From food security to climate resilience, South African agriculture is keeping up with global competitors

The Who Owns Whom report on Trends in South African Agribusiness shares a wealth of excellent information about the agricultural sector in South Africa, with graphical illustrations that offer valuable insights into its evolution, its positioning for sustainability and the adoption of smart farming technology while securing food for its citizens.

Why South Africa’s agriculture matters more than ever

The South African agricultural sector has been a stellar performer in an otherwise lacklustre economy. One of the illustrations in the Who owns Whom report shows that the sector has not only continued to grow at a healthy pace, increasing value added, but has also outperformed broader economic growth by dramatically increasing its share of GDP over the past 10 years. Historically, as countries develop, agriculture’s share of GDP declines even as agricultural output continues to grow in absolute terms, as corroborated by The World Bank’s report on Structural Change and Cross-Country Growth Empirics.

As countries industrialise, their service sectors and higher-value activities such as manufacturing, finance, technology, healthcare, and professional services tend to grow faster than agriculture. Developed economies such as the United States, Germany, and Australia are good examples of this pattern, with their agricultural sectors contributing less than 3% of GDP despite being among the most productive.

South Africa has followed a similar trajectory, with agriculture accounting for a relatively small share of GDP compared with services and industry. However, what is different about South Africa is that agriculture has recently played an increasing role in GDP contribution and employment, particularly in rural areas, where it remains a major source of livelihoods, economic inclusion, and food security. This highlights its continued socio-economic importance despite its declining relative contribution to national output.

The table below illustrates these patterns in the different economic development phases:

The main drivers behind the relative decline of agriculture as economies develop are, first, that as incomes rise, people spend proportionally less on food and more on housing, healthcare, entertainment and services, and second, that manufacturing and services expand faster, creating higher value added per worker. But this does not denigrate agriculture, as it continues to grow on its own thanks to mechanisation, fertilisers and improved genetics, enabling one farmer to feed many more people.

Growing global demand for sustainable food production

Sustainable food production is reshaping agricultural markets as consumers, retailers, investors, and regulators place greater emphasis on environmentally responsible farming. In countries such as the Netherlands and Brazil, major agricultural producers are increasing investment in climate-smart agriculture, water-efficient technologies, regenerative farming, and traceability to mitigate environmental risks.

The Who Owns Whom report highlights that the agricultural sector, more than ever, must balance the country’s food security with its dependence on exports to sustain growth, thereby reinforcing the need for the industry to comply with Environmental, Social and Governance (ESG) standards set by international markets.

As a leading exporter of citrus, wine, table grapes, and nuts, compliance with ESG standards imposed by international markets is non-negotiable, and the country’s performance in the face of these challenges is laudable and should set an example for other sectors, especially the languishing manufacturing sector in South Africa.