Don’t read too much into current growth rate

The agricultural sector recorded a positive growth of 16,3% in the third quarter of 2010. This follows a 4,9% growth rate in the first quarter and a 13,6% growth rate in the second quarter, said Statistics SA.

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However, the economic growth rate for the third quarter slowed down to 2,6%, compared to 2,8% in the second and 4,6% in the first quarter of 2010.Agricultural Business Chamber CEO Dr John Purchase said agriculture’s growth was “basically still part of the recovery process from the rather acute recession”. It could also, he suggested, be attributed to seasonal factors, such as a very good maize crop, as well as fair increases in most commodity prices in the third quarter.
He said gross domestic product (GDP) growth in agriculture fluctuated considerably from quarter to quarter, and year to year, due to variable weather conditions and commodity price fluctuations. Dr Purchase warned against reading too much into the current growth rate, adding that a slowing down of the recovery trend was a possibility in the next quarter.

The current agricultural growth rate wouldn’t necessarily impact the sector’s international competitiveness. “Primary agriculture has grown at an average of less than 1% per annum over the past decade,” he said. “At these poor and disappointing growth levels over a sustained period, it becomes clear that agriculture’s long-term competitiveness and profitability are under threat, and that the sector is thus not attracting the necessary investment to grow at the required rate of 7% per annum.”

The trade union Solidarity reacted to the figures saying that the economy only managed to grow by a mere 0,7% in the past two years. This was “light years” from the government’s target of 7% annual growth and showed that growth hadn’t nearly reached the level necessary to significantly lessen unemployment.

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