Agricultural efficiency and welfare in South Africa

Figures & data

Figure 1. Two-tier production structure

Table 1: TFP growth estimates for South Africa (1960–1999) (percentage change)

(Vink, 2000)		(Thirtle et al., 2000)		(Hartzenberg & Stuart, 2002)
Period	TFP growth (agriculture)	Period	TFP growth (agriculture)	Period	TFP growth (agriculture)	TFP growth (total)
1960–1980	2.05	1965–1981	2.15	1960–1976	1.00	–1.00
1980–1990	0.96	1981–1991	2.88	1976–1989	1.70	0.00
1980–1996	1.19
1990–1996	1.56			1990–1999	N/A	0.80
1960–1996	1.66
Note: Comparisons should be made with care since time periods, data sources and growth decomposition techniques may differ.

Table 2: Input and output patterns of agricultural and food industries

	Share of gross output (%)		Share of value added (%)			Output composition (%)
	Intermediate inputs	Value added	Capital	Land	Labour	Field crops	Horticulture	Livestock and other animals
Agricultural industries
Agriculture Western Cape	47.62	55.25	47.00	9.68	43.32	6.83	64.58	28.59
Agriculture Northern Cape	41.86	61.43	28.82	8.48	62.71	24.03	35.87	40.10
Agriculture North West	53.65	49.73	38.21	11.47	50.32	37.98	11.01	51.01
Agriculture Free State	58.70	45.23	54.04	14.33	31.64	41.13	14.18	44.68
Agriculture East Cape	46.29	57.67	33.30	9.53	57.17	5.06	31.58	63.36
Agriculture KwaZulu-Natal	48.03	55.48	33.36	10.08	56.56	33.08	16.61	50.32
Agriculture Mpumalanga	55.45	48.04	58.23	13.77	28.00	29.03	39.68	31.29
Agriculture Limpopo	48.09	55.06	41.50	7.45	51.05	12.64	64.05	23.31
Agriculture Gauteng	58.64	45.59	58.42	14.47	27.11	9.85	22.69	67.46
Agricultural industries (values – R million)	31 032	31 919	14 035	3456	14 427	13 179	21 331	24 267
Food industries
Meat	96.76	3.91	29.82		70.18
Fish	82.19	17.93	64.62		35.38
Fruit	83.01	17.62	48.04		51.96
Oil	88.00	12.81	60.10		39.90
Dairy	87.09	13.30	39.73		60.27
Grain mills	82.63	17.84	53.65		46.35
Animal feed	87.03	13.81	43.98		56.02
Bakeries	80.52	19.74	30.68		69.32
Sugar	85.59	14.79	80.41		19.59
Other food	74.74	25.76	56.52		43.48
Beverages and tobacco	73.42	25.91	66.56		33.44
Food industries (values – R million)	133 087	25 086	13 939		11 147
Other industries
Other industries	60.37	40.32	45.48		54.52
Other industries (values – R million)	1 125 878	751 921	341 998		409 923

Table 3: Consumption of agricultural and food products

	Share of total demand (%)		Share of final demand (%)
	Intermediate demand	Final demand	Household consumption	Exports
Agricultural products
Field crops	85	15	0	100
Horticulture	12	88	77	23
Livestock and other animals	55	45	88	12
Agricultural products (values – R million)	31 508	34 362	25 127	7592
Food products
Meat products	21	79	98	2
Processed fish products	9	91	82	18
Fruit and vegetable products	14	86	75	25
Oils and fats products	52	48	93	7
Dairy products	17	83	98	2
Grain mill products	29	71	97	3
Animal feeds	85	15	96	4
Bakery products	3	97	100	0.4
Sugar products	32	68	92	8
Other food products	35	65	90	10
Beverages and tobacco	25	75	88	12
Food products (values – R million)	43 232	122 976	113 027	8997
Other goods and services
Other goods and services	55	45	64	36
Other goods and services (values – R million)	1 215 255	981 651	433 849	240 004

Table 4: Changes in intermediate inputs, value added and domestic production for efficiency gains of 4 per cent in all agricultural industries (DOMSET, sim04, percentage changes)

