An ARDL-Based Analysis of the Short and Long-Run Impact of Agricultural Exports on Gross Agricultural Income in South Africa (1990-2022)

Abstract

Agriculture continues to play a vital role in promoting economic transformation, supporting sustainable livelihoods and advancing development in many developing nations. Agriculture has long been seen simply as a provider of food and fibre, but in today’s world it is increasingly recognised for its broader and more meaningful role, one that extends far beyond this traditional view. Despite experiencing considerable growth in agricultural exports in recent years, the agricultural sector’s gross income failed to reflect a proportional increase. The study aimed to estimate both the short and long-run effects of the agricultural exports on the gross income of the agricultural sector in South Africa from 1990 to 2022. The study utilized an autoregressive distributed lag model to address the objective of the study. Secondary annual data of the total value of agricultural exports, gross income of the agricultural sector, gross domestic product, net farming income and contribution of the agricultural sector to gross domestic product were utilised. The data was collected from different sources, covering the period from 1990 to 2022. Autoregressive distributed lag model results revealed the presence of both short and long-run effects between agriculture exports and gross income. The study recommends strengthening of agricultural export performance through value addition, quality improvement and market expansion while mitigating short-run income volatility via diversification and risk management strategies.