Implications of persistent drought in the Western Cape

The agricultural sector has overall survived the worst of the recent drought that gripped the country over the past three years; however, the Western Cape has not been as fortunate – damn levels are low and the lack of rain has led to decreasing soil moisture that is threatening production.

The Department of Water and Sanitation (DWS) reported that dam levels have eased marginally as we approach the end of the rainy season in the summer production areas, reaching 73.7% full versus 54.8% last year during the week ended 03 April 2017. In contrast, the summer rainfall areas of the Western Cape (WC) did not receive sufficient rainfall and dam levels remain critically low at 24.2% full compared to 31.2% last year this time.

“Recent weather forecasts indicate that we might see a return of the El Nino weather pattern in the new season (2017/18), however, it is early days as the situation may improve. Already, the weather forecasts have signalled a possibility of above normal rainfall for late autumn to mid-winter which is a welcome relief for the Western Cape winter crop areas” says Paul Makube, Senior Agricultural Economist at FNB Business.

Makube shares some implications from the drought that is gripping the agricultural sector in the Western Cape.

Wine – Production volumes have declined. However, the drier conditions in general mean improved quality of wine. The lower volumes may lead to a modest increase in prices to the benefit of the producers.

Fruit and vegetables – Not all areas in the Western Cape are badly affected by the drought: an example is the Ceres region which is reportedly doing fine. We must however differentiate between water available for human consumption and that for irrigation. Although the situation with dam levels is dire, some farmers have on-farm water storage capacity for irrigation which is not for human consumption. Nonetheless, some vegetable farmers who do not have this capacity are expected to face a bleak future if it does not rain sooner.

Grain production – the rainy season normally starts beginning of May, so everything is not yet lost. Fortunately, the rainfall outlook has since improved with the possibility of above-normal showers in the winter ahead which will be beneficial for wheat and other winter crops. This will also help alleviate the current water shortages across the Western Cape. Some farmers have opted to diversify into barley production, a product only produced in the southern Cape in the past.

Livestock – the persistent drought conditions are devastating for livestock producers especially for beef, dairy and culling. Stock reduction will result in elevated prices. During a drought, animals lose condition and production suffers which erodes the farmer’s margins.

“While both the overall SA producer and consumer inflation are expected to moderate in the coming months, local trends may remain stubbornly high if the drought conditions persists. The agri-value chain may come under pressure and impede potential job growth in the sector. With that said we remain hopeful that the much needed rains will return in the coming month,” concludes Makube.