	Intermediate inputs		Value added		Domestic production
Industries	Quantity (QINT)	Price (PINT)	Quantity (QVA)	Price (PVA)	Purchaser prices (PQD)	Prices (PX)	Commodity groups	Purchaser prices (PQD)	Domestic production (QXC)
Agricultural production regions in South Africa							Agricultural commodity groups
Eastern Cape	− 3.71	− 0.12	− 1.48	− 1.26	1.42	− 4.57	Field crops	− 2.67	2.87
Free State	− 1.81	− 0.14	− 0.33	− 0.88	2.79	− 4.29	Horticulture	− 4.02	3.17
Gauteng	− 2.63	− 0.59	− 0.59	− 1.62	2.19	− 4.85	Livestock & other	− 6.29	1.82
KwaZulu-Natal	− 1.70	− 0.06	− 0.73	− 0.55	2.77	− 4.16
Limpopo	− 0.41	− 0.01	− 0.28	− 0.07	3.65	− 3.88
Mpumalanga	− 0.72	− 0.07	− 0.19	− 0.34	3.50	− 4.03
Northern Cape	− 2.05	0.08	− 0.72	− 0.59	2.69	− 4.15
North West	− 2.21	− 0.26	− 0.85	− 0.94	2.38	− 4.41
Western Cape	− 0.69	− 0.02	− 0.28	− 0.23	3.51	− 3.97
Processed food industries							Processed food commodity groups
Animal feeds	− 1.48	− 0.79	− 1.35	− 0.86	− 1.46	− 0.80	Animal feeds	− 0.87	− 1.33
Bakeries	0.44	− 0.10	− 0.17	0.21	0.32	− 0.04	Bakery products	− 0.08	0.40
Beverages and tobacco	1.21	− 0.14	0.01	0.46	0.90	0.02	Beverages and tobacco	− 0.03	0.90
Dairy products	0.82	− 0.75	− 0.57	− 0.06	0.64	− 0.66	Dairy products	− 0.73	0.63
Fish products	0.85	− 0.25	− 0.06	0.21	0.69	− 0.17	Processed fish products	− 0.21	0.69
Fruit	1.00	− 0.19	− 0.02	0.31	0.83	− 0.11	Fruit and vegetable products	− 0.22	0.81
Grain mills	1.00	− 0.91	− 0.45	− 0.19	0.74	− 0.78	Grain mill products	− 0.82	0.74
Meat products	1.00	− 1.58	− 1.28	− 0.45	0.91	− 1.54	Meat products	− 1.63	0.91
Other food products	1.45	− 0.82	− 0.19	0.00	1.03	− 0.61	Other food products	− 0.61	1.02
Oils	1.66	− 0.62	− 0.06	0.23	1.44	− 0.52	Oils and fats products	− 0.30	1.42
Sugar	0.81	− 0.29	− 0.04	0.13	0.68	− 0.22	Sugar products	− 0.28	0.69

Table 5: Commodity flows for efficiency gains of 4 per cent in all agricultural industries (DOMSET, sim04, percentage changes)

	Domestic production (QXC)	Composite commodity (QQ)	Domestic demand (QD)	Exports (QE)	Imports (QM)
Agricultural commodities	2.22	0.73	1.08	11.31	− 4.85
Food commodities	0.74	0.53	0.65	2.10	− 1.14
Other commodities	0.11	0.18	0.16	− 0.24	0.32
Total	0.22	0.22	0.23	0.19	0.19
Note: The commodity (product) accounts in the SAM are disaggregated into various agricultural and food commodities. The percentage changes reported here are the percentage changes in the total quantities of agricultural and food commodities and thus represent a ‘weighted’ average percentage change.

Table 6: Factor demand (FD) effects for efficiency gains of 4 per cent in all agricultural industries (DOMSET, sim04, percentage changes)

	Unskilled/unemployed		Medium-skilled/Fully employed			High-skilled/Fully employed
Factor groups	African	Coloured/Asian	African	Coloured/Asian	White	African	Coloured/Asian	White
FD (agric)	− 1.36	− 0.68	− 1.16	− 1.39	− 1.17	− 1.73	− 0.95	− 1.17
FD (food)	− 0.34	− 0.18	− 0.45	− 0.48	− 0.62	− 0.74	− 0.70	− 0.83
FD (other)	0.45	0.30	0.06	0.05	0.13	0.01	0.02	0.06
Total	0.28	0.19	0.00	0.00	0.00	0.00	0.00	0.00

Figure 2. Economy-wide factor income effects (YF) for efficiency gains of 4 per cent in all agricultural industries (DOMSET, sim04, percentage changes)

Table 7: Commodity flows for a 4 and 2 per cent reduction in world agricultural and food commodity prices respectively (INTSET, sim04, percentage changes)

