MAIN ECONOMIC ACTIVITIES
The Cape Winelands is the second largest economy in the Western Cape, contributing 10.5% to the Gross Domestic Product (GDP). The region has a diverse economic base with the main contributors to the district’s economy as follows:
- Manufacturing (22.16%),
- Finance, real estate and business services (20.26%),
- Wholesale and retail trade, catering and accommodation (15.21%),
- Agriculture & forestry (14.67%),
- General government services (11.20%), and
- Transport, storage and communication (8.01%).
Agriculture forms the backbone of the proposed Biosphere Reserve’s economy and although it only contributes 15% to the GDP, the other sectors, especially manufacturing and wholesale and trade, are dependent on its strong backward and forward linkages. The agricultural sector, and primarily the horticultural enterprises, also provides the largest proportion of employment, i.e. 38% (Boland District Municipality, 2004).
Viticulture, deciduous fruits and vegetables are the main products of the Cape Winelands. Viticulture is however the main agricultural practice. Approximately 56% of all wine grapes and 68% of South Africa’s wine is produced in the Cape Winelands. Other products and significant agricultural practices include:
- Deciduous fruit produced in the Villiersdorp/Vyeboom Valley.
- Extensive wheat, stock and chicken farming in the northern rural hinterland of Wellington along the Limietberg Mountains.
- Olives, of which approximately 90% of the South African crop is produced mainly around Paarl, Stellenbosch and Somerset West (farmers are diversifying their operations by combining wine and olive production and developing their products around agri-tourism).
- Natural products such as Fynbos (fresh and dried flowers), Buchu and Honeybush Tea.
- Stock farming in combination with wheat production in the Wellington / Hermon area.
The manufacturing sector is characterised by its backward linkages to the agricultural sector. The main activities are in the food and beverage sectors more specifically wine and brandy, juice products and dried and tinned fruits. Some of the main cooperates include KVW, the largest wine organisation in South Africa, and SAD, who is South Africa’s leading producer of dried fruit products.
Wholesale and retail is also closely linked to the agricultural and manufacturing sectors. A number of corporate and institutional head offices occur, including Rembrandt, Medi-Clinic Corporation, Distillers Corporation and KWV Holdings.
The Financial, Real Estate and Business Services sector is continually expanding with the improvement of the economic environment in the region. Activities in this sector, especially tourism real estate, accounts for 97% of investments in the area.
The Tourism sector is well established and has significant linkages to all other economic sectors operating within the area. Currently 50% of all tourists visiting the Western Cape Province visit a wine route. The current perception of the area is that it is an up market day visitor destination for wine tourists. A concerted effort is however being made to highlight the exceptional diversity of the tourism products which are on offer.
With regard to employment within the various economic sectors operating in the region it is important to take into consideration that the dominance of the agricultural sector exposes the area to seasonal employment. A large pool of unskilled labourers is dependent on seasonal employment during the pruning and harvesting seasons in the grape and fruit producing areas of the district. This not only put increased pressure on social services and infrastructure, but it contributes to uncertainty regarding the unemployment rate. It has been stated that 38% of the area’s labour force is employed by the agricultural sector (CWDM Growth & Development Strategy, 2006). However, the 2003 figures published by the Demarcation Board and Census South Africa indicate that approximately 9% of the population is employed in the agricultural sector, 9% in the general government services sector, and 5% in the manufacturing sector. Approximately 66% of the labour force is employed in an undetermined industry.