and crops ranging from citrus and deciduous fruits, dairy, vegetables, ostrich products, poultry, wool and mohair, among others. The Eastern Cape Provincial Government, as part of its Provincial Growth and Development Plan (PGDP), has identified agriculture as an economic growth sector with a large-scale investment potential which could contribute significantly to economic diversification and job creation. According to DAFF, the Eastern Cape Province produces 21% of South Africa’s cattle, 28% of its sheep and 46% of its goats. Successful crops grown in the Eastern Cape include pineapples, tea, citrus fruit, tomatoes and chicory. Opportunities that the CDC would like to pursue are in processing and distribution. Agro-processing is the processing, preservation and preparation of agricultural production for intermediate and final consumption.
The South African government has identified the agro-processing industry as a vital part of development that has a potential to create sustainable employment up and down stream and also through integration with other sectors, such as the green economy. The agro-processing industry has backward linkages with agriculture and rural development, thus possibilities exist of alleviating poverty in the rural poor communities of South Africa. The agro-processing sector is particularly well placed for scaling up through leveraging market growth and associated upgrading of supply capacity and capabilities..
Agro-processing is a diverse industry with sub-sectors that include food processing, beverages, aquaculture, biofuels and medicinal applications. In 2014, the food processing sub-sector was the largest manufacturing sector in employment terms, with approximately 252,189 employees. This figure could be in excess of a million jobs if up-stream (primary) agriculture is included. In economic terms the statistical analysis of the agro-processing sector contributed R77.8 bn to the GDP (21% of GDP in manufacturing) and 19% towards employment in 2014, through the food-processing and beverage manufacturing sub-sectors (IPAP 2016).
The country possesses competitive advantage in a number of fruit and beverage sub-sectors that – if fully exploited – would place South Africa among the top 10 export producers in high-value agricultural products. The products from subsectors such as high-quality wines, indigenous Rooibos and Honeybush tea, and certain fruits are highly sought after in export markets. The global market has also seen substantial growth in the trade of farmed fish and related products.
As natural fish resources continue to decline and demand grows, the viability of farming a range of fish
species has grown. Aquaculture is the fastest-growing food production sector in the world, growing at an annual rate of 8-10% per annum for the last two decades and outstripping livestock three to fold, while South Africa’s sector has grown at only 3% annually. The CDC has identified 440 Ha for land-based aquaculture that could create 3,000 jobs and contribute R2.8 billion to the GDP of the country. Species that has been earmarked for production in Coega IDZ include abalone, finfish, seaweed, Tillapia, trout and oysters
The CDC would continue to pursue opportunities in the agro-processing and aqua farming industries that will play an important role in creating jobs, alleviating poverty and reducing hunger, especially within the Eastern Cape.
For investors who wish to take advantage of opportunities in the agriculture sector, please contact our expert in the agriculture sector, Dr Keith du Plessis on:
Telephone: +27 41 403 0400 / 086 102 6342
Fax: +27 41 403 0401