	Domestic production (QXC)	Composite commodity (QQ)	Domestic demand (QD)	Exports (QE)	Imports (QM)
Agricultural commodities	− 1.05	− 0.22	− 0.40	− 6.48	2.74
Food commodities	− 0.48	− 0.11	− 0.28	− 3.65	2.36
Other commodities	0.04	− 0.03	− 0.01	0.33	− 0.20
Total	− 0.04	− 0.04	− 0.04	− 0.01	− 0.06

Table 8: Factor demand (FD) effects for a 4 and 2 per cent reduction in world agricultural and food commodity prices respectively (INTSET, sim04, percentage changes)

	Unskilled/unemployed		Medium-skilled/Fully employed			High-skilled/Fully employed
Factor groups	African	Coloured/Asian	African	Coloured/Asian	White	African	Coloured/Asian	White
FD (agric)	− 1.07	− 1.42	− 1.44	− 1.38	− 1.06	− 1.11	− 1.57	− 1.26
FD (food)	− 0.51	− 0.60	− 0.60	− 0.37	− 0.58	− 0.54	− 0.62	− 0.70
FD (other)	0.07	0.10	0.08	0.04	0.11	0.01	0.02	0.06
Total	− 0.04	− 0.08	0.00	0.00	0.00	0.00	0.00	0.00

Figure 3. Economy-wide factor income effects (YF) for a 4 and 2 per cent reduction in world agricultural and food commodity prices respectively (INTSET, sim04, percentage changes)

Table 9: Commodity flows for simultaneous domestic and international agricultural technical change (COMSET, sim04, percentage changes)

	Domestic production (QXC)	Composite commodity (QQ)	Domestic demand (QD)	Exports (QE)	Imports (QM)
Agricultural commodities	1.02	0.49	0.66	4.00	− 2.25
Food commodities	0.23	0.41	0.35	− 1.66	1.19
Other commodities	0.14	0.14	0.15	0.12	0.11
Total	0.18	0.17	0.18	0.17	0.11

Table 10: Domestic agricultural production (QX) for a 4 and 2 per cent reduction in world agricultural and food commodity prices respectively, and domestic efficiency gains in all agricultural industries ranging from 1 to 5 per cent (COMSET, sim01–sim05, percentage changes)

	sim01 (1%)	sim02 (2%)	sim03 (3%)	sim04 (4%)	sim05 (5%)
Eastern Cape	0.14	0.46	0.78	1.11	1.44
Free State	− 0.81	− 0.15	0.51	1.18	1.85
Gauteng	0.72	1.23	1.75	2.27	2.79
KwaZulu-Natal	− 0.48	0.18	0.84	1.51	2.18
Limpopo	− 1.18	− 0.33	0.53	1.41	2.30
Mpumalanga	− 0.99	− 0.16	0.67	1.52	2.37
Northern Cape	− 0.81	− 0.18	0.46	1.10	1.75
North West	− 0.65	− 0.09	0.47	1.03	1.60
Western Cape	− 0.78	0.04	0.87	1.72	2.57
Total	− 0.64	0.05	0.74	1.44	2.15

Figure 4. Economy-wide factor income effects (YF) for simultaneous domestic and international agricultural technical change (COMSET, sim04 percentage changes)

Table 11: Factor demand (FD) effects for simultaneous domestic and international agricultural technical change (COMSET, sim04, percentage changes)

	Unskilled/unemployed		Medium-skilled/Fully employed			High-skilled/Fully employed
Factor groups	African	Coloured/ Asian	African	Coloured/ Asian	White	African	Coloured/ Asian	White
FD (agric)	− 2.52	− 2.22	− 2.69	− 2.85	− 2.31	− 2.92	− 2.63	− 2.51
FD (food)	− 0.85	− 0.78	− 1.05	− 0.84	− 1.18	− 1.28	− 1.31	− 1.52
FD (other)	0.52	0.40	0.14	0.09	0.25	0.02	0.03	0.12
Total	0.23	0.10	0.00	0.00	0.00	0.00	0.00	0.00

Figure 5. Poverty headcount ratios in urban and rural areas for simultaneous domestic and international agricultural technical change (COMSET, sim04 percentage changes)

Figure 6. Changes in inequality as measured by the Gini coefficient for simultaneous domestic and international agricultural technical change (COMSET, sim04 percentage changes)

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