THE AGRICULTURAL INDUSTRY AND ECONOMIC GROWTH IN SOUTH AFRICA – AN EMPIRICAL ANALYSIS
THE AGRICULTURAL INDUSTRY AND ECONOMIC GROWTH IN SOUTH AFRICA – AN EMPIRICAL ANALYSIS

Summary/Abstract: This study measures the source of short-term agricultural economic growth in South Africa, using the Exact Maximum Likelihood (EML) method by categorizing the variables into five main categories: cyclical reversion, structural policies and institutions, stabilization policies, cyclical volatility and external conditions. The statistically significant finding of structural policies and institutional category variables imply that the sector growth was achieved with improved education, financial depth, and trade openness. However, the negative relationship of financial depth (RDGDP) indicates the sector is suffering from a debt crisis. Therefore, farmers need to follow an effective debt management system. The cyclical reversion was found to be statistically significant and related negatively. This shows that there is an important connection between the business cycle and agricultural economic growth